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Item 1. Financial Statements

2024-11-06 compared with 2024-08-06 · 165 added, 135 removed, 613 unchanged (33% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) June 30, 2024 December 31, 2023

(in millions, except share and per share data) September 30, 2024 December 31, 2023

Assets (unaudited)

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Short-term borrowings 99.6 147.9

Commercial paper, net of debt issuance costs of $ 2.0 and $ —

Short-term contract liabilities and deferred income 200.1 226.4

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Credit facility, net of debt issuance costs of $ 12.2 and $ 14.4

1,262.1 610.6

Long-term debt, net of debt issuance costs of $ 6.8 and $ 8.1

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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

2024 2023 2024 2023

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Equity losses ( 0.9 ) ( 11.2 ) ( 20.0 ) ( 117.3 )

Other income (expense) 9.7 ( 1.2 ) 11.2 ( 1.1 )

Income (loss) before income taxes and noncontrolling interest 105.0 4.0 186.5 ( 7.0 )

Income tax provision (benefit) 20.5 0.8 36.4 ( 1.5 )

Net income (loss) 84.5 3.2 150.1 ( 5.5 )

Net income (loss) attributable to noncontrolling interest 0.1 0.7 ( 0.4 ) 1.2

Net income (loss) attributable to common shareholders $ 84.4 2.5 $ 150.5 ( 6.7 )

Basic earnings (loss) per common share $ 1.77 0.05 $ 3.17 ( 0.14 )

Other income 2.9 3.0 14.1 1.9

Income before income taxes and noncontrolling interest 192.2 73.8 378.7 66.8

Income tax provision 37.4 14.5 73.8 13.0

Net income 154.8 59.3 304.9 53.8

Net (loss) income attributable to noncontrolling interest ( 0.3 ) ( 0.4 ) ( 0.7 ) 0.8

Net income attributable to common shareholders $ 155.1 59.7 $ 305.6 53.0

Basic earnings per common share $ 3.26 1.25 $ 6.43 1.11

Basic weighted average shares outstanding (in 000's) 47,505 47,662 47,506 47,655

Diluted earnings (loss) per common share $ 1.75 0.05 $ 3.12 ( 0.14 )

Diluted earnings per common share $ 3.20 1.23 $ 6.32 1.10

Diluted weighted average shares outstanding (in 000's) 48,497 48,394 48,355 48,317

Net income (loss) attributable to common shareholders $ 84.4 2.5 $ 150.5 ( 6.7 )

Net income attributable to common shareholders $ 155.1 59.7 $ 305.6 53.0

Change in pension liabilities, net of tax — — 0.3 ( 1.1 )

Foreign currency translation adjustments 115.9 ( 60.0 ) 56.1 ( 22.1 )

Comprehensive income attributable to common shareholders $ 62.3 12.5 $ 91.0 30.1

Comprehensive income (loss) attributable to common shareholders $ 271.0 ( 0.3 ) $ 362.0 29.8

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Company Shareholders' Equity

21 unchanged sentences

June 30, 2024 47,497,305 $ 0.5 2,013.3 5,941.9 ( 11.9 ) ( 913.6 ) ( 651.0 ) 119.1 $ 6,498.3

Net income (loss) — — — 155.1 — — — ( 0.3 ) 154.8

Vesting of shares related to equity compensation plans, net of amounts withheld for payment of taxes 59,771 — ( 14.5 ) ( 2.4 ) — 11.8 — — ( 5.1 )

Stock-based compensation — — 22.0 — — — — — 22.0

Shares held in trust — — — — ( 0.2 ) — — — ( 0.2 )

Repurchase of common stock ( 85,451 ) — — — — ( 20.0 ) — — ( 20.0 )

Foreign currency translation adjustments — — — — — — 115.9 — 115.9

Increase in amounts due to noncontrolling interest — — — — — — — 3.3 3.3

September 30, 2024 47,471,625 $ 0.5 2,020.8 6,094.6 ( 12.1 ) ( 921.8 ) ( 535.1 ) 122.1 $ 6,769.0

Accumulated other comprehensive income (loss)

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Company Shareholders' Equity

21 unchanged sentences

June 30, 2023 47,720,950 $ 0.5 2,015.3 5,567.6 ( 11.6 ) ( 895.8 ) ( 611.4 ) 120.2 $ 6,184.8

Net income (loss) (3)

— — — 59.7 — — — ( 0.1 ) 59.6

Vesting of shares related to equity compensation plans, net of amounts withheld for payment of taxes 41,415 — ( 12.3 ) ( 2.8 ) — 8.5 — — ( 6.6 )

Stock-based compensation — — 6.5 — — — — — 6.5

Shares held in trust — — — — 0.2 — — — 0.2

Repurchase of common stock ( 150,160 ) — — — — ( 19.9 ) — — ( 19.9 )

Foreign currency translation adjustments — — — — — — ( 60.0 ) — ( 60.0 )

Decrease in amounts due to noncontrolling interest — — — — — — — ( 1.7 ) ( 1.7 )

September 30, 2023 47,612,205 $ 0.5 2,009.5 5,624.5 ( 11.4 ) ( 907.2 ) ( 671.4 ) 118.4 $ 6,162.9

Accumulated other comprehensive income (loss)

Noncontrolling interest

(3) Excludes net income attributable to redeemable noncontrolling interest of $0.1 million for the three months ended June 30, 2023.

(3) Excludes net (loss) income attributable to redeemable noncontrolling interest of $(0.3) million and $0.1 million for the three months ended September 30, 2023 and June 30, 2023, respectively.

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) (unaudited) 2024 2023

Cash flows from operating activities:

Net income (loss) $ 150.1 ( 5.5 )

Net income $ 304.9 53.8

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

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Distributions of capital from investments 14.3 21.5

Acquisition of controlling interest, net of cash acquired 3.7 —

Other, net ( 0.7 ) ( 3.8 )

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Repayments of borrowings under credit facility ( 6,309.0 ) ( 5,594.0 )

Proceeds from issuance of commercial paper 800.0 —

Net repayments of short-term borrowings ( 73.0 ) ( 46.4 )

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Repurchase of common stock ( 60.4 ) ( 39.4 )

Noncontrolling interest contributions, net 3.3 —

Noncontrolling interest contributions (distributions), net 2.1 ( 4.2 )

Other, net ( 34.6 ) ( 31.2 )

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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 2023 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Consolidated Financial Statements as of June 30, 2024, and for the periods ended June 30, 2024 and 2023, are unaudited.

Our Consolidated Financial Statements as of September 30, 2024, and for the periods ended September 30, 2024 and 2023, 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 Consolidated Financial Statements for these interim periods.

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

SUBSEQUENT EVENTS & NEW ACCOUNTING STANDARDS

Subsequent events

In August of 2024, we repurchased a loan, which we originated and sold to Fannie Mae, with an unpaid principal balance ("UPB") of $74.25 million.

As this subsequent event represented additional evidence about a matter that existed as of the reporting date, for the period ended June 30, 2024, we recognized $18.0 million within Operating, administrative and other expenses, for the current estimated loss associated with the repurchase in our results.

This impact represents the difference between our estimate of the current fair value of the repurchased loan and the repurchase price, including amounts in excess of the UPB for items such as unpaid interest.

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.

NEW ACCOUNTING STANDARDS

Recently issued accounting guidance

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This ASU is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, with early adoption permitted.

We are evaluating the effect this guidance will have on our segment disclosures.

This ASU will result in additional disclosures related to each reportable segment but will not have any material impact on our consolidated operating results or financial position.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Such out-of-scope revenue is presented below.

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

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

(in millions) 2024 2023 2024 2023

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Such contract assets and liabilities are presented below.

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Contract assets, gross $ 384.5 402.3

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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 June 30, 2024, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

As of September 30, 2024, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5 % of our total revenue.

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

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

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

In the first quarter of 2024, we revised the definition of segment Adjusted EBITDA to exclude certain Equity earnings/losses from investments.

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Summarized financial information by business segment is as follows.

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

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

(in millions) 2024 2023 2024 2023

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$ 16.3 15.9 $ 49.2 48.5

Equity (losses) earnings $ — ( 0.1 ) $ 0.4 0.2

Equity earnings $ 0.1 0.1 $ 0.5 0.3

Adjusted EBITDA $ 151.9 85.1 $ 376.8 256.1

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$ ( 7.8 ) ( 5.7 ) $ ( 23.8 ) ( 25.2 )

Equity losses $ ( 9.0 ) ( 103.9 ) $ ( 10.0 ) ( 99.0 )

Equity earnings (losses) $ 11.6 ( 3.0 ) $ 1.6 ( 102.0 )

Advisory fees $ 92.7 102.7 $ 278.1 306.3

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(2) JLL Technologies and LaSalle Adjusted EBITDA excludes Equity earnings/losses.

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

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

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,

(in millions) 2024 2023 2024 2023

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Restructuring and acquisition charges $ 8.8 ( 31.6 ) $ ( 4.4 ) ( 79.1 )

Net loss on disposition — ( 1.8 ) — ( 1.8 )

Net gain (loss) on disposition — 1.3 — ( 0.5 )

Interest on employee loans, net of forgiveness 1.8 1.6 4.1 2.3

Equity earnings (losses) - JLL Technologies and LaSalle ( 2.2 ) ( 12.1 ) ( 23.4 ) ( 125.0 )

Credit losses on convertible note investments ( 6.3 ) — ( 6.3 ) —

Net non-cash MSR and mortgage banking derivative activity ( 5.1 ) ( 7.1 ) ( 25.9 ) ( 9.5 )

Interest expense, net of interest income ( 38.1 ) ( 37.1 ) ( 110.3 ) ( 103.9 )

Income tax (provision) benefit ( 20.5 ) ( 0.8 ) ( 36.4 ) 1.5

Income tax provision ( 37.4 ) ( 14.5 ) ( 73.8 ) ( 13.0 )

Depreciation and amortization (1)

( 64.5 ) ( 58.1 ) ( 185.9 ) ( 173.6 )

Net income (loss) attributable to common shareholders $ 84.4 2.5 $ 150.5 ( 6.7 )

Net income attributable to common shareholders $ 155.1 59.7 $ 305.6 53.0

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

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2024 Business Combinations Activity

During the six months ended June 30, 2024, we completed one strategic acquisition.

During the nine months ended September 30, 2024, we completed one strategic acquisition.

This strategic acquisition is presented below.

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A preliminary allocation of purchase consideration resulted in (i) goodwill of $ 43.8 million, (ii) identifiable intangibles of $ 15.5 million and (iii) other net assets (acquired assets less assumed liabilities) of $ 0.9 million.

As of June 30, 2024, we have not completed our analysis to assign fair values to all of the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for this acquisition during the open measurement period.

During the six months ended June 30, 2024 and 2023, we paid $ 4.9 million and $ 22.0 million, respectively, for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

As of September 30, 2024, we have not completed our analysis to assign fair values to all of the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for this acquisition during the open measurement period.

During the nine months ended September 30, 2024 and 2023, we paid $ 5.1 million and $ 22.8 million, respectively, for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

Earn-Out Payments

($ in millions) June 30, 2024 December 31, 2023

($ in millions) September 30, 2024 December 31, 2023

Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria 13 14

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(1) Included in Other current and Other long-term liabilities on the Consolidated Balance Sheets.

Assuming the achievement of the applicable performance criteria, we anticipate making these earn-out payments over the next four years.

Assuming the achievement of the applicable performance criteria, we anticipate making these earn-out payments over the next five years.

Refer to Note 8, Fair Value Measurements, and Note 11, Restructuring and Acquisition Charges, for additional discussion of our earn-out liabilities.

Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of June 30, 2024 consisted of:

Goodwill and unamortized intangibles as of September 30, 2024 consisted of:

(i) goodwill of $ 4,667.2 million, (ii) identifiable intangibles of $ 671.2 million amortized over their remaining finite useful lives and (iii) $ 49.9 million of identifiable intangibles with indefinite useful lives that are not amortized.

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Impact of exchange rate movements 14.5 16.3 4.4 — 0.8 36.0

Balance as of June 30, 2024 $ 1,751.7 1,977.9 575.8 247.7 56.1 $ 4,609.2

Balance as of September 30, 2024 $ 1,773.8 2,006.1 582.5 247.7 57.1 $ 4,667.2

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

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Additions, net of adjustments — 18.7 — — — 18.7

Dispositions ( 0.4 ) ( 0.2 ) — — — ( 0.6 )

Impact of exchange rate movements ( 1.7 ) ( 2.0 ) ( 0.5 ) ( 0.1 ) — ( 4.3 )

Balance as of June 30, 2023 $ 1,755.4 1,982.0 536.4 247.7 56.2 $ 4,577.7

Balance as of September 30, 2023 $ 1,740.8 1,965.7 532.1 247.6 55.6 $ 4,541.8

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

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Impact of exchange rate movements — 1.8 1.8

Balance as of June 30, 2024 $ 820.5 549.3 $ 1,369.8

Balance as of September 30, 2024 $ 828.5 553.6 $ 1,382.1

Accumulated Amortization

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Impact of exchange rate movements — ( 1.1 ) ( 1.1 )

Balance as of June 30, 2024 $ ( 349.7 ) ( 276.2 ) $ ( 625.9 )

Net book value as of June 30, 2024 $ 470.8 273.1 $ 743.9

Balance as of September 30, 2024 $ ( 367.1 ) ( 293.9 ) $ ( 661.0 )

Net book value as of September 30, 2024 $ 461.4 259.7 $ 721.1

(1) Included in this amount for MSRs was $ 6.0 million relating to write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights.

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Impact of exchange rate movements — ( 1.0 ) ( 1.0 )

Balance as of June 30, 2023 $ 772.6 547.5 $ 1,320.1

Balance as of September 30, 2023 $ 794.1 541.5 $ 1,335.6

Accumulated Amortization

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Impact of exchange rate movements — 0.3 0.3

Balance as of June 30, 2023 $ ( 276.5 ) ( 222.5 ) $ ( 499.0 )

Net book value as of June 30, 2023 $ 496.1 325.0 $ 821.1

Balance as of September 30, 2023 $ ( 296.6 ) ( 235.8 ) $ ( 532.4 )

Net book value as of September 30, 2023 $ 497.5 305.7 $ 803.2

(1) Included in this amount for MSRs was $ 8.4 million relating to write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights.

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

Summarized investment balances as of June 30, 2024 and December 31, 2023 are presented in the following table.

(in millions) June 30, 2024 December 31, 2023

Summarized investment balances as of September 30, 2024 and December 31, 2023 are presented in the following table.

(in millions) September 30, 2024 December 31, 2023

JLL Technologies investments $ 423.4 397.6

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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 $ 254.7 million and $ 11.7 million as of June 30, 2024 for our LaSalle Investment Management business and JLL Technologies, respectively.

LaSalle Investment Management’s potential unfunded commitments decline in the second quarter of 2024 was primarily due to the legal release of a $ 60.3 million remaining unfunded commitment in a specific underlying fund.

There were no significant other-than-temporary impairment charges on investments for the six months ended June 30, 2024 and 2023.

We have maximum potential unfunded commitments to direct investments or investment vehicles of $ 233.0 million and $ 10.5 million as of September 30, 2024 for our LaSalle Investment Management business and JLL Technologies, respectively.

LaSalle Investment Management’s potential unfunded commitments decline in 2024 was primarily due to the legal release of a $ 60.3 million remaining unfunded commitment in a specific underlying fund.

There were no significant other-than-temporary impairment charges on investments for the nine months ended September 30, 2024 and 2023.

We report a majority of our investments at fair value.

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Foreign currency translation adjustments, net 2.1 ( 1.2 )

Fair value investments as of June 30, $ 744.7 802.5

(1) During the six months ended June 30, 2024 and 2023, $ 8.4 million and $ 63.8 million, respectively, in Notes receivable, inclusive of accrued interest, converted to unconsolidated equity investments.

Fair value investments as of September 30, $ 795.5 792.8

(1) Included in this caption are Notes receivable, inclusive of accrued interest, which converted to unconsolidated equity investments;

these amounts were $ 8.4 million and $ 66.9 million for the nine months ended September 30, 2024 and 2023, respectively.

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

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(in 000's) Weighted Average

Unvested as of March 31, 2024

Unvested as of June 30, 2024

1,098.1 511.4 1,609.5 $ 180.52

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Forfeited ( 14.3 ) ( 1.8 ) ( 16.1 ) 179.09

Unvested as of June 30, 2024

Unvested as of September 30, 2024

1,082.1 509.6 1,591.7 $ 184.62

Unvested as of March 31, 2023

Unvested as of June 30, 2023

1,003.4 463.6 1,467.0 $ 174.54

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Forfeited ( 39.6 ) ( 4.2 ) ( 43.8 ) 176.43

Unvested as of June 30, 2023

Unvested as of September 30, 2023

1,072.7 461.8 1,534.5 $ 174.73

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Forfeited ( 45.8 ) ( 8.3 ) ( 54.1 ) 174.50

Unvested as of June 30, 2024

Unvested as of September 30, 2024

1,082.1 509.6 1,591.7 $ 184.62

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Forfeited ( 62.0 ) ( 33.2 ) ( 95.2 ) 161.55

Unvested as of June 30, 2023

Unvested as of September 30, 2023

1,072.7 461.8 1,534.5 $ 174.73

As of June 30, 2024, we had $ 126.9 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we expect to be recognized over a weighted average period of 1.5 years.

As of September 30, 2024, we had $ 107.2 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we expect to be recognized over a weighted average period of 1.4 years.

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, Commercial paper, Short-term borrowings, 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.

The carrying values of our Credit facility, Commercial paper 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 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) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Long-term debt, fair value $ 817.3 798.1

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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 June 30, 2024 and December 31, 2023, investments at fair value using NAV were $ 332.7 million and $ 321.8 million, respectively.

As of September 30, 2024 and December 31, 2023, investments at fair value using NAV were $ 368.3 million and $ 321.8 million, respectively.

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

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

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

(in billions) June 30, 2024 December 31, 2023

(in billions) September 30, 2024 December 31, 2023

Foreign currency forward contracts, gross notional value $ 2.30 2.07

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

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Net asset, receivable positions $ 11.9 15.2

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Warehouse Receivables

As of June 30, 2024 and December 31, 2023, 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 September 30, 2024 and December 31, 2023, 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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The components of the plan are presented in the following table.

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Deferred compensation plan assets $ 672.2 604.3

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Both our interest rate lock commitments to prospective borrowers and forward sale contracts with prospective investors are undesignated derivatives and considered Level 3 valuations due to significant unobservable inputs related to nonperformance risk.

An increase in nonperformance risk assumptions would result in a lower fair value measurement.

Although non-performance risk does not currently have a material impact, an increase in nonperformance risk assumptions would result in a lower fair value measurement.

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 March 31, 2024 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers in (out) (2)

Balance as of June 30, 2024

(in millions) Balance as of June 30, 2024 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Balance as of September 30, 2024

Investments $ 367.8 9.5 1.5 — — $ 378.8

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Earn-out liabilities 53.7 ( 20.9 ) 0.2 2.4 ( 0.2 ) 35.2

(in millions) Balance as of March 31, 2023 Net change in fair value Foreign CTA (1)

(in millions) Balance as of June 30, 2023 Net change in fair value Foreign CTA (1)

Purchases / Additions Settlements Transfers in (2)

Balance as of June 30, 2023

Balance as of September 30, 2023

Investments $ 438.1 ( 2.0 ) ( 1.0 ) 0.5 — 3.1 $ 438.7

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Purchases / Additions Settlements Transfers in (out) (2)

Balance as of June 30, 2024

Balance as of

September 30, 2024

Investments $ 367.3 ( 0.9 ) 1.2 2.8 — 8.4 $ 378.8

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Purchases / Additions Settlements Transfers in (2)

Balance as of June 30, 2023

Balance as of September 30, 2023

Investments $ 452.0 ( 101.0 ) 0.2 20.6 — 66.9 $ 438.7

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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 six months ended June 30, 2024 or 2023.

We did not recognize any significant investment-level impairment losses during either of the nine months ended September 30, 2024 or 2023.

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) June 30, 2024 December 31, 2023

($ in millions) September 30, 2024 December 31, 2023

Short-term debt:

Local overdraft facilities $ 22.5 13.4

Other short-term borrowings 77.1 134.5

Short-term borrowings $ 126.2 147.9

Commercial paper, net of debt issuance costs of $ 2.0 and $ —

Total short-term debt, net of debt issuance costs $ 897.6 147.9

Credit facility, net of debt issuance costs of $ 12.2 and $ 14.4

1,262.1 610.6

Long-term senior notes, 1.96 %, face amount of € 175.0 , due June 2027, net of debt issuance costs of $ 0.3 and $ 0.4

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Total debt, net of debt issuance costs $ 2,014.1 1,537.8

Commercial Paper Program

On June 27, 2024, we established a commercial paper program (the “Program”) in which we may issue up to $ 2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time, under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Amounts available under the Program may be borrowed, repaid and re-borrowed from time to time.

Payment of the Program notes will be fully and unconditionally guaranteed on an unsecured and unsubordinated basis.

We intend to use net proceeds of the Program for general corporate purposes, including the repayment of outstanding borrowings under the Facility.

Notes issued under the Program will be sold under customary market terms in the U.S.

commercial paper market at par less a discount representing an interest factor or, if interest bearing, at par.

The maturities of the Program notes may vary but may not exceed 397 days from the date of issuance.

The Program notes and guarantee of payment thereof will rank pari passu with all other unsecured and unsubordinated indebtedness.

Credit Facilities

We have a $ 3.3 billion unsecured revolving credit facility (the "Facility") that matures on November 3, 2028.

Pricing on the Facility ranges from Adjusted Term Secured Overnight Financing Rate ("SOFR") plus 0.875% to 1.35% , with pricing including facility fees, as of June 30, 2024 at Adjusted Term SOFR plus 0.98 %.

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 June 30, 2024 and December 31, 2023.

Pricing on the Facility ranges from Adjusted Term Secured Overnight Financing Rate ("SOFR") plus 0.875% to 1.35% , with pricing including facility fees, as of September 30, 2024 at Adjusted Term SOFR plus 0.98 %.

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 September 30, 2024 and December 31, 2023.

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.

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

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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 June 30, 2024 and December 31, 2023.

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

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

As such, the Uncommitted Facility had no outstanding balance as of both September 30, 2024 and December 31, 2023.

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

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

($ in millions) 2024 2023 2024 2023

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Average effective interest rate 5.9 % 6.1 % 6.1 % 5.8 %

Short-Term and Long-Term Debt

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Amounts outstanding are presented in the debt table above.

As of June 30, 2024, our issuer and senior unsecured ratings are investment grade:

As of September 30, 2024, our issuer and senior unsecured ratings are investment grade:

Baa1 from Moody’s Investors Service, Inc.

and BBB+ from Standard & Poor’s Ratings Services.

Commercial Paper Program

Amounts available under the Program may be borrowed, repaid and re-borrowed from time to time.

Payment of the Program notes will be fully and unconditionally guaranteed on an unsecured and unsubordinated basis.

We intend to use net proceeds of the Program for general corporate purposes, including the repayment of outstanding borrowings under the Facility.

Notes issued under the Program will be sold under customary market terms in the U.S.

commercial paper market at par less a discount representing an interest factor or, if interest bearing, at par.

The maturities of the Program notes may vary but may not exceed 397 days from the date of issuance.

The Program notes and guarantee of payment thereof will rank pari passu with all other unsecured and unsubordinated indebtedness.

As of the end of June 30, 2024, we have not issued any notes under the Program.

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 June 30, 2024.

We remained in compliance with all covenants as of September 30, 2024.

Warehouse Facilities

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

Warehouse facilities:

BSBY (1) plus 1.30% , expires September 16, 2024

SOFR plus 1.40% , expires September 15, 2025 (1)

$ 566.8 700.0 159.0 700.0

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1,152.6 1,700.0 405.1 1,200.0

SOFR plus 1.40% , expires July 26, 2024 (2)

SOFR plus 1.40% , expires October 24, 2024 (2)

195.8 400.0 62.3 400.0

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Total warehouse facilities $ 2,053.1 2,800.0 662.7 2,300.0

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

(2) In July 2024, we extended the term of the Warehouse facility to October 24, 2024.

(1) Warehouse facility has been amended since December 31, 2023.

Refer to our previously filed Form 10-K for specific terms of the agreement as of the comparative period.

(2) In October 2024, we extended the term of the Warehouse facility to October 23, 2025.

(3) 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 June 30, 2024.

We remained in compliance with all covenants under our facilities as of September 30, 2024.

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.

There was no such receivable recorded as of June 30, 2024.

There was no such receivable recorded as of September 30, 2024.

As of December 31, 2023, a receivable of $ 2.5 million was included in Notes and other receivables on our Consolidated Balance Sheet.

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Claims paid ( 7.2 )

June 30, 2024 $ 2.8

September 30, 2024 $ 3.7

December 31, 2022 $ 2.2

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Claims paid ( 2.3 )

June 30, 2023 $ 6.9

September 30, 2023 $ 5.7

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 June 30, 2024 and December 31, 2023, we had loans, funded and sold, subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 21.8 billion and $ 20.8 billion, respectively.

As of September 30, 2024 and December 31, 2023, we had loans, funded and sold, subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $ 22.3 billion and $ 20.8 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 Consolidated Statements of Comprehensive Income.

As of June 30, 2024 and December 31, 2023, the loss-sharing guarantee obligations were $ 30.6 million and $ 30.9 million, respectively, and are included in Other liabilities on our Consolidated Balance Sheets.

There were no loan losses incurred during the six months ended June 30, 2024 and 2023.

As of September 30, 2024 and December 31, 2023, the loss-sharing guarantee obligations were $ 29.9 million and $ 30.9 million, respectively, and are included in Other liabilities on our Consolidated Balance Sheets.

There were no loan losses incurred during the nine months ended September 30, 2024 and 2023.

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 June 30, 2024 and December 31, 2023, the loan loss guarantee reserve was $ 26.4 million and $ 23.4 million, respectively, and is included within Other liabilities on our Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, the loan loss guarantee reserve was $ 29.0 million and $ 23.4 million, respectively, and is included within Other liabilities on our Consolidated Balance Sheets.

Loan Repurchase

In August of 2024, we repurchased a loan, which we originated and sold to Fannie Mae, with an unpaid principal balance ("UPB") of $ 74.25 million.

For the nine months ended September 30, 2024, we recognized net expense of $ 17.8 million within Operating, administrative and other expenses, for the estimated loss associated with the repurchase in our results.

This amount primarily reflects the difference between our estimate of the current fair value of the repurchased loan and the repurchase price, including amounts in excess of the UPB for items such as unpaid interest.

The acquired asset is not held for investment and is included in Prepaid and other on our Consolidated Balance Sheets.

RESTRUCTURING AND ACQUISITION CHARGES

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Restructuring and acquisition charges are presented in the table below.

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

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

(in millions) 2024 2023 2024 2023

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Restructuring and acquisition charges $ ( 8.8 ) 31.6 $ 4.4 79.1

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 June 30, 2024 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 September 30, 2024 will be paid during the next twelve months.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

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

Balance as of March 31, 2024 $ ( 63.5 ) ( 565.4 ) $ ( 628.9 )

Other comprehensive loss before reclassification

Balance as of June 30, 2024 $ ( 63.5 ) ( 587.5 ) $ ( 651.0 )

Other comprehensive income before reclassification

— 107.2 107.2

1 unchanged sentence

$ -, $ - and $ - — 8.7 8.7

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

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

— 115.9 115.9

Balance as of June 30, 2024 $ ( 63.5 ) ( 587.5 ) $ ( 651.0 )

Balance as of September 30, 2024 $ ( 63.5 ) ( 471.6 ) $ ( 535.1 )

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

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

Other comprehensive (loss) income before reclassification

Balance as of June 30, 2023 $ ( 65.3 ) ( 546.1 ) $ ( 611.4 )

Other comprehensive loss before reclassification

( 60.0 ) ( 60.0 )

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$ - , $ - and $ - — — —

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

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

— ( 60.0 ) ( 60.0 )

Balance as of June 30, 2023 $ ( 65.3 ) ( 546.1 ) $ ( 611.4 )

Balance as of September 30, 2023 $ ( 65.3 ) ( 606.1 ) $ ( 671.4 )

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

Balance as of December 31, 2023 $ ( 63.8 ) ( 527.7 ) $ ( 591.5 )

Other comprehensive income (loss) before reclassification

Other comprehensive income before reclassification

0.3 47.4 47.7

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$ - , $ - and $ - — 8.7 8.7

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

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

0.3 56.1 56.4

Balance as of June 30, 2024 $ ( 63.5 ) ( 587.5 ) $ ( 651.0 )

Balance as of September 30, 2024 $ ( 63.5 ) ( 471.6 ) $ ( 535.1 )

(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) income before reclassification

Other comprehensive loss before reclassification

( 1.1 ) ( 22.1 ) ( 23.2 )

1 unchanged sentence

$ - , $ - and $ - — — —

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

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

( 1.1 ) ( 22.1 ) ( 23.2 )

Balance as of June 30, 2023 $ ( 65.3 ) ( 546.1 ) $ ( 611.4 )

Balance as of September 30, 2023 $ ( 65.3 ) ( 606.1 ) $ ( 671.4 )

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

SUBSEQUENT EVENTS

On October 16, 2024, we closed our acquisition of Raise Commercial Real Estate (“Raise”), a U.S.-based technology-powered brokerage company that provides client solutions using a transformative digital real estate platform.

The acquisition of Raise was considered a business combination under U.S.

GAAP and will be accounted for using the acquisition method.

As such, the total consideration of approximately $ 28 million will be allocated to Raise’s tangible and intangible assets acquired, as well as liabilities assumed, based on their respective fair values with any excess allocated to goodwill.

This allocation is dependent on certain valuations and other fair value analyses that have not yet been completed.

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