What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-02-18 · 221 added, 241 removed, 1153 unchanged (29% of the section changed)

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019 due to the adoption of Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 842, Leases.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill impairment analysis for the Europe, Middle East, and Africa reporting unit

As described in Notes 2 and 4 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis and whenever events or changes in circumstances indicate that the carrying value of a reporting unit might exceed its fair value.

The goodwill balance was $4,224.7 million as of December 31, 2020, of which $959.7 million related to the Europe, Middle East, and Africa (EMEA) reporting unit.

We identified the evaluation of the quantitative goodwill impairment analysis for the EMEA reporting unit as a critical audit matter.

The estimated fair value of the EMEA reporting unit required the evaluation of a discounted cash flow model.

Our evaluation of the discounted cash flow model required us to assess assumptions that are determined based on especially subjective judgment.

Specifically, the forecasted revenue growth rates, forecasted profitability margins, and the discount rate assumption used to calculate the fair value of the reporting unit were challenging to test as changes to those assumptions could have a significant effect on the Company’s assessment of the carrying value of goodwill.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment assessment process, including controls related to the determination of the fair value of the reporting unit, forecasted revenue growth rates, forecasted profitability margins, and discount rate assumptions.

We evaluated the Company’s forecasted revenue growth rates and forecasted profitability margins for the EMEA reporting unit, by comparing these assumptions to current and historical performance and analysts’ revenue growth and profitability margin expectations for the Company and its peer companies.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in the following:

– evaluating the discount rate used in the discounted cash flow model, by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities

– researching analysts’ expectations of the forecasted revenue growth rates and forecasted profitability margins for the Company and its peer companies, to assist in evaluating these assumptions

– developing an estimate of the EMEA reporting unit’s fair value using the reporting unit’s cash flow assumptions, and an independently developed discount rate range, and comparing the result of our estimate of fair value to the Company’s fair value estimate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over income taxes

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We identified the evaluation of the sufficiency of audit evidence over income tax expense as a critical audit matter.

The Company’s global tax structure adds complexity that required subjective auditor judgment to evaluate the sufficiency of audit of evidence obtained.

The Company’s global tax structure adds complexity that required subjective auditor judgment to evaluate the sufficiency of audit evidence obtained.

This required the involvement of domestic and international tax professionals with specialized skills and knowledge, in order to assess the nature and extent of procedures performed in relation to the amounts recorded and disclosed in the consolidated financial statements.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and related notes (collectively, the consolidated financial statements), and our report dated February 18, 2021 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and related notes (collectively, the consolidated financial statements), and our report dated February 28, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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Trade receivables, net of allowance of $ 67.6 and $ 66.5

2,004.1 1,636.1

Notes and other receivables 389.3 469.9

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Warehouse receivables 822.3 1,529.2

Short-term contract assets, net of allowance of $1.8 and n/a 265.8 333.4

Short-term contract assets, net of allowance of $ 2.5 and $ 1.8

Prepaid & other 500.7 517.1

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Identified intangibles, net of accumulated amortization of $ 340.1 and $ 295.3

Investments in real estate ventures, including $340.3 and $328.6 at fair value 430.8 404.2

Investments, including $ 639.6 and $ 340.3 at fair value

Long-term receivables 316.4 231.1

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Short-term borrowings 147.9 62.0

Current maturities of long-term debt, net of debt issuance costs of $ 0.3 and $ —

Short-term contract liabilities and deferred income 208.2 192.9

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Credit facility, net of debt issuance costs of $ 11.8 and $ 8.7

138.2 ( 8.7 )

Long-term debt, net of debt issuance costs of $ 1.4 and $ 2.5

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Treasury stock, at cost, 2,052,661 and 864,890 shares

( 406.3 ) ( 96.1 )

Shares held in trust ( 5.2 ) ( 5.6 )

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Net income 959.3 422.7 537.9

Net income attributable to noncontrolling interest 20.2 2.6 7.2

Net (loss) income attributable to noncontrolling interest ( 2.3 ) 20.2 2.6

Net income attributable to the Company 961.6 402.5 535.3

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Net income (3)

— — — 535.3 — — — 2.4 537.7

Shares issued under stock compensation programs 301,670 — 3.7 — — — — — 3.7

Acquisition of HFF 5,733,603 — 841.2 — — — — — 841.2

Shares repurchased for payment of taxes on stock awards ( 85,037 ) — ( 13.6 ) — — — — — ( 13.6 )

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Foreign currency translation adjustments — — — — — — 43.0 — 43.0

Net decrease in amounts attributable to noncontrolling interest — — — — — — — ( 2.3 ) ( 2.3 )

Acquisition of redeemable noncontrolling interest — — 2.4 — — — — — 2.4

Net increase in amounts attributable to noncontrolling interest — — — — — — — 41.2 41.2

December 31, 2019 51,549,654 $ 0.5 1,962.8 3,588.3 ( 5.7 ) — ( 427.8 ) 86.6 $ 5,204.7

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Shares issued under stock-based compensation programs 632,638 — 0.2 — — 3.9 — — 4.1

Acquisition of HFF 5,733,603 — 841.2 — — — — — 841.2

Shares repurchased for payment of taxes on stock-based compensation ( 179,938 ) — ( 23.5 ) — — — — — ( 23.5 )

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

Dividends paid, $0.86 per share — — — ( 42.7 ) — — — — ( 42.7 )

Cumulative effect from adoption of new accounting for credit losses — — — ( 14.9 ) — — — — ( 14.9 )

Repurchase of common stock ( 896,937 ) — — — — ( 100.0 ) — — ( 100.0 )

Change in pension liabilities, net of tax — — — — — — ( 9.2 ) — ( 9.2 )

Foreign currency translation adjustments — — — — — — 59.8 — 59.8

Net increase in amounts attributable to noncontrolling interest — — — — — — — 41.2 41.2

Net decrease in amounts attributable to noncontrolling interest — — — — — — — ( 17.9 ) ( 17.9 )

December 31, 2020 51,105,417 $ 0.5 2,023.3 3,975.9 ( 5.6 ) ( 96.1 ) ( 377.2 ) 89.2 $ 5,610.0

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Shares held in trust — — — — 0.4 — — — 0.4

Cumulative effect from adoption of new accounting for credit losses — — — ( 14.9 ) — — — — ( 14.9 )

Dividends from vested historic award — — — 0.1 — — — — 0.1

Repurchase of common stock ( 1,451,720 ) — — — — ( 343.3 ) — — ( 343.3 )

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Foreign currency translation adjustments — — — — — — ( 56.7 ) — ( 56.7 )

Net decrease in amounts attributable to noncontrolling interest — — — — — — — ( 17.9 ) ( 17.9 )

Net increase in amounts attributable to noncontrolling interest — — — — — — — 141.5 141.5

December 31, 2021 50,024,139 $ 0.5 2,053.7 4,937.6 ( 5.2 ) ( 406.3 ) ( 395.4 ) 228.5 $ 6,413.4

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Noncontrolling interest

(3) Excludes net (loss) income attributable to redeemable noncontrolling interest of $( 0.3 ) million and $ 0.2 million for the years ended December 31, 2020 and 2019, respectively.

(3) Excludes net (loss) income attributable to redeemable noncontrolling interest of $( 0.1 ) million, $( 0.3 ) million and $ 0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

See accompanying notes to Consolidated Financial Statements.

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Equity earnings ( 209.4 ) ( 8.0 ) ( 36.3 )

Loss (gain) on the disposition of assets 1.2 0.9 ( 12.9 )

Net (gain) loss on the disposition of assets ( 10.9 ) 1.2 0.9

Distributions of earnings from real estate ventures 28.6 11.7 21.0

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Repayments of borrowings under credit facility ( 4,944.0 ) ( 5,742.0 ) ( 5,339.0 )

Net (repayments of) proceeds from short-term borrowings ( 64.3 ) 86.8 ( 41.4 )

Net proceeds from (repayments of) short-term borrowings 91.8 ( 64.3 ) 86.8

Payments of deferred business acquisition obligations and earn-outs ( 63.7 ) ( 44.4 ) ( 77.3 )

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Payment of dividends — — ( 42.7 )

Noncontrolling interest (distributions) contributions, net ( 0.9 ) 40.6 3.6

Noncontrolling interest contributions (distributions), net 19.0 ( 0.9 ) 40.6

Other, net 54.9 ( 13.1 ) 65.8

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Income taxes, net of refunds 262.5 138.5 280.8

Operating leases 191.4 171.2 n/a

Operating leases 196.7 191.4 171.2

Non-cash activities:

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Deferred business acquisition obligations 10.0 — 17.0

Non-cash consideration received for disposition 23.9 — —

See accompanying notes to Consolidated Financial Statements.

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Jones Lang LaSalle Incorporated ("Jones Lang LaSalle," which we may refer to as "JLL," "we," "us," "our," or the "Company") was incorporated in 1997.

We have corporate offices worldwide and nearly 91,000 employees, including approximately 41,100 employees whose costs are reimbursed by our clients.

We have corporate offices worldwide and over 98,000 employees, including approximately 44,500 employees whose costs are reimbursed by our clients.

We provide comprehensive integrated real estate and investment management expertise on a local, regional and global level to owner, occupier and investor clients.

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LaSalle Investment Management ("LaSalle") is one of the world's largest and most diversified real estate investment management firms, with $ 76.6 billion of assets under management (unaudited) as of December 31, 2021.

The following table shows our revenue by service line.

The following table shows the revenue for the major product categories into which we group our services.

Year Ended December 31,

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We work for a broad range of clients representing a wide variety of industries in markets throughout the world.

Our clients vary greatly in size and include for-profit and not-for-profit entities of all kinds, public-private partnerships and governmental (public sector) entities looking to outsource real estate services.

Our clients vary greatly in size and include for-profit and not-for-profit entities of all kinds, public-private partnerships and governmental (public sector) entities.

We provide real estate investment management services on a global basis for both public and private assets through LaSalle.

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Intercompany balances and transactions have been eliminated.

Investments in real estate ventures over which we exercise significant influence, but do not control, are accounted for either at fair value or under the equity method.

Investments over which we exercise significant influence, but do not control, are accounted for either at fair value or under the equity method.

When applying principles of consolidation, we begin by determining whether an investee entity is a variable interest entity ("VIE") or a voting interest entity.

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the income or loss attributable to the noncontrolling interest holders is reflected in Net income attributable to noncontrolling interest on the Consolidated Statements of Comprehensive Income.

Changes in amounts attributable to non-redeemable noncontrolling interests are reflected in the Consolidated Statements of Changes in Equity.

Changes in amounts attributable non-redeemable noncontrolling interests are reflected in the Consolidated Statements of Changes in Equity.

Changes in amounts attributable to redeemable noncontrolling interests are presented in the following table.

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Redeemable noncontrolling interests as of December 31, 2018

Acquisition of redeemable noncontrolling interest (1)

Redeemable noncontrolling interests as of December 31, 2018 —

Business acquisition (1)

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Distribution to redeemable noncontrolling interest ( 0.5 )

Redeemable noncontrolling interests as December 31, 2020

Net loss ( 0.1 )

Redeemable noncontrolling interests as of December 31, 2021

(1) Reflects our redemption of a portion of the redeemable noncontrolling interest related to our Tenzing AB acquisition and includes $ 2.3 million, representing the difference between the redemption value and the carrying value of the acquired interest in 2018.

(1) Reflects the ownership interests retained by the seller associated with our 2019 acquisition of Latitude Real Estate Investors.

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GAAP requires us to make estimates and assumptions about future events that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses during the reporting periods.

Such estimates include the value and allocation of purchase consideration, valuation of accounts receivable, Reimbursable receivables, Warehouse receivables, Investments in real estate ventures, Goodwill, intangible assets, derivative financial instruments, other long-lived assets, earn-out liabilities, legal contingencies, assumptions used in the calculation of income taxes, incentive compensation, self-insurance program liabilities, and retirement and other post-employment benefits, among others.

Such estimates include the value and allocation of purchase consideration, valuation of accounts receivable, Reimbursable receivables, Warehouse receivables, Investments, Goodwill, intangible assets, derivative financial instruments, other long-lived assets, earn-out liabilities, legal contingencies, assumptions used in the calculation of income taxes, incentive compensation, self-insurance program liabilities, and retirement and other post-employment benefits, among others.

These estimates and assumptions are based on management's best estimate and judgment.

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Capital Markets

Capital Markets provides brokerage and other services for capital transactions, such as real estate sales or loan originations and refinancings.

Capital Markets provides brokerage and other services for capital transactions, such as real estate sales or loan originations and refinancing.

Our performance obligation is to facilitate the execution of capital transactions, and we are generally entitled to the full consideration at the point in time upon which our performance obligation is satisfied, at which time we recognize revenue.

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Contract assets, gross $ 438.7 347.8

Allowance for contract assets ( 2.1 ) n/a

Allowance for contract assets ( 2.8 ) ( 2.1 )

Contract assets, net $ 435.9 345.7

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

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

As of December 31, 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 property and facility management contracts and LaSalle advisory contracts.

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Pursuant to contractual arrangements, Trade receivables, net of allowances include unbilled amounts of $ 600.6 million and $ 460.1 million as of December 31, 2021 and 2020, respectively.

We estimate an allowance to provide for uncollectible accounts receivable, which is applied upon recognition of the receivable.

We base this estimate on historical experience combined with a review of the receivable aging, current and expected economic conditions, and client credit quality.

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

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.

We estimate the allowance necessary to provide for uncollectible accounts receivable.

The estimate includes specific amounts for which payment has become unlikely.

We also base this estimate on historical experience combined with a review of current developments and client credit quality.

The process by which we calculate the allowance begins with the individual business units where specific accounts for which collectability is uncertain are identified and reserved as part of an overall reserve that is formulaic and driven by the age profile of the receivables and our historical experience.

We then review these allowances on a quarterly basis to ensure they are appropriate.

After all collection efforts have been exhausted by management, the outstanding balance considered not collectible is written off against the allowance.

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Allowance as of December 31, $ 67.6 66.5 68.1

(1) January 1, 2020 includes $3.6 million adjustment due to adoption of ASC Topic 326.

Refer to the "New Accounting Standards" section below for further detail.

(1) January 1, 2020 includes $3.6 million adjustment due to the adoption of ASC Topic 326.

Notes and Other Receivables and Long-Term Receivables

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

As of December 31, 2020, the loan loss guarantee reserve was $ 36.7 million and was included within Other liabilities on the Consolidated Balance Sheets.

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

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

The balance as of December 31, 2021 reflects a notable decrease from the prior year as a result of improving economic conditions and projections over the course of 2021.

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.

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The loss-sharing guarantee obligation (in accordance with ASC Topic 460, Guarantees ) is separate from the loan loss guarantee reserve discussed above.

As of December 31, 2020 and 2019, loss-sharing guarantee obligations were $ 22.1 million and $ 20.6 million, respectively, and are included in Other liabilities on the Consolidated Balance Sheets.

As of December 31, 2021 and 2020, loss-sharing guarantee obligations were $ 24.6 million and $ 22.1 million, respectively, and was included in Other liabilities on the Consolidated Balance Sheets.

See Note 13, Commitments and Contingencies , for further information on the DUS program.

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In addition, we evaluate MSR intangible assets for impairment on a quarterly basis, or more frequently if circumstances or events indicate a change in fair value.

Other than write-offs due to prepayments of sold Warehouse receivables for which we retained the servicing rights (generally only during the last six months of loan term given the punitive contractual terms of any earlier prepayment), there have been no significant instances of impairment during the three-year period ended December 31, 2020.

Other than write-offs due to prepayments of sold Warehouse receivables for which we retained the servicing rights, there have been no significant instances of impairment during the three-year period ended December 31, 2021.

However, an increase in loan prepayment activity or deterioration in the credit quality of borrowers could result in a decrease to our MSR balance.

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and (iv) LaSalle.

We have considered qualitative and quantitative factors while performing our annual impairment test of goodwill (as of July 1, 2020) and determined it is not more-likely-than-not that the fair value of our Americas, Asia Pacific, and LaSalle reporting units are less than their carrying values.

We have considered qualitative and quantitative factors while performing our annual impairment test of goodwill (as of July 1, 2021) and determined it is not more-likely-than-not that the fair value of all our reporting units are less than their carrying values.

In performing our assessments of all reporting units, we primarily considered (i) macroeconomic and industry trends, (ii) our overall financial performance, and nature of the key drivers thereof, during the year at both the reporting unit and consolidated reporting levels, (iii) near and longer-term forecasts of operating income and cash flows generated by our reporting units in relation to the carrying values of the net assets of each reporting unit, and (iv) our market capitalization in relation to the aggregate carrying value of our net assets.

With respect to our EMEA reporting unit, we performed Step 1 of the goodwill impairment analysis during our 2020 annual impairment test, which indicated the estimated fair value exceeded the carrying value by over 20%.

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 estimated future cash flows.

In addition to our annual impairment evaluation, we evaluated whether events or circumstances have occurred in the period subsequent to our annual impairment testing and determined it is not more-likely-than-not that the fair value of all our reporting units are less than their respective carrying values.

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See Note 4, Business Combinations, Goodwill and Other Intangible Assets, for additional information on business combinations, goodwill and other intangible assets.

Investments in Real Estate Ventures

We invest in certain ventures that primarily own and operate commercial real estate on a global basis across a wide array of sectors including retail, residential and office.

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These investments take the form of equity ownership interests generally ranging from less than 1 % to 10 % of the respective ventures and, based upon investment-specific objectives, have generally included five to nine-year investment periods.

Typically, our investments in real estate ventures are not redeemable until the earlier of the disposition of the underlying real estate investments or the end of the fund's life.

Typically, our investments are not redeemable until the earlier of the disposition of the underlying real estate investments or the end of the fund's life.

When in place, such restrictions are a result of our role beyond that of a passive investor, which generally means an advisory or management responsibility on behalf of the other investors who are typically clients of our LaSalle business.

We primarily account for these investments at fair value utilizing information provided by investees, however, as further discussed below, we report certain of our investments under the equity method.

In addition to our LaSalle investments, we invest, primarily through the JLL Spark Global Venture funds, in property technology funds and early-stage companies to improve our strategic position within the real estate technology landscape.

In addition to our LaSalle investments, JLL Technologies has strategic investments in property technology ("proptech") funds and early to mid-stage proptech companies to improve our strategic position within the real estate technology landscape, including investments through the JLL Spark Global Venture funds.

We generally account for these investments at fair value.

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See "Principles of Consolidation" above for additional discussion of the accounting for our co-investments.

For investments in real estate ventures reported at fair value, we maintain an investment account that is increased or decreased each reporting period by the difference between the fair value of the investment and the carrying value as of the balance sheet date.

For investments reported at fair value, we maintain an investment account that is increased or decreased each reporting period by the difference between the fair value of the investment and the carrying value as of the balance sheet date.

These fair value adjustments are reflected as gains or losses on the Consolidated Statements of Comprehensive Income within Equity earnings.

The fair value of these investments as of the balance sheet date is generally determined using NAV per share (or its equivalent), an unobservable input in the fair value hierarchy, provided by the investee.

For investments in real estate ventures accounted for under the equity method, we maintain an investment account that is (i) increased by contributions made and by our share of net income earned by the real estate ventures, and (ii) decreased by distributions received and by our share of net losses realized by the real estate ventures.

To the extent applicable, we estimate fair value of our investments using the net asset value ("NAV") per share (or its equivalent) our investees provide.

For JLL Technologies investments in proptech companies, we primarily estimate the fair value based on the per-share pricing.

Subsequent funding rounds or changes in the companies' business strategy/outlook are indicators of a change in fair value.

For investments accounted for under the equity method, we maintain an investment account that is (i) increased by contributions made and by our share of net income earned by the real estate ventures, and (ii) decreased by distributions received and by our share of net losses realized by the real estate ventures.

Our share of each real estate venture's net income or loss, including gains and losses from capital transactions, is reflected on the Consolidated Statements of Comprehensive Income as Equity earnings.

We evaluate our investments in real estate ventures accounted for under the equity method for other-than-temporary impairment on a quarterly basis, or as events or changes in circumstances warrant such an evaluation.

We evaluate our investments accounted for under the equity method for other-than-temporary impairment on a quarterly basis, or as events or changes in circumstances warrant such an evaluation.

Our evaluations consider the existence of impairment indicators in the underlying real estate assets that compose the majority of our investments.

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We recognize our proportionate share of such impairment within Equity earnings on the Consolidated Statements of Comprehensive Income.

See Note 5, Investments in Real Estate Ventures and Note 9, Fair Value Measurements for additional information on Investments in real estate ventures.

See Note 5, Investments and Note 9, Fair Value Measurements for additional information on Investments.

Stock-Based Compensation

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We periodically assess the achievement probability for performance conditions.

As of December 31, 2020, less than 3% of unvested shares were subject to a market condition.

As of December 31, 2021, approximately 8% of unvested shares were subject to a market condition.

Employees of a specific age, with a sum of age plus years of service with the Company which meets or exceeds 65 , based on the terms of the Jones Lang LaSalle 2019 Stock Award and Incentive Plan ("SAIP"), are eligible to be considered for receipt of retirement benefits upon departure from the Company.

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We recognize the liability associated with a loss contingency when a loss is probable and estimable.

See Note 13, Commitments and Contingencies, for additional information on our captive insurance company as well as our commitments and contingencies.

See Note 13, Commitments and Contingencies, for additional information on commitments and contingencies.

Earnings Per Share;

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Common stock equivalents consist of shares to be issued under employee stock-based compensation programs.

Anti-dilutive shares were de minimus for all periods presented.

Anti-dilutive shares were de minimis for all periods presented.

See Note 6, Stock-Based Compensation, for additional information on our stock-based compensation plans.

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Recently adopted accounting guidance

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments - Credit Losses (ASC Topic 326) , which created a new framework to evaluate financial instruments, such as trade receivables, for expected credit losses.

This new framework replaced the existing incurred loss approach and is expected to result in more timely recognition of credit losses.

On January 1, 2020, we adopted ASU No.

2016-13 using a modified-retrospective approach, as required by the ASU.

The adoption impacted our methodology of reserving for (i) Trade receivables, (ii) other receivable-related financial assets, specifically contract assets, and (iii) off-balance sheet credit exposures within the scope of this ASU.

Specifically, we evaluated our historical reserve balances for Trade receivables and the related write-off activity and developed a forward-looking process for adoption.

We also evaluated our loss-sharing guarantee obligation for certain mortgage loans we originate, sell and retain the servicing rights.

The following table details the cumulative impact to Retained earnings upon adoption of ASC Topic 326.

Published Adjustment due to Reported Under ASC Topic 326

(in millions) December 31, 2019 adoption of ASC Topic 326 on January 1, 2020

Allowance for trade receivables $ ( 68.1 ) ( 3.6 ) $ ( 71.7 )

Deferred tax assets, net 245.4 5.5 250.9

Allowance for contract assets (1)

— ( 1.7 ) ( 1.7 )

Liabilities and equity

Loan loss guarantee reserve (2)

$ — 15.1 $ 15.1

Retained earnings 3,588.3 ( 14.9 ) 3,573.4

(1) The portion of the allowance for long-term contract assets is included within Other assets on the Consolidated Balance Sheets.

(2) Included within Other liabilities on the Consolidated Balance Sheets

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) , which increased transparency and comparability by requiring the recognition of lease assets and lease liabilities on the balance sheet, as well as requiring the disclosure of key information about leasing arrangements.

On January 1, 2019, we adopted this, on a modified retrospective basis under the optional transition method.

Therefore, the application of the provisions of this ASU are effective January 1, 2019, and any prior periods are presented in accordance with ASC Topic 840.

Additionally, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward (i) our historical lease classification and assessments for expired and existing leases, and (ii) our historical accounting for initial direct costs for existing leases.

We elected not to record on the Consolidated Balance Sheets any lease whose term is 12 months or less and does not include a purchase option that we are reasonably certain to exercise.

We also elected to account for the non-lease components within our leases as part of the single lease component to which they are related.

The most significant impact of the adoption of this ASU was an increase to the Consolidated Balance Sheets to reflect operating lease right-of-use assets and lease liabilities, which are primarily associated with our office leases around the world.

Our accounting for finance leases was not materially impacted.

In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020‑01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) , which, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323.

In addition, it clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option.

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

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

In October 2021, the FASB issued ASU 2021-08 Business Combination (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires companies to apply ASC Topic 606 to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination.

This generally will result in companies recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date.

The ASU is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted.

We early adopted this guidance effective December 31, 2021, and applied it retrospectively to all business combinations in 2021.

The adoption did not have a material impact to our financial statements and related disclosures.

BUSINESS SEGMENTS

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Therefore, we have not disclosed asset information by segment.

As of December 31, 2020, we define the CODM collectively as our Global Executive Board, which comprises the following:

• Chief Executive Officer and President • Chief Executive Officers of each of our four business segments

• Chief Financial Officer • Chief Executive Officer of Corporate Solutions

• Chief Human Resources Officer • Chief Executive Officer of Capital Markets

• Co-Chief Executive Officers of JLL Technologies

As of December 31, 2021, we define the Global Executive Board, collectively, as our CODM.

Summarized financial information by business segment is as follows.

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Depreciation and amortization $ 6.6 7.2 6.4

Equity (losses) earnings $ ( 12.4 ) 33.3 30.0

Equity earnings (losses) $ 62.6 ( 12.4 ) 33.3

Segment income $ 139.2 54.2 147.4

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Operating income $ 1,043.5 559.1 715.4

The following table sets forth the revenue from our most significant currencies.

The following table sets forth the revenue and assets from our most significant currencies.

TOTAL REVENUE

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United States dollar $ 11,283.1 9,457.8 10,054.9

Euro 1,350.6 1,507.7 1,527.1

British pound 1,626.6 1,341.1 1,514.8

Euro 1,393.3 1,350.6 1,507.7

Australian dollar 1,118.7 876.1 924.5

Indian rupee 524.5 651.8 580.4

Hong Kong dollar 545.6 512.2 533.8

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Canadian dollar 508.3 432.6 435.5

Japanese yen 257.9 349.4 285.2

Indian rupee 508.2 524.5 651.8

Singapore dollar 327.4 246.6 309.2

Japanese yen 256.8 257.9 349.4

Other currencies 1,259.9 1,117.4 1,195.7

$ 19,367.0 16,589.9 17,983.2

Change in Reporting Segments

Effective January 1, 2022, our Real Estate Services segments (Americas, EMEA and Asia Pacific) were reorganized into four global business segments focused on product offerings versus geographical alignment.

The new segments are:

(i) Markets Advisory, (ii) Capital Markets, (iii) Work Dynamics and (iv) JLL Technologies ("JLLT").

We will continue to manage our investment management business globally as LaSalle, a distinct segment.

Effective with financial reporting in 2022, prior period results will be restated to conform with our new reporting structure.

BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

2021 Business Combinations Activity

During 2020, we completed no new strategic acquisitions and paid $ 67.7 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

2019 Business Combinations Activity

During the year ended December 31, 2019, we completed four new strategic acquisitions, all located in the Americas.

Acquisition of HFF, Inc.

On July 1, 2019, we completed the acquisition of HFF, a public commercial real estate financial intermediary providing real estate and capital markets services.

The acquisition of HFF, regarded as one of the premier capital markets advisors in the industry, greatly enhanced our existing capital markets services, significantly expanded our client reach and aligned with our strategy to grow the capital markets business line.

The following table details the total consideration transferred.

(in millions) Amount

Cash consideration (1)

Share consideration (2)

JLL RSUs issued to replace unvested HFF RSUs (3)

Total consideration $ 1,870.7

(1) Exclusive of $ 262.8 million cash and $ 5.8 million of restricted cash acquired.

(2) Represents the fair value of JLL common stock issued to then-HFF stockholders.

(3) Represents the allocation of expense to the pre-combination period;

included within APIC.

The cash and share consideration transferred were used to purchase all outstanding shares of HFF Class A common stock.

We financed the cash portion of the purchase price with cash on hand and borrowings under our existing $ 2.75 billion unsecured revolving credit facility (the "Facility").

For acquisition related costs refer to Note 12, Restructuring and Acquisition Charges.

The successor to HFF in the merger acquisition is operating as a wholly-owned subsidiary of JLL and conducts business as JLL.

As of December 31, 2020 our analysis to assign fair values to all tangible and intangible assets and liabilities acquired and assumed for the acquisition of HFF was final.

There were no significant adjustments to the purchase price allocation recorded during the year ended December 31, 2020.

The allocation of the purchase consideration resulted in identified intangibles of $ 349.9 million, tangible assets of $ 1,227.8 million and liabilities of $ 1,104.7 million.

The excess purchase price over the estimated fair value of net assets acquired of $ 1,397.7 million has been recorded to goodwill.

The goodwill relating to this acquisition is primarily attributable to assembled workforce and synergies.

Other 2019 Business Combinations Activity

Aggregate terms of these acquisitions, other than HFF, included (i) cash paid at closing of $ 40.4 million (net of $ 3.8 million in cash acquired), (ii) guaranteed deferred consideration of $ 17.0 million and (iii) contingent earn-out consideration of $ 5.0 million recorded at their respective acquisition date fair value, which we will pay upon satisfaction of certain performance conditions.

As of December 31, 2019, a preliminary allocation of this purchase consideration for these other acquisitions resulted in goodwill of $ 62.8 million, identifiable intangibles of $ 12.7 million, and other net liabilities (assumed liabilities less acquired assets) of $ 4.7 million, and redeemable noncontrolling interest of $ 8.4 million.

As of December 31, 2020, the purchase price allocations for our 2019 acquisitions was final.

There were no significant adjustments to the purchase price allocation recorded during the year ended December 31, 2020.

During 2021, we completed four new strategic acquisitions, expanding our capabilities and increasing our presence in key regional markets.

These strategic acquisitions are presented below.

Acquired Company Quarter of Acquisition Country Primary Service Line

Skyline AI (Skyline) Q3 Israel Capital Markets

Sterling Bay Property Management, LLC ( 1)

Q4 United States Property & Facility Management

Building Engines, Inc.

Q4 United States Property & Facility Management

Enerdapt, Inc.

(Hank) Q4 United States Advisory, Consulting and Other

(1) We acquired a 50.1% interest in a joint venture with Sterling Bay, LLC.

Aggregate terms of our acquisitions included:

(i) cash paid at closing of $ 416.8 million (net of $ 13.9 million in cash acquired), (ii) guaranteed deferred consideration of $ 10.0 million and (iii) contingent earn-out consideration of $ 68.6 million, payable upon satisfaction of certain performance conditions and which we have initially recorded at their respective acquisition date fair value.

A preliminary allocation of this purchase consideration resulted in goodwill of $ 442.3 million, identifiable intangibles of $ 210.2 million, other net liabilities (assumed liabilities less acquired assets) of $ 34.6 million.

The noncontrolling interest of 49.9% in the less-than-wholly-owned acquisition was $ 122.5 million at the acquisition date.

As of December 31, 2021, we have completed our analysis to assign fair values to all of the material identifiable intangible and tangible assets acquired and, therefore, we do not anticipate further refinement to the purchase price allocations for our 2021 acquisitions.

During the year ended December 31, 2021, we also paid $ 88.7 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

Of the $ 442.3 million of total additions to goodwill in 2021, we expected to amortize and deduct $ 99.8 million for tax purposes as of December 31, 2021, subject to statutory amortization periods.

2020 Business Combinations Activity

During the year ended December 31, 2020, we completed no new acquisitions.

Earn-Out Payments

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Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of December 31, 2020 consisted of (i) goodwill of $ 4,224.7 million, (ii) identifiable intangibles of $ 625.8 million amortized over their remaining finite useful lives and (iii) $ 54.0 million of identifiable intangibles with indefinite useful lives that are not amortized.

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

(i) goodwill of $ 4,611.6 million, (ii) identifiable intangibles of $ 836.4 million amortized over their remaining finite useful lives and (iii) $ 50.6 million of identifiable intangibles with indefinite useful lives that are not amortized.

Significant portions of our goodwill and unamortized intangibles are denominated in currencies other than the U.S.

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

Additions, net of adjustments 1,424.4 1.6 — 35.5 1,461.5

Dispositions — ( 0.7 ) — — ( 0.7 )

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Balance as of December 31, 2020 2,878.0 959.7 329.2 57.8 4,224.7

Additions, net of adjustments 442.3 — — — 442.3

Dispositions ( 11.0 ) ( 1.0 ) — — ( 12.0 )

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Balance as of December 31, 2019

$ 480.4 285.7 55.9 21.4 54.0 $ 897.4

Additions, net of adjustments (1)

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Adjustment for fully amortized intangibles ( 47.3 ) ( 19.9 ) ( 1.9 ) ( 0.1 ) — ( 69.2 )

Impairments — ( 0.5 ) — — — ( 0.5 )

Impact of exchange rate movements — — 1.7 1.8 3.9 7.4

Balance as of December 31, 2020

572.1 265.8 55.7 23.6 57.9 975.1

Additions, net of adjustments (1)

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Balance as of December 31, 2019

$ ( 104.0 ) ( 68.3 ) ( 33.1 ) ( 6.7 ) ( 2.7 ) $ ( 214.8 )

Amortization expense, net (2)

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Adjustment for fully amortized intangibles 47.3 19.9 1.9 0.1 — 69.2

Impairments — 0.5 — — — 0.5

Impact of exchange rate movements — 0.3 ( 1.2 ) ( 0.6 ) — ( 1.5 )

Balance as of December 31, 2020

( 147.8 ) ( 94.1 ) ( 39.5 ) ( 8.6 ) ( 5.3 ) ( 295.3 )

Amortization expense, net (2)

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Net book value as of December 31, 2021 $ 478.7 334.4 13.4 13.0 47.5 $ 887.0

(1) Included in this amount for MSRs was (i) $ 23.7 million and $ 16.6 million for 2020 and 2019, respectively, relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired, or retained the servicing rights and (ii) $ 0.1 million relating to a net impairment valuation allowance.

(1) Included in this amount for MSRs was (i) $ 31.2 million and $ 23.7 million for 2021 and 2020, respectively, relating to write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights and (ii) $( 0.1 ) million and $ 0.1 million for 2021 and 2020, respectively, relating to an impairment valuation allowance.

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

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Total $ 478.7 357.7 $ 836.4

INVESTMENTS IN REAL ESTATE VENTURES

As of December 31, 2020 and 2019, we had Investments in real estate ventures of $ 430.8 million and $ 404.2 million, respectively.

Approximately 90% of our investments, as of December 31, 2020, are in 50 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 10% o f our Investments in real estate ventures, as of December 31, 2020, were attributable to investment vehicles that use our capital and outside capital generally provided by institutional investors to invest, primarily, in certain real estate ventures that own and operate real estate.

As of December 31, 2021 and 2020, we had Investments of $ 745.7 million and $ 430.8 million, respectively.

Summarized investment balances is presented in the following table.

(in millions) 2021 2020

LaSalle co-investments $ 354.6 300.3

JLL Technologies investments 353.6 94.0

Other investments 37.5 36.5

Total $ 745.7 430.8

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

The remaining 10% of our Investments, as of December 31, 2021, were attributable to investment vehicles that use our capital and outside capital generally 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 %.

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Of this amount, while we remain contractually obligated, we do not expect a call on the $ 60.3 million relating to our investment in LIC II as its fund life terminated in January 2020.

Our investments in real estate ventures include investments in entities classified as VIEs, which we analyze for potential consolidation.

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

we assess each identified VIE to determine whether we are the primary beneficiary.

We had equity method investments, either directly or indirectly of $ 95.2 million and $ 76.4 million as of December 31, 2021 and 2020, respectively, in entities classified as VIEs.

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Property and equipment, net $ 184.7 117.4

Investments in real estate ventures 9.0 13.2

Investments 10.2 9.0

Other assets 17.7 21.0

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Net gains on sale of investments (1)

Net income (loss) $ 20.4 ( 1.0 ) 2.7

(1) $12.3 million of the 2020 year-to-date gain is included in Equity earnings;

the remaining $9.8 million is included in Other income.

The 2018 year-to-date gain is included in Other income.

Net (loss) income $ ( 3.9 ) 20.4 ( 1.0 )

(1) $12.3 million of the 2020 gain was included in Equity earnings;

the remaining $9.8 million was included in Other income.

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

The following tables summarize the combined financial information for our unconsolidated real estate ventures accounted for under equity method or at fair value.

The following tables summarize the combined financial information for certain of our unconsolidated investments accounted for under the equity method or at fair value.

(in millions) 2021 2020

Balance Sheets:

Investments in real estate, net of depreciation $ 24,320.4 22,006.6

Investments, net of depreciation $ 31,084.0 24,320.4

Total assets 34,816.3 28,129.3

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Net income 1,850.7 241.5 831.2

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for each of the years in the three-year period ended December 31, 2020.

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

There were no significant other-than-temporary impairment charges on Investments for each of the years in the three-year period ended December 31, 2021.

We report a majority of our investments at fair value.

For such investments, we increase or decrease our investment each reporting period by the change in the fair value and we report these fair value adjustments in our Consolidated Statements of Comprehensive Income within Equity earnings.

The table below shows the movement in our investments in real estate ventures reported at fair value.

The table below shows the movement in our investments reported at fair value.

Year Ended December 31,

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Fair value investments as of January 1,

$ 340.3 328.6 247.3

Investments 190.3 51.7 144.9

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Fair value investments as of December 31,

See Note 9, Fair Value Measurements, for further discussion of our investments in real estate ventures reported at fair value.

$ 639.6 340.3 328.6

See Note 9, Fair Value Measurements, for further discussion of our investments reported at fair value.

STOCK-BASED COMPENSATION

The SAIP provides for the granting of various stock awards to eligible employees of JLL.

Such awards have historically been RSUs and generally vested in three years.

In 2018, we issued PSUs for the first time to certain employees, including our GEB members, under the SAIP.

PSU awards generally vest in three years, subject to performance and, for certain awards, market conditions.

The Stock Award and Incentive Plan ("SAIP") provides for the granting of various stock awards to eligible employees of JLL.

These awards have historically been RSUs which generally vest over three years (either cliff or graded vesting) and PSUs which generally vest in three years (cliff vesting), subject to performance and, for certain awards, market conditions.

There were approximately 1.1 million shares available for grant under the SAIP as of December 31, 2021.

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Unvested as of December 31, 2018

559.6 93.1 652.7 $ 131.32 2.02

Granted 1,298.0 196.5 1,494.5 141.06

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Unvested as of December 31, 2019

1,532.3 286.8 1,819.1 141.51 2.39

Granted 173.1 276.4 449.5 124.98

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Unvested as of December 31, 2020

1,096.2 531.5 1,627.7 137.42 1.69

Granted 335.7 218.9 554.6 189.40

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Unvested as of December 31, 2021

912.4 646.0 1,558.4 $ 152.27 1.99

As of December 31, 2021, we had $ 101.8 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate to be recognized over varying periods into 2026;

$ 32.3 million relates to the awards issued in conjunction with the HFF acquisition.

$ 9.0 million relates to the awards issued in conjunction with the HFF acquisition in 2019.

Shares vested during the years ended December 31, 2021, 2020 and 2019, had grant date fair values of $ 80.1 million, $ 78.8 million, and $ 33.5 million, respectively.

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Accumulated benefit obligation $ 442.0 486.2

The primary driver for the year-over-year change in projected benefit obligation is an actuarial gain driven by an increase in the discount rate assumptions.

Defined benefit pension plan amounts recorded in the Consolidated Balance Sheets are presented in the below table.

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Total $ 264.3 106.9 159.7

Our income taxes in 2018 and 2019 were impacted by tax legislation enacted in the United States in December 2017, commonly known as the Tax Cuts and Jobs Act ("the Act"), and by interpretive regulatory guidance afterward.

Our income taxes in 2019 were impacted by tax legislation enacted in the United States in December 2017, commonly known as the Tax Cuts and Jobs Act ("the Act"), and by interpretive regulatory guidance afterward.

The Act brought significant changes to the U.S.

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international taxation from a worldwide tax system to a modified territorial tax system, including a "transition tax" payable over an eight year period for those foreign earnings not previously taxed in the U.S.

In 2018, we recorded $ 47.0 million of additional expense due to regulatory interpretation of the Act and for an adjustment to the deferred tax consequences of the enactment.

In 2019, we recorded $4.3 million of adjustments to lower our prior provision, due to further regulatory interpretation and state income tax interpretation of the Act.

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State and local income taxes, net of federal income tax benefit 39.7 3.2 9.4 1.8 4.9 0.7

Amortization of goodwill and other intangibles ( 3.3 ) ( 0.6 ) ( 3.7 ) ( 0.5 ) ( 3.4 ) ( 0.5 )

Nondeductible expenses 17.6 1.4 11.2 2.1 18.9 2.7

International earnings taxed at various rates ( 22.6 ) ( 1.8 ) ( 20.5 ) ( 3.9 ) ( 8.7 ) ( 1.3 )

Valuation allowances 4.3 0.8 7.2 1.0 12.4 1.8

Transition tax and deferred tax due to the Act — — ( 4.3 ) ( 0.6 ) 47.0 6.7

capital loss carryover ( 35.2 ) ( 2.9 ) — — — —

Valuation allowance 34.2 2.8 4.3 0.8 7.2 1.0

Other, net ( 26.3 ) ( 2.1 ) ( 8.7 ) ( 1.6 ) ( 9.1 ) ( 1.2 )

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to be a very low tax rate jurisdiction.

With respect to very low tax rate jurisdictions in which we operate, income from Hong Kong ( 16.5 %), Singapore ( 17 %), the United Kingdom ( 19 %) and Saudi Arabia ( 20 %) represent the most significant components of the international earnings line item in the effective tax rate reconciliation above.

In the aggregate, these very low rate jurisdictions were the primary driver of the difference between the actual income tax provision for international earnings and the equivalent provision at the U.S.

With respect to very low tax rate jurisdictions in which we operate, income from Hong Kong ( 16.5 %), Singapore ( 17 %), and Saudi Arabia ( 20 %) represent the most significant components of the international earnings line item in our effective tax rate reconciliation.

In the aggregate, these very low rate jurisdictions contributed substantially all of the difference between the actual income tax provision for international earnings and the equivalent provision at the U.S.

federal and state statutory rate in 2021.

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Income deferred for tax purposes 6.3 10.1

Investment in real estate ventures 14.1 3.9

Investments 56.2 14.1

Other 0.3 1.1

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As of December 31, 2021, we had an available U.S.

federal net operating loss carryover of $ 4.1 million from an acquired company, for which we have established a full valuation allowance due to significant statutory limitations on its usage, and which began to expire in 2020.

state net operating loss carryovers with a tax effect of $ 17.1 million, which expire at various dates through 2040, and international net operating loss carryovers of $ 750.5 million, which generally do not have expiration dates.

The change in deferred tax balances for net operating loss carryovers from 2019 to 2020 included increases from current year losses and decreases from current year estimated utilization.

federal net operating loss carryover of $ 62.5 million from acquired companies, for which we have established a full valuation allowance due to significant statutory limitations on its usage, and which will begin to expire in 2028.

state net operating loss ("NOL") carryovers with a tax effect of $ 19.2 million, which expire at various dates through 2041, and international NOL carryovers of $ 1,014.2 million, which generally do not have expiration dates.

The change in deferred tax balances for NOL carryovers from 2020 to 2021 included increases from current year losses, acquired NOL carryovers and changes in the tax rates at which carryovers will be utilized;

and decreases from current year estimated utilization.

As of December 31, 2021, we believe it is more-likely-than-not the net deferred tax assets of $ 151.1 million will be realized based upon our estimates of future income and the consideration of net operating losses, earnings trends and tax planning strategies.

Valuation allowances have been provided with regard to the tax benefit of certain international net operating loss carryovers, for which we have concluded recognition is not yet appropriate.

In 2020, we reduced valuation allowances by $ 10.5 million on some jurisdictions' net operating losses due to the utilization or expiration of those losses, and we increased valuation allowances by $ 7.4 million for other jurisdictions based upon circumstances that caused us to establish or continue to provide valuation allowances on current or prior year losses in addition to those provided in prior years.

In 2021, we reduced valuation allowances by $ 6.0 million on some jurisdictions' net operating losses due to the utilization or expiration of those losses;

and we increased valuation allowances by $ 66.7 million for other jurisdictions based upon circumstances that caused us to establish or continue to provide valuation allowances on current or prior year losses (including acquired NOL carryovers) in addition to those provided in prior years, and for capital loss carryovers incurred in 2021.

The balance of the movement in valuation allowances comparing December 31, 2021 to December 31, 2020 was attributable to the effect of changes in foreign currency exchange rates.

As of December 31, 2020, our net current receivable for income tax was $ 20.6 million, consisting of a current receivable of $ 221.5 million and current payable of $ 200.9 million, and our net noncurrent liability was $ 163.6 million, entirely a noncurrent payable.

As of December 31, 2021, our net current payable for income tax was $ 33.7 million, consisting of a current receivable of $ 187.3 million and current payable of $ 221.1 million, and our net noncurrent liability was $ 144.6 million, entirely a noncurrent payable.

As of December 31, 2020, our net current receivable for income tax was $ 20.6 million, consisting of a current receivable of $ 221.5 million and a current payable of $ 200.9 million, and our net noncurrent liability was $ 163.6 million, entirely a noncurrent payable.

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Generally, the Company's open tax years include those from 2017 to the present, although reviews of taxing authorities for more recent years have been completed or are in process in a number of jurisdictions.

As of December 31, 2020, we were under examination in Germany, Nigeria, Turkey, China, India, Indonesia, Malaysia, the Philippines and Thailand;

in the U.S., we were under examination in the states of Colorado, Massachusetts and Minnesota, and in New York City.

As of December 31, 2021, we were under examination in Germany, Poland, Russia, Turkey, Australia, China, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore and Thailand;

in the U.S., we were under examination in the states of Colorado, Massachusetts, Minnesota, and in New York City.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is presented in the following table.

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Additions based on tax positions related to the current year 5.7 2.8

(Decrease) increase related to tax positions of prior years ( 5.0 ) 24.3

Increase related to tax positions of prior years ( 1.7 ) ( 5.0 )

Settlements with taxing authorities — ( 0.7 )

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We recognize interest accrued and penalties, if any, related to income taxes as a component of income tax expense.

During the year ended December 31, 2020, we recognized no interest expense or penalties and during the years 2019 and 2018, we recognized $ 0.1 million and $ 1.6 million, respectively, in interest expense and no penalties.

We had approximately $ 0.6 million and $ 1.8 million of accrued interest related to income taxes as of December 31, 2020 and 2019, respectively.

During the years ended December 31, 2021, 2020 and 2019, the amount of interest expense and penalties was not material.

In addition, the amount of accrued interest related to income taxes was not material as of December 31, 2021, 2020 and 2019.

FAIR VALUE MEASUREMENTS

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Financial Instruments

Our financial instruments include Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, Warehouse receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, Short-term borrowings, contract liabilities, Warehouse facilities, Credit facility, Long-term debt and foreign currency forward contracts.

Our financial instruments include Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, Warehouse receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, Short-term borrowings, Current portion of long-term debt, contract liabilities, Warehouse facilities, Credit facility, Long-term debt and foreign currency forward contracts.

The carrying amounts of Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, contract liabilities and the Warehouse facilities approximate their estimated fair values due to the short-term nature of these instruments.

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 $ 723.7 million and $ 685.9 million as of December 31, 2020 and 2019, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our Long-term debt was $ 702.0 million and $ 664.6 million as of December 31, 2020 and 2019, respectively, which included debt issuance costs of $ 2.5 million and $ 3.1 million, respectively.

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

We estimated the fair value of our long-term debt, including its current portion, as $ 687.2 million and $ 723.7 million as of December 31, 2021 and 2020, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of our long-term debt includes the current portion of $ 274.7 million, net of $ 0.3 million debt issuance costs, as of December 31, 2021, and the long-term portion of $ 395.6 million and $ 702.0 million as of December 31, 2021 and 2020, respectively, which included debt issuance costs of $ 1.4 million and $ 2.5 million, respectively.

Investments at Fair Value - Net Asset Value ("NAV")

For the majority of our investments reported at fair value, we estimate the fair value using the NAV per share (or its equivalent) our investees provide.

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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 December 31, 2020, such adjustments totaled $22.8 million.

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

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 December 31, 2020 and 2019, investments in real estate ventures at fair value using NAV were $ 203.8 million and $ 224.8 million, respectively.

As of December 31, 2021 and 2020, investments at fair value using NAV were $ 372.8 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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(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Investments in real estate ventures - fair value $ 77.2 — 59.3 69.4 — 34.4

Investments - fair value $ 84.5 — 182.3 77.2 — 59.3

Foreign currency forward contracts receivable — 15.9 — — 13.1 —

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Total liabilities at fair value $ — 513.8 122.6 — 431.0 159.1

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

We report these fair value adjustments in the Consolidated Statements of Comprehensive Income within Equity earnings.

We report the fair value adjustments in the Consolidated Statements of Comprehensive Income within Equity earnings.

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.

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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).

(in millions) Balance as of December 31, 2019 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Balance as of December 31, 2020

Investments in real estate ventures $ 34.4 6.8 — 18.1 — $ 59.3

(in millions) Balance as of December 31, 2020

Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Level Transfers Out (2)

Balance as of December 31, 2021

Investments $ 59.3 67.6 0.2 57.1 — ( 1.9 ) $ 182.3

Mortgage banking derivative assets and liabilities, net 13.7 19.1 — 187.4 ( 198.3 ) — 21.9

Earn-out liabilities 85.7 3.0 ( 0.4 ) 70.2 ( 74.4 ) — 84.1

(in millions) Balance as of December 31, 2018 Net change in fair value Foreign CTA (1)

(in millions) Balance as of December 31, 2019

Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Balance as of December 31, 2020

Investments in real estate ventures $ 11.5 0.8 — 22.9 ( 0.8 ) $ 34.4

Investments $ 34.4 6.8 — 18.1 — $ 59.3

Mortgage banking derivative assets and liabilities, net 10.2 ( 94.1 ) — 197.1 ( 99.5 ) 13.7

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Currency translation adjustments

(2) In May 2021, an investment previously classified 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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Earn-out liabilities (short-term and long-term) Restructuring and acquisition charges

Investments in real estate ventures Equity earnings

Investments Equity earnings

Other current assets - Mortgage banking derivative assets Revenue before reimbursements

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Non-Recurring Fair Value Measurements

We review our investments in real estate ventures, except those investments otherwise reported at fair value, on a quarterly basis, or as otherwise deemed necessary, for indications of whether we may be unable to recover the carrying value of our investments and whether such investments are other than temporarily impaired.

We review our investments, except those investments otherwise reported at fair value, on a quarterly basis, or as otherwise deemed necessary, for indications of whether we may be unable to recover the carrying value of our investments and whether such investments are other than temporarily impaired.

When the carrying amount of the investment is in excess of the estimated future undiscounted cash flows, we use a discounted cash flow approach or other acceptable method to determine the fair value of the investment in computing the amount of the impairment.

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We did not recognize any significant investment-level impairment losses during the three-year period ended December 31, 2021.

See Note 5, 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.

See Note 5, Investments, for additional information, including information related to impairment charges recorded at the investee level.

Debt is composed of the following obligations.

($ in millions) 2021 2020

Short-term borrowings:

Short-term debt:

Local overdraft facilities $ 9.2 12.0

Other short-term borrowings 138.7 50.0

Total short-term borrowings $ 62.0 120.1

Long-term senior notes, 4.4 %, face amount of $ 275.0 , due November 2022, net of debt issuance costs of $ 0.3 and $ —

Total short-term debt $ 422.6 62.0

Credit facility, net of debt issuance costs of $ 11.8 and $ 8.7

138.2 ( 8.7 )

Long-term senior notes, 4.4 %, face amount of $ 275.0 , due November 2022, net of debt issuance costs of $ — and $ 0.8

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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 December 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 December 31, 2020 and 2019, respectively.

We have a $ 2.75 billion unsecured revolving credit facility (the "Facility") that matures on April 14, 2026.

Pricing on the Facility ranges from LIBOR plus 0.875% to 1.35% , with pricing as of December 31, 2021, at LIBOR plus 0.88 %.

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 December 31, 2021 and 2020.

The following table provides additional information on our Facility.

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Average outstanding borrowings under the Facility $ 432.0 865.1

Effective interest rate on the Facility 1.6 % 3.0 %

Average effective interest rate on the Facility 0.9 % 1.6 %

We will continue to use the Facility for, but not limited to, business acquisitions, working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases and capital expenditures.

Short-Term Borrowings and Long-Term Debt

Short-Term and Long-Term Debt

In addition to our Facility, we have the capacity to borrow up to an additional $ 55.5 million under local overdraft facilities.

Amounts outstanding are presented in the debt table presented above.

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

Amounts outstanding are presented in the debt table above.

As of December 31, 2021, our senior notes due November 2022 were classified as a current liability as the maturity was within one year.

As of December 31, 2021, our issuer and senior unsecured ratings were investment grade:

Baa1 from Moody’s Investors Service, Inc.

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Warehouse facilities:

LIBOR plus 1.40%, September 20, 2021 (1)

BSBY plus 1.30% , expires September 19, 2022 (1)

$ 516.9 700.0 144.4 400.0

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192.8 300.0 195.9 900.0

Fannie Mae ASAP (4) program, LIBOR plus 1.15%

LIBOR plus 1.60% , expires July 30, 2022 (4)

Fannie Mae ASAP (5) program, SOFR plus 1.25% (6)

12.5 n/a 128.8 n/a

LIBOR plus 1.50%

LIBOR plus 1.25% — — 11.0 175.0

— — 261.6 300.0

Gross warehouse facilities 796.9 2,600.0 1,499.6 3,200.0

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Total warehouse facilities $ 795.7 2,600.0 1,498.4 3,200.0

(1) In 2020, JLL extended the Warehouse facility with an increase to the interest rate and maximum capacity;

previously, the facility had a maturity date of September 21, 2020, a maximum capacity of $375.0 million and an interest rate of LIBOR plus 1.15%.

(2) In 2020, JLL extended the Warehouse facility with an increase to the interest rate and maximum capacity;

previously, the facility had a maturity date of September 19, 2020,a maximum capacity of $775.0 million and an interest rate of LIBOR plus 1.15%.

(3) In 2020, JLL extended the Warehouse facility with an increase to the interest rate and maximum capacity;

previously, the facility had a maturity date of August 31, 2020, a maximum capacity of $100.0 million and an interest rate of LIBOR plus 1.15%.

(1) In 2021, JLL extended the Warehouse facility with an increase to the maximum capacity;

previously, the facility had a maturity date of September 20, 2021 and a maximum capacity of $400.0 million.

JLL amended the interest rate to Bloomberg Short-Term Bank Yield Index rate ("BSBY") plus 1.30%;

previously, the facility had an interest rate of LIBOR plus 1.40%.

(2) In 2021, JLL extended the Warehouse facility with a decrease to the interest rate;

previously, the facility had a maturity date of September 18, 2021 and interest rate of LIBOR plus 1.40%.

The temporary maximum capacity increase to $1,600.0 million in the fourth quarter of 2020 expired on January 31, 2021 and the temporary maximum increase to $2,000.0 million in the third quarter of 2021 expired on December 31, 2021;

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

(3) In 2021, JLL extended the Warehouse facility with a decrease to the interest rate and increase to the maximum capacity;

previously, the facility had a maturity date of August 27, 2021 and interest rate of LIBOR plus 1.40%.

The temporary maximum capacity of $900.0 million expired on January 6, 2021.

(4) In 2021, JLL added a new secured borrowing for $400.0 million under a master repurchase agreement that is scheduled to expire on July 30, 2022.

Advances are made at 100% of the loan balance and borrowings are secured by the related warehouse receivables and bear interest at LIBOR plus 1.60%.

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

(6) 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.

These lines of credit exist with financial institutions and are secured by the related warehouse receivables.

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 December 31, 2020.

Pursuant to these 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 facilities as of December 31, 2021.

As a supplement to our lines of credit, we have an uncommitted facility with Fannie Mae under its As Soon As Pooled ("ASAP") funding program.

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The difference between the price paid upon the original sale to Fannie Mae and the ultimate sale reflects borrowing costs.

For the years ended December 31, 2020 and 2019, operating lease expense was $ 187.3 million and $ 170.5 million, respectively, and variable and short-term lease expense was $ 36.0 million and $ 33.3 million, respectively.

In addition, $ 94.3 million and $ 310.7 million of Operating lease right-of-use assets were obtained in exchange for lease obligations during the years ended December 31, 2020 and 2019, respectively.

For the years ended December 31, 2021, 2020, and 2019, operating lease expense was $ 189.2 million, $ 187.3 million, and $ 170.5 million, respectively, and variable and short-term lease expense was $ 37.0 million, $ 36.0 million, and $ 33.3 million, respectively.

In addition, $ 148.5 million and $ 94.3 million of Operating lease right-of-use assets were obtained in exchange for lease obligations during the year ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, our total commitments related to finance leases was $ 15.3 million.

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Weighted average discount rate 3.2 %

Total rent expense, including office space and other rentals was $ 195.3 million for the year ended December 31, 2018, in accordance with ASC Topic 840.

TRANSACTIONS WITH AFFILIATES

As part of our co-investment strategy, we have equity interests in real estate ventures, some of which have certain of our officers as trustees or board of director members, and from which we earn advisory and management fees.

Included in the accompanying Consolidated Financial Statements is revenue of $ 516.4 million, $ 490.0 million, and $ 447.8 million for 2020, 2019 and 2018, respectively, as well as receivables of $ 102.2 million and $ 75.9 million as of December 31, 2020 and 2019, respectively, related to transactions with affiliates.

Included in the accompanying Consolidated Financial Statements was revenue of $ 723.3 million, $ 516.4 million, and $ 490.0 million for 2021, 2020 and 2019, respectively, as well as receivables of $ 152.9 million and $ 102.2 million as of December 31, 2021 and 2020, respectively, related to transactions with affiliates.

These amounts primarily relate to transactions with the real estate ventures in which we have equity interests.

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Cash-based charges primarily consist of (1) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership, or transformation of business processes, (2) acquisition, transaction and integration-related charges, and (3) other restructuring including lease exit charges.

Non-cash charges include (1) stock-based compensation expense for retention awards issued in conjunction with the HFF acquisition and (2) fair value adjustments to earn-out liabilities relating to prior-period acquisition activity.

Non-cash charges include (1) stock-based compensation expense for retention awards issued in conjunction with the HFF, Inc.

("HFF") acquisition and (2) fair value adjustments to earn-out liabilities relating to prior-period acquisition activity.

Restructuring and acquisition charges are presented in table below.

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Restructuring and acquisition charges $ 84.7 142.4 184.4

Portion of total restructuring & acquisition charges related to the acquisition and integration of HFF $ 40.0 75.9 115.1

Charges associated with the acquisition and integration of HFF primarily included transaction/deal costs, expenses associated with retention and severance, and other integration expenses, such as early lease termination costs.

The following tables show the accrual activity and payments relating to cash-based Restructuring and acquisition charges.

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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 $ 75.9 million for the year ended December 31, 2020 compared to $ 115.1 million for the year ended December 31, 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.

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 at this time.

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

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

Other comprehensive loss before reclassification ( 18.0 ) 43.0 25.0

Other comprehensive income before reclassification ( 12.3 ) 59.8 47.5

Amounts reclassified from AOCI after tax expense of $0.7, $- and $0.7 3.1 — 3.1

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Amounts reclassified from AOCI after tax expense of $0.7, $- and $0.7 3.2 — 3.2

Other comprehensive income after tax benefit of $3.2, $- and $3.2 ( 9.2 ) 59.8 50.6

Other comprehensive income after tax expense of $7.6, $- and $7.6 38.5 ( 56.7 ) ( 18.2 )

Balance as of December 31, 2021 $ ( 42.7 ) ( 352.7 ) $ ( 395.4 )

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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-K

Item 8. Financial Statements and Supplementary Data