What changed in this filing

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Item 1. Financial Statements

2020-08-06 compared with 2020-05-06 · 178 added, 99 removed, 623 unchanged (31% of the section changed)

3 unchanged sentences

(in millions, except share and per share data)

March 31, 2020

June 30, 2020

December 31, 2019

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(in millions, except share and per share data) (unaudited)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Revenue before reimbursements

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Interest expense, net of interest income

Equity (losses) earnings

Other income (expense)

Equity earnings (losses)

Income before income taxes and noncontrolling interest

Income tax provision (benefit)

Net income (loss) attributable to noncontrolling interest

Income tax provision

Net (loss) income attributable to noncontrolling interest

Net income attributable to the Company

Dividends on unvested common stock, net of tax benefit

Net income attributable to common shareholders

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Diluted weighted average shares outstanding (in 000's)

Dividends declared per share

Net income attributable to the Company

1 unchanged sentence

Foreign currency translation adjustments

Comprehensive (loss) income attributable to the Company

Comprehensive income (loss) attributable to the Company

See accompanying notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

Company Shareholders' Equity

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March 31, 2020

Net income (3)

Shares issued under stock-based compensation programs

Shares repurchased for payment of taxes on stock-based compensation

Amortization of stock-based compensation

Shares held in trust

Foreign currency translation adjustments

Increase in amounts attributable to noncontrolling interest

June 30, 2020

Accumulated other comprehensive income (loss)

Noncontrolling interest

(3) Excludes net income attributable to redeemable noncontrolling interest of $ 0.1 million for the three months ended June 30, 2020.

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

Company Shareholder's Equity

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March 31, 2019

Net income (3)

Shares issued under stock-based compensation programs

Shares repurchased for payment of taxes on stock-based compensation

Amortization of stock-based compensation

Dividends paid

Shares held in trust

Change in pension liabilities, net of tax

Foreign currency translation adjustments

Increase in amounts attributable to noncontrolling interest

June 30, 2019

(3) Excludes net income attributable to redeemable noncontrolling interest of $ 0.1 million for the three months ended June 30, 2019.

See accompanying notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) (unaudited)

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Repayments of borrowings under credit facility

Net proceeds from short-term borrowings

Net (repayments of) proceeds from short-term borrowings

Payments of deferred business acquisition obligations and earn-outs

Repurchase of common stock

Payment of dividends

Net cash provided by financing activities

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Management's Discussion and Analysis of Financial Condition and Result of Operations and to Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our 2019 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Condensed Consolidated Financial Statements as of March 31, 2020 , and for the three months ended March 31, 2020 and 2019 , are unaudited.

Our Condensed Consolidated Financial Statements as of June 30, 2020 , and for the periods ended June 30, 2020 and 2019 , are unaudited.

In the opinion of management, we have included all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the Condensed Consolidated Financial Statements for these interim periods.

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leasing and capital markets) is driven by the size and timing of our clients' transactions and can fluctuate significantly from period to period.

The COVID-19 pandemic may have a material impact on the historical seasonality of our revenue and profits.

A significant portion of our compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets.

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Changes in the geographic mix of income, including as a result of the COVID-19 pandemic, can impact our estimated effective tax rate.

As a result of the items mentioned above, the results for the periods ended March 31 are not fully indicative of what our results will be for the full fiscal year.

As a result of the items mentioned above, the results for the periods ended June 30 are not fully indicative of what our results will be for the full fiscal year.

NEW ACCOUNTING STANDARDS

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The estimate also includes specifically identified amounts for which payment has become unlikely.

For receivables with lives of less than one year, changes to economic conditions are not expected to have a significant impact on our estimate of expected credit losses.

As trade receivables are due within one year, changes to economic conditions are not expected to have a significant impact on our estimate of expected credit losses.

However, we will monitor economic conditions on a quarterly basis to determine if any adjustments are deemed necessary.

Notes and Other Receivables and Long-Term Receivables

We make ongoing assessments of the collectability of outstanding Notes and other receivables and Long-term receivables, considering both objective and subjective factors such as the age profile of outstanding balances, the contractual terms of repayment, and credit quality.

We make ongoing assessments of the collectability of outstanding Notes and other receivables and Long-term receivables, considering both objective and subjective factors such as the aging profile of outstanding balances, the contractual terms of repayment, and credit quality.

Aspects of credit quality considered in our assessments of collectability include historical experience, current and expected economic conditions, and our broader business relationship with the obligor.

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The loan loss guarantee reserve is calculated on an individual loan level.

For the period ended March 31, 2020, the inputs to the model incorporated specific economic conditions related to the COVID-19

pandemic that resulted in a notable increase to our loan loss guarantee reserve.

As of March 31, 2020, the loan loss guarantee reserve was $ 45.7 million and was included within Other liabilities on the Condensed Consolidated Balance Sheets.

As of June 30, 2020, the loan loss guarantee reserve was $ 45.7 million and was included within Other liabilities on the Condensed

Consolidated Balance Sheets.

This balance reflected a notable increase from our opening balance (reflected in the table below) as a result of incorporating, into our model, economic conditions and projections related to the COVID-19 pandemic.

The loss-sharing guarantee obligation (in accordance with ASC Topic 460, Guarantees ) represents the non-contingent obligation incurred as a result of issuing a loss-sharing guarantee as part of our participation in the DUS program and is separate from the loan loss guarantee reserve discussed above.

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Such revenue was included entirely within Americas Capital Markets and is presented below.

Three months Ended March 31,

Three Months Ended June 30,

Six months ended June 30,

(in millions)

Revenue excluded from scope of ASC Topic 606

Contract assets - As of March 31, 2020 and December 31, 2019 , we had $ 414.7 million and $ 419.3 million of contract assets, net of allowance, respectively, which are included in Short-term contract assets and Other assets on the Condensed Consolidated Balance Sheets.

Contract liabilities - As of March 31, 2020 and December 31, 2019 , we had $ 88.4 million and $ 87.7 million of contract liabilities, respectively, which are included in Short-term contract liabilities and deferred income on our Condensed Consolidated Balance Sheets.

Contract assets - As of June 30, 2020 and December 31, 2019 , we had $ 405.3 million and $ 419.3 million of contract assets, net of allowance, respectively, which are included in Short-term contract assets and Other assets on the Condensed Consolidated Balance Sheets.

Contract liabilities - As of June 30, 2020 and December 31, 2019 , we had $ 93.0 million and $ 87.7 million of contract liabilities, respectively, which are included in Short-term contract liabilities and deferred income on our Condensed Consolidated Balance Sheets.

The majority of contract liabilities are recognized as revenue within 90 days.

Remaining performance obligations - Remaining performance obligations represent the aggregate transaction price for contracts where our performance obligations have not yet been satisfied.

As of March 31, 2020 , the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

As of June 30, 2020 , the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

In accordance with ASC Topic 606, excluded from the aforementioned remaining performance obligations are (i) amounts attributable to contracts expected to be completed within 12 months and (ii) variable consideration for services performed as a series of daily performance obligations, such as facilities management, property management, and LaSalle contracts.

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The Chief Operating Decision Maker of JLL measures and evaluates the segment results excluding (a) gross contract costs, (b) net non-cash MSR and mortgage banking derivative activity, and (c) Restructuring and acquisition charges.

As of March 31, 2020 , we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:

As of June 30, 2020 , we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:

• Chief Executive Officer and President

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• Chief Executive Officer of Capital Markets

• Chief Human Resources Officer

• Co-Chief Executive Officers of JLL Technologies

Summarized financial information by business segment is as follows.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

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Segment operating income

Equity earnings (losses)

Equity earnings

Segment income

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Segment operating loss

Equity earnings

Equity losses

Summarized financial information by business segment is as follows.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

14 unchanged sentences

Segment operating income

Equity (losses) earnings

Equity earnings (losses)

Segment income

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Segment operating income

Equity (losses) earnings

Segment (loss) income

Three Months Ended March 31,

Equity earnings (losses)

Segment income (loss)

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

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2020 Business Combinations Activity

During the three months ended March 31, 2020 , we completed no new acquisitions and paid $ 12.9 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

During the six months ended June 30, 2020 , we completed no new acquisitions and paid $ 47.7 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

2019 Business Combination Activity

During the three months ended March 31, 2020 , we made no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2019.

As of March 31, 2020 , we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired for our 2019 acquisitions, with the exception of tax-related accounts with respect to our acquisition of HFF, Inc.

During the six months ended June 30, 2020 , we made no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2019.

As of June 30, 2020 , we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired for our 2019 acquisitions.

Earn-Out Payments

($ in millions)

March 31, 2020

June 30, 2020

December 31, 2019

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Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of March 31, 2020 consisted of:

Goodwill and unamortized intangibles as of June 30, 2020 consisted of:

(1) goodwill of $ 4,120.9 million , (2) identifiable intangibles of $ 602.9 million amortized over their remaining finite useful lives, and (3) $ 50.0 million of identifiable intangibles with indefinite useful lives that are not amortized.

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dollar, which means a portion of the movements in the reported book value of these balances is attributable to movements in foreign currency exchange rates.

In addition to our annual impairment evaluation, we periodically evaluate whether events or changes in circumstances indicate the carrying value of a reporting unit(s) may be impaired ("triggering event").

During the three months ended June 30, 2020, we determined our EMEA reporting unit had a triggering event which required us to determine if it was not more-likely-than-not that the fair value of our reporting unit was less than its carrying value.

As a result, we performed step 1 of the goodwill impairment analysis which indicated the estimated fair value exceeded the carrying value by over 30%.

In performing step 1, we relied on the discounted cash flow (“DCF”) method, an income approach, in determining the estimated fair value.

Our DCF analysis relied on significant judgments and assumptions in determining the inputs, specifically, forecasted revenue growth, forecasted profitability margin, and the discount rate used to present value the cash flows.

The following tables detail, by reporting segment, movements in goodwill.

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Impact of exchange rate movements

Balance as of March 31, 2020

Balance as of June 30, 2020

Real Estate Services

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Impact of exchange rate movements

Balance as of March 31, 2019

Balance as of June 30, 2019

The following tables detail, by reporting segment, movements in the gross carrying amount and accumulated amortization of our identifiable intangibles.

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Impact of exchange rate movements

Balance as of March 31, 2020

Balance as of June 30, 2020

Accumulated Amortization

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Impact of exchange rate movements

Balance as of March 31, 2020

Net book value as of March 31, 2020

(1) Included in this amount for MSRs was $ 5.9 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights.

Balance as of June 30, 2020

Net book value as of June 30, 2020

(1) Included in this amount for MSRs was (i) $ 9.3 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights and (ii) $ 2.8 million relating to an impairment valuation allowance, recognized during the three months ended June 30, 2020.

(2) Amortization of MSRs is included in Revenue before reimbursements within the Condensed Consolidated Statements of Comprehensive Income.

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Impact of exchange rate movements

Balance as of March 31, 2019

Balance as of June 30, 2019

Accumulated Amortization

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Impact of exchange rate movements

Balance as of March 31, 2019

Net book value as of March 31, 2019

Balance as of June 30, 2019

Net book value as of June 30, 2019

(1) Included in this amount for MSRs was $ 3.0 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights.

(2) Amortization of MSRs is included in Revenue before reimbursements within the Condensed Consolidated Statements of Comprehensive Income.

The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of March 31, 2020 , is presented in the following table.

The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of June 30, 2020 , is presented in the following table.

(in millions)

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INVESTMENTS IN REAL ESTATE VENTURES

As of March 31, 2020 and December 31, 2019 , we had Investments in real estate ventures of $ 390.8 million and $ 404.2 million , respectively.

Approximately 85% of our investments, as of March 31, 2020 , are in 46 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement.

As of June 30, 2020 and December 31, 2019 , we had Investments in real estate ventures of $ 393.6 million and $ 404.2 million , respectively.

Approximately 85% of our investments, as of June 30, 2020 , are direct investments in 47 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement.

These also include investments by JLL Spark in property-technology funds and early-stage companies.

The remaining 15% of our Investments in real estate ventures, as of March 31, 2020 , were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, primarily, in certain real estate ventures that own and operate real estate.

The remaining 15% of our Investments in real estate ventures, as of June 30, 2020 , were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, primarily, in certain real estate ventures that own and operate real estate.

Of our investments attributable to investment vehicles, the majority was invested in LaSalle Investment Company II ("LIC II"), in which we held an effective ownership interest of 48.78 % .

We have maximum potential unfunded commitments to direct investments or investment vehicles of $ 309.0 million as of March 31, 2020 .

Of this amount, $ 60.4 million relates to our investment in LIC II, whose fund life terminated in January 2020.

We have maximum potential unfunded commitments to direct investments or investment vehicles of $ 338.5 million as of June 30, 2020 .

Of this amount, while we remain contractually obligated, we do not expect a call on the $ 60.4 million relating to our investment in LIC II as its fund life terminated in January 2020.

We evaluate our less-than-wholly-owned investments to determine whether the underlying entities are classified as variable interest entities ("VIEs");

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(in millions)

March 31, 2020

June 30, 2020

December 31, 2019

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Total liabilities and members' equity

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

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Net gains on sale of investments (included in Equity earnings)

Net income (loss)

Net (loss) income

We allocate the members' equity and net income of the consolidated VIEs to the noncontrolling interest holders as Noncontrolling interest on our Condensed Consolidated Balance Sheets and as Net income attributable to noncontrolling interest in our Condensed Consolidated Statements of Comprehensive Income, respectively.

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the three months ended March 31, 2020 and 2019 .

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the six months ended June 30, 2020 and 2019 .

We report a majority of our investments in real estate ventures at fair value.

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Distributions

Change in fair value

Change in fair value, net

Foreign currency translation adjustments, net

Fair value investments as of March 31,

Fair value investments as of June 30,

See Note 8, Fair Value Measurements , for additional discussion of our investments in real estate ventures reported at fair value.

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Contractual Life

Unvested as of December 31, 2019

Unvested as of March 31, 2020

Unvested as of December 31, 2018

Unvested as of June 30, 2020

Unvested as of March 31, 2019

During the three months ended March 31, 2020, we recognized a $ 5.5 million expense reversal to reflect our revised estimate of PSU achievement in response to the anticipated impact of the COVID-19 pandemic.

As of March 31, 2020 , we had $ 107.2 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2024 ;

Unvested as of June 30, 2019

Weighted Average

Contractual Life

Unvested as of December 31, 2019

Unvested as of June 30, 2020

Unvested as of December 31, 2018

Unvested as of June 30, 2019

As of June 30, 2020 , we had $ 122.4 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2024 ;

$ 50.8 million relates to the awards issued in conjunction with the HFF acquisition.

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The carrying values of our Credit facility and Short-term borrowings approximate their estimated fair values given the variable interest rate terms and market spreads.

We estimated the fair value of our Long-term debt as $ 595.5 million and $ 685.9 million as of March 31, 2020 and December 31, 2019 , respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our Long-term debt was $ 656.1 million and $ 664.6 million as of March 31, 2020 and December 31, 2019 , respectively, and included debt issuance costs of $ 2.9 million and $ 3.1 million , respectively.

We estimated the fair value of our Long-term debt as $ 645.4 million and $ 685.9 million as of June 30, 2020 and December 31, 2019 , respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our Long-term debt was $ 665.4 million and $ 664.6 million as of June 30, 2020 and December 31, 2019 , respectively, and included debt issuance costs of $ 2.8 million and $ 3.1 million , respectively.

Investments in Real Estate Ventures at Fair Value - Net Asset Value ("NAV")

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Critical inputs to NAV estimates included valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates, and asset-specific market borrowing rates.

As a result of the changes in market conditions from the COVID-19 pandemic, which occurred following the measurement dates used by investees to calculate NAV per share, we recognized a $36.3 million decrease in aggregate to the reported NAV per share for the three months ended March 31, 2020.

As of March 31, 2020 and December 31, 2019 , investments in real estate ventures at fair value using NAV were $ 197.4 million and $ 224.8 million , respectively.

As of June 30, 2020 and December 31, 2019 , investments in real estate ventures at fair value using NAV were $ 187.8 million and $ 224.8 million , respectively.

As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.

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The following table categorizes by level in the fair value hierarchy the estimated fair value of our assets and liabilities measured at fair value on a recurring basis.

March 31, 2020

June 30, 2020

December 31, 2019

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Investments classified as Level 3 in the fair value hierarchy represent investments in early-stage non-public entities where we elected the fair value option.

Generally, the carrying value is deemed to approximate the fair value of these investments due to the proximity of the investment date to the balance sheet date as well as investee-level performance updates.

The carrying value was deemed to approximate fair value for the majority of these investments due to the proximity of the investment date to the balance sheet date as well as consideration of investee-level performance updates.

To the extent there are changes in fair value, a result of pricing in subsequent funding rounds or changes in business strategy, for example, we recognize such changes through Equity earnings.

Foreign Currency Forward Contracts

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The inputs for these valuations are Level 2 inputs in the fair value hierarchy.

As of March 31, 2020 and December 31, 2019 , these contracts had a gross notional value of $ 1.80 billion ( $ 0.84 billion on a net basis) and $ 2.30 billion ( $ 1.05 billion on a net basis), respectively.

As of June 30, 2020 and December 31, 2019 , these contracts had a gross notional value of $ 2.00 billion ( $ 0.98 billion on a net basis) and $ 2.30 billion ( $ 1.05 billion on a net basis), respectively.

We recognize gains and losses from revaluation of these contracts as a component of Operating, administrative and other expense.

They are offset by the gains and losses we recognize on the revaluation of intercompany loans and other foreign currency balances.

The impact to net income was not significant for the three months ended March 31, 2020 or 2019 .

The impact to net income was not significant for the six months ended June 30, 2020 or 2019 .

We record the asset and liability positions for our foreign currency forward contracts based on the net payable or net receivable position with the financial institutions from which we purchase these contracts.

The $ 6.1 million asset as of March 31, 2020 , was composed of gross contracts with receivable positions of $ 7.3 million and payable positions of $ 1.2 million .

The $ 6.2 million liability as of March 31, 2020 , was composed of gross contracts with receivable positions of $ 2.1 million and payable positions of $ 8.3 million .

The $ 3.0 million asset as of June 30, 2020 , was composed of gross contracts with receivable positions of $ 3.6 million and payable positions of $ 0.7 million .

The $ 5.0 million liability as of June 30, 2020 , was composed of gross contracts with receivable positions of $ 0.6 million and payable positions of $ 5.5 million .

As of December 31, 2019 , the $ 10.5 million asset was composed of gross contracts with receivable positions of $ 10.6 million and payable positions of $ 0.1 million .

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Warehouse Receivables

As of March 31, 2020 and December 31, 2019 , all of our Warehouse receivables were under commitment to be purchased by government-sponsored enterprises ("GSEs") or by a qualifying investor as part of a U.S.

As of June 30, 2020 and December 31, 2019 , all of our Warehouse receivables were under commitment to be purchased by government-sponsored enterprises ("GSEs") or by a qualifying investor as part of a U.S.

government or GSE mortgage-backed security program.

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employees that allows them to defer portions of their compensation.

We recorded this plan on our Condensed Consolidated Balance Sheet as of March 31, 2020 , as Deferred compensation plan assets of $ 374.2 million , long-term deferred compensation plan liabilities of $ 348.4 million , included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.6 million .

We recorded this plan on our Condensed Consolidated Balance Sheet as of June 30, 2020 , as Deferred compensation plan assets of $ 372.4 million , long-term deferred compensation plan liabilities of $ 351.1 million , included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.7 million .

We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, 2019 , as Deferred compensation plan assets of $ 349.9 million , long-term deferred compensation plan liabilities of $ 346.1 million , included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.7 million .

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The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Balance as of March 31, 2020

Net change in fair value

Foreign CTA 1

Purchases / Additions

Balance as of June 30, 2020

Investments in real estate ventures

Mortgage banking derivative assets and liabilities, net

Earn-out liabilities

Balance as of March 31, 2019

Net change in fair value

Foreign CTA 1

Purchases / Additions

Balance as of June 30, 2019

Investments in real estate ventures

Mortgage banking derivative assets and liabilities, net

Earn-out liabilities

(in millions)

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Purchases / Additions

Balance as of March 31, 2020

Balance as of June 30, 2020

Investments in real estate ventures

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Purchases / Additions

Balance as of March 31, 2019

Balance as of June 30, 2019

Investments in real estate ventures

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Investments in real estate ventures

Equity (losses) earnings

Equity earnings (losses)

Other current assets - Mortgage banking derivative assets

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Our determination of fair value primarily relies on Level 3 inputs.

We did not recognize any significant investment-level impairment losses during either of the three months ended March 31, 2020 or 2019 .

We did not recognize any significant investment-level impairment losses during either of the six months ended June 30, 2020 or 2019 .

See Note 6, Investments in Real Estate Ventures , for additional information, including information related to impairment charges recorded at the investee level.

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(in millions)

March 31, 2020

June 30, 2020

December 31, 2019

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We have a $ 2.75 billion unsecured revolving credit facility (the "Facility") that matures on May 17, 2023 .

Pricing on the Facility ranges from LIBOR plus 0.875% to 1.35% , with pricing as of March 31, 2020 , at LIBOR plus 0.95 % .

In addition to outstanding borrowings under the Facility presented in the above table, we had outstanding letters of credit under the Facility of $ 0.7 million and $ 0.8 million as of March 31, 2020 and December 31, 2019 , respectively.

Pricing on the Facility ranges from LIBOR plus 0.875% to 1.35% , with pricing as of June 30, 2020 , at LIBOR plus 1.00 % .

In addition to outstanding borrowings under the Facility presented in the above table, we had outstanding letters of credit under the Facility of $ 0.7 million and $ 0.8 million as of June 30, 2020 and December 31, 2019 , respectively.

The following tables provides additional information on our Facility.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions)

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Amounts outstanding are presented in the debt table above.

As of March 31, 2020 , our issuer and senior unsecured ratings are investment grade:

As of June 30, 2020 , our issuer and senior unsecured ratings are investment grade:

Baa1 from Moody’s Investors Service, Inc.

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Our Facility and senior notes are subject to customary financial and other covenants, including cash interest coverage ratios and leverage ratios, as well as event of default conditions.

We remained in compliance with all covenants as of March 31, 2020 .

We remained in compliance with all covenants as of June 30, 2020 .

Warehouse Facilities

March 31, 2020

June 30, 2020

December 31, 2019

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Pursuant to these warehouse facilities, we are required to comply with certain financial covenants regarding (1) minimum net worth, (2) minimum servicing-related loans, and (3) minimum adjusted leverage ratios.

We remained in compliance with all covenants under our Warehouse facilities as of March 31, 2020 .

We remained in compliance with all covenants under our Warehouse facilities as of June 30, 2020 .

COMMITMENTS AND CONTINGENCIES

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In addition, we have established receivables from third-party insurance providers for claim amounts in excess of the risk retained by our captive insurance company.

In total, these receivables were $ 32.9 million and $ 37.7 million as of March 31, 2020 and December 31, 2019 , respectively, and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

In total, these receivables were $ 36.9 million and $ 37.7 million as of June 30, 2020 and December 31, 2019 , respectively, and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

The following table shows the professional indemnity accrual activity and related payments.

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Prior year claims adjustments (including foreign currency changes)

March 31, 2020

June 30, 2020

December 31, 2018

Prior year claims adjustments (including foreign currency changes)

March 31, 2019

June 30, 2019

As a participant in the DUS program, we retain a portion of the risk of loss for loans that are originated and sold under the DUS program.

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Generally, we share approximately one-third of incurred losses, subject to a cap of 20% of the principal balance of the mortgage at origination.

As of March 31, 2020 and December 31, 2019 , we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 9.9 billion and $ 9.7 billion , respectively.

As of June 30, 2020 and December 31, 2019 , we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 10.5 billion and $ 9.7 billion , respectively.

For all DUS program loans with loss-sharing obligations, we record a non-contingent liability equal to the estimated fair value of the guarantee obligations undertaken upon sale of the loan, which reduces our gain on sale of the loan.

Subsequently, this liability is amortized over the estimated life of the loan and recognized as Revenue on the Condensed Consolidated Statements of Comprehensive Income.

As of March 31, 2020 and December 31, 2019 , the loss-sharing guarantee obligations were $ 20.8 million and $ 20.6 million , respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets.

There were no loan losses incurred for the three months ended March 31, 2020 and 2019 .

As of June 30, 2020 and December 31, 2019 , the loss-sharing guarantee obligations were $ 20.9 million and $ 20.6 million , respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets.

There were no loan losses incurred for the three and six months ended June 30, 2020 and 2019 .

RESTRUCTURING AND ACQUISITION CHARGES

3 unchanged sentences

Restructuring and acquisition charges are presented in table below.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

11 unchanged sentences

Payments made

March 31, 2020

June 30, 2020

(in millions)

4 unchanged sentences

Payments made

March 31, 2019

We expect the majority of accrued severance and other accrued acquisition costs as of March 31, 2020 will be paid during the next twelve months.

June 30, 2019

We expect the majority of accrued severance and other accrued acquisition costs as of June 30, 2020 will be paid during the next twelve months.

Lease exit payments depend on the terms of various leases, which extend as far out as 2022.

HFF Acquisition

For the three months ended March 31, 2020 and 2019, amounts included in Restructuring and acquisition charges associated with the HFF acquisition and integration were $ 21.3 million and $ 6.5 million , respectively.

These charges included transaction/deal costs, retention and severance expense, early lease termination costs, and other integration expenses.

Included in Restructuring and acquisition charges were $ 20.1 million and $ 41.4 million , respectively, for the three and six months ended June 30, 2020 compared to $ 3.2 million and $ 9.7 million , respectively, for the three and six months ended June 30, 2019 of charges relating to the acquisition and integration of HFF (including transaction/deal costs, retention and severance expense, early lease termination costs, and other integration expenses).

During the integration of HFF, we expect to incur significant charges over the two years following the acquisition in an effort to maximize the value of the combined organization.

9 unchanged sentences

Cumulative foreign currency translation adjustment

Balance as of March 31, 2020

Other comprehensive income before reclassification

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ -

Other comprehensive income after tax expense of $ - , $ - and $ -

Balance as of June 30, 2020

(in millions)

Pension and postretirement benefit

Cumulative foreign currency translation adjustment

Balance as of March 31, 2019

Other comprehensive loss before reclassification

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ -

Other comprehensive loss after tax expense of $ - , $ - and $ -

Balance as of June 30, 2019

(in millions)

Pension and postretirement benefit

Cumulative foreign currency translation adjustment

Balance as of December 31, 2019

2 unchanged sentences

$ - , $ - and $ -

Other comprehensive income (loss) after tax expense of $ - , $ - and $ -

Balance as of March 31, 2020

Other comprehensive loss after tax expense of $ - , $ - and $ -

Balance as of June 30, 2020

(in millions)

6 unchanged sentences

Other comprehensive (loss) income after tax expense of $ - , $ - and $ -

Balance as of March 31, 2019

Balance as of June 30, 2019

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements