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Item 1. Financial Statements

2021-08-04 compared with 2021-05-06 · 157 added, 95 removed, 565 unchanged (31% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) March 31, 2021 December 31, 2020

(in millions, except share and per share data) June 30, 2021 December 31, 2020

Assets (unaudited)

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, except share and per share data) (unaudited) Three Months Ended March 31,

(in millions, except share and per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Revenue before reimbursements $ 2,507.5 1,828.5 $ 4,637.1 4,061.5

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Equity earnings (losses) 40.8 14.7 89.3 ( 13.6 )

Other income 11.8 0.9

Other (loss) income ( 0.2 ) 5.2 11.6 6.1

Income before income taxes and noncontrolling interest 254.3 15.8 384.9 38.4

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Foreign currency translation adjustments ( 0.2 ) 33.8 ( 6.4 ) ( 109.6 )

Comprehensive income attributable to common shareholders $ 96.6 ( 138.1 )

Comprehensive income (loss) attributable to common shareholders $ 200.5 49.0 $ 297.1 ( 89.1 )

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, 2021 AND 2020

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

Company Shareholders' Equity

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March 31, 2021 51,306,200 $ 0.5 2,015.5 4,078.9 ( 5.4 ) ( 85.7 ) ( 383.6 ) 86.7 $ 5,706.9

Net income (loss) — — — 200.0 — — — ( 0.6 ) 199.4

Shares issued under stock-based compensation programs 13,712 — ( 1.0 ) — — 1.5 — — 0.5

Shares repurchased for payment of taxes on stock-based compensation ( 2,184 ) — ( 0.2 ) — — ( 0.2 ) — — ( 0.4 )

Amortization of stock-based compensation — — 26.3 — — — — — 26.3

Shares held in trust — — — — 0.1 — — — 0.1

Change in pension liabilities, net of tax — — — — — 0.7 — 0.7

Repurchase of common stock ( 172,500 ) — — — — ( 37.9 ) — — ( 37.9 )

Foreign currency translation adjustments — — — — — — ( 0.2 ) — ( 0.2 )

Increase in amounts attributable to noncontrolling interest — — — — — — — 4.3 4.3

June 30, 2021 51,145,228 $ 0.5 2,040.6 4,278.9 ( 5.3 ) ( 122.3 ) ( 383.1 ) 90.4 $ 5,899.7

Accumulated other comprehensive income (loss)

Noncontrolling interest

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

Company Shareholder's Equity

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March 31, 2020 51,622,839 $ 0.5 1,969.6 3,578.7 ( 5.6 ) ( 25.0 ) ( 571.2 ) 81.9 $ 5,028.9

Net income (loss) (3)

— — — 15.2 — — — ( 1.0 ) 14.2

Shares issued under stock-based compensation programs 23,762 — — — — 0.6 — — 0.6

Shares repurchased for payment of taxes on stock-based compensation ( 4,546 ) — ( 1.0 ) — — — — — ( 1.0 )

Amortization of stock-based compensation — — 30.7 — — — — — 30.7

Shares held in trust — — — — ( 0.1 ) — — — ( 0.1 )

Foreign currency translation adjustments — — — — — — 33.8 — 33.8

Increase in amounts attributable to noncontrolling interest — — — — — — — 2.3 2.3

Balances at June 30, 2020 51,642,055 $ 0.5 1,999.3 3,593.9 ( 5.7 ) ( 24.4 ) ( 537.4 ) 83.2 $ 5,109.4

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.

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) 2021 2020

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Equity (earnings) losses ( 89.3 ) 13.6

Net gain on dispositions ( 11.4 ) —

Net (gain) loss on dispositions ( 11.4 ) 1.1

Distributions of earnings from real estate ventures 4.6 8.7

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Management's Discussion and Analysis of Financial Condition and Results of Operations and to Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our 2020 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, 2021, and for the three months ended March 31, 2021 and 2020, are unaudited.

Our Condensed Consolidated Financial Statements as of June 30, 2021, and for the periods ended June 30, 2021 and 2020, 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.

In 2020 and the three months ended March 31, 2021, macroeconomic conditions influenced by the COVID-19 pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

In 2020 and during the six months ended June 30, 2021, macroeconomic conditions influenced by the COVID-19 pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

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 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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This ASU is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted.

The adoption of this guidance did not impact our financial statements and related disclosures.

We adopted this guidance effective January 1, 2021, and the adoption did not impact our financial statements and related disclosures.

REVENUE RECOGNITION

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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) 2021 2020 2021 2020

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Such contract assets and liabilities are presented below.

(in millions) March 31, 2021 December 31, 2020

(in millions) June 30, 2021 December 31, 2020

Contract assets, gross $ 366.1 347.8

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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, 2021, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

As of June 30, 2021, 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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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) 2021 2020 2021 2020

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Equity earnings $ — — $ — —

Segment loss $ ( 35.8 ) ( 20.5 )

Segment income (loss) $ 0.3 ( 33.4 ) $ ( 35.5 ) ( 53.9 )

Leasing $ 52.7 33.8 $ 84.1 59.2

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The following table is a reconciliation of Segment income to consolidated Operating income.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2021 2020 2021 2020

Segment income - Americas $ 206.6 42.5 $ 351.6 137.1

Segment loss - EMEA ( 35.8 ) ( 20.5 )

Segment income (loss) - EMEA 0.3 ( 33.4 ) ( 35.5 ) ( 53.9 )

Segment income - APAC 36.5 19.2 54.3 21.6

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2021 Business Combinations Activity

During the three months ended March 31, 2021, we paid $ 26.2 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

During the six months ended June 30, 2021, there were no strategic acquisitions and we paid $ 78.4 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

2020 Business Combinations Activity

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Earn-Out Payments

($ in millions) March 31, 2021 December 31, 2020

($ in millions) June 30, 2021 December 31, 2020

Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria 22 35

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Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of March 31, 2021 consisted of:

Goodwill and unamortized intangibles as of June 30, 2021 consisted of:

(1) goodwill of $ 4,205.1 million, (2) identifiable intangibles of $ 620.0 million amortized over their remaining finite useful lives, and (3) $ 52.5 million of identifiable intangibles with indefinite useful lives that are not amortized.

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Impact of exchange rate movements 1.0 ( 4.5 ) ( 4.4 ) — ( 7.9 )

Balance as of March 31, 2021 $ 2,867.3 950.4 326.2 57.8 $ 4,201.7

Balance as of June 30, 2021 $ 2,868.0 954.5 324.8 57.8 $ 4,205.1

Real Estate Services

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Balance as of December 31, 2019 $ 2,877.6 915.9 317.6 57.1 $ 4,168.2

Dispositions — ( 0.7 ) — — ( 0.7 )

Impact of exchange rate movements ( 1.7 ) ( 41.4 ) ( 2.5 ) ( 1.0 ) ( 46.6 )

Balance as of March 31, 2020 $ 2,874.7 869.3 304.2 56.1 $ 4,104.3

Balance as of June 30, 2020 $ 2,875.9 873.8 315.1 56.1 $ 4,120.9

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 — — 0.3 ( 0.5 ) ( 1.4 ) ( 1.6 )

Balance as of March 31, 2021 $ 605.4 258.0 58.8 21.0 56.1 $ 999.3

Balance as of June 30, 2021 $ 616.8 256.8 43.7 19.4 56.5 $ 993.2

Accumulated Amortization

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Impact of exchange rate movements — ( 0.1 ) ( 0.2 ) 0.1 — ( 0.2 )

Balance as of March 31, 2021 $ ( 162.7 ) ( 96.7 ) ( 40.5 ) ( 6.6 ) ( 5.8 ) $ ( 312.3 )

Net book value as of March 31, 2021 $ 442.7 161.3 18.3 14.4 50.3 $ 687.0

(1) Included in this amount for MSRs was (i) $ 3.1 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, 2021 $ ( 175.5 ) ( 105.9 ) ( 27.6 ) ( 5.5 ) ( 6.2 ) $ ( 320.7 )

Net book value as of June 30, 2021 $ 441.3 150.9 16.1 13.9 50.3 $ 672.5

(1) Included in this amount for MSRs was $ 7.6 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.

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Impact of exchange rate movements — ( 0.4 ) ( 3.5 ) ( 0.4 ) ( 0.1 ) ( 4.4 )

Balance as of March 31, 2020 $ 484.6 285.2 52.3 19.8 52.9 $ 894.8

Balance as of June 30, 2020 $ 503.4 279.1 51.9 21.5 53.9 $ 909.8

Accumulated Amortization

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Impact of exchange rate movements — 0.3 2.2 0.1 — 2.6

Balance as of March 31, 2020 $ ( 113.9 ) ( 79.7 ) ( 32.6 ) ( 6.6 ) ( 3.3 ) $ ( 236.1 )

Net book value as of March 31, 2020 $ 370.7 205.5 19.7 13.2 49.6 $ 658.7

(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 $ ( 126.5 ) ( 85.2 ) ( 33.9 ) ( 7.3 ) ( 4.0 ) $ ( 256.9 )

Net book value as of June 30, 2020 $ 376.9 193.9 18.0 14.2 49.9 $ 652.9

(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 .

INVESTMENTS IN REAL ESTATE VENTURES

As of March 31, 2021 and December 31, 2020, we had Investments in real estate ventures of $ 545.1 million and $ 430.8 million, respectively.

Approximately 90% of our investments, as of March 31, 2021, are primarily (i) direct investments in 50 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement and (ii) investments by JLL Technologies in early-stage proptech companies.

The remaining 10% of our Investments in real estate ventures, as of March 31, 2021, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, generally, in certain real estate ventures that own and operate real estate.

As of June 30, 2021 and December 31, 2020, we had Investments in real estate ventures of $ 614.0 million and $ 430.8 million, respectively.

Approximately 90% of our investments, as of June 30, 2021, are primarily (i) direct investments in 50 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement and (ii) investments by JLL Technologies in early-stage proptech companies.

The remaining 10% of our Investments in real estate ventures, as of June 30, 2021, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, generally, 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 $ 309.9 million as of March 31, 2021.

We have maximum potential unfunded commitments to direct investments or investment vehicles of $ 315.5 million as of June 30, 2021.

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.

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Summarized financial information for our consolidated VIEs is presented in the following tables.

(in millions) March 31, 2021 December 31, 2020

(in millions) June 30, 2021 December 31, 2020

Property and equipment, net $ 157.8 117.4

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Total liabilities and members' equity $ 179.8 147.4

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2021 2020 2021 2020

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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, 2021 and 2020.

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the six months ended June 30, 2021 and 2020.

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

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Foreign currency translation adjustments, net ( 3.1 ) ( 3.3 )

Fair value investments as of March 31, $ 435.4 302.0

Fair value investments as of June 30, $ 505.0 304.1

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, 2020 1,096.2 531.5 1,627.7 $ 137.42 1.69

Unvested as of March 31, 2021 940.3 439.1 1,379.4 $ 134.84 1.70

Granted 200.5 107.2 307.7 186.21

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Forfeited ( 12.0 ) ( 1.1 ) ( 13.1 ) 123.85

Unvested as of June 30, 2021 1,118.1 545.2 1,663.3 $ 144.01 1.92

Unvested as of March 31, 2020 1,208.9 286.8 1,495.7 $ 144.71 1.78

Granted 152.3 272.0 424.3 113.67

Vested ( 10.2 ) — ( 10.2 ) 118.91

Forfeited ( 7.8 ) — ( 7.8 ) 143.09

Unvested as of June 30, 2020 1,343.2 558.8 1,902.0 $ 137.93 2.01

(in 000's) PSU Shares

(in 000's) Total Shares

(in 000's) Weighted Average

Fair Value Weighted Average

Contractual Life

Unvested as of December 31, 2020 1,096.2 531.5 1,627.7 $ 137.42 1.69

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Forfeited ( 17.1 ) ( 14.5 ) ( 31.6 ) 138.47

Unvested as of March 31, 2020 1,208.9 286.8 1,495.7 $ 144.71 1.78

As of March 31, 2021, we had $ 74.2 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2026;

Unvested as of June 30, 2021 1,118.1 545.2 1,663.3 $ 144.01 1.92

Unvested as of December 31, 2019 1,532.3 286.8 1,819.1 $ 141.51 2.39

Granted 162.0 272.0 434.0 118.66

Vested ( 334.8 ) — ( 334.8 ) 136.36

Forfeited ( 16.3 ) — ( 16.3 ) 140.22

Unvested as of June 30, 2020 1,343.2 558.8 1,902.0 $ 137.93 2.01

As of June 30, 2021, we had $ 104.0 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2026;

$ 16.7 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 $ 704.8 million and $ 723.7 million as of March 31, 2021 and December 31, 2020, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our Long-term debt was $ 684.0 million and $ 702.0 million as of March 31, 2021 and December 31, 2020, respectively, and included debt issuance costs of $ 2.3 million and $ 2.5 million, respectively.

We estimated the fair value of our Long-term debt as $ 706.0 million and $ 723.7 million as of June 30, 2021 and December 31, 2020, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our Long-term debt was $ 687.9 million and $ 702.0 million as of June 30, 2021 and December 31, 2020, respectively, and included debt issuance costs of $ 2.1 million and $ 2.5 million, respectively.

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

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In instances where the reported NAV per share did not fully incorporate the COVID-19 pandemic’s impact on the fair value of underlying investments, we recognized an adjustment to decrease the reported NAV.

As of March 31, 2021, such adjustments totaled $9.3 million.

We did not consider any other adjustments to NAV estimates provided by investees, including adjustments for any restrictions to the transferability of ownership interests embedded within investment agreements to which we are a party, to be necessary based upon (i) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level, (ii) consideration of market demand for the specific types of real estate assets held by each venture and (iii) contemplation of real estate and capital markets conditions in the localities in which these ventures operate.

As of March 31, 2021 and December 31, 2020, investments in real estate ventures at fair value using NAV were $ 222.7 million and $ 203.8 million, respectively.

As of June 30, 2021, there were no such adjustments compared with adjustments of $22.8 million as of December 31, 2020.

We did not consider any adjustments to NAV estimates provided by investees, including adjustments for any restrictions to the transferability of ownership interests embedded within investment agreements to which we are a party, to be necessary based upon (i) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level, (ii) consideration of market demand for the specific types of real estate assets held by each venture and (iii) contemplation of real estate and capital markets conditions in the localities in which these ventures operate.

As of June 30, 2021 and December 31, 2020, investments in real estate ventures at fair value using NAV were $ 234.8 million and $ 203.8 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, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

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Investments in Real Estate Ventures

We classify one investment as Level 1 in the fair value hierarchy as a quoted price is readily available.

We classify two investments as Level 1 in the fair value hierarchy as quoted prices are readily available.

We increase or decrease our investment each reporting period by the change in the fair value of the investment.

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

As of March 31, 2021 and December 31, 2020, these contracts had a gross notional value of $ 2.22 billion ($ 1.22 billion on a net basis) and $ 2.34 billion ($ 1.42 billion on a net basis), respectively.

As of June 30, 2021 and December 31, 2020, these contracts had a gross notional value of $ 2.15 billion ($ 1.17 billion on a net basis) and $ 2.34 billion ($ 1.42 billion on a net basis), respectively.

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 $ 6.9 million asset as of March 31, 2021, was composed of gross contracts with receivable positions of $ 8.4 million and payable positions of $ 1.5 million.

The $ 9.4 million liability as of March 31, 2021, was composed of gross contracts with receivable positions of $ 0.7 million and payable positions of $ 10.1 million.

The $ 8.7 million asset as of June 30, 2021, was composed of gross contracts with receivable positions of $ 11.1 million and payable positions of $ 2.4 million.

The $ 17.3 million liability as of June 30, 2021, was composed of gross contracts with receivable positions of $ 1.0 million and payable positions of $ 18.3 million.

As of December 31, 2020, the $ 13.1 million asset was composed of gross contracts with receivable positions of $ 13.5 million and payable positions of $ 0.4 million.

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Warehouse Receivables

As of March 31, 2021 and December 31, 2020, 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, 2021 and December 31, 2020, 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, 2021, as Deferred compensation plan assets of $ 480.2 million, long-term deferred compensation plan liabilities of $ 452.0 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.4 million.

We recorded this plan on our Condensed Consolidated Balance Sheet as of June 30, 2021, as Deferred compensation plan assets of $ 503.5 million, long-term deferred compensation plan liabilities of $ 475.4 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.3 million.

We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, 2020, as Deferred compensation plan assets of $ 446.3 million, long-term deferred compensation plan liabilities of $ 427.6 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.6 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, 2021 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Level transfer out (2)

Balance as of June 30, 2021

Investments in real estate ventures $ 140.1 6.3 — 37.1 — ( 1.9 ) $ 181.6

Mortgage banking derivative assets and liabilities, net 32.9 ( 7.6 ) — 29.6 ( 42.3 ) — 12.6

Earn-out liabilities 68.2 1.1 — — ( 51.3 ) — 18.0

Balance as of March 31, 2020 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Balance as of

June 30, 2020

Investments in real estate ventures $ 41.4 2.5 — 0.4 — $ 44.3

Mortgage banking derivative assets and liabilities, net ( 64.0 ) ( 15.4 ) — 38.4 35.5 ( 5.5 )

Earn-out liabilities 130.0 0.6 1.1 — ( 33.9 ) 97.8

(in millions) Balance as of December 31, 2020 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Balance as of March 31, 2021

Purchases / Additions Settlements Level transfer out (2)

Balance as of June 30, 2021

Investments in real estate ventures $ 59.3 38.1 — 86.2 ( 0.1 ) ( 1.9 ) $ 181.6

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Purchases / Additions Settlements Balance as of

March 31, 2020

June 30, 2020

Investments in real estate ventures $ 34.4 2.5 — 7.4 — $ 44.3

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Currency translation adjustments

(2) In May 2021, an investment previously treated as a Level 3 investment became publicly traded on the NYSE and was considered a Level 1 investment immediately.

Net change in fair value, included in the tables above, is reported in Net income as follows.

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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, 2021 or 2020.

We did not recognize any significant investment-level impairment losses during either of the six months ended June 30, 2021 or 2020.

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

Short-term borrowings and long-term debt obligations are composed of the following.

($ in millions) March 31, 2021 December 31, 2020

($ in millions) June 30, 2021 December 31, 2020

Short-term borrowings:

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Credit Facility

Our $ 2.75 billion unsecured revolving credit facility (the "Facility") matures on May 17, 2023.

Pricing on the Facility ranges from three-month LIBOR plus 0.875% to 1.35% , with pricing as of March 31, 2021, 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 as of both March 31, 2021 and December 31, 2020.

On April 14, 2021, we renewed the Facility, which included the extension of the maturity date to April 2026.

Refer to Note 13, Subsequent Events for further detail.

On April 14, 2021, we amended our $ 2.75 billion unsecured revolving credit facility (the "Facility"), which extended the maturity date from May 17, 2023 to April 14, 2026.

Pricing on the Facility ranges from LIBOR plus 0.875% to 1.35% , with pricing as of June 30, 2021, 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 as of both June 30, 2021 and December 31, 2020.

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) 2021 2020 2021 2020

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Amounts outstanding are presented in the debt table above.

As of March 31, 2021, our issuer and senior unsecured ratings are investment grade:

As of June 30, 2021, 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, 2021.

We remained in compliance with all covenants as of June 30, 2021.

Warehouse Facilities

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

($ in millions) Outstanding Balance Maximum Capacity Outstanding Balance Maximum Capacity

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151.1 200.0 195.9 900.0

Fannie Mae ASAP (3) program, LIBOR plus 1.15%

Fannie Mae ASAP (4) program, SOFR plus 1.25% (5)

16.0 n/a 128.8 n/a

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Total warehouse facilities $ 714.1 2,100.0 1,498.4 3,200.0

(1) In the second quarter of 2021, JLL increased the maximum capacity of the Warehouse facility with a decrease to the interest rate, previously, the facility had an interest rate of LIBOR plus 1.40% and a maximum capacity of $400.0 million.

(2) In the second quarter of 2021, JLL amended the Warehouse facility with a decrease to the interest rate, previously, the facility had an interest rate of LIBOR plus 1.40%.

The temporary maximum capacity increase to $1,600.0 million expired on January 31, 2021;

thereafter, the maximum capacity reverted to its original contractual amount.

(3) In the second quarter of 2021, JLL amended the Warehouse facility with a decrease to the interest rate, previously, the facility had an interest rate of LIBOR plus 1.40%.

The temporary maximum capacity increase to $900.0 million expired on January 6, 2021;

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(4) As Soon As Pooled ("ASAP") funding program.

(5) JLL amended the Fannie Mae ASAP program interest rate to Secured Overnight Financing Rate ("SOFR") plus 1.25%, previously, the facility had an interest rate of LIBOR plus 1.15%.

We have lines of credit established for the sole purpose of funding our Warehouse receivables.

1 unchanged sentence

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

We remained in compliance with all covenants under our Warehouse facilities as of March 31, 2021.

We remained in compliance with all covenants under our Warehouse facilities as of June 30, 2021.

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 $ 14.5 million and $ 44.0 million as of March 31, 2021 and December 31, 2020, respectively, and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

In total, these receivables were $ 2.5 million and $ 44.0 million as of June 30, 2021 and December 31, 2020, 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.

1 unchanged sentence

December 31, 2020 $ 48.2

New claims 1.3

Prior year claims adjustments (including foreign currency changes) ( 30.7 )

Claims paid ( 11.9 )

March 31, 2021 $ 17.6

June 30, 2021 $ 6.9

December 31, 2019 $ 38.1

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Claims paid —

March 31, 2020 $ 33.6

DUS Program Loan Loss-Sharing

June 30, 2020 $ 38.1

Delegated Underwriting and Servicing (" DUS") Program Loan Loss-Sharing

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, 2021 and December 31, 2020, we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 12.9 billion and $ 12.2 billion, respectively.

As of June 30, 2021 and December 31, 2020, we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 13.2 billion and $ 12.2 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, 2021 and December 31, 2020, the loss-sharing guarantee obligations were $ 23.5 million and $ 22.1 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, 2021 and 2020.

As of June 30, 2021 and December 31, 2020, the loss-sharing guarantee obligations were $ 23.6 million and $ 22.1 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, 2021 and 2020.

The loss-sharing aspect of the program represents an off-balance sheet credit exposure.

We record a separate contingent reserve for this risk calculated on an individual loan level.

As of March 31, 2021 and December 31, 2020, the loan loss guarantee reserve was $28.6 million and $36.7 million, respectively, and are included within Other liabilities on our Condensed Consolidated Balance Sheets.

As of June 30, 2021 and December 31, 2020, the loan loss guarantee reserve was $ 22.9 million and $ 36.7 million, respectively, and are included within Other liabilities on our Condensed Consolidated Balance Sheets.

RESTRUCTURING AND ACQUISITION CHARGES

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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) 2021 2020 2021 2020

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Payments made ( 26.4 ) ( 6.4 ) ( 15.8 ) ( 48.6 )

March 31, 2021 $ 24.2 1.0 1.8 $ 27.0

June 30, 2021 $ 15.8 1.0 1.9 $ 18.7

(in millions) Severance & Employment-Related Lease

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Payments made ( 16.0 ) ( 13.5 ) ( 14.0 ) ( 43.5 )

March 31, 2020 $ 11.3 1.2 4.3 $ 16.8

We expect the majority of accrued severance and other accrued acquisition costs as of March 31, 2021 will be paid during the next twelve months.

June 30, 2020 $ 16.6 1.6 0.5 $ 18.7

We expect the majority of accrued severance and other accrued acquisition costs as of June 30, 2021 will be paid during the next twelve months.

Lease exit payments depend on the terms of various leases, which extend as far out as 2026.

HFF Acquisition

Included in Restructuring and acquisition charges were $ 11.5 million for the three months ended March 31, 2021 compared to $ 21.3 million for the three months ended March 31, 2020 of charges relating to the acquisition and integration of HFF (including 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.

We expect to recognize approximately $ 100 million of expense over this two-year window relating to retention awards which have already been paid or granted (in the case of RSUs).

In addition, we may incur other costs in connection with the integration including, but not limited to, lease termination charges and other employee-related costs, but are unable to estimate these amounts.

We anticipate that other than RSU retention awards granted, substantially all of these cumulative charges will result in cash expenditures.

Included in Restructuring and acquisition charges were $ 12.4 million and $ 23.9 million, respectively, for the three and six months ended June 30, 2021 compared to $ 20.1 million and $ 41.4 million, respectively, for the three and six months ended June 30, 2020 of charges relating to the acquisition and integration of HFF (including retention and severance expense, early lease termination costs, and other integration expenses).

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

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(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total

Balance as of December 31, 2020 $ ( 81.2 ) ( 296.0 ) $ ( 377.2 )

Balance as of March 31, 2021 $ ( 81.4 ) ( 302.2 ) $ ( 383.6 )

Other comprehensive loss before reclassification — ( 0.2 ) ( 0.2 )

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Other comprehensive loss after tax expense of $ - , $ - and $ - 0.7 ( 0.2 ) 0.5

Balance as of June 30, 2021 $ ( 80.7 ) ( 302.4 ) $ ( 383.1 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total

Balance as of March 31, 2020 $ ( 72.0 ) ( 499.2 ) $ ( 571.2 )

Other comprehensive loss before reclassification — 33.8 33.8

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ - — — —

Other comprehensive loss after tax expense of $ - , $ - and $ - — 33.8 33.8

Balance as of June 30, 2020 $ ( 72.0 ) ( 465.4 ) $ ( 537.4 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total

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Other comprehensive loss after tax expense of $ - , $ - and $ - 0.5 ( 6.4 ) ( 5.9 )

Balance as of March 31, 2020 $ ( 72.0 ) ( 499.2 ) $ ( 571.2 )

Balance as of June 30, 2021 $ ( 80.7 ) ( 302.4 ) $ ( 383.1 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total

Balance as of December 31, 2019 $ ( 72.0 ) ( 355.8 ) $ ( 427.8 )

Other comprehensive income before reclassification — ( 109.6 ) ( 109.6 )

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ - — — —

Other comprehensive (loss) income after tax expense of $ - , $ - and $ - — ( 109.6 ) ( 109.6 )

Balance as of June 30, 2020 $ ( 72.0 ) ( 465.4 ) $ ( 537.4 )

For pension and postretirement benefits, we report amounts reclassified from AOCI relating to employer service cost in Compensation and benefits within the Condensed Consolidated Statements of Comprehensive Income.

All other reclassifications relating to pension and postretirement benefits are reported within Other income.

SUBSEQUENT EVENTS

On April 14, 2021, we executed Amendment No.

2 ("Amendment No.

2") to the Second Amended and Restated Multicurrency Credit Agreement dated as of June 21, 2016 (as amended, the "Credit Agreement") with a syndicate of lenders.

The borrowing capacity under the Credit Agreement remains at $ 2.75 billion.

The features to the Credit Agreement, as amended, provide for (i) an extension of the maturity date from May 2023 to April 2026, (ii) incremental flexibility of cash add-backs, all capped at the greater of $175.0 million or 20% of Bank Adjusted EBITDA for any twelve-month period, (iii) incorporating non-cash add-backs to Bank Adjusted EBITDA, (iv) certain sustainability-linked metrics incorporating KPI's with incentive pricing, and (v) auto-adjustment to new benchmark interest rates.

Refer to Note 9, Debt for further information on our Facility.

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