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Item 7. Management’s Discussion and Analysis

2025-02-19 compared with 2024-02-27 · 155 added, 189 removed, 392 unchanged (47% of the section changed)

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In this Item, we discuss results for the years ended December 31, 2024 and 2023 and the comparison between these years.

Discussions of results for the year ended December 31, 2021 and comparisons between 2022 and 2021 results can be found in Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 202 2 .

Discussions of results for the year ended December 31, 2022 and comparisons between 2023 and 2022 results can be found in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2023 .

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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instead, we evaluate goodwill for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.

We reassessed our reporting units as of January 1, 2022, the effective date of our current organizational structure, and reassigned goodwill to reflect our new segment structure using a relative fair value allocation approach.

In addition, we may record intangible assets as a result of acquisitions, which are primarily composed of customer relationships, management contracts and customer backlog, and are amortized on a straight-line basis over their estimated useful lives.

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Second, JLL Technologies invests in proptech funds and early to mid-stage companies to improve our strategic position within the real estate technology landscape, including investments through the JLL Spark Global Ventures Funds.

We account for these investments at fair value.

We account for a majority of these investments at fair value.

Certain investments are accounted for under the measurement alternative, defined as cost minus impairment.

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

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

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

In circumstances where the NAV provided by the investee has a reporting date different than ours or when the NAV is not calculated consistent with U.S.

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Macroeconomic Conditions

Our results of operations and the variability of these results are significantly influenced by (i) macroeconomic trends, (ii) the geopolitical environment, (iii) the global and regional real estate markets and (iv) the financial and credit markets.

Our results of operations and the variability of these results are significantly influenced by (i) macroeconomic trends, (ii) geopolitical environment, (iii) global and regional real estate markets and (iv) financial and credit markets.

These macroeconomic and other conditions have had, and we expect will continue to have, a significant impact on the variability of our results of operations.

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Our results include incremental revenues and expenses following the completion date of an acquisition.

Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions and results may also include gains (losses) on the disposition.

Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions, and may also include gains (losses) on the disposition.

In addition, there is generally an initial adverse impact on net income from an acquisition as a result of pre-acquisition due diligence expenditures, transaction/deal costs and post-acquisition integration costs, such as fees from third-party advisors engaged to assist with onboarding and process alignment, retention and severance expense, early lease termination costs, and other integration expenses.

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Transaction-based revenues are impacted by the size and timing of our clients' transactions.

Such revenues include investment sales and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, increase the variability of the revenue we earn.

Specifically for LaSalle, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following:

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The issuance of the senior notes and Euro Notes at fixed interest rates has helped to limit our exposure to future movements in interest rates.

We had $199.3 million of outstanding borrowings, net of debt issuance costs as of December 31, 2024.

Our Program provides us with another source of short-term capital, which may help us mitigate interest rate risk.

We assess interest rate sensitivity to estimate the potential effect of rising interest rates on our variable rate debt.

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Our revenue from outside of the U.S.

approximated 41% of our total revenue for both 2023 and 2022, as outlined in the table below.

approximated 39% and 41% of our total revenue for the years ended December 31, 2024 and 2023, respectively, as outlined in the table below.

Operating in international markets means we are exposed to movements in foreign exchange rates, most significantly the British pound and the euro.

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Had euro-to-U.S.

dollar exchange rates been 10% higher throughout the course of 2023, we estimate our reported operating income would have decreased by $0.3 million.

dollar exchange rates been 10% higher throughout the course of 2024, we estimate our reported operating income would have increased by $2.7 million.

These hypothetical calculations estimate the impact of translating results into U.S.

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Other factors may affect seasonality.

For example, we experienced disruption to our historical seasonality trends due to rising interest rates and widespread economic uncertainty in 2022 and 2023.

Our operating expenses fluctuate with our revenue and general economic conditions, including inflation.

The impacts of inflation, including wage inflation, continue to be noticeable in our results.

However, we do not believe inflation had a material impact on our results of operations for the twelve months ended December 31, 2024.

RESULTS OF OPERATIONS

• Assets under management data for LaSalle is reported on a one-quarter lag.

not meaningful, represented by a percentage change of greater than 1,000% or a change in margin of greater than 10,000 basis points ("bps"), favorable or unfavorable.

• Net income margin attributable to common shareholders is measured on Revenue and Adjusted EBITDA margin is measured on Fee revenue.

• Assets under management data for LaSalle are reported on a one-quarter lag.

not meaningful, represented by a percentage change of greater than 1,000%, favorable or unfavorable.

• We define "Resilient" revenue as (i) Property Management, within Markets Advisory, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets, (iii) Workplace Management, within Work Dynamics, (iv) JLL Technologies and (v) Advisory Fees, within LaSalle.

In addition, we define "Transactional" revenue as (i) Leasing and Advisory, Consulting and Other, within Markets Advisory, (ii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, (iii) Project Management and Portfolio Services and Other, within Work Dynamics, and (iv) Incentive fees and Transaction fees and other, within LaSalle.

• We define "Transactional" revenue as (i) Leasing and Advisory, Consulting and Other, within Markets Advisory, (ii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, (iii) Project Management and Portfolio Services and Other, within Work Dynamics and (iv) Incentive fees and Transaction fees and other, within LaSalle.

• Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive.

These costs are presented on a gross basis in Operating expenses (with the corresponding fees in Revenue).

Year Ended December 31, 2024 compared with Year Ended December 31, 2023

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Revenue $ 23,432.9 20,760.8 2,672.1 13 % 13 %

Gross contract costs (13,375.9) (12,549.1) (826.8) 7 7

Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) 29.2 (265) (266)

Fee revenue $ 7,403.1 8,302.0 (898.9) (11) % (11) %

Markets Advisory 2,968.0 3,360.2 (392.2) (12) (11)

Capital Markets 1,748.7 2,430.2 (681.5) (28) (28)

Work Dynamics 1,999.7 1,864.7 135.0 7 7

JLL Technologies 231.9 200.2 31.7 16 16

LaSalle 454.8 446.7 8.1 2 2

Compensation and benefits, excluding gross contract costs $ 5,310.4 5,893.8 (583.4) (10) % (10) %

Operating, administrative and other expenses, excluding gross contract costs 1,158.9 1,218.2 (59.3) (5) (5)

Platform compensation and benefits $ 5,652.8 5,310.4 342.4 6 % 7 %

Platform operating, administrative and other expenses 1,242.1 1,158.9 83.2 7 7

Depreciation and amortization 255.8 238.4 17.4 7 7

Restructuring and acquisition charges 100.7 104.8 (4.1) (4) (5)

Total fee-based operating expenses 6,808.4 7,444.9 (636.5) (9) (8)

Total platform operating expenses 7,150.7 6,707.7 443.0 7 7

Gross contract costs 15,391.0 13,375.9 2,015.1 15 15

Restructuring and acquisition charges 23.1 100.7 (77.6) (77) (77)

Total operating expenses $ 22,564.8 20,184.3 2,380.5 12 % 12 %

Operating income $ 868.1 576.5 291.6 51 % 54 %

Equity (losses) earnings $ (194.1) 51.0 (245.1) (481) % (480) %

Equity losses $ (70.8) (194.1) 123.3 64 % 64 %

Net non-cash MSR and mortgage banking derivative activity $ (18.2) (18.2) — — % — %

Adjusted EBITDA $ 1,186.3 938.4 247.9 26 % 28 %

Net income margin attributable to common shareholders (USD basis) 1.1 % 3.1 % (200) bps n/a

Adjusted EBITDA margin (local currency basis) 10.0 % 15.0 % (500) bps (500) bps

Adjusted EBITDA margin (USD basis) 10.0 %

Non-GAAP Financial Measures

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These measures are believed to be useful to investors and other external stakeholders as supplemental measures of core operating performance and include the following.

(i) Fee revenue and Fee-based operating expenses;

(ii) Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and Adjusted EBITDA margin;

(iii) Percentage changes against prior periods, presented on a local currency basis.

(i) Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and

(ii) Percentage changes against prior periods presented on a local currency basis.

However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with U.S.

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GAAP, they may not be comparable to similarly titled measures used by other companies.

Effective January 1, 2024, we updated our definition of Adjusted EBITDA to exclude certain equity earnings/losses as further described below.

Comparable periods have been recast to conform to the revised presentation.

Also effective with 2024 reporting, we no longer report the non-GAAP measures "Fee revenue" and "Fee-based operating expenses" following the conclusion of a comment letter from the Securities and Exchange Commission Staff in February 2024.

Adjustments to U.S.

GAAP Financial Measures Used to Calculate non-GAAP Financial Measures

Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive.

These costs are presented on a gross basis in Operating expenses with the equal amount of corresponding fees in Revenue.

Excluding gross contract costs from both Fee revenue and Fee-based operating expenses more accurately reflects how we manage our expense base and operating margins and also enables a more consistent performance assessment across a portfolio of contracts with varying payment terms and structures.

Net non-cash MSR and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity and (ii) gains recognized from the retention of MSR upon origination and sale of mortgage loans, offset by (iii) amortization of MSR intangible assets over the period that net servicing income is projected to be received.

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Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.

Restructuring and acquisition 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, including non-cash fair value adjustments to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets and (iii) lease exit charges.

Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods.

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Given the low frequency of business disposals by the company historically, the gain or loss directly associated with such activity is excluded as it is not considered indicative of core operating performance.

In 2023, we recorded a $0.5 million net loss, versus a $7.5 million net loss in 2022.

Interest on Employee Loans, Net reflects interest accrued on employee loans less the amount of accrued interest forgiven.

Certain employees (predominantly in our Leasing and Capital Markets businesses) receive cash payments structured as loans, with interest.

Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production, annually.

In 2024, we did not recognize any gain or loss on disposition.

In 2023, the $0.5 million net loss included $1.8 million of loss related to the disposition of a business in Markets Advisory, partially offset by a $1.3 million gain related to the disposition of a business in Markets Advisory and Capital Markets.

Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven.

Certain employees (predominantly in Leasing and Capital Markets) receive cash payments structured as loans, with interest.

Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production.

Such forgiven amounts are reflected in Compensation and benefits expense.

Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.

Equity earnings/losses (JLL Technologies and LaSalle) primarily reflects valuation changes on investments reported at fair value.

Investments reported at fair value are increased or decreased each reporting period by the change in the fair value of the investment.

Where the measurement alternative has been elected, our investment is increased or decreased upon observable price changes.

Such activity is excluded as the amounts are generally non‑cash in nature and not indicative of core operating performance.

Equity earnings/losses in the remaining segments represent the results of unconsolidated operating ventures (not investments), and therefore, the amounts are included in Adjusted EBITDA on both a segment and consolidated basis.

Credit losses on convertible note investments reflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises.

Such losses are similar to the equity investment-related losses included in equity earnings/losses for JLL Technologies' investments and are therefore consistently excluded from adjusted measures.

Reconciliation of Non-GAAP Financial Measures

Below are the reconciliations of (i) Revenue to fee revenue and (ii) Operating expenses to Fee-based operating expenses.

Year Ended December 31,

(in millions) 2023 2022

Revenue $ 20,760.8 20,862.1

Gross contract costs (13,375.9) (12,549.1)

Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0)

Fee revenue $ 7,403.1 8,302.0

Operating expenses $ 20,184.3 19,994.0

Gross contract costs

(13,375.9) (12,549.1)

Fee-based operating expenses $ 6,808.4 7,444.9

Operating income $ 576.5 868.1

Below is a reconciliation of Net income attributable to common shareholders to EBITDA and Adjusted EBITDA.

Below is a reconciliation of Net income attributable to common shareholders to Adjusted EBITDA.

Year Ended December 31,

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Depreciation and amortization (1)

EBITDA $ 620.9 1,155.7

Restructuring and acquisition charges 23.1 100.7

Net loss on disposition 0.5 7.5

Net loss (gain) on disposition — 0.5

Net non-cash MSR and mortgage banking derivative activity 18.2 18.2

Interest on employee loans, net (3.6) (9.7)

Interest on employee loans, net of forgiveness (5.9) (3.6)

Equity losses - JLL Technologies and LaSalle 76.4 201.7

Credit losses on convertible note investments 6.3 —

Adjusted EBITDA $ 1,186.3 938.4

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We believe this methodology provides a framework for assessing performance and operations excluding the effect of foreign currency fluctuations.

The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Fee revenue, (iii) Operating income and (iv) Adjusted EBITDA.

The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.

Year Ended December 31,

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At comparative period exchange rates $ 23,485.4 13 %

At current period exchange rates $ 7,403.1 (11) %

Impact of change in exchange rates 11.5 n/a

At comparative period exchange rates $ 7,414.6 (11) %

Operating income:

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At comparative period exchange rates $ 1,201.0 28 %

For the full year, revenue was flat and fee revenue decreased 11% compared with the prior year, as transaction-based businesses lagged the prior year.

Resilient businesses, collectively, delivered 5% growth for the full year, as Property Management, within Markets Advisory, grew 11%;

Workplace Management, within Work Dynamics, grew 7%;

and JLL Technologies grew 16%.

In contrast, transaction-based businesses, notably Investment Sales and Debt Advisory within Capital Markets as well as Leasing within Markets Advisory, experienced challenges from a rapid increase in interest rates and negative economic sentiment, consistent with performance starting in the second half of 2022.

The following highlights Revenue and fee revenue by segment, for the current and prior year ($ in millions).

Consolidated revenue grew 13% and was broad-based across revenue types and most sub-segments.

Resilient revenues grew 14% collectively, highlighted by Workplace Management, up 17%, and Property Management, up 8%.

Growth in these businesses outpaced declines in LaSalle Advisory Fees, down 7%, and JLL Technologies, down 8%.

Fueled by a strong second half of 2024, Transactional revenue increased 11% collectively, led by (i) Leasing, up 11%, (ii) Investment Sales, Debt/Equity Advisory and Other, up 20%, and (iii) Project Management, up 8%.

The following highlights Revenue by segment and type (Transactional versus Resilient), for the current and prior year ($ in millions).

Refer to segment operating results for further detail.

Operating Expenses

Operating expenses increased 1% to $20.2 billion in 2023 while fee-based operating expenses were $6.8 billion in 2023, down 8% from prior year.

The net increase in operating expenses was driven by growth in resilient businesses, such as Workplace Management and Property Management, including associated reimbursed expenses.

The decline in fee-based operating expenses was attributable to Capital Markets, which represented 65% of the decrease on a local currency basis, Markets Advisory, which represented 46% of the decrease, and JLL Technologies, which represented 7% of the decrease.

These were partially offset by Work Dynamics, which had an increase in fee-based operating expenses.

Operating expenses increased 12% to $22.6 billion in 2024.

Generally, the net increase in platform operating expenses was largely driven by growth in revenue-related expenses, partially offset by greater platform leverage.

Gross contract costs also increased due to top-line performance.

Refer to segment operating results for additional detail.

Restructuring and acquisition charges in 2023 were slightly lower than 2022;

refer to the following table and commentary below for additional detail.

Restructuring and acquisition charges were lower in 2024, compared with 2023, primarily due to (i) an expense credit in the third quarter of 2024 associated with a reduction to an acquisition-related earn-out and (ii) lower employment-related costs over the full year as significant cost-out actions were executed in 2023.

Refer to the following table for further detail.

Year Ended December 31,

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Restructuring and acquisition charges $ 23.1 100.7

The increase in severance and other employment-related charges, compared with 2022, reflected notable cost mitigation actions taken across the globe in 2023.

The decrease in restructuring and pre- and post-acquisition charges was largely driven by lower retention-related post-acquisition charges and fewer restructuring costs related to business exits in 2023 compared to 2022.

Interest Expense

Interest expense, net of interest income, for 2024 was $136.9 million, compared to $135.4 million in 2023.

The change was driven by a higher effective interest rate on our credit facilities and a year-over-year increase in the average outstanding borrowings.

The average outstanding borrowings under our credit facilities increased to $1,875.9 million, with an average effective interest rate of 5.9%, in 2023, from $1,399.1 million, with an average effective interest rate of 2.9%, during 2022.

Equity Earnings

The following details Equity (losses) earnings by relevant segment.

The average outstanding borrowings under our credit facilities and commercial paper program was $1,381.4 million this year, with an average effective interest rate of 5.9%, in 2024, compared with $1,875.9 million, also with an average effective interest rate of 5.9%, during 2023.

Equity Earnings (Losses)

The following details Equity losses by relevant segment.

Refer to the segment discussions for additional details.

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Other 5.6 7.6

Equity (losses) earnings $ (194.1) 51.0

Equity losses $ (70.8) (194.1)

The provision for income taxes was $132.5 million and $25.7 million for the years ended December 31, 2024 and 2023, respectively, representing effective tax rates ("ETR") of 19.5% and 10.2%, respectively.

The meaningfully lower ETR in 2023 was primarily attributable to the significant decline in pre-tax earnings as well as the geographic mix of income.

The meaningfully lower ETR in 2023 was primarily attributable to the significantly lower pre-tax earnings (compared to 2024) as well as the geographic mix of income.

Refer to the Income Tax discussion in the Summary of Critical Accounting Policies and Estimates and Note 8, Income Taxes, of the Notes to Consolidated Financial Statements, included in Item 8, for a further discussion of our effective tax rate.

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Net income attributable to common shareholders was $546.8 million for the year, or $11.30 per diluted common share, compared with $225.4 million for 2023, or $4.67 per diluted common share.

Adjusted EBITDA decreased 40% from the prior year to $736.7 million in 2023.

Net income margin attributable to common shareholders was 1.1% in 2023, down from 3.1% in the prior year.

Adjusted EBITDA margin, calculated on a fee revenue basis, was 10.0% in both USD and local currency for 2023, compared with 15.0% in 2022.

The full-year margin contraction was primarily attributable to the $245.1 million decrease in equity earnings, which comprised nearly two-thirds of the margin decline, and the impact of lower transaction-based revenue.

Partially offsetting these items were margin accretive drivers including resilient revenue growth and the benefit of cost reduction actions executed in the last year.

Adjusted EBITDA increased 28% from the prior year to $1,186.3 million in 2024.

Adjusted EBITDA expansion was primarily attributable to (i) higher revenues, both Transactional and certain Resilient revenue streams, including Workplace Management within Work Dynamics, and (ii) cost discipline and enhanced platform leverage.

These drivers notably outpaced the $19.5 million expense associated with the Fannie Mae loan repurchase and the $18.1 million impact associated with an outsized prior-year actuarial benefit.

Refer to the segment performance highlights for additional detail.

Segment Operating Results

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Our JLL Technologies segment offers software products, solutions and services, while LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.

For segment reporting, (i) gross contract costs and (ii) net non-cash MSR and mortgage banking derivative activity are both excluded from revenue in determining Fee revenue.

Gross contract costs are excluded from operating expenses in determining Fee-based operating expenses.

In addition, our measure of segment results also excludes Restructuring and acquisition charges.

Segment operating expenses comprise Gross contract costs and Segment platform operating expenses, which includes Platform compensation and benefits;

Platform operating, administrative and other expenses;

and Depreciation and amortization.

Our measure of segment results excludes Restructuring and acquisition charges.

Markets Advisory

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dollars Currency

Revenue $ 4,121.6 4,415.5 (293.9) (7) % (6) %

Gross contract costs (1,153.6) (1,055.3) (98.3) 9 11

Fee revenue $ 2,968.0 3,360.2 (392.2) (12) % (11) %

Leasing $ 2,596.2 2,343.6 252.6 11 % 11 %

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Advisory, Consulting and Other 109.4 102.9 6.5 6 7

Compensation and benefits, excluding gross contract costs 2,178.2 2,433.7 (255.5) (10) (10)

Operating, administrative and other expenses, excluding gross contract costs 368.3 405.0 (36.7) (9) (8)

Revenue $ 4,500.7 4,121.6 379.1 9 % 9 %

Platform compensation and benefits $ 2,309.2 2,178.2 131.0 6 % 6 %

Platform operating, administrative and other 371.9 368.3 3.6 1 1

Depreciation and amortization 70.0 69.6 0.4 1 1

Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,616.1 2,912.2 (296.1) (10) (10)

Segment platform operating expenses 2,751.1 2,616.1 135.0 5 5

Gross contract costs 1,269.6 1,153.6 116.0 10 11

Segment operating expenses $ 4,020.7 3,769.7 251.0 7 % 7 %

Equity losses $ (0.5) (0.3) (0.2) (67) % (51) %

Equity earnings (losses) $ 0.7 (0.5) 1.2 240 % 227 %

Adjusted EBITDA $ 547.6 416.6 131.0 31 % 31 %

Adjusted EBITDA margin (local currency basis) 14.1 % 15.7 % (170) bps (160) bps

Adjusted EBITDA margin (USD basis) 14.0 %

Markets Advisory top-line movements were largely driven by Leasing and reflected a decrease in average deal size and lower transaction volumes across nearly all asset classes, especially the office sector.

Economic uncertainty has delayed commercial real estate decision making, particularly for large-scale leasing actions where JLL has a greater presence.

Property Management continued to achieve top-line growth, primarily attributable to portfolio expansions, predominantly in the Americas, and incremental fees from interest-rate-sensitive contract terms in the U.K.

The decrease in Advisory, Consulting and Other was substantially driven by the absence of revenues associated with a business exited at the end of the fourth quarter of 2022.

The decreases in segment operating expenses and segment fee-based operating expenses in 2023 were driven primarily by (i) lower commissions, commensurate with the top-line performance, (ii) the absence of operating costs associated with the business exited at the end of 2022 (referenced in the revenue narrative above) and (iii) the benefit associated with cost management actions executed over the last year to reduce expenses.

These decreases were partially offset by higher annual incentive compensation expense this year as the prior-year results reflected a company-wide discretionary reduction to annual incentive compensation accruals.

Adjusted EBITDA margin contraction was predominantly driven by the lower Leasing revenue (net of lower commissions) and higher incentive compensation accruals in the current year, which overshadowed the revenue growth in Property Management and benefit associated with cost management actions discussed above.

The broad-based increase in Markets Advisory revenue was primarily driven by Leasing and led by the office sector.

Many geographies achieved double-digit Leasing revenue growth, most notably the U.S., India and the UK.

In addition, the number of large Leasing deals (where JLL has a greater presence) increased over the prior year in nearly all asset classes.

Property Management revenue growth for the year was led by expansions in the U.S.

and several countries in Asia Pacific, largely due to greater pass-through costs (i.e., Gross contract costs), as management fees increased low single-digits.

The increase in Segment platform operating expenses was driven by higher commissions, partially offset by greater platform leverage.

Higher Adjusted EBITDA was driven by transactional revenue growth, which outpaced the expense increased described above.

Capital Markets

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dollars Currency

Revenue $ 1,778.0 2,488.2 (710.2) (29) % (29) %

Gross contract costs (47.5) (47.0) (0.5) 1 1

Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) 29.2 (265) (266)

Fee revenue $ 1,748.7 2,430.2 (681.5) (28) % (28) %

Investment Sales, Debt/Equity Advisory and Other $ 1,506.2 1,261.6 244.6 19 % 20 %

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Loan Servicing 161.2 152.6 8.6 6 6

Compensation and benefits, excluding gross contract costs 1,337.7 1,727.1 (389.4) (23) (22)

Operating, administrative and other expenses, excluding gross contract costs 246.1 263.2 (17.1) (6) (6)

Revenue $ 2,040.4 1,778.0 262.4 15 % 15 %

Platform compensation and benefits $ 1,491.9 1,337.7 154.2 12 % 12 %

Platform operating, administrative and other 278.4 246.1 32.3 13 13

Depreciation and amortization 66.8 65.6 1.2 2 2

Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,649.4 2,051.9 (402.5) (20) (20)

Segment platform operating expenses 1,837.1 1,649.4 187.7 11 11

Gross contract costs 48.6 47.5 1.1 2 3

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Equity earnings $ 2.7 6.7 (4.0) (60) % (59) %

Net non-cash MSR and mortgage banking derivative activity $ (18.2) (18.2) — — % — %

Adjusted EBITDA $ 244.4 173.1 71.3 41 % 42 %

Adjusted EBITDA margin (local currency basis) 9.9 % 18.3 % (840) bps (840) bps

Adjusted EBITDA margin (USD basis) 9.9 %

Lower Capital Markets revenue and fee revenue reflected the meaningful drop in transaction volumes compared with 2022.

The rapid rise in interest rates and elevated uncertainty prolonged investor decision making and drove wide bid-ask spreads.

This impact was most pronounced in Investment Sales and Debt/Equity Advisory, which experienced declines across all asset classes and geographies.

Globally, fourth-quarter market volumes for investment sales were down 23% in USD (24% in local currency) according to JLL Research, the lowest fourth quarter since 2011.

Loan Servicing continued to achieve growth in fees generated by the Fannie Mae DUS portfolio as core servicing fees were up 6%, more than offset by $13.4 million of lower prepayment fees as refinancing activity remained suppressed.

The net decreases in segment operating expenses and segment fee-based operating expenses in 2023 were driven primarily by lower commissions, commensurate with the top-line performance, and to the benefit of cost management strategies actioned in the last year.

These decreases were partially offset by higher incentive bonus expense in 2023, primarily reflecting the benefit to the prior year associated with the company-wide discretionary reduction to annual incentive compensation accruals.

The margin contraction was predominantly driven by the decline in Investment Sales and Debt/Equity Advisory revenue, net of lower commissions expense, as well as incentive compensation accruals, as described above.

Capital Markets top-line results were driven by Investment Sales, Debt/Equity Advisory and Other as investor sentiment and increasing interest rate stability supported year-over-year accelerated activity.

Both investment sales and debt advisory achieved double-digit growth across most geographies.

Investment sales in the U.S.

grew 30%, outperforming the broader market for U.S.

investment sales, which grew 12% according to JLL Research.

The increase in Segment platform operating expenses was driven by (i) higher commissions, correlated to revenue growth, (ii) the $19.5 million adverse impact associated with the August repurchase of a Fannie Mae loan and (iii) $5.1 million higher non-cash expense attributable to the year-over-year change in loan loss credit reserves.

The Adjusted EBITDA improvement was largely attributable to transactional revenue growth, together with cost discipline, tempered by the expense drivers described above.

Work Dynamics

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dollars Currency

Revenue $ 14,131.1 13,268.5 862.6 7 % 7 %

Gross contract costs (12,131.4) (11,403.8) (727.6) 6 7

Fee Revenue $ 1,999.7 1,864.7 135.0 7 % 7 %

Workplace Management $ 12,529.7 10,706.2 1,823.5 17 % 17 %

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Portfolio Services and Other 516.0 500.1 15.9 3 3

Compensation and benefits, excluding gross contract costs 1,305.1 1,202.3 102.8 9 9

Operating, administrative and other expenses, excluding gross contract costs 431.6 432.9 (1.3) — —

Revenue $ 16,197.6 14,131.1 2,066.5 15 % 15 %

Platform compensation and benefits $ 1,385.8 1,305.1 80.7 6 % 6 %

Platform operating, administrative and other 467.8 431.6 36.2 8 9

Depreciation and amortization 91.1 79.2 11.9 15 15

Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,815.9 1,706.3 109.6 6 7

Segment platform operating expenses 1,944.7 1,815.9 128.8 7 7

Gross contract costs 14,029.9 12,131.4 1,898.5 16 16

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Adjusted EBITDA $ 316.3 264.0 52.3 20 % 20 %

Adjusted EBITDA margin (local currency basis) 13.1 % 12.3 % 90 bps 80 bps

Adjusted EBITDA margin (USD basis) 13.2 %

Work Dynamics revenue and fee revenue growth was broad-based across service lines and geographies, led by strong performance in Workplace Management as recent wins and mandate expansions ramped up in the second half of the year.

Momentum from increased project demand drove Project Management top-line expansion throughout 2023, though the pace of growth decelerated in the fourth quarter.

The net increases in segment operating expenses and segment fee-based operating expenses in 2023 were primarily due to higher revenue-related expenses, which correlated to the overall growth in revenue as the benefit of cost management actions executed over the last year largely offset other operating expense increases.

Margin expansion was driven by the Workplace Management and Project Management revenue growth and the reduction of certain expenses associated with cost management actions over the last year.

Work Dynamics revenue growth was led by continued strong performance in Workplace Management, largely from a balanced mix of client wins and mandate expansions, as well as incremental pass-through costs in the United States.

Project Management revenue performance varied across geographies given shifts in business mix as management fees increased in the mid-single digits, supplemented by higher pass-through costs.

The increase in Segment platform operating expenses was driven by (i) a nearly $13 million lower actuarial benefit associated with U.S.

medical self-insurance compared to the prior year, (ii) higher U.S.

state gross receipt tax expense reported in the third quarter of 2024 and (iii) incremental investments in our platform (including technology and artificial intelligence capabilities).

Adjusted EBITDA growth was driven by top-line performance, which more than overcame the incremental expenses described above.

JLL Technologies

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Revenue $ 226.3 246.4 (20.1) (8) % (8) %

Gross contract costs (14.5) (13.7) (0.8) 6 6

Fee revenue $ 231.9 200.2 31.7 16 % 16 %

Compensation and benefits, excluding gross contract costs (1)

Platform compensation and benefits (1)

$ 197.0 200.7 (3.7) (2 %) (2 %)

Operating, administrative and other expenses, excluding gross contract costs 50.3 57.4 (7.1) (12) (12)

Platform operating, administrative and other 54.2 50.3 3.9 8 8

Depreciation and amortization 19.4 15.9 3.5 22 22

Segment fee-based operating expenses (excluding restructuring and acquisition charges) 266.9 313.1 (46.2) (15) (15)

Segment platform operating expenses 270.6 266.9 3.7 1 1

Gross contract costs 5.5 14.5 (9.0) (62) (62)

Segment operating expenses $ 276.1 281.4 (5.3) (2) % (2) %

Equity (losses) earnings $ (177.0) 46.6 (223.6) (480) % (480) %

Adjusted EBITDA (2)

Adjusted EBITDA margin (local currency basis) (84.9) % (25.4) % (5,920) bps (5,950) bps

Adjusted EBITDA margin (USD basis) (84.6) %

(1) Included in Compensation and benefits expenses for JLL Technologies is a reduction in carried interest expense of $13.8 million for the twelve months ended December 31, 2023, and carried interest expense of $16.6 million for the twelve months ended December 31, 2022, related to Equity earnings of the segment.

The full-year increases in JLL Technologies revenue and fee revenue were primarily due to growth in services and software solutions, largely from existing enterprise clients, as well as a modest increase from subscriptions.

Equity losses in 2023 were largely driven by fair value declines and reflected the particularly challenging economic environment for venture capital companies.

Equity earnings in 2022 were attributable to modest valuation increases across several investments, offset by less significant impairments/valuation declines compared with 2023.

Lower segment operating expenses and segment fee-based operating expenses in 2023 were largely driven by (i) a $30.4 million year-over-year difference associated with carried interest expense (which broadly correlates to equity earnings/losses), given the reduction in carried interest expense in 2023 compared with incremental expense in 2022 and (ii) the reduction of certain expenses associated with cost management actions over the last year.

The full-year margin contraction was entirely driven by the equity losses, partially offset by (i) fee revenue growth, (ii) the reduction in carried interest expense (associated with equity losses) and (iii) the reduction of certain expenses associated with cost management actions and improved operating efficiency over the last year.

$ (22.3) (19.1) (3.2) (17) % (15) %

Equity losses $ (53.8) (177.0) 123.2 70 % 70 %

(1) Included in Compensation and benefits expenses for JLL Technologies is carried interest expense of $2.7 million for the twelve months ended December 31, 2024, and carried interest benefit of $13.8 million for the twelve months ended December 31, 2023.

Carried interest expense (benefit) is associated with equity earnings/losses on Spark Venture Funds investments.

(2) Adjusted EBITDA excludes Equity losses for JLL Technologies.

The decrease in JLL Technologies revenue was due to lower contract signings in technology solutions over the past year, partially offset by modest growth in software services.

The net increase in Segment platform operating expenses was largely driven by a $16.5 million year-over-year difference associated with carried interest expense (given incremental expense in 2024 compared with a reduction in carried interest in 2023), largely offset by the impact of cost discipline and improved operating efficiency achieved over the past year.

The decline in Adjusted EBITDA was attributable to the revenue and expense drivers described above.

Lower equity losses in 2024 were attributable to modest valuation increases across several investments, offset by less significant valuation declines compared with 2023.

Year Ended December 31, Change in in Local

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dollars Currency

Revenue $ 483.7 476.0 7.7 2 % 2 %

Gross contract costs (28.9) (29.3) 0.4 (1) (2)

Fee revenue $ 454.8 446.7 8.1 2 % 2 %

Advisory fees $ 373.8 406.2 (32.4) (8) % (7) %

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Incentive fees 60.6 47.5 13.1 28 36

Compensation and benefits, excluding gross contract costs 288.7 290.4 (1.7) (1) —

Operating, administrative and other expenses, excluding gross contract costs 62.6 59.7 2.9 5 5

Revenue $ 467.9 483.7 (15.8) (3) % (2) %

Platform compensation and benefits $ 268.9 288.7 (19.8) (7) % (6) %

Platform operating, administrative and other 69.8 62.6 7.2 12 11

Depreciation and amortization 8.5 8.1 0.4 5 5

Segment fee-based operating expenses (excluding restructuring and acquisition charges) 359.4 356.6 2.8 1 1

Segment platform operating expenses 347.2 359.4 (12.2) (3) (3)

Gross contract costs 37.4 28.9 8.5 29 30

Segment operating expenses $ 384.6 388.3 (3.7) (1) % — %

Equity (losses) earnings $ (24.7) 0.4 (25.1) n.m.

Adjusted EBITDA (1)

Adjusted EBITDA margin (local currency basis) 17.5 % 21.6 % (420) bps (410) bps

Adjusted EBITDA margin (USD basis) 17.4 %

LaSalle's top-line growth was fueled by higher incentive fees earned on asset dispositions on behalf of clients, following muted transaction volume in 2022.

Advisory fees were stable compared to the prior year as increases from capital raising were largely offset by valuation declines impacting AUM.

Lower transaction fees reflected the global trends in investment sales transaction volumes.

The 2023 equity losses were primarily attributable to valuation declines in the co-investment portfolio.

Adjusted EBITDA margin contraction was primarily driven by equity losses in the current year (over 500 basis point negative impact to margin), partially offset by higher incentive fees.

As of December 31, 2023, LaSalle had $73.9 billion of AUM, a decrease of 7% in both USD and local currency from

$79.1 billion as of December 31, 2022.

The net decrease in AUM during the year resulted from (i) $5.7 billion of dispositions and withdrawals and (ii) $4.0 billion of net valuation decreases, partially offset by (iii) $4.0 billion of acquisitions and $0.5 billion of foreign currency increases.

As further described in Item 1, LaSalle will refine the definition of AUM in 2024 to conform with industry standards.

Under the new definition, AUM as of December 31, 2023 would have been $89.0 billion.

$ 100.3 103.8 (3.5) (3) % 1 %

Equity losses $ (22.6) (24.7) 2.1 9 % 9 %

(1) Adjusted EBITDA excludes Equity losses for LaSalle.

The decrease in revenue was driven by lower advisory fees, which reflected (i) reduced fees in Europe as a result of structural changes to a lower-margin business and (ii) declines in AUM over the trailing twelve months.

The decrease in advisory fees was largely offset by higher incentive fees, in particular those earned in the fourth quarter of 2024 from asset dispositions on behalf of clients in Asia Pacific.

Lower Segment platform operating expenses reflected (i) lower variable incentive compensation expense as a result of decreased revenue and (ii) the 2024 benefit of cost management actions.

These decreases were partially offset by a few discrete, individually immaterial expense items.

Adjusted EBITDA was flat compared to the prior year, reflecting the lower revenues offset by the expense drivers noted above and an $8.2 million gain recognized in the second quarter of 2024 following the purchase of a controlling interest in a LaSalle-managed fund.

Net equity losses were lower in 2024 as LaSalle reported equity earnings for the fourth-quarter, as valuation movements in AUM continue to stabilize.

The fourth quarter of 2024 was the first quarter since mid-2022 with positive equity earnings, reflecting greater stabilization of underlying valuations.

In 2024, AUM decreased nominally in USD (3% in local currency).

Changes in AUM are detailed below (in billions):

Beginning balance (December 31, 2023) $ 89.0

Asset acquisitions/takeovers 4.6

Asset dispositions/withdrawals (5.3)

Valuation changes (1.3)

Foreign currency translation 2.4

Change in uncalled committed capital and cash held (0.6)

Ending balance (December 31, 2024) $ 88.8

LIQUIDITY AND CAPITAL RESOURCES

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Operating activities provided $785.3 million of cash in 2024, compared with $575.8 million provided in 2023.

The improvement in cash provided was primarily due to (i) improved collection of receivables (ii) $162.8 million less in cash taxes paid, (iii) lower annual incentive compensation payments, typically paid in the first quarter, compared with the prior year and (iv) lower commission payments in 2023.

Improved cash flow performance was primarily driven by (i) higher cash provided by earnings, (ii) higher commission and bonus accruals (versus payments made) and (iii) improvements in Net reimbursables.

These were partially offset by an increase in receivables associated with revenue growth, $126.4 million of higher cash taxes paid, and the August 2024 loan repurchase from Fannie Mae.

Cash Flows from Investing Activities

We used $316.8 million of cash for investing activities during 2024, compared with $290.4 million used in 2023.

Net cash outflow was lower in 2022 due to the receipt of $132.4 million net capital proceeds relating to an investment by a less than wholly-owned subsidiary (offset within cash flows from financing activities as noted below).

Net cash outflow increased in 2024 due to higher business acquisition volumes in the current year, partially offset by lower investment activity within JLL Technologies and LaSalle.

We discuss key drivers, along with other investing activities, individually below in further detail.

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Financing activities used $451.2 million of cash during 2024, compared with $374.3 million used during 2023.

The decrease in net borrowings on our Facility ($600.0 million net paydowns in 2023 versus $1,075.0 million of net borrowings in 2022) was driven by lower share repurchases (refer to the Share Repurchases section below) and higher cash provided by operating activities.

In addition, the $400.0 million in proceeds associated with the issuance of senior notes was used to pay down the Facility.

Cash outflow relating to noncontrolling interest distributions in 2022 included a $142.3 million gain by a consolidated variable interest entity in which the company held no equity interest that was also distributed during the year.

The offset to this is included in cash from investing activities, specifically investment activity by less than wholly-owned entities.

On November 3, 2023, we amended our Facility to extend the maturity date to November 3, 2028 as well as update our borrowing capacity to $3.30 billion.

Our Facility continues to bear a variable rate of interest.

Outstanding borrowings, including the balance of the Facility and Short-term borrowings (financing lease obligations, overdrawn bank accounts and local overdraft facilities) are presented below.

This change resulted from a net year-over-year decrease in debt outstanding, as cash provided by earnings was higher in 2024.

We discuss the key components of our financing activity below in further detail.

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.

Our $3.3 billion Facility matures on November 3, 2028, and bears a variable interest rate.

Outstanding borrowings, including the balance of the Facility, Short-term borrowings (financing lease obligations, overdrawn bank accounts and local overdraft facilities) and the balance outstanding under the Program are presented below.

(in millions) 2024 2023

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Short-term borrowings 153.8 147.9

Outstanding commercial paper 200.0 —

In addition to our Facility, we had the capacity to borrow up to $42.5 million under local overdraft facilities as of December 31, 2024.

The following table provides additional information on our Facility as well as our uncommitted credit agreement ("Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $400.0 million, collectively.

The following table provides additional information on our Facility, commercial paper, and our uncommitted credit agreement ("Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $400.0 million, collectively.

Year Ended December 31,

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As of December 31, 2024, $1,013.2 million remained authorized for repurchases under our repurchase program.

The following table outlines share repurchase activity for the last two year.

The following table outlines share repurchase activity for the last two years.

Year Ended December 31,

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Capital Expenditures

Capital expenditures, excluding those made by a consolidated VIE in which we held no equity interest, were $186.9 million and $205.8 million in 2023 and 2022, respectively.

Capital expenditures were $185.5 million and $186.9 million in 2024 and 2023, respectively.

Expenditures in both years were primarily related to office leasehold improvements, hardware and purchased/developed software.

Investment Asset Activity of Consolidated Less Than Wholly-Owned Entities

Net capital proceeds related to consolidated VIEs in which we held no equity interest were $134.8 million in 2022, as a result of a reconsideration event.

The distribution of proceeds from the sale of this investment (the initial acquisition of which was largely funded from employee-investors and related third-party debt) also occurred in 2022 and is included within financing activities.

Business Acquisitions

In 2024, we paid $69.7 million for business acquisitions.

This included $13.6 million of payments relating to an acquisition that closed in 2023 and $26.8 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flows from financing activities.

This included $62.3 million of payments relating to acquisitions that closed in 2024 and $7.4 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flows from financing activities.

Terms for our acquisitions have typically included cash paid at closing with provisions for additional consideration and earn-out payments subject to certain contract provisions and performance.

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As of December 31, 2024 and 2023, we had total cash and cash equivalents of $416.3 million and $410.0 million, respectively, of which $314.4 million and $310.1 million, respectively, was held by our foreign subsidiaries.

Restricted Net Assets

We face regulatory restrictions in certain countries that limit or prevent the transfer of funds to other countries or the exchange of the local currency to other currencies, however, we generally face no such restrictions with regard to the use or application of funds for ordinary course business activities within such countries.

The total assets of these countries in aggregate totaled approximately 4% of our total assets as of both December 31, 2023 and 2022.

Our lease obligations primarily consist of operating leases of office space in various buildings for our own use as well as operating leases for equipment.

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Deferred compensation obligations are inclusive of amounts attributable to service conditions satisfied as of December 31, 2024, as well as service conditions expected to be satisfied in future periods.

The deferred compensation plans include a provision for deferred compensation plans, predominantly in the U.S., that allow employees to defer portions of their compensation.

We invest directly in insurance contracts which yield returns to fund these deferred compensation obligations.

These plans allow employees and members of our Board of Directors to defer portions of their compensation, and plan balances predominantly relate to U.S.

We recognize an asset for the amount that could be realized under these insurance contracts at the balance sheet date, and the deferred compensation obligation is adjusted to reflect the changes in the fair value of the amount owed to the employees.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis