What changed in this filing

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Item 1. Financial Statements

2023-05-04 compared with 2022-11-02 · 143 added, 342 removed, 498 unchanged (49% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) September 30, 2022 December 31, 2021

(in millions, except share and per share data) March 31, 2023 December 31, 2022

Assets (unaudited)

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Short-term borrowings 104.3 164.2

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

Short-term contract liabilities and deferred income 205.5 216.5

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, except share and per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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

Revenue $ 4,715.5 4,801.4

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Interest expense, net of interest income 26.3 10.2

Equity earnings 0.5 17.4 72.6 106.7

Equity (losses) earnings ( 2.6 ) 18.5

Other income 0.1 0.2

Income before income taxes and noncontrolling interest 180.4 302.0 772.9 686.9

Income tax provision 42.3 65.3 155.4 148.4

Net income 138.1 236.7 617.5 538.5

Net (loss) income attributable to noncontrolling interest ( 2.1 ) ( 0.5 ) 137.8 ( 1.7 )

Net income attributable to common shareholders $ 140.2 237.2 $ 479.7 540.2

Basic earnings per common share $ 2.93 4.67 $ 9.83 10.57

(Loss) income before income taxes and noncontrolling interest ( 11.0 ) 184.2

Income tax (benefit) provision ( 2.3 ) 40.3

Net (loss) income ( 8.7 ) 143.9

Net income (loss) attributable to noncontrolling interest 0.5 ( 1.7 )

Net (loss) income attributable to common shareholders $ ( 9.2 ) 145.6

Basic (loss) earnings per common share $ ( 0.19 ) 2.92

Basic weighted average shares outstanding (in 000's) 47,555 49,781

Diluted earnings per common share $ 2.88 4.57 $ 9.65 10.35

Diluted (loss) earnings per common share $ ( 0.19 ) 2.86

Diluted weighted average shares outstanding (in 000's) 47,555 50,957

Net income attributable to common shareholders $ 140.2 237.2 $ 479.7 540.2

Change in pension liabilities, net of tax — — — 0.5

Net (loss) income attributable to common shareholders $ ( 9.2 ) 145.6

Foreign currency translation adjustments 26.8 ( 24.1 )

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Company Shareholders' Equity

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December 31, 2022 47,507,758 $ 0.5 2,022.6 5,590.4 ( 9.8 ) ( 934.6 ) ( 648.2 ) 121.6 $ 6,142.5

Net income (loss) — — — 145.6 — — — ( 1.7 ) 143.9

Shares issued under stock-based compensation programs 305,435 — ( 3.6 ) — — 5.5 — — 1.9

Shares repurchased for payment of taxes on stock-based compensation ( 105,295 ) — ( 1.9 ) — — ( 1.9 ) — — ( 3.8 )

Amortization of stock-based compensation — — 18.6 — — — — — 18.6

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

Repurchase of common stock ( 615,351 ) — — — — ( 150.0 ) — — ( 150.0 )

Foreign currency translation adjustments — — — — — — ( 24.1 ) — ( 24.1 )

Increase in amounts attributable to noncontrolling interest — — — — — — — 15.2 15.2

March 31, 2022 49,608,928 $ 0.5 2,066.8 5,083.2 ( 5.1 ) ( 552.7 ) ( 419.5 ) 242.0 $ 6,415.2

Net income (3)

— — — 193.9 — — — 141.7 335.6

Shares issued under stock-based compensation programs 36,251 — ( 25.4 ) ( 1.7 ) — 42.2 — — 15.1

Shares repurchased for payment of taxes on stock-based compensation ( 6,592 ) — ( 16.5 ) — — ( 16.5 ) — — ( 33.0 )

Amortization of stock-based compensation — — 25.8 — — — — — 25.8

Repurchase of common stock ( 1,397,915 ) — — — — ( 297.7 ) — — ( 297.7 )

Foreign currency translation adjustments — — — — — — ( 164.4 ) — ( 164.4 )

Decrease in amounts attributable to noncontrolling interest — — — — — — — ( 149.9 ) ( 149.9 )

June 30, 2022 48,240,672 $ 0.5 2,050.7 5,275.4 ( 5.1 ) ( 824.7 ) ( 583.9 ) 233.8 $ 6,146.7

Net income (loss) (3)

— — — 140.2 — — — ( 2.0 ) 138.2

Net (loss) income — — — ( 9.2 ) — — — 0.5 ( 8.7 )

Shares issued under stock-based compensation programs 146,727 — ( 60.3 ) ( 14.5 ) — 81.8 — — 7.0

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Amortization of stock-based compensation — — 16.7 — — — — — 16.7

Repurchase of common stock ( 847,549 ) — — — — ( 148.9 ) — — ( 148.9 )

Foreign currency translation adjustments — — — — — — 26.8 — 26.8

Decrease in amounts attributable to noncontrolling interest — — — — — — — ( 0.7 ) ( 0.7 )

September 30, 2022 47,516,574 $ 0.5 2,034.5 5,415.6 ( 5.1 ) ( 950.9 ) ( 723.0 ) 230.6 $ 6,002.2

Accumulated other comprehensive income (loss)

Noncontrolling interest

(3) Excludes net loss attributable to redeemable noncontrolling interest of $0.1 million for both the three months ended September 30, 2022 and June 30, 2022.

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

March 31, 2023 47,609,204 $ 0.5 1,981.3 5,566.7 ( 9.8 ) ( 883.5 ) ( 621.4 ) 121.4 $ 6,155.2

Company Shareholders' Equity

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

Change in pension liabilities, net of tax — — — — — — ( 0.2 ) — ( 0.2 )

Foreign currency translation adjustments — — — — — — ( 6.2 ) — ( 6.2 )

Decrease in amounts attributable to noncontrolling interest — — — — — — — ( 1.9 ) ( 1.9 )

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 ( 615,351 ) — — — — ( 150.0 ) — — ( 150.0 )

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Increase in amounts attributable to noncontrolling interest — — — — — — — 15.2 15.2

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

Net income (loss) — — — 237.2 — — — ( 0.5 ) 236.7

Shares issued under stock-based compensation programs 200,425 — ( 14.8 ) — — 25.5 — — 10.7

Shares repurchased for payment of taxes on stock-based compensation ( 82,956 ) — ( 16.1 ) — — ( 10.7 ) — — ( 26.8 )

Amortization of stock-based compensation — — 24.0 — — — — — 24.0

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

Repurchase of common stock ( 680,500 ) — — — — ( 151.6 ) — — ( 151.6 )

Foreign currency translation adjustments — — — — — — ( 47.2 ) — ( 47.2 )

Increase in amounts attributable to noncontrolling interest — — — — — — — 6.5 6.5

September 30, 2021 50,582,197 $ 0.5 2,033.7 4,516.1 ( 5.2 ) ( 259.1 ) ( 430.3 ) 96.4 $ 5,952.1

March 31, 2022 49,608,928 $ 0.5 2,066.8 5,083.2 ( 5.1 ) ( 552.7 ) ( 419.5 ) 242.0 $ 6,415.2

Accumulated other comprehensive income (loss)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) (unaudited) 2023 2022

Cash flows from operating activities:

Net income $ 617.5 538.5

Net (loss) income $ ( 8.7 ) 143.9

Reconciliation of net income to net cash used in operating activities:

Depreciation and amortization 57.5 54.4

Equity earnings ( 72.6 ) ( 106.7 )

Equity losses (earnings) 2.6 ( 18.5 )

Net gain on dispositions — 0.4

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Accrued compensation ( 618.4 ) ( 710.1 )

Net cash (used in) provided by operating activities ( 401.9 ) 210.3

Net cash used in operating activities ( 716.3 ) ( 716.4 )

Cash flows from investing activities:

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Repayments of borrowings under credit facility ( 1,793.0 ) ( 1,373.0 )

Repayment of senior notes ( 275.0 ) —

Net proceeds from short-term borrowings ( 62.3 ) ( 27.4 )

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Repurchase of common stock — ( 150.0 )

Noncontrolling interest (distributions) contributions, net ( 135.8 ) —

Other, net ( 23.8 ) 14.9

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Business acquisitions (including contingent consideration) $ — 2.0

Non-cash consideration received for disposition 15.8 23.9

Deferred business acquisition obligations — 1.4

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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 2022 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Condensed Consolidated Financial Statements as of September 30, 2022, and for the periods ended September 30, 2022 and 2021, are unaudited.

Our Condensed Consolidated Financial Statements as of March 31, 2023, and for the periods ended March 31, 2023 and 2022, 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.

We have also reclassified certain prior year amounts to conform to the current presentation, specifically the incorporation of directly reimbursed expenses within Compensation and benefits, and Operating, administrative and other on our Condensed Consolidated Statements of Comprehensive Income, compared with its historical separate presentation.

Historically, our quarterly revenue and profits have tended to increase from quarter to quarter as the year progresses.

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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 September 30 are not fully indicative of what our results will be for the full fiscal year.

Change in Reporting Segments

Effective January 1, 2022, we changed from our geographic-centric Real Estate Services segments of Americas, EMEA and Asia Pacific to global business line segments of Markets Advisory, Capital Markets, Work Dynamics and JLL Technologies.

Our real estate investment management business, LaSalle, continues as a reporting segment.

As our segment financial results are presented on this global business line view, the comparable period has been recast to align with the new reporting structure.

Refer to Note 3, Revenue Recognition, and Note 4, Business Segments, for additional information, including detail financial information, on our segments.

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.

NEW ACCOUNTING STANDARDS

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The guidance is intended to address requests from stakeholders for information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity and cash flows.

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

We do not expect the new guidance to have a material impact to our financial statements and related disclosures.

We adopted this guidance effective January 1, 2023, and the adoption did not impact our financial statements and related disclosures.

REVENUE RECOGNITION

We earn revenue from the following services (segments are bolded).

• Markets Advisory

◦ Property Management

◦ Advisory, Consulting and Other

• Capital Markets

◦ Investment Sales, Debt/Equity Advisory and Other

◦ Loan Servicing

◦ Valuation Advisory

• Work Dynamics

◦ Workplace Management

◦ Project Management

◦ Portfolio Services and Other

• JLL Technologies

Markets Advisory

Leasing revenue is earned from brokerage commissions as we represent tenants and/or landlords in connection with real estate leases.

Our performance obligation is to facilitate the execution of a lease agreement, which is satisfied at a point in time, upon lease execution.

Generally, we are either entitled to the full consideration upon lease execution or in part upon lease execution with the remainder upon the occurrence of a future event outside of our control (e.g., tenant occupancy, lease commencement, or rent commencement).

The majority of the events that preclude our entitlement to the full consideration upon lease execution are considered to be “normal course of business” and, therefore, do not result in a constraint upon the recognition of revenue.

In the infrequent instance our fee entitlement in a contract with a customer is predicated on the occurrence of a future event(s) uncertain of occurring, we constrain the recognition of revenue until the uncertainty is resolved or the future event occurs.

Property Management

Property Management provides on-site day-to-day real estate management services for owners of office, industrial, retail, multifamily residential and various other types of properties, representing a series of daily performance obligations delivered over time.

Pricing is generally in the form of a monthly management fee based upon property-level cash receipts, square footage under management or some other variable metric.

Although we are principal in limited situations, we generally act as agent on behalf of our Property Management clients in relation to third-party vendors and subcontractors engaged to deliver operational services to our clients' properties.

In these situations, we arrange, but do not control, the services provided by third party vendors and subcontractors prior to the transfer of the services to the client.

As a result, the third-party costs incurred on behalf of clients, along with the corresponding revenue, are presented net on our Condensed Consolidated Statements of Comprehensive Income.

Advisory, Consulting and Other

Advisory, Consulting and Other includes a variety of different service offerings, whereby our performance obligation is to provide services as specified in the contract.

Occasionally, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of a report for which client acceptance is required.

However, except for event-driven point-in-time transactions, the majority of services provided within this service line are delivered over time due to the continuous transfer of control to our clients.

Capital Markets

Investment Sales, Debt/Equity Advisory and Other

We provide 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.

In addition, revenue related to mortgage servicing rights ("MSR" or "MSRs") and loan origination fees are reported within Investment Sales, Debt/Equity Advisory and Other.

Loan Servicing

We service substantially all the loans we originate and sell, and service loans we did not originate but subsequently acquire the rights to service.

We obtain a periodic fee for each loan we service based on a proportion of the cash collections.

Capital Markets revenue excluded from the scope of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC Topic 606")

Our mortgage banking and servicing operations, comprised of (i) all Loan Servicing revenue and (ii) activities related to MSRs and loan origination fees (included in Investment Sales, Debt/Equity Advisory and Other), are not considered revenue from contracts with customers, and accordingly are excluded from the scope of ASC Topic 606.

Our mortgage banking and servicing operations, comprised of (i) all Loan Servicing revenue and (ii) activities related to mortgage servicing rights ("MSR" or "MSRs") and loan origination fees (included in Investment Sales, Debt/Equity Advisory and Other), are not considered revenue from contracts with customers, and accordingly are excluded from the scope of ASC Topic 606.

Such out-of-scope revenue is presented below.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

Revenue excluded from scope of ASC Topic 606 $ 66.2 69.9

Valuation Advisory

Valuation Advisory service offerings include (but are not limited to) asset appraisal, business valuation, property tax advisory, complex litigation, and environmental property consulting.

Our performance obligation is to provide services as specified in the contract and our pricing is negotiated based on the scale and complexity of each assignment.

Typically, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of an appraisal or report for which client acceptance is required.

Work Dynamics

Workplace Management

Workplace Management, previously referred to as Integrated Facilities Management (IFM), provides comprehensive, on-site day-to-day real estate management services to corporations and institutions across a broad range of industries that outsource the management of the real estate they occupy, representing a series of daily performance obligations delivered over time.

Pricing generally includes a management fee and, in many instances, an incentive fee or other form of variable consideration.

Although we may act as agent on behalf of our clients with respect to certain mandates, we generally act as principal for our Workplace Management contracts with respect to third-party vendors and subcontractors engaged to deliver operational services to our clients' facilities.

In these situations, we control the services provided by such third-party vendors and subcontractors prior to the transfer of the services to the client.

As a result, the third-party costs incurred on behalf of our clients, along with the corresponding reimbursement revenue, are presented gross on our Condensed Consolidated Statements of Comprehensive Income.

Project Management

Project Management, previously referred to as Project & Development Services, provides short-term construction-related services ranging from development and design to general contracting and project management for owners and occupiers of real estate.

Depending on the terms of our engagement, our performance obligation is either to arrange for the completion of a project or to assume responsibility for completing a project on behalf of a client.

Our obligations to clients are satisfied over time due to the continuous transfer of control of the underlying asset.

Therefore, we recognize revenue over time, generally using input measures (e.g., to-date costs incurred relative to total estimated costs at completion).

Typically, we are entitled to consideration at distinct milestones over the term of an engagement.

For certain contracts where we assume responsibility for completing a project, we control the services provided by third-party vendors and subcontractors prior to transfer of the assets to the client.

In these situations, the third-party costs incurred on behalf of clients, along with the associated reimbursement revenue, are presented gross on our Condensed Consolidated Statements of Comprehensive Income.

In contrast, where we act as agent on behalf of clients, third-party costs incurred and the associated revenue are presented net on our Condensed Consolidated Statements of Comprehensive Income.

Portfolio Services and Other

Portfolio Services and Other includes a variety of different service offerings, including advising clients on how to optimize their workplace strategies and occupancy planning efforts, and overall portfolio strategy management and administration for our clients.

Our performance obligation is to provide services as specified in the contract.

For event-driven point-in-time transactions, we record revenue when our performance obligation is complete, such as the delivery of a report where client acceptance is required, whereas revenue is recorded over time for services with a continuous transfer of control to our clients.

JLL Technologies

JLL Technologies offers multiple cloud-based software solutions that generate value for investors and businesses by enabling higher-quality decision-making through improved data and analytics.

We recognize cloud-based software revenue over time commensurate with the length and terms of the contract.

In addition, we offer professional services such as program and project management, implementation and support, managed services, and advisory services.

We recognize professional services revenue at the time our performance obligation is satisfied.

LaSalle provides real estate investment management services to clients and generally earns consideration in the form of advisory fees, transaction fees and incentive fees.

Typically, our performance obligation is to manage clients’ capital for a specified period of time and is delivered as a series of daily performance obligations over time.

Revenue recognition for transaction and incentive fees is generally constrained until all contingencies have cleared due to the possibility of a significant reversal until completion of the events necessary to realize the associated consideration.

Substantially all incentive fees recognized as revenue were previously constrained.

Contract assets and liabilities - Our contract assets, net of allowance, are included in Short-term contract assets and Other assets and our contract liabilities are included in Short-term contract liabilities and deferred income on our Condensed

Consolidated Balance Sheets.

Contract assets and liabilities

Our contract assets, net of allowance, are included in Short-term contract assets and Other assets and our contract liabilities are included in Short-term contract liabilities and deferred income on our Condensed Consolidated Balance Sheets.

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

Such contract assets and liabilities are presented below.

(in millions) September 30, 2022 December 31, 2021

(in millions) March 31, 2023 December 31, 2022

Contract assets, gross $ 434.6 447.0

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Contract liabilities $ 142.6 151.4

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

As of September 30, 2022, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

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, 2023, 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.

Contracts within these businesses represent a significant portion of our contracts with customers not expected to be completed within 12 months.

A significant portion of our customer contracts, which are not expected to be fulfilled within 12 months, are represented by the contracts within these businesses.

BUSINESS SEGMENTS

On February 28, 2022, we announced a new organizational structure that became effective on January 1, 2022.

Under the new structure, we organize our operations around, and publicly report our financial results on, five global business segments:

We manage and report our operations as five global business segments:

(1) Markets Advisory,

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Allocated expenses primarily consist of corporate functional costs across the globe, which we allocate to the business segments using an expense-specific driver-based methodology.

Adjusted EBITDA does not include (i) depreciation and amortization, (ii) restructuring and acquisition charges, (iii) interest expense, net of interest income, (iv) provision for income tax, (v) gain on disposal and (vi) net non-cash MSR and mortgage banking derivative activity which are otherwise included in Net income on the Condensed Consolidated Statements of Comprehensive Income.

Adjusted EBITDA does not include (i) Restructuring and acquisition charges, (ii) gain/loss on disposal, (iii) interest on employee loans, net of forgiveness, (iv) net non-cash MSR and mortgage banking derivative activity, (v) Interest expense, net of interest income, (vi) Income tax (benefit) provision and (vii) Depreciation and amortization, which are otherwise included in Net income on the Condensed Consolidated Statements of Comprehensive Income.

The Chief Operating Decision Maker ("CODM") of JLL measures and evaluates the segment results based on Adjusted EBITDA for purposes of making decisions about allocating resources and assessing performance.

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Summarized financial information by business segment is as follows.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

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Revenue $ 906.4 999.5

Depreciation and amortization (a)

$ 16.6 16.4 $ 50.0 49.0

Equity (losses) earnings $ ( 0.2 ) 0.1 $ 0.7 0.6

Depreciation and amortization (1)

Equity earnings $ 0.3 0.5

Adjusted EBITDA $ 71.6 111.2

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Depreciation and amortization $ 1.3 1.4

Equity (losses) earnings $ ( 1.1 ) 8.4 $ 4.0 44.8

Equity losses $ ( 8.8 ) ( 1.9 )

Adjusted EBITDA $ 14.3 21.3

(a) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

(1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

The following table is a reconciliation of Adjusted EBITDA to Net income attributable to common shareholders.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

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Restructuring and acquisition charges $ ( 35.7 ) ( 19.5 )

Net gain (loss) on disposition — 0.4 ( 7.5 ) 12.4

Interest on employee loans, net of forgiveness ( 0.2 ) —

Net non-cash MSR and mortgage banking derivative activity ( 1.8 ) ( 3.6 )

Interest expense, net of interest income ( 26.3 ) ( 10.2 )

Provision for income taxes ( 42.3 ) ( 65.3 ) ( 155.4 ) ( 148.4 )

Depreciation and amortization (a)

Income tax benefit (provision) 2.3 ( 40.3 )

Depreciation and amortization (1)

( 56.5 ) ( 54.4 )

Net income attributable to common shareholders $ 140.2 237.2 $ 479.7 540.2

(a) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

Net (loss) income attributable to common shareholders $ ( 9.2 ) 145.6

(1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

2023 Business Combinations Activity

During the nine months ended September 30, 2022, there were no material acquisitions.

During the three months ended March 31, 2023, there were no strategic acquisitions.

We paid $ 13.8 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

2022 Business Combinations Activity

During the nine months ended September 30, 2022, we made no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2021.

As of September 30, 2022, we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired as of September 30, 2021.

During the three months ended March 31, 2022, we completed no strategic acquisitions.

Earn-Out Payments

($ in millions) September 30, 2022 December 31, 2021

($ in millions) March 31, 2023 December 31, 2022

Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria 16 17

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Goodwill and Other Intangible Assets

In conjunction with our new organizational structure described more fully in Note 4, Business Segments, we reassessed our reporting units as of January 1, 2022, and reassigned goodwill to reflect our new segment structure using a relative fair value allocation approach.

Under this methodology, the fair value of each impacted reporting unit was determined using a combination of the income approach and the market approach, and this resulting relative fair value was used to reassign the balance of goodwill.

We considered the change to our reportable segments a triggering event requiring the testing of our goodwill for impairment as of January 1, 2022.

We performed a quantitative test relying on the discounted cash flow (“DCF”) method, an income approach, in determining the estimated fair value of our reporting units.

Our DCF analysis relied on significant judgements 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.

Our analysis indicated that no impairment existed as the estimated fair value of each of our reporting units exceeded its respective carrying value.

Goodwill and unamortized intangibles as of September 30, 2022 consisted of:

Goodwill and unamortized intangibles as of March 31, 2023 consisted of:

(1) goodwill of $ 4,543.9 million, (2) identifiable intangibles of $ 784.3 million amortized over their remaining finite useful lives and (3) $ 48.8 million of identifiable intangibles with indefinite useful lives that are not amortized.

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(in millions) Markets Advisory Capital Markets Work Dynamics JLL Technologies LaSalle Consolidated

Balance as of December 31, 2022 $ 1,742.9 1,949.2 532.6 247.7 55.6 $ 4,528.0

Additions, net of adjustments — — — — — —

Impact of exchange rate movements 6.5 7.2 1.9 — 0.3 15.9

Balance as of March 31, 2023 $ 1,749.4 1,956.4 534.5 247.7 55.9 $ 4,543.9

(in millions) Markets Advisory Capital Markets Work Dynamics JLL Technologies LaSalle Consolidated

Balance as of January 1, 2022 $ 1,782.9 1,983.9 539.9 247.5 57.4 $ 4,611.6

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Impact of exchange rate movements ( 7.9 ) ( 8.8 ) ( 2.4 ) — ( 0.4 ) ( 19.5 )

Balance as of September 30, 2022 $ 1,713.1 1,916.0 523.7 247.7 54.3 $ 4,454.8

(in millions)

Balance as of March 31, 2022 $ 1,775.0 1,975.9 542.1 247.9 57.0 $ 4,597.9

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

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Additions, net of adjustments (1)

103.3 19.1 122.4

Adjustment for fully amortized intangibles ( 9.0 ) ( 0.4 ) ( 9.4 )

Impact of exchange rate movements — 1.3 1.3

Balance as of September 30, 2022 $ 725.1 560.1 $ 1,285.2

Balance as of March 31, 2023 $ 755.6 557.9 $ 1,313.5

Accumulated Amortization

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Impact of exchange rate movements — ( 0.4 ) ( 0.4 )

Balance as of September 30, 2022 $ ( 229.8 ) ( 193.8 ) $ ( 423.6 )

Net book value as of September 30, 2022 $ 495.3 366.3 $ 861.6

Balance as of March 31, 2023 $ ( 259.3 ) ( 221.1 ) $ ( 480.4 )

Net book value as of March 31, 2023 $ 496.3 336.8 $ 833.1

(1) Included in this amount for MSRs was $ 2.9 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights.

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Impact of exchange rate movements — ( 1.2 ) ( 1.2 )

Balance as of September 30, 2021 $ 631.4 372.2 $ 1,003.6

Balance as of March 31, 2022 $ 691.7 555.6 $ 1,247.3

Accumulated Amortization

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Impact of exchange rate movements — 0.4 0.4

Balance as of September 30, 2021 $ ( 183.5 ) ( 139.5 ) $ ( 323.0 )

Net book value as of September 30, 2021 $ 447.9 232.7 $ 680.6

Balance as of March 31, 2022 $ ( 204.7 ) ( 163.1 ) $ ( 367.8 )

Net book value as of March 31, 2022 $ 487.0 392.5 $ 879.5

(1) Included in this amount for MSRs was $ 7.8 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 within the Condensed Consolidated Statements of Comprehensive Income.

Summarized investment balances as of September 30, 2022 and December 31, 2021 are presented in the following table.

(in millions) September 30, 2022 December 31, 2021

Summarized investment balances as of March 31, 2023 and December 31, 2022 are presented in the following table.

(in millions) March 31, 2023 December 31, 2022

JLL Technologies investments $ 496.3 483.4

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Total $ 896.0 873.8

Approximately 90% of our investments, as of September 30, 2022, are (i) investments by JLL Technologies in early to mid-stage proptech companies as well as proptech funds, or (ii) direct investments in 55 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement.

The remaining 10% of our investments, as of September 30, 2022, 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 $ 352.5 million as of September 30, 2022.

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 JLL Technologies investments are, generally, investments in early to mid-stage proptech companies as well as proptech funds, while our LaSalle co-investments are, primarily, direct investments in 47 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement.

We have maximum potential unfunded commitments to direct investments or investment vehicles of $ 326.9 million and $ 16.0 million as of March 31, 2023 for our LaSalle Investment Management business and JLL Technologies, respectively.

Of the $ 326.9 million related to LaSalle, while we remain contractually obligated, we do not expect a call on the $ 60.3 million relating to a specific investment since the underlying fund moved into its liquidation phase in January 2020.

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 have determined that we are the primary beneficiary of certain VIEs and accordingly, we have consolidated such entities.

The assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities and the mortgage loans of the consolidated VIEs are non-recourse to JLL.

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

(in millions) September 30, 2022 December 31, 2021

Property and equipment, net $ 190.7 184.7

Investments 10.7 10.2

Other assets 22.0 17.7

Total assets $ 223.4 212.6

Other current liabilities $ 2.7 2.1

Mortgage indebtedness (included in Other liabilities) 113.6 107.5

Total liabilities 116.3 109.6

Members' equity (included in Noncontrolling interest) 107.1 103.0

Total liabilities and members' equity $ 223.4 212.6

Three Months Ended September 30, Nine Months Ended September 30,

In prior periods, we determined we were the primary beneficiary of certain VIEs and, accordingly, we consolidated such entities.

In December of 2022, as a result of a reconsideration event, we concluded we were no longer the primary beneficiary of these VIEs and, therefore, no longer consolidate these VIEs.

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

As a result of the reconsideration event described above, there were no consolidated VIE balances as of March 31, 2023 and December 31, 2022;

net income was consolidated up to the reconsideration date.

Three Months Ended March 31,

(in millions) 2023 2022

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Operating and other expenses — ( 5.7 )

Net gains on sale of investments (1)

Net (loss) income $ ( 1.6 ) ( 0.9 ) $ 137.6 ( 2.1 )

(1) The gain was included in Other income (expense) on the Condensed Consolidated Statements of Comprehensive Income.

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

There were no significant other-than-temporary impairment charges on investments for the nine months ended September 30, 2022 and 2021.

Net loss $ — ( 2.2 )

We allocate the net loss of the consolidated VIEs to the noncontrolling interest holders as Net income (loss) attributable to noncontrolling interest in our Condensed Consolidated Statements of Comprehensive Income.

There were no significant other-than-temporary impairment charges on investments for the three months ended March 31, 2023 and 2022.

We report a majority of our investments at fair value.

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Foreign currency translation adjustments, net 7.7 ( 4.9 )

Fair value investments as of September 30, $ 786.7 537.7

Fair value investments as of March 31, $ 825.5 677.5

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

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Contractual Life

Unvested as of June 30, 2022

939.0 576.9 1,515.9 $ 167.23 1.98

Granted 59.9 1.6 61.5 172.22

Vested ( 203.7 ) — ( 203.7 ) 141.15

Forfeited ( 10.2 ) ( 10.6 ) ( 20.8 ) 158.85

Unvested as of September 30, 2022

785.0 567.9 1,352.9 $ 171.51 1.85

Unvested as of June 30, 2021

1,118.1 545.2 1,663.3 $ 144.01 1.92

Granted 23.7 58.8 82.5 205.50

Vested ( 199.6 ) — ( 199.6 ) 141.21

Forfeited ( 6.9 ) ( 9.4 ) ( 16.3 ) 145.07

Unvested as of September 30, 2021

935.3 594.6 1,529.9 $ 147.75 1.96

(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, 2022

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Forfeited ( 7.3 ) ( 24.4 ) ( 31.7 ) 125.84

Unvested as of September 30, 2022

Unvested as of March 31, 2023

688.4 316.4 1,004.8 $ 192.36 1.66

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Forfeited ( 2.8 ) ( 4.8 ) ( 7.6 ) 174.32

Unvested as of September 30, 2021

Unvested as of March 31, 2022

786.8 466.1 1,252.9 $ 152.62 1.84

As of September 30, 2022, we had $ 99.9 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2026.

As of March 31, 2023, we had $ 77.9 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into 2027.

FAIR VALUE MEASUREMENTS

We measure certain assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures , which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date.

We measure certain assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures , which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date.

In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy:

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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, including its current portion, as $ 325.1 million and $ 687.2 million as of September 30, 2022 and December 31, 2021, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The carrying value of the short-term portion of our Long-term debt as of December 31, 2021 was $ 274.7 million, net of $ 0.3 million of debt issuance costs.

We retired this debt during September 2022.

The carrying value of the long-term portion was $ 341.5 million and $ 395.6 million, as of September 30, 2022 and December 31, 2021, respectively, which included debt issuance costs of $ 1.3 million and $ 1.4 million as of September 30, 2022 and December 31, 2021, respectively.

See Note 9, Debt, for additional discussion of the redemption of our Long-term debt.

We estimated the fair value of our Long-term debt using dealer quotes that are Level 2 inputs in the fair value hierarchy.

The fair value and carrying value of our debt are presented in the following table.

(in millions) March 31, 2023 December 31, 2022

Long-term debt, fair value $ 360.1 360.9

Long-term debt, carrying value, net of debt issuance costs 379.2 372.8

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

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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 September 30, 2022 and December 31, 2021, investments at fair value using NAV were $ 279.5 million and $ 251.6 million, respectively.

As of March 31, 2023 and December 31, 2022, investments at fair value using NAV were $ 303.5 million and $ 284.6 million, respectively.

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

Recurring Fair Value Measurements

During the second quarter of 2022, certain investments previously reported as NAV investments were reclassified as Level 3 within the fair value hierarchy.

Prior period amounts within the fair value table below have been reclassified to reflect the current period presentation.

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.

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

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

As of September 30, 2022 and December 31, 2021, these contracts had a gross notional value of $ 1.73 billion ($ 1.10 billion on a net basis) and $ 2.61 billion ($ 1.51 billion on a net basis), respectively.

The following table details the gross notional value and net basis of these contracts.

(in billions) March 31, 2023 December 31, 2022

Foreign currency forward contracts, gross notional value $ 1.79 1.81

Foreign currency forward contracts, net basis 0.90 1.02

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 $ 14.1 million asset as of September 30, 2022 was composed of gross contracts with receivable positions of $ 16.9 million and payable positions of $ 2.8 million.

The $ 34.7 million liability as of September 30, 2022 was composed of gross contracts with receivable positions of $ 0.2 million and payable positions of $ 34.9 million.

As of December 31, 2021, the $ 15.9 million asset was composed of gross contracts with receivable positions of $ 19.2 million and payable positions of $ 3.3 million.

The $ 0.8 million liability as of December 31, 2021 was composed of gross contracts with receivable positions of $ 0.2 million and payable positions of $ 1.0 million.

The outstanding balances of these contracts are presented in the following table.

(in millions) March 31, 2023 December 31, 2022

Net asset, receivable positions $ 6.7 7.7

Net asset, payable positions ( 1.8 ) ( 4.0 )

Foreign currency forward contracts receivable $ 4.9 3.7

Net liability, receivable positions $ ( 1.5 ) ( 1.6 )

Net liability, payable positions 5.4 6.4

Foreign currency forward contracts payable $ 3.9 4.8

Warehouse Receivables

As of September 30, 2022 and December 31, 2021, 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 March 31, 2023 and December 31, 2022, 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 September 30, 2022 as Deferred compensation plan assets of $ 520.2 million, long-term deferred compensation plan liabilities of $ 477.2 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 5.1 million.

We recorded this plan on our Condensed Consolidated Balance Sheet as of March 31, 2023 as Deferred compensation plan assets of $ 551.3 million, long-term deferred compensation plan liabilities of $ 507.9 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 9.8 million.

We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, 2022 as Deferred compensation plan assets of $ 517.9 million, long-term deferred compensation plan liabilities of $ 485.4 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $ 9.8 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 June 30, 2022 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers out Balance as of

September 30, 2022

Investments $ 460.4 2.5 — 1.8 — ( 11.2 ) $ 453.5

Mortgage banking derivative assets and liabilities, net 21.6 34.1 — 33.6 ( 29.0 ) — 60.3

Earn-out liabilities 74.9 ( 0.1 ) ( 0.3 ) 3.3 ( 1.2 ) — 76.6

Balance as of June 30, 2021 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers out Balance as of September 30, 2021

Investments $ 181.6 6.1 0.3 19.7 — — $ 207.7

Mortgage banking derivative assets and liabilities, net 12.6 7.3 — 57.8 ( 44.0 ) — 33.7

Earn-out liabilities 18.0 — 0.3 27.5 ( 0.4 ) — 45.4

For the comparative period, we have reclassified certain investments previously reported as NAV investments to Level 3 to conform with current presentation.

(in millions) Balance as of December 31, 2022 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers out Balance as of

September 30, 2022

Purchases / Additions Settlements Balance as of

March 31, 2023

Investments $ 452.0 4.9 0.5 9.1 — $ 466.5

2 unchanged sentences

(in millions) Balance as of December 31, 2021 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers out Balance as of September 30, 2021

Purchases / Additions Settlements Balance as of March 31, 2022

Investments $ 303.5 17.2 — 23.5 — $ 344.2

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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 nine months ended September 30, 2022 or 2021.

We did not recognize any significant investment-level impairment losses during either of the three months ended March 31, 2023 or 2022.

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

Debt is composed of the following obligations.

($ in millions) September 30, 2022 December 31, 2021

($ in millions) March 31, 2023 December 31, 2022

Short-term debt:

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Other short-term borrowings 93.4 143.0

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

Total short-term debt $ 104.3 164.2

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Total debt $ 2,573.2 1,750.8

Credit Facility

On June 16, 2022, we executed Amendment No.

3 ("Amendment No.

3") 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 features of the Credit Agreement, as amended, provide for (i) Greenhouse Gas Emissions KPI to align with the World Green Building Council ("WGBC") Commitment to reach net zero by 2030 and (ii) incorporates the Adjusted Term Secured Overnight Financing Rate ("SOFR") successor rates for USD and other currency borrowings.

On August 31, 2022, we executed Amendment No.

4 ("Amendment No.

4") to the Credit Agreement which increased the borrowing capacity from $ 2.75 billion to $ 3.35 billion.

The maturity date of April 14, 2026 and covenants were unchanged by the amendments.

Pricing on the unsecured revolving credit facility (the "Facility") ranges from Adjusted Term SOFR plus 0.875% to 1.35% , with pricing as of September 30, 2022 at Adjusted Term SOFR plus 0.94 %.

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 September 30, 2022 and December 31, 2021.

The following tables provides additional information on our Facility.

Three Months Ended September 30, Nine Months Ended September 30,

Credit Facilities

We have a $ 3.35 billion unsecured revolving credit facility (the "Facility") that matures on April 14, 2026.

Pricing on the Facility ranges from Adjusted Term Secured Overnight Financing Rate ("SOFR") plus 0.875% to 1.35% , with pricing as of March 31, 2023 at Adjusted Term SOFR plus 0.94 %.

In addition to outstanding borrowings under the Facility presented in the above table, we had outstanding letters of credit under the Facility of $ 0.4 million as of both March 31, 2023 and December 31, 2022.

In addition, we have an uncommitted credit agreement (the "Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $ 400.0 million.

Interest and fees are set at the time of utilization and calculated on a 360-day basis.

Between quarter-end dates, we intend to use the proceeds to reduce indebtedness under the Facility at a lower interest rate.

As such, the Uncommitted Facility had no outstanding balance as of both March 31, 2023 and December 31, 2022.

The following table provides additional information on our Facility and Uncommitted Facility, collectively.

Three Months Ended March 31,

($ in millions) 2023 2022

Average outstanding borrowings under the Facility $ 1,599.8 497.1 $ 1,295.9 432.5

Effective interest rate on the Facility 3.2 % 1.0 % 2.2 % 1.0 %

Average outstanding borrowings $ 1,719.9 683.2

Average effective interest rate 5.4 % 1.0 %

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 and Long-Term Debt

In addition to our Facility, we have the capacity to borrow up to an additional $ 50.1 million under local overdraft facilities.

In addition to our credit facilities, we have the capacity to borrow up to an additional $ 54.8 million under local overdraft facilities.

Amounts outstanding are presented in the debt table above.

As of September 30, 2022, we redeemed all of our outstanding 4.4 % Senior Notes due November 2022 (the "Notes").

The aggregate outstanding principal amount of the Notes was $ 275.0 million.

The redemption price for the Notes was equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest.

As of September 30, 2022, our issuer and senior unsecured ratings are investment grade:

As of March 31, 2023, 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 September 30, 2022.

We remained in compliance with all covenants as of March 31, 2023.

Warehouse Facilities

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

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503.1 1,200.0 132.3 1,200.0

LIBOR plus 1.30% , expired August 27, 2022

— — 192.8 300.0

SOFR plus 1.40% , expires July 28, 2023

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Total warehouse facilities $ 813.6 2,300.0 455.3 2,300.0

(1) In the third quarter of 2022, JLL extended the Warehouse facility;

previously, the facility had a maturity date of September 19, 2022.

(2) In the third quarter of 2022, JLL extended the Warehouse facility and amended the interest rate;

previously, the facility had a maturity date of September 16, 2022 and an interest rate of LIBOR plus 1.30%.

(3) In the third quarter of 2022, JLL extended the Warehouse facility and amended the interest rate;

previously the facility had a maturity date of July 30, 2022 and an interest rate of LIBOR plus 1.60%.

(1) Bloomberg Short-Term Bank Yield Index rate ("BSBY")

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

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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 September 30, 2022.

We remained in compliance with all covenants under our facilities as of March 31, 2023.

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 $ 22.5 million as of both September 30, 2022 and December 31, 2021 and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

In total, these receivables were $ 22.5 million as of both March 31, 2023 and December 31, 2022 and are included in Notes and other receivables on our Condensed Consolidated Balance Sheets.

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

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December 31, 2022 $ 2.2

New claims 0.1

Prior year claims adjustments (including foreign currency changes) —

Claims paid —

September 30, 2022 $ 0.9

March 31, 2023 $ 2.3

December 31, 2021 $ 1.2

New claims 1.5

Prior year claims adjustments (including foreign currency changes) —

Claims paid —

September 30, 2021 $ 25.8

March 31, 2022 $ 1.2

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

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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 September 30, 2022 and December 31, 2021, we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 17.0 billion and $ 15.4 billion, respectively.

As of March 31, 2023 and December 31, 2022, we had loans, funded and sold, subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 18.9 billion and $ 18.3 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 September 30, 2022 and December 31, 2021, the loss-sharing guarantee obligations were $ 26.9 million and $ 24.6 million, respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets.

There were no loan losses incurred during the nine months ended September 30, 2022 and 2021.

As of March 31, 2023 and December 31, 2022, the loss-sharing guarantee obligations were $ 28.9 million and $ 29.0 million, respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets.

There were no loan losses incurred during the three months ended March 31, 2023 and 2022.

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 September 30, 2022 and December 31, 2021, the loan loss guarantee reserve was $ 20.3 million and $ 22.9 million, respectively, and is included within Other liabilities on our Condensed Consolidated Balance Sheets.

As of March 31, 2023 and December 31, 2022, the loan loss guarantee reserve was $ 20.6 million and $ 24.8 million, respectively, and is included within Other liabilities on our Condensed Consolidated Balance Sheets.

RESTRUCTURING AND ACQUISITION CHARGES

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Cash-based charges primarily consist of (i) 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, (ii) acquisition, transaction and integration-related charges, and (iii) other restructuring including lease exit charges.

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

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

Restructuring and acquisition charges are presented in table below.

Three Months Ended September 30, Nine Months Ended September 30,

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

Restructuring and acquisition charges are presented in the table below.

Three Months Ended March 31,

(in millions) 2023 2022

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Restructuring, pre-acquisition and post-acquisition charges 8.2 14.2

Stock-based compensation expense for HFF retention awards 0.3 3.2 5.7 15.2

Stock-based compensation expense for post-acquisition retention awards 1.8 2.7

Fair value adjustments to earn-out liabilities — ( 0.7 )

Restructuring and acquisition charges $ 35.7 19.5

We expect nearly all expenses related to (i) severance and other employment-related charges and (ii) restructuring, pre-acquisition and post-acquisition charges as of September 30, 2022 will be paid during the next twelve months.

We expect nearly all expenses related to (i) severance and other employment-related charges and (ii) restructuring, pre-acquisition and post-acquisition charges as of March 31, 2023 will be paid during the next twelve months.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

1 unchanged sentence

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

Balance as of June 30, 2022 $ ( 42.7 ) ( 541.2 ) $ ( 583.9 )

Other comprehensive loss before reclassification — ( 139.1 ) ( 139.1 )

Amounts reclassified from AOCI after tax expense of

$ -, $ - and $ - — — —

Other comprehensive loss after tax expense of $ - , $ - and $ - — ( 139.1 ) ( 139.1 )

Balance as of September 30, 2022 $ ( 42.7 ) ( 680.3 ) $ ( 723.0 )

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

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

Other comprehensive loss before reclassification — ( 47.2 ) ( 47.2 )

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ - — — —

Other comprehensive loss after tax expense of $ - , $ - and $ - — ( 47.2 ) ( 47.2 )

Balance as of September 30, 2021 $ ( 80.7 ) ( 349.6 ) $ ( 430.3 )

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

Balance as of December 31, 2022 $ ( 64.2 ) ( 584.0 ) $ ( 648.2 )

Other comprehensive loss before reclassification — ( 327.6 ) ( 327.6 )

Other comprehensive income before reclassification — 26.8 26.8

Amounts reclassified from AOCI after tax expense of

$ - , $ - and $ - — — —

Other comprehensive loss after tax expense of $ - , $ - and $ - — ( 327.6 ) ( 327.6 )

Balance as of September 30, 2022 $ ( 42.7 ) ( 680.3 ) $ ( 723.0 )

Other comprehensive income after tax expense of $ - , $ - and $ - — 26.8 26.8

Balance as of March 31, 2023 $ ( 64.2 ) ( 557.2 ) $ ( 621.4 )

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

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$ - , $ - and $ - — — —

Other comprehensive income (loss) after tax expense of $ - , $ - and $ - 0.5 ( 53.6 ) ( 53.1 )

Balance as of September 30, 2021 $ ( 80.7 ) ( 349.6 ) $ ( 430.3 )

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.

Other comprehensive loss after tax expense of $ - , $ - and $ - — ( 24.1 ) ( 24.1 )

Balance as of March 31, 2022 $ ( 42.7 ) ( 376.8 ) $ ( 419.5 )

For pension and postretirement benefits, we report amounts reclassified from Accumulated other comprehensive income (loss) in Other income within the Condensed Consolidated Statements of Comprehensive Income.

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