United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission File Number 1-13145

Jones Lang LaSalle Incorporated

(Exact name of registrant as specified in its charter)

Maryland

36-4150422

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

200 East Randolph Drive

Chicago,

60601

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code:

(312)

782-5800

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01

JLL

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant's common stock (par value $0.01) as of the close of business on ~~October 27, 2020~~April 29, 2021 was ~~51,302,899.~~51,307,170.

Table of Contents




Part I			Financial Information

Item 1.			Condensed Consolidated Financial Statements:	3

			Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	3

			Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	4

			Statements of Changes in Equity for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	5

			Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	76

			Notes to Condensed Consolidated Financial Statements	87

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	2824

Item 3.			Quantitative and Qualitative Disclosures about Market Risk	4939

Item 4.			Controls and Procedures	4939

Part II			Other Information

Item 1.			Legal Proceedings	5040

Item 1A.			Risk Factors	5040





Item 2.6.			~~Unregistered Sales of Equity Securities and Use of Proceeds~~Exhibits	5040

~~Item 6.~~	~~Exhibits~~	51

Signature				5241

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS


(in millions, except share and per share data)	September 30, 2020			December 31, 2019			(in millions, except share and per share data)	March 31, 2021		December 31, 2020
Assets	(unaudited)						Assets	(unaudited)
Current assets:							Current assets:
Cash and cash equivalents	$	440.0		451.9			Cash and cash equivalents	$	456.6	574.3
Trade receivables, net of allowance of $81.3 and $68.1	1,439.9			2,034.3
Trade receivables, net of allowance of $70.2 and $66.5							Trade receivables, net of allowance of $70.2 and $66.5	1,477.4		1,636.1
Notes and other receivables	443.1			472.8			Notes and other receivables	399.9		469.9
Reimbursable receivables	1,357.1			1,671.2			Reimbursable receivables	1,430.1		1,461.3
Warehouse receivables	1,750.6			527.1			Warehouse receivables	832.1		1,529.2
Short-term contract assets, net of allowance of $2.8 and $-	293.0			333.4
Short-term contract assets, net of allowance of $2.1 and $1.8							Short-term contract assets, net of allowance of $2.1 and $1.8	264.7		265.8
Prepaid & other	444.8			377.9			Prepaid & other	412.9		517.1
Total current assets	6,168.5			5,868.6			Total current assets	5,273.7		6,453.7
Property and equipment, net of accumulated depreciation of $775.9 and $660.7	675.4			701.9
Property and equipment, net of accumulated depreciation of $834.9 and $806.2							Property and equipment, net of accumulated depreciation of $834.9 and $806.2	682.0		663.9
Operating lease right-of-use assets	756.8			804.4			Operating lease right-of-use assets	706.5		707.4
Goodwill	4,164.0			4,168.2			Goodwill	4,201.7		4,224.7
Identified intangibles, net of accumulated amortization of $277.0 and $214.8	653.9			682.6
Investments in real estate ventures, including $299.0 and $328.6 at fair value	389.6			404.2
Identified intangibles, net of accumulated amortization of $312.3 and $295.3							Identified intangibles, net of accumulated amortization of $312.3 and $295.3	687.0		679.8
Investments in real estate ventures, including $435.4 and $340.3 at fair value							Investments in real estate ventures, including $435.4 and $340.3 at fair value	545.1		430.8
Long-term receivables	239.8			250.2			Long-term receivables	249.7		231.1
Deferred tax assets, net	235.3			245.4			Deferred tax assets, net	293.9		296.5
Deferred compensation plan	410.7			349.9			Deferred compensation plan	480.2		446.3
Other	208.1			197.2			Other	186.6		182.3
Total assets	$	13,902.1		13,672.6			Total assets	$	13,306.4	14,316.5
Liabilities and Equity							Liabilities and Equity
Current liabilities:							Current liabilities:
Accounts payable and accrued liabilities	$	1,096.7		1,289.4			Accounts payable and accrued liabilities	$	1,108.7	1,229.8
Reimbursable payables	1,030.3			1,245.8			Reimbursable payables	1,016.6		1,154.5
Accrued compensation & benefits	1,113.7			1,729.2			Accrued compensation & benefits	1,031.4		1,433.2
Short-term borrowings	106.4			120.1			Short-term borrowings	90.6		62.0
Short-term contract liabilities and deferred income	161.0			158.8			Short-term contract liabilities and deferred income	181.0		192.9
Short-term acquisition-related obligations	92.6			74.4			Short-term acquisition-related obligations	72.4		91.7
Warehouse facilities	1,723.8			515.9			Warehouse facilities	833.5		1,498.4

Short-term operating lease liabilities	164.0			153.4			Short-term operating lease liabilities	159.1		165.7
Other	313.6			203.2			Other	198.5		299.6
Total current liabilities	5,802.1			5,490.2			Total current liabilities	4,691.8		6,127.8
Credit facility, net of debt issuance costs of $9.6 and $12.3	390.4			512.7
Long-term debt, net of debt issuance costs of $2.7 and $3.1	682.9			664.6
Credit facility, net of debt issuance costs of $7.7 and $8.7							Credit facility, net of debt issuance costs of $7.7 and $8.7	342.3		(8.7)
Long-term debt, net of debt issuance costs of $2.3 and $2.5							Long-term debt, net of debt issuance costs of $2.3 and $2.5	684.0		702.0
Deferred tax liabilities, net	42.9			106.0			Deferred tax liabilities, net	114.6		120.0
Deferred compensation	405.9			374.3			Deferred compensation	461.8		450.0

Long-term acquisition-related obligations	39.6			124.1			Long-term acquisition-related obligations	22.7		26.2

Long-term operating lease liabilities	705.1			751.2			Long-term operating lease liabilities	692.4		683.9
Other	539.1			436.2			Other	582.1		597.5
Total liabilities	8,608.0			8,459.3			Total liabilities	7,591.7		8,698.7

Redeemable noncontrolling interest	7.9			8.6			Redeemable noncontrolling interest	7.8		7.8
Company shareholders' equity:							Company shareholders' equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 51,968,753 and 51,549,654 shares issued; 51,539,136 and 51,549,654 outstanding	0.5			0.5
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,073,440 and 51,970,307 shares issued; 51,306,200 and 51,105,417 outstanding							Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,073,440 and 51,970,307 shares issued; 51,306,200 and 51,105,417 outstanding	0.5		0.5
Additional paid-in capital	2,008.1			1,962.8			Additional paid-in capital	2,015.5		2,023.3
Retained earnings	3,725.9			3,588.3			Retained earnings	4,078.9		3,975.9
Treasury stock, at cost, 429,617 and - shares	(47.8		)	0
Treasury stock, at cost, 767,240 and 864,890 shares							Treasury stock, at cost, 767,240 and 864,890 shares	(85.7)		(96.1)
Shares held in trust	(5.6		)	(5.7		)	Shares held in trust	(5.4)		(5.6)
Accumulated other comprehensive loss	(477.4		)	(427.8		)	Accumulated other comprehensive loss	(383.6)		(377.2)
Total Company shareholders’ equity	5,203.7			5,118.1			Total Company shareholders’ equity	5,620.2		5,520.8
Noncontrolling interest	82.5			86.6			Noncontrolling interest	86.7		89.2
Total equity	5,286.2			5,204.7			Total equity	5,706.9		5,610.0
Total liabilities, redeemable noncontrolling interest and equity	$	13,902.1		$	13,672.6		Total liabilities, redeemable noncontrolling interest and equity	$	13,306.4	14,316.5

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(in millions, except share and per share data) (unaudited)	Three Months Ended September 30,				Nine Months Ended September 30,					(in millions, except share and per share data) (unaudited)	Three Months Ended March 31,
	2020		2019		2020			2019				2021		2020
Revenue:										Revenue:
Revenue before reimbursements	$	2,091.4	2,545.8		$	6,152.9		6,855.6		Revenue before reimbursements		$	2,129.6	2,233.0
Reimbursements	1,886.7		1,949.8		5,591.6			5,727.1		Reimbursements		1,907.5		1,863.0
Total revenue	$	3,978.1	4,495.6		$	11,744.5		12,582.7		Total revenue		$	4,037.1	4,096.0
Operating expenses:										Operating expenses:
Compensation and benefits	$	1,198.7	1,488.6		$	3,698.5		4,007.2		Compensation and benefits		$	1,334.4	1,324.5
Operating, administrative and other	649.4		762.0		1,981.5			2,241.4		Operating, administrative and other		644.3		774.8
Reimbursed expenses	1,886.7		1,949.8		5,591.6			5,727.1		Reimbursed expenses		1,907.5		1,863.0
Depreciation and amortization	54.9		53.6		166.8			145.6		Depreciation and amortization		53.0		55.0
Restructuring and acquisition charges	33.5		70.0		75.8			114.3		Restructuring and acquisition charges		17.2		14.1
Total operating expenses	$	3,823.2	4,324.0		$	11,514.2		12,235.6		Total operating expenses		$	3,956.4	4,031.4
Operating income	$	154.9	171.6		$	230.3		347.1		Operating income		$	80.7	64.6
Interest expense, net of interest income	12.3		18.0		41.8			41.2		Interest expense, net of interest income		10.4		14.6
Equity earnings	15.0		17.1		1.4			32.3
Equity earnings (losses)										Equity earnings (losses)		48.5		(28.3)
Other income	2.7		0.7		8.8			1.2		Other income		11.8		0.9
Income before income taxes and noncontrolling interest	160.3		171.4		198.7			339.4		Income before income taxes and noncontrolling interest		130.6		22.6
Income tax provision	25.7		42.1		32.2			77.6		Income tax provision		28.2		5.0
Net income	134.6		129.3		166.5			261.8		Net income		102.4		17.6
Net income attributable to noncontrolling interest	2.7		0.4		14.1			0.9
Net income attributable to the Company	131.9		128.9		152.4			260.9
Dividends on unvested common stock, net of tax benefit	0		0		0			0.2
Net (loss) income attributable to noncontrolling interest										Net (loss) income attributable to noncontrolling interest		(0.6)		12.3

Net income attributable to common shareholders	$	131.9	128.9		$	152.4		260.7		Net income attributable to common shareholders		$	103.0	5.3
Basic earnings per common share	$	2.55	2.50		$	2.95		5.47		Basic earnings per common share		$	2.01	0.10
Basic weighted average shares outstanding (in 000's)	51,761		51,528		51,670			47,672		Basic weighted average shares outstanding (in 000's)		51,173		51,612
Diluted earnings per common share	$	2.52	2.47		$	2.92		5.42		Diluted earnings per common share		$	1.97	0.10
Diluted weighted average shares outstanding (in 000's)	52,247		52,104		52,224			48,077		Diluted weighted average shares outstanding (in 000's)		52,175		52,458
Dividends declared per share	$	0	0		$	0		0.43
Net income attributable to the Company	$	131.9	128.9		$	152.4		260.9

Net income attributable to common shareholders										Net income attributable to common shareholders		$	103.0	5.3
Change in pension liabilities, net of tax	0.7		0.1		0.7			(1.7	)	Change in pension liabilities, net of tax		(0.2)		0
Foreign currency translation adjustments	59.3		(34.6	)	(50.3		)	(26.6	)	Foreign currency translation adjustments		(6.2)		(143.4)
Comprehensive income attributable to the Company	$	191.9	94.4		$	102.8		232.6
Comprehensive income attributable to common shareholders										Comprehensive income attributable to common shareholders		$	96.6	(138.1)

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2021 AND 2020 ~~AND 2019~~


	Company Shareholders' Equity

	Common Stock			Additional		Shares
(in millions, except share and per share data) (unaudited)	Outstanding			Paid-In	Retained	Held in	Treasury			Total
	Shares	Amount		Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2020	51,105,417	$	0.5	2,023.3	3,975.9	(5.6)	(96.1)	(377.2)	89.2	$	5,610.0
Net income (loss)	—	—		—	103.0	—	—	—	(0.6)	102.4
Shares issued under stock-based compensation programs	290,563	—		(15.6)	—	—	15.9	—	—	0.3
Shares repurchased for payment of taxes on stock-based compensation	(89,780)	—		(9.7)	—	—	(5.5)	—	—	(15.2)
Amortization of stock-based compensation	—	—		17.5	—	—	—	—	—	17.5


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


Change in pension liabilities, net of tax	—	—		—	—	—	—	(0.2)	—	(0.2)
Foreign currency translation adjustments	—	—		—	—	—	—	(6.2)	—	(6.2)
Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(1.9)	(1.9)

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

Company Shareholders' Equity
Common Stock Additional Shares
(in millions, except share and
per share data) (unaudited)
Outstanding Paid-In Retained Held in Treasury Total
Shares Amount Capital Earnings Trust Stock
AOCI⁽¹⁾
NCI⁽²⁾
Equity
December 31, 2019 51,549,654
$ 0.5
1,962.8
3,588.3
(5.7 ) 0
(427.8 ) 86.6
$ 5,204.7
Net income —
—
—
5.3
—
—
—
12.3
17.6
Shares issued under stock-based compensation programs 363,308
—
4.4
—
—
—
—
—
4.4
Shares repurchased for payment of taxes on stock-based compensation (102,370 ) —
(16.2 ) —
—
—
—
—
(16.2 )
Amortization of stock-based compensation —
—
18.6
—
—
—
—
—
18.6
Shares held in trust —
—
—
—
0.1
—
—
—
0.1
Cumulative effect from adoption of new accounting for credit losses —
—
—
(14.9 ) —
—
—
—
(14.9 )
Repurchase of common stock (187,753 ) —
—
—
—
(25.0 ) —
—
(25.0 )
Foreign currency translation adjustments —
—
—
—
—
—
(143.4 ) —
(143.4 )
Decrease in amounts attributable to noncontrolling interest —
—
—
—
—
—
—
(17.0 ) (17.0 )
March 31, 2020 51,622,839
$ 0.5
1,969.6
3,578.7
(5.6 ) (25.0 ) (571.2 ) 81.9
$ 5,028.9
Net income⁽³⁾
—
—
—
15.2
—
—
—
(1.0 ) 14.2
Shares issued under stock-based compensation programs 23,762
—
—
—
—
0.6
—
—
0.6
Shares repurchased for payment of taxes on stock-based compensation (4,546 ) —
(1.0 ) —
—
—
—
—
(1.0 )
Amortization of stock-based compensation —
—
30.7
—
—
—
—
—
30.7
Shares held in trust —
—
—
—
(0.1 ) —
—
—
(0.1 )
Foreign currency translation adjustments —
—
—
—
—
—
33.8
—
33.8
Increase in amounts attributable to noncontrolling interest —
—
—
—
—
—
—
2.3
2.3
June 30, 2020 51,642,055
$ 0.5
1,999.3
3,593.9
(5.7 ) (24.4 ) (537.4 ) 83.2
$ 5,109.4
Net income⁽³⁾
—
—
—
131.9
—
—
—
2.9
134.8
Shares issued under stock-based compensation programs 221,527
—
(1.2 ) 0.1
—
1.6
—
—
0.5
Shares repurchased for payment of taxes on stock-based compensation (66,315 ) —
(6.3 ) —
—
—
—
—
(6.3 )
Amortization of stock-based compensation —
—
16.3
—
—
—
—
—
16.3
Shares held in trust —
—
—
—
0.1
—
—
—
0.1
Repurchase of common stock (258,131 ) —
—
—
—
(25.0 ) —
—
(25.0 )
Change in pension liabilities, net of tax —
—
—
—
—
—
0.7
—
0.7
Foreign currency translation adjustments —
—
—
—
—
—
59.3
—
59.3
Decrease in amounts attributable to noncontrolling interest —
—
—
—
—
—
—
(3.6 ) (3.6 )
September 30, 2020 51,539,136
$ 0.5
2,008.1
3,725.9
(5.6 ) (47.8 ) (477.4 ) 82.5
$ 5,286.2


	Company Shareholder's Equity

				Additional		Shares
(in millions, except share and per share data) (unaudited)	Common Stock			Paid-In	Retained	Held in	Treasury			Total
	Shares	Amount		Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2019	51,549,654	$	0.5	1,962.8	3,588.3	(5.7)	0	(427.8)	86.6	$	5,204.7
Net income	—	—		—	5.3	—	—	—	12.3	17.6
Shares issued under stock-based compensation programs	363,308	—		4.4	—	—	—	—	—	4.4
Shares repurchased for payment of taxes on stock-based compensation	(102,370)	—		(16.2)	—	—	—	—	—	(16.2)
Amortization of stock-based compensation	—	—		18.6	—	—	—	—	—	18.6
Shares held in trust	—	—		—	—	0.1	—	—	—	0.1
Cumulative effect from adoption of new accounting for credit losses	—	—		—	(14.9)	—	—	—	—	(14.9)

Repurchase of common stock	(187,753)	—		—	—	—	(25.0)	—	—	(25.0)
Foreign currency translation adjustments	—	—		—	—	—	—	(143.4)	—	(143.4)
Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(17.0)	(17.0)

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

(1) AOCI: Accumulated other comprehensive income (loss)

(2) NCI: Noncontrolling interest

(3) Excludes net (loss) income attributable to redeemable noncontrolling interest of $(0.2) million and $0.1 million for the three months ended September 30, 2020 and June 30, 2020, respectively.

~~Table of Contents~~

~~JONES LANG LASALLE INCORPORATED~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)~~

~~FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019~~

Company Shareholder's Equity
Accumulated
Additional Shares Other
(in millions, except share and
per share data) (unaudited) Common Stock Paid-In Retained Held in Comprehensive Noncontrolling Total
Shares Amount Capital Earnings Trust Loss Interest Equity
December 31, 2018 45,599,418
$ 0.5
1,057.3
3,095.7
(5.8 ) (456.2 ) 43.0
$ 3,734.5
Net income —
—
—
21.3
—
—
(0.1 ) 21.2
Shares issued under stock-based compensation programs 198,575
—
2.0
—
—
—
—
2.0
Shares repurchased for payment of taxes on stock-based compensation (58,750 ) —
(9.7 ) —
—
—
—
(9.7 )
Amortization of stock-based compensation —
—
7.0
—
—
—
—
7.0
Change in pension liabilities, net of tax —
—
—
—
—
(1.0 ) —
(1.0 )
Foreign currency translation adjustments —
—
—
—
—
31.3
—
31.3
Increase in amounts attributable to noncontrolling interest —
—
—
—
—
—
9.8
9.8
March 31, 2019 45,739,243
$ 0.5
1,056.6
3,117.0
(5.8 ) (425.9 ) 52.7
$ 3,795.1
Net income⁽³⁾
—
—
—
110.7
—
—
0.5
111.2
Shares issued under stock-based compensation programs 31,820
—
0.8
—
—
—
—
0.8
Shares repurchased for payment of taxes on stock-based compensation (8,375 ) —
(0.7 ) —
—
—
—
(0.7 )
Amortization of stock-based compensation —
—
12.9
—
—
—
—
12.9
Dividends paid —
—
—
(19.9 ) —
—
—
(19.9 )
Shares held in trust —
—
—
—
(0.1 ) —
—
(0.1 )
Change in pension liabilities, net of tax —
—
—
—
—
(0.8 ) —
(0.8 )
Foreign currency translation adjustments —
—
—
—
—
(23.3 ) —
(23.3 )
Increase in amounts attributable to noncontrolling interest —
—
—
—
—
—
0.1
0.1
June 30, 2019 45,762,688
$ 0.5
1,069.6
3,207.8
(5.9 ) (450.0 ) 53.3
$ 3,875.3
Net income —
—
—
128.9
—
—
0.4
129.3
Shares issued under stock-based compensation programs 49,292
—
0.9
—
—
—
—
0.9
Acquisition of HFF 5,733,603
—
841.2
—
—
—
—
841.2
Shares repurchased for payment of taxes on stock-based compensation (11,464 ) —
(2.1 ) —
—
—
—
(2.1 )
Amortization of stock-based compensation —
—
27.7
—
—
—
—
27.7
Shares held in trust —
—
—
—
0.2
—
—
0.2
Change in pension liabilities, net of tax —
—
—
—
—
0.1
—
0.1
Foreign currency translation adjustments —
—
—
—
—
(34.6 ) —
(34.6 )
Increase in amounts attributable to noncontrolling interest —
—
—
—
—
—
20.1
20.1
September 30, 2019 51,534,119
$ 0.5
1,937.3
3,336.7
(5.7 ) (484.5 ) 73.8
$ 4,858.1

~~(3) Excludes net income attributable to redeemable noncontrolling interest of $0.1 million for the three months ended June 30, 2019.~~

See accompanying notes to Condensed Consolidated Financial Statements.

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JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,
(in millions) (unaudited) 2020 2019
Cash flows from operating activities:
Net income $ 166.5
261.8
Adjustments to reconcile net income to net cash used in operating activities:

Distributions of earnings from real estate ventures 10.4
12.0
Other adjustments, net 238.8
169.2
Changes in working capital, net (52.6 ) (694.5 )
Net cash provided by (used in) operating activities 363.1
(251.5 )
Cash flows from investing activities:

Net capital additions – property and equipment (112.5 ) (131.1 )
Net investment asset activity (less than wholly-owned) (10.2 ) (67.6 )
Business acquisitions, net of cash acquired 0
(789.2 )
Capital contributions to real estate ventures (63.2 ) (65.6 )
Distributions of capital from real estate ventures 30.5
24.4
Other, net 31.2
35.0
Net cash used in investing activities (124.2 ) (994.1 )
Cash flows from financing activities:

Proceeds from borrowings under credit facility 4,404.0
4,705.0
Repayments of borrowings under credit facility (4,529.0 ) (3,580.0 )
Net (repayments of) proceeds from short-term borrowings (17.1 ) 68.6
Payments of deferred business acquisition obligations and earn-outs (28.9 ) (39.8 )
Repurchase of common stock (50.0 ) 0
Payment of dividends 0
(19.9 )
Other, net (22.8 ) 60.7
Net cash (used in) provided by financing activities (243.8 ) 1,194.6
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash (4.3 ) (9.4 )
Net change in cash, cash equivalents and restricted cash (9.2 ) (60.4 )
Cash, cash equivalents and restricted cash, beginning of the period 652.1
634.2
Cash, cash equivalents and restricted cash, end of the period $ 642.9
573.8
Supplemental disclosure of cash flow information:

Restricted cash, beginning of period $ 200.2
153.3
Restricted cash, end of period 202.9
171.6
Cash paid during the period for:

Interest $ 35.0
36.7
Income taxes, net of refunds 101.6
218.8
Operating leases 142.0
127.7
Non-cash activities:

Business acquisitions (including contingent consideration) $ 0
842.7
Deferred business acquisition obligations 0
6.5


	Three Months Ended March 31,
(in millions) (unaudited)	2021		2020
Cash flows from operating activities:
Net income	$	102.4	17.6
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	53.0		55.0
Equity (earnings) losses	(48.5)		28.3
Net gain on dispositions	(11.4)		0
Distributions of earnings from real estate ventures	0.4		3.6
Provision for loss on receivables and other assets	(0.5)		38.1
Amortization of stock-based compensation	17.5		18.6
Net non-cash mortgage servicing rights and mortgage banking derivative activity	(9.7)		1.6
Accretion of interest and amortization of debt issuance costs	1.2		1.4
Other, net	(3.9)		(10.8)
Change in:
Receivables	154.0		250.4
Reimbursable receivables and reimbursable payables	(107.6)		(58.7)
Prepaid expenses and other assets	(32.4)		(45.9)
Deferred tax assets, net	(2.7)		(5.5)
Accounts payable and accrued liabilities	(189.2)		(187.8)
Accrued Compensation	(384.4)		(652.0)
Net cash used in operating activities	(461.8)		(546.1)
Cash flows from investing activities:
Net capital additions – property and equipment	(34.6)		(44.4)
Net investment asset activity (less than wholly-owned)	(37.2)		(3.2)

Business acquisitions, net of cash acquired	(0.2)		0

Capital contributions to real estate ventures	(33.8)		(54.0)
Distributions of capital from real estate ventures	4.0		13.4
Other, net	4.0		(2.3)
Net cash used in investing activities	(97.8)		(90.5)
Cash flows from financing activities:

Proceeds from borrowings under credit facility	1,242.0		2,555.0
Repayments of borrowings under credit facility	(892.0)		(1,630.0)
Net proceeds from (repayments of) short-term borrowings	36.8		6.6
Payments of deferred business acquisition obligations and earn-outs	(21.0)		(9.8)



Repurchase of common stock	0		(25.0)






Other, net	10.9		(13.5)
Net cash provided by financing activities	376.7		883.3
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	(12.4)		(21.1)
Net change in cash, cash equivalents and restricted cash	(195.3)		225.6
Cash, cash equivalents and restricted cash, beginning of the period	839.8		652.1
Cash, cash equivalents and restricted cash, end of the period	$	644.5	877.7
Supplemental disclosure of cash flow information:
Restricted cash, beginning of period	$	265.5	200.2
Restricted cash, end of period	187.9		157.0
Cash paid during the period for:
Interest	$	4.5	9.3
Income taxes, net of refunds	30.5		44.4
Operating leases	49.0		47.1
Non-cash activities:
Business acquisitions (including contingent consideration)	$	3.8	0
Non-cash consideration received for disposition	23.9		0

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.	~~INTERIM INFORMATION~~

1.INTERIM INFORMATION

Readers of this quarterly report should refer to the audited financial statements of Jones Lang LaSalle Incorporated ("JLL," which may also be referred to as "the Company" or as "we," "us" or "our") for the year ended December 31, ~~2019,~~2020, which are included in our ~~2019~~2020 Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission ("SEC") and also available on our website (~~www.us.jll.com~~www.jll.com), since we have omitted from this quarterly report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to the "Summary of Critical Accounting Policies and Estimates" section within Item 7. 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 ~~2019~~2020 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Condensed Consolidated Financial Statements as of ~~September 30, 2020,~~March 31, 2021, and for the ~~periods~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are unaudited. In the opinion of management, we have included all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the Condensed Consolidated Financial Statements for these interim periods.

Historically, our quarterly revenue and profits have tended to increase from quarter to quarter as the year progresses. This is the result of a general focus in the real estate industry on completing transactions by calendar year end, while certain expenses are recognized evenly throughout the year. Our LaSalle Investment Management ("LaSalle") segment generally earns investment-generated performance fees on clients' real estate investment returns when assets are sold, the timing of which is geared toward the benefit of our clients, as well as co-investment equity gains and losses, primarily dependent on underlying valuations. Within our Real Estate Services ("RES") segments, revenue from transaction-based activities (e.g. leasing and capital markets) is driven by the size and timing of our clients' transactions and can fluctuate significantly from period to period. ~~The~~In 2020 and the three months ended March 31, 2021, macroeconomic conditions influenced by the COVID-19 pandemic ~~may have a material impact on~~impacted the historical seasonality of our revenue and ~~profits.~~profits and may continue to do so during the remainder of 2021.

A significant portion of our compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets. This process can result in significant fluctuations in quarterly compensation and benefits expense from period to period. Non-variable operating expenses, which we recognize when incurred during the year, are relatively constant on a quarterly basis.

We provide for the effects of income taxes on interim financial statements based on our estimate of the effective tax rate for the full year, which we base on forecasted income by country and expected enacted tax rates. As required, we adjust for the impact of discrete items in the quarters in which they occur. Changes in the geographic mix of income ~~including as a result of the COVID-19 pandemic,~~ can impact our estimated effective tax rate.

As a result of the items mentioned above, the results for the periods ended ~~September 30~~March 31 are not fully indicative of what our results will be for the full fiscal year.

Table of Contents

2.NEW ACCOUNTING STANDARDS


2.	~~NEW ACCOUNTING STANDARDS~~

Recently adopted accounting guidance

In ~~June 2016,~~January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~No. 2016-13,~~2020‑01, ~~Financial Instruments - Credit Losses (ASC Topic 326)~~Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which, ~~created~~among other things, clarifies that a ~~new framework~~company should consider observable transactions that require a company to ~~evaluate financial instruments, such as trade receivables,~~either apply or discontinue the equity method of accounting under Topic 323 and clarifies that, when determining the accounting for ~~expected credit losses.~~certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This ~~new framework replaced the existing incurred loss approach~~ASU is effective for annual and ~~is expected to result in more timely recognition of credit losses. On January 1,~~interim periods beginning after December 15, 2020, ~~we adopted ASU No. 2016-13 using a modified-retrospective approach, as required by the ASU.~~

with early adoption permitted. The adoption impacted our methodology of reserving for (i) Trade receivables, (ii) other receivable-related financial assets, specifically contract assets, and (iii) off-balance sheet credit exposures within the scope of this ~~ASU. Specifically, we evaluated~~guidance did not impact our ~~historical reserve balances for Trade receivables~~financial statements and ~~the~~ related write-off activity and developed a forward-looking process for adoption. We also evaluated our loss-sharing guarantee obligation for certain mortgage loans we originate, sell and retain the servicing rights. The following sections discuss our updated reserve methodologies.disclosures.

~~Trade Receivables~~

We estimate an allowance to provide for uncollectible accounts receivable, which is applied upon recognition of the receivable. We base this estimate on historical experience combined with a review of the receivable aging, current and expected economic conditions, and client credit quality. The estimate also includes specifically identified amounts for which payment has become unlikely. As trade receivables are due within one year, changes to economic conditions are not expected to have a significant impact on our estimate of expected credit losses. However, we will monitor economic conditions on a quarterly basis to determine if any adjustments are deemed necessary.

~~Notes and Other Receivables and Long-Term Receivables~~

We make ongoing assessments of the collectability of outstanding Notes and other receivables and Long-term receivables, considering both objective and subjective factors such as the aging profile of outstanding balances, the contractual terms of repayment, and credit quality. Aspects of credit quality considered in our assessments of collectability include historical experience, current and expected economic conditions, and our broader business relationship with the obligor. We record an allowance against the outstanding balance when our assessments determine payment has become unlikely. After all collection efforts have been exhausted by management, the outstanding balance is written off against the reserve. Historically, credit quality deterioration to the point of impairment or non-performance in our Notes and other receivables and Long-term receivables has been limited and has not had a material impact on the Condensed Consolidated Financial Statements.

~~Reimbursable Receivables~~

We record an allowance based on specific identification of an uncollectible reimbursable receivable, considering current and future economic conditions as well as client credit quality. Historically, we have not experienced any material collection issues and, as such, have not applied a formulaic reserve to these receivables.

~~Contract Assets~~

Contract assets include amounts recognized as revenue for which we are not yet entitled to payment for reasons other than the passage of time, but that do not constrain revenue recognition. Historically, we have not recognized a provision for contract assets. Under ASC Topic 326, we include Contract assets in our reserving process and assess the risk of loss similar to our methodology for Trade receivables, since Contract assets are reclassified to Trade receivables when we become entitled to payment. Accordingly, a reserve is applied upon recognition of the contract asset.

~~Table of Contents~~

~~Financial Guarantees~~

Certain loans we originate and sell under the Fannie Mae Delegated Underwriting and Servicing (“DUS”) program retain a percentage of the risk of loss. This loss-sharing aspect of the program represents an off-balance sheet credit exposure, and we have established a contingent reserve ("loan loss guarantee reserve") for this risk in accordance with ASC Topic 326. To estimate the reserve, we use a model that analyzes historical losses, current and expected economic conditions, and reasonable and supportable forecasts. The model also considers specific details of the underlying property used as collateral, such as occupancy and financial performance. The loan loss guarantee reserve is calculated on an individual loan level. As of September 30, 2020, the loan loss guarantee reserve was $45.7 million and was included within Other liabilities on the Condensed Consolidated Balance Sheets. This balance reflected a notable increase from our opening balance (reflected in the table below) as a result of incorporating, into our model, economic conditions and projections related to the COVID-19 pandemic.

~~The loss-sharing guarantee obligation (in accordance with ASC Topic 460,~~ 3.~~Guarantees~~) represents the non-contingent obligation incurred as a result of issuing a loss-sharing guarantee as part of our participation in the DUS program and is separate from the loan loss guarantee reserve discussed above. See Note 10, Commitments and Contingencies, for further information on the DUS program and the loss-sharing guarantee obligation.REVENUE RECOGNITION

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

Published Adjustment due to As Reported Under
December 31, 2019 adoption of ASC Topic 326 on January 1, 2020
(in millions) (audited) ASC Topic 326 (unaudited)
Assets
Allowance for trade receivables $ (68.1 ) (3.6 ) $ (71.7 )
Deferred tax assets, net 245.4
5.5
250.9
Allowance for contract assets ⁽¹⁾
—
(1.7 ) (1.7 )
Liabilities and equity
Loan loss guarantee reserve ⁽²⁾
$ —
15.1
$ 15.1
Retained earnings 3,588.3
(14.9 ) 3,573.4

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

²~~Included within Other liabilities on the Condensed Consolidated Balance Sheets~~


3.	~~REVENUE RECOGNITION~~

Revenue excluded from the scope of ASC Topic 606 - Our mortgage banking and servicing operations - such as Mortgage Servicing Rights ("MSR")-related activity, loan origination fees, and servicing income - are excluded from the scope of ASC Topic 606. Such revenue was included entirely within Americas Capital Markets and is presented below.

Three Months Ended September 30,
Nine months ended
September 30,
(in millions) 2020 2019 2020 2019
Revenue excluded from scope of ASC Topic 606 $ 72.0
74.3
$ 174.7
137.6


	Three months Ended March 31,
(in millions)		2021		2020
Revenue excluded from scope of ASC Topic 606		$	70.2	49.3

Contract assets and liabilities - Our contract assets, net of allowance, are included in Short-term contract assets and Other assets and our contract liabilities are included in Short-term contract liabilities and deferred income on our Condensed Consolidated Balance Sheets. The majority of contract liabilities are recognized as revenue within 90 days. Such contract assets and liabilities are presented below.

~~Table of Contents~~

(in millions) September 30, 2020 December 31, 2019
Contract assets, gross $ 389.8
419.3
Contract asset allowance (3.2 ) 0
Contract assets, net $ 386.6
419.3

Contract liabilities $ 85.7
87.7


(in millions)	March 31, 2021		December 31, 2020
Contract assets, gross	$	348.3	347.8
Contract asset allowance	(2.4)		(2.1)
Contract assets, net	$	345.9	345.7

Contract liabilities	$	105.4	111.0

Remaining performance obligations - Remaining performance obligations represent the aggregate transaction price for contracts where our performance obligations have not yet been satisfied. As of ~~September 30, 2020,~~March 31, 2021, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5% of our total revenue. In accordance with ASC Topic 606, excluded from the aforementioned remaining performance obligations are (i) amounts attributable to contracts expected to be completed within 12 months and (ii) variable consideration for services performed as a series of daily performance obligations, such as facilities management, property management, and LaSalle contracts. Contracts within these businesses represent a significant portion of our contracts with customers not expected to be completed within 12 months.

Table of Contents


4.	~~BUSINESS SEGMENTS~~

4.BUSINESS SEGMENTS

We manage and report our operations as four business segments:

The three geographic regions of RES including:

(1) Americas,

(2) Europe, Middle East and Africa ("EMEA"), and

(3) Asia Pacific;

and

(4) LaSalle.

Each geographic region offers our full range of real estate services, including agency leasing and tenant representation, capital markets, property and facility management, project and development management, energy management and sustainability, construction management, and advisory, consulting and valuation services. LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.

We allocate all indirect expenses to our segments, other than interest and income taxes, as nearly all expenses incurred benefit one or more of the segments. Allocated expenses primarily consist of corporate global overhead, which we allocate to the business segments based on the budgeted operating expenses of each segment.

Segment income does not include (i) restructuring and acquisition charges, (ii) interest expense, net of interest income, (iii) other income, and (iv) provision for income tax, which are otherwise included in Net income on the Consolidated Statements of Comprehensive Income.

The Chief Operating Decision Maker of JLL measures and evaluates the segment results based on Segment income for purposes of making decisions about allocating resources and assessing performance. ~~As of September 30, 2020, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:~~



~~• Chief Executive Officer and President~~	~~• Chief Executive Officers of each of our four business segments~~
~~• Chief Financial Officer~~	~~• Chief Executive Officer of Corporate Solutions~~
~~• Chief Human Resources Officer~~	~~• Chief Executive Officer of Capital Markets~~
	~~• Co-Chief Executive Officers of JLL Technologies~~

Table of Contents

Summarized financial information by business segment is as follows.


	Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
(in millions)	2020			2019	2020			2019		(in millions)		2021		2020
Americas										Americas
Leasing	$	325.2		472.7	$	1,022.2		1,354.3		Leasing		$	363.7	418.9
Capital Markets	190.8			323.2	579.0			553.1		Capital Markets		216.9		247.4
Property & Facility Management	1,433.3			1,386.3	4,331.6			4,119.2		Property & Facility Management		1,494.8		1,458.8
Project & Development Services	336.2			406.0	917.9			1,091.5		Project & Development Services		269.8		306.4
Advisory, Consulting and Other	95.3			99.4	282.2			283.2		Advisory, Consulting and Other		98.7		91.6
Revenue	$	2,380.8		2,687.6	$	7,132.9		7,401.3		Revenue		$	2,443.9	2,523.1
Depreciation and amortization	$	36.4		35.3	$	112.9		88.9		Depreciation and amortization		$	33.1	37.4

Equity earnings	$	4.8		1.5	$	20.4		1.6		Equity earnings		$	34.5	12.7
Segment income	$	140.0		177.9	$	277.1		359.1		Segment income		$	145.0	94.6

EMEA										EMEA
Leasing	$	58.5		72.2	$	153.3		190.3		Leasing		$	54.4	48.1
Capital Markets	73.3			106.2	196.5			248.7		Capital Markets		74.2		73.2
Property & Facility Management	348.7			387.1	1,044.2			1,137.0		Property & Facility Management		344.1		375.0
Project & Development Services	190.8			234.2	558.3			633.9		Project & Development Services		183.7		203.2
Advisory, Consulting and Other	72.5			62.9	173.6			194.4		Advisory, Consulting and Other		59.8		56.4
Revenue	$	743.8		862.6	$	2,125.9		2,404.3		Revenue		$	716.2	755.9
Depreciation and amortization	$	9.8		10.1	$	28.0		32.7		Depreciation and amortization		$	10.9	9.2
Equity earnings (losses)	$	0.8		0	$	0.8		(1.0	)
Segment income (loss)	$	(1.9	)	13.8	$	(55.8	)	(17.9	)

Equity earnings										Equity earnings		$	0	0
Segment loss										Segment loss		$	(35.8)	(20.5)

Asia Pacific										Asia Pacific
Leasing	$	46.6		59.4	$	105.8		161.5		Leasing		$	31.4	25.4
Capital Markets	20.4			50.6	66.1			128.2		Capital Markets		29.3		21.7
Property & Facility Management	521.3			539.4	1,568.5			1,630.6		Property & Facility Management		575.1		532.0
Project & Development Services	104.5			145.7	296.5			393.9		Project & Development Services		98.3		94.8
Advisory, Consulting and Other	50.4			38.7	133.7			123.5		Advisory, Consulting and Other		51.7		38.2
Revenue	$	743.2		833.8	$	2,170.6		2,437.7		Revenue		$	785.8	712.1
Depreciation and amortization	$	6.9		6.5	$	20.5		19.3		Depreciation and amortization		$	7.3	6.6
Equity earnings	$	0.9		0.7	$	0.7		1.4

Equity earnings (losses)										Equity earnings (losses)		$	1.0	(0.7)
Segment income	$	35.8		31.5	$	57.4		59.5		Segment income		$	17.8	2.4

LaSalle										LaSalle
Advisory fees	$	84.6		79.9	$	251.1		237.0		Advisory fees		$	83.5	85.6
Transaction fees & other	17.7			14.2	36.1			43.7		Transaction fees & other		7.7		13.6
Incentive fees	8.0			17.5	27.9			58.7		Incentive fees		0		5.7
Revenue	$	110.3		111.6	$	315.1		339.4		Revenue		$	91.2	104.9
Depreciation and amortization	$	1.8		1.7	$	5.4		4.7		Depreciation and amortization		$	1.7	1.8

Equity earnings (losses)	$	8.5		14.9	$	(20.5	)	30.3		Equity earnings (losses)		$	13.0	(40.3)
Segment income	$	29.5		35.5	$	28.8		93.0
Segment income (loss)										Segment income (loss)		$	19.4	(26.1)

Table of Contents

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


	Three Months Ended March 31,
(in millions)		2021		2020
Segment income - Americas		$	145.0	94.6
Segment loss - EMEA		(35.8)		(20.5)
Segment income - APAC		17.8		2.4
Segment income (loss) - LaSalle		19.4		(26.1)

Less: Equity (earnings) losses		(48.5)		28.3
Add: Restructuring and acquisition charges		(17.2)		(14.1)
Operating income		$	80.7	64.6

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Segment income - Americas $ 140.0
177.9
$ 277.1
359.1
Segment income (loss) - EMEA (1.9 ) 13.8
(55.8 ) (17.9 )
Segment income - APAC 35.8
31.5
57.4
59.5
Segment income - LaSalle 29.5
35.5
28.8
93.0
Less: Equity earnings (15.0 ) (17.1 ) (1.4 ) (32.3 )
Add: Restructuring and acquisition charges (33.5 ) (70.0 ) (75.8 ) (114.3 )
Operating income $ 154.9
171.6
$ 230.3
347.1

5.BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS


5.	~~BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~2020~~2021 Business Combinations Activity

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we ~~completed no new acquisitions and~~ paid ~~$58.5~~$26.2 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

~~2019~~2020 Business Combinations Activity

During the ~~nine months~~year ended ~~September 30,~~December 31, 2020 we ~~made~~completed no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2019. As of September 30, 2020, we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired for our 2019new acquisitions.

Earn-Out Payments


($ in millions)	September 30, 2020		December 31, 2019		($ in millions)	March 31, 2021		December 31, 2020
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	42		44		Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	24		35
Maximum earn-out payments (undiscounted)	$	221.3	$	268.9	Maximum earn-out payments (undiscounted)	$	157.8	$	199.2
Short-term earn-out liabilities (fair value)¹	77.0		53.9
Long-term earn-out liabilities (fair value)¹	18.0		94.5
Short-term earn-out liabilities (fair value)(1)					Short-term earn-out liabilities (fair value)(1)	59.9		77.2
Long-term earn-out liabilities (fair value)(1)					Long-term earn-out liabilities (fair value)(1)	8.3		8.5

¹(1)Included in Short-term and Long-term acquisition-related obligations on the Condensed Consolidated Balance Sheets.

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 ~~September 30, 2020~~March 31, 2021 consisted of: (1) goodwill of ~~$4,164.0~~$4,201.7 million, (2) identifiable intangibles of ~~$601.9~~$634.9 million amortized over their remaining finite useful lives, and (3) ~~$52.0~~$52.1 million of identifiable intangibles with indefinite useful lives that are not amortized. Notable portions of our goodwill and unamortized intangibles are denominated in currencies other than the U.S. dollar, which means a portion of the movements in the reported book value of these balances is attributable to movements in foreign currency exchange rates.

During the three months ended September 30, 2020, as part of our annual impairment test of goodwill, we have considered qualitative and quantitative factors and determined it is not more-likely-than-not that the fair value of our Americas, Asia Pacific, and LaSalle reporting units are less than their carrying values. With respect to our EMEA reporting unit reporting, we performed step 1 of the goodwill impairment analysis which indicated the estimated fair value exceeded the carrying value by over 20%. In performing step 1, we relied on the discounted cash flow (“DCF”) method, an income approach, in determining the estimated fair value. Our DCF analysis relied on significant judgments and assumptions in determining the inputs, specifically, forecasted revenue growth, forecasted profitability margin, and the discount rate used to present value the estimated future cash flows.

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The following tables detail, by reporting segment, movements in goodwill.


	Real Estate Services
(in millions)	Americas		EMEA	Asia Pacific	LaSalle	Consolidated
Balance as of December 31, 2020	$	2,878.0	959.7	329.2	57.8	$	4,224.7

Dispositions	(11.0)		(0.7)	0	0	(11.7)
Impact of exchange rate movements	0.3		(8.6)	(3.0)	0	(11.3)
Balance as of March 31, 2021	$	2,867.3	950.4	326.2	57.8	$	4,201.7

Real Estate Services
(in millions) Americas EMEA Asia Pacific LaSalle Consolidated
Balance as of December 31, 2019 $ 2,877.6
915.9
317.6
57.1
$ 4,168.2
Dispositions 0
(0.7 ) 0
0
(0.7 )
Impact of exchange rate movements (1.1 ) (4.7 ) 2.6
(0.3 ) (3.5 )
Balance as of September 30, 2020 $ 2,876.5
910.5
320.2
56.8
$ 4,164.0

Real Estate Services
(in millions) Americas EMEA Asia Pacific LaSalle Consolidated
Balance as of December 31, 2018 $ 1,452.0
906.8
316.8
22.2
$ 2,697.8
Additions, net of adjustments 1,392.9
1.6
0
35.5
1,430.0
Dispositions 0
(0.9 ) 0
0
(0.9 )
Impact of exchange rate movements 0.3
(37.6 ) (4.6 ) (1.8 ) (43.7 )
Balance as of September 30, 2019 $ 2,845.2
869.9
312.2
55.9
$ 4,083.2


	Real Estate Services
(in millions)	Americas		EMEA	Asia Pacific	LaSalle	Consolidated
Balance as of December 31, 2019	$	2,877.6	915.9	317.6	57.1	$	4,168.2


Impact of exchange rate movements	(2.9)		(46.6)	(13.4)	(1.0)	(63.9)
Balance as of March 31, 2020	$	2,874.7	869.3	304.2	56.1	$	4,104.3

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


	MSRs			Other Intangibles												MSRs		Other Intangibles
(in millions)	Americas			Americas		EMEA		Asia Pacific		LaSalle		Consolidated			(in millions)	Americas		Americas	EMEA	Asia Pacific	LaSalle	Consolidated
Gross Carrying Amount															Gross Carrying Amount
Balance as of December 31, 2019	$	480.4		285.7		55.9		21.4		54.0		$	897.4
Balance as of December 31, 2020															Balance as of December 31, 2020	$	572.1	265.8	55.7	23.6	57.9	$	975.1
Additions, net of adjustments ⁽¹⁾	77.9			0		0		0.5		0		78.4			Additions, net of adjustments (1)	40.0		0	3.8	0	0	43.8
Adjustment for fully amortized intangibles	(30.9		)	(14.1	)	(0.4	)	0		0		(45.4		)	Adjustment for fully amortized intangibles	(6.7)		(7.9)	(0.9)	(2.2)	0	(17.7)

Impact of exchange rate movements	0			(0.2	)	(1.5	)	0.3		1.9		0.5			Impact of exchange rate movements	0		0.1	0.2	(0.4)	(1.8)	(1.9)
Balance as of September 30, 2020	$	527.4		271.4		54.0		22.2		55.9		$	930.9
Balance as of March 31, 2021															Balance as of March 31, 2021	$	605.4	258.0	58.8	21.0	56.1	$	999.3

Accumulated Amortization															Accumulated Amortization
Balance as of December 31, 2019	$	(104.0	)	(68.3	)	(33.1	)	(6.7	)	(2.7	)	$	(214.8	)
Balance as of December 31, 2020															Balance as of December 31, 2020	$	(147.8)	(94.1)	(39.5)	(8.6)	(5.3)	$	(295.3)
Amortization, net ⁽²⁾	(65.5		)	(35.0	)	(5.2	)	(1.1	)	(2.0	)	(108.8		)	Amortization, net (2)	(21.6)		(10.5)	(1.8)	(0.3)	(0.4)	(34.6)
Adjustment for fully amortized intangibles	30.9			14.1		0.4		0		0		45.4			Adjustment for fully amortized intangibles	6.7		7.9	0.9	2.2	0	17.7

Impact of exchange rate movements	0			0.4		0.9		(0.1	)	0		1.2			Impact of exchange rate movements	0		0	(0.1)	0.1	(0.1)	(0.1)
Balance as of September 30, 2020	$	(138.6	)	(88.8	)	(37.0	)	(7.9	)	(4.7	)	$	(277.0	)
Balance as of March 31, 2021															Balance as of March 31, 2021	$	(162.7)	(96.7)	(40.5)	(6.6)	(5.8)	$	(312.3)

Net book value as of September 30, 2020	$	388.8		182.6		17.0		14.3		51.2		$	653.9
Net book value as of March 31, 2021															Net book value as of March 31, 2021	$	442.7	161.3	18.3	14.4	50.3	$	687.0

(1) Included in this amount for MSRs was (i) ~~$15.3~~$3.1 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing ~~rights and (ii) $1.9 million relating to a net impairment valuation allowance.~~rights.

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

Table of Contents


	MSRs			Other Intangibles												MSRs		Other Intangibles
(in millions)	Americas			Americas		EMEA		Asia Pacific		LaSalle		Consolidated			(in millions)	Americas		Americas	EMEA	Asia Pacific	LaSalle	Consolidated
Gross Carrying Amount															Gross Carrying Amount
Balance as of December 31, 2018	$	266.2		90.0		83.1		23.5		43.9		$	506.7
Balance as of December 31, 2019															Balance as of December 31, 2019	$	480.4	285.7	55.9	21.4	54.0	$	897.4
Additions, net of adjustments ⁽¹⁾	208.3			194.5		0		0		10.3		413.1			Additions, net of adjustments (1)	16.9		0	0	0.5	0	17.4
Adjustment for fully amortized intangibles	(21.8		)	(0.7	)	(22.1	)	(2.0	)	0		(46.6		)	Adjustment for fully amortized intangibles	(12.7)		0	(0.2)	0	0	(12.9)
Impairments	0			(0.5	)	0		0		0		(0.5		)

Impact of exchange rate movements	0			0		(2.8	)	(0.8	)	(1.6	)	(5.2		)	Impact of exchange rate movements	0		(0.5)	(3.4)	(2.1)	(1.1)	(7.1)
Balance as of September 30, 2019	$	452.7		283.3		58.2		20.7		52.6		$	867.5
Balance as of March 31, 2020															Balance as of March 31, 2020	$	484.6	285.2	52.3	19.8	52.9	$	894.8

Accumulated Amortization															Accumulated Amortization
Balance as of December 31, 2018	$	(72.4	)	(38.8	)	(51.8	)	(6.8	)	0		$	(169.8	)
Balance as of December 31, 2019															Balance as of December 31, 2019	$	(104.0)	(68.3)	(33.1)	(6.7)	(2.7)	$	(214.8)
Amortization, net⁽²⁾	(41.6		)	(18.9	)	(7.5	)	(1.6	)	(2.0	)	(71.6		)	Amortization, net (2)	(22.6)		(11.6)	(1.8)	(0.4)	(0.7)	(37.1)
Adjustment for fully amortized intangibles	21.8			0.7		22.1		2.0		0		46.6			Adjustment for fully amortized intangibles	12.7		0	0.2	0	0	12.9
Impairments	0			0.5		0		0		0		0.5

Impact of exchange rate movements	0			0		2.2		0.2		0		2.4			Impact of exchange rate movements	0		0.2	2.1	0.5	0.1	2.9
Balance as of September 30, 2019	$	(92.2	)	(56.5	)	(35.0	)	(6.2	)	(2.0	)	$	(191.9	)
Balance as of March 31, 2020															Balance as of March 31, 2020	$	(113.9)	(79.7)	(32.6)	(6.6)	(3.3)	$	(236.1)

Net book value as of September 30, 2019	$	360.5		226.8		23.2		14.5		50.6		$	675.6
Net book value as of March 31, 2020															Net book value as of March 31, 2020	$	370.7	205.5	19.7	13.2	49.6	$	658.7

(1) Included in this amount for MSRs was ~~$10.6~~$5.9 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights.

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

~~The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of September 30, 2020, is presented in the following table.~~

(in millions) MSRs Other Intangibles Total
2020 (remaining 3 months) $ 17.2
16.0
$ 33.2
2021 66.2
48.6
114.8
2022 59.3
42.9
102.2
2023 53.0
40.5
93.5
2024 45.4
36.2
81.6
2025 37.7
18.9
56.6
Thereafter 110.0
10.0
120.0
Total $ 388.8
213.1
$ 601.9

6.INVESTMENTS IN REAL ESTATE VENTURES

~~Table of Contents~~


6.	~~INVESTMENTS IN REAL ESTATE VENTURES~~

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had Investments in real estate ventures of ~~$389.6~~$545.1 million and ~~$404.2~~$430.8 million, respectively.

Approximately 90% of our investments, as of ~~September 30, 2020,~~March 31, 2021, are primarily (i) direct investments in 4850 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement and (ii) investments by JLL ~~Spark~~Technologies in ~~property-technology funds and~~ early-stage proptech companies. The remaining 10% of our Investments in real estate ventures, as of ~~September 30, 2020,~~March 31, 2021, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, ~~primarily,~~generally, in certain real estate ventures that own and operate real estate. Of our investments attributable to investment vehicles, the majority was invested in LaSalle Investment Company II ("LIC II"), in which we held an effective ownership interest of 48.78%.

We have maximum potential unfunded commitments to direct investments or investment vehicles of ~~$338.8~~$309.9 million as of ~~September 30, 2020.~~March 31, 2021. Of this amount, while we remain contractually obligated, we do not expect a call on the $60.4 million relating to our investment in LIC II as its fund life terminated in January 2020.

We evaluate our less-than-wholly-owned investments to determine whether the underlying entities are classified as variable interest entities ("VIEs"); we assess each identified VIE to determine whether we are the primary beneficiary. We have determined that we are the primary beneficiary of certain VIEs and accordingly, we have consolidated such entities. The assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities and the mortgage loans of the consolidated VIEs are non-recourse to JLL.

Table of Contents

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

(in millions) September 30, 2020 December 31, 2019
Property and equipment, net $ 132.9
126.3
Investments in real estate ventures 9.2
13.2
Other assets 9.6
14.3
Total assets $ 151.7
153.8
Other current liabilities $ 2.6
3.2
Mortgage indebtedness (included in Other liabilities) 71.3
69.7
Total liabilities 73.9
72.9
Members' equity (included in Noncontrolling interest) 77.8
80.9
Total liabilities and members' equity $ 151.7
153.8


(in millions)	March 31, 2021		December 31, 2020
Property and equipment, net	$	154.0	117.4
Investments in real estate ventures	9.2		9.0
Other assets	11.2		21.0
Total assets	$	174.4	147.4
Other current liabilities	$	1.8	1.9
Mortgage indebtedness (included in Other liabilities)	89.6		60.3
Total liabilities	91.4		62.2
Members' equity (included in Noncontrolling interest)	83.0		85.2
Total liabilities and members' equity	$	174.4	147.4

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Revenue $ 3.6
1.9
$ 10.8
4.9
Operating and other expenses (3.7 ) (2.1 ) (11.9 ) (5.3 )
Net gains on sale of investments¹
3.1
0
15.3
0
Net income (loss) $ 3.0
(0.2 ) $ 14.2
(0.4 )


	Three Months Ended March 31,
(in millions)		2021		2020
Revenue		$	2.6	4.3
Operating and other expenses		(3.2)		(4.3)
Net gains on sale of investments(1)		0		12.2
Net (loss) income		$	(0.6)	12.2

(1) ~~$12.2 million of the year-to-date~~The 2020 gain iswas included in Equity ~~earnings; the remaining $3.1 million is included in Other income.~~earnings.

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

~~Table of Contents~~

Impairment

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

Fair Value

We report a majority of our investments in real estate ventures at fair value. For such investments, we increase or decrease our investment each reporting period by the change in the fair value and we report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings. The table below shows the movement in our investments in real estate ventures reported at fair value.

(in millions) 2020 2019
Fair value investments as of January 1, $ 328.6
247.3
Investments 36.8
67.1
Distributions (58.8 ) (39.2 )
Change in fair value, net (9.1 ) 29.8
Foreign currency translation adjustments, net 1.5
(0.8 )
Fair value investments as of September 30, $ 299.0
304.2


(in millions)	2021		2020
Fair value investments as of January 1,	$	340.3	328.6
Investments	55.8		28.9
Distributions	(3.3)		(16.0)
Change in fair value, net	45.7		(35.2)
Foreign currency translation adjustments, net	(3.1)		(4.3)
Fair value investments as of March 31,	$	435.4	302.0

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

Table of Contents

7.STOCK-BASED COMPENSATION


7.	~~STOCK-BASED COMPENSATION~~

Stock Unit Awards

Restricted stock unit ("RSU") and performance stock unit ("PSU") awards activity is presented in the following tables.

RSU Shares
(in 000's) PSU Shares
(in 000's) Total Shares
(in 000's) Weighted Average
Grant Date
Fair Value Weighted Average
Remaining
Contractual Life
(in years)
Unvested as of June 30, 2020 1,343.2
558.8
1,902.0
$ 137.93
2.01
Granted 11.2
4.4
15.6
107.51

Vested (213.5 ) 0
(213.5 ) 140.38

Forfeited (13.0 ) (4.5 ) (17.5 ) 134.03

Unvested as of September 30, 2020 1,127.9
558.7
1,686.6
$ 137.49
1.85

Unvested as of June 30, 2019 436.7
259.6
696.3
$ 144.17
2.25
Granted 1,130.1
0
1,130.1
141.14

Vested (45.8 ) 0
(45.8 ) 122.48

Forfeited (8.1 ) 0
(8.1 ) 138.96

Unvested as of September 30, 2019 1,512.9
259.6
1,772.5
$ 142.82
2.59

RSU Shares
(in 000's) PSU Shares
(in 000's) Total Shares
(in 000's) Weighted Average
Grant Date
Fair Value
Weighted Average
Remaining
Contractual Life
(in years)
Unvested as of December 31, 2019 1,532.3
286.8
1,819.1
$ 141.51
2.39
Granted 173.1
276.4
449.5
114.19

Vested (548.4 ) 0
(548.4 ) 137.92

Forfeited (29.1 ) (4.5 ) (33.6 ) 136.96

Unvested as of September 30, 2020 1,127.9
558.7
1,686.6
$ 137.49
1.85

Unvested as of December 31, 2018 559.6
93.1
652.7
$ 131.32
2.02
Granted 1,243.4
166.9
1,410.3
149.22

Vested (268.3 ) 0
(268.3 ) 116.25

Forfeited (21.8 ) (0.4 ) (22.2 ) 134.54

Unvested as of September 30, 2019 1,512.9
259.6
1,772.5
$ 142.82
2.59


	RSU Shares (in 000's)	PSU Shares (in 000's)	Total Shares (in 000's)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (in years)
Unvested as of December 31, 2020	1,096.2	531.5	1,627.7	$	137.42	1.69
Granted	56.6	0	56.6	145.93
Vested	(207.5)	(79.0)	(286.5)	150.76
Forfeited	(5.0)	(13.4)	(18.4)	149.11
Unvested as of March 31, 2021	940.3	439.1	1,379.4	$	134.84	1.70

Unvested as of December 31, 2019	1,532.3	286.8	1,819.1	$	141.51	2.39
Granted	9.7	0	9.7	160.03
Vested	(324.6)	0	(324.6)	136.91
Forfeited	(8.5)	0	(8.5)	137.68
Unvested as of March 31, 2020	1,208.9	286.8	1,495.7	$	144.71	1.78

As of ~~September 30, 2020,~~March 31, 2021, we had ~~$84.3~~$74.2 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into ~~2024; $41.5~~2026; $24.1 million relates to the awards issued in conjunction with the HFF acquisition.

~~Table of Contents~~8.FAIR VALUE MEASUREMENTS


8.	~~FAIR VALUE MEASUREMENTS~~

We measure certain assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy:

•Level 1 - Quoted prices for identical assets or liabilities in active markets accessible as of the measurement date;

•Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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. The carrying amounts of Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, contract liabilities, and the Warehouse facilities approximate their estimated fair values due to the short-term nature of these instruments. The carrying values of our Credit facility and Short-term borrowings approximate their estimated fair values given the variable interest rate terms and market spreads.

We estimated the fair value of our Long-term debt as ~~$686.1~~$704.8 million and ~~$685.9~~$723.7 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy. The carrying value of our Long-term debt was ~~$682.9~~$684.0 million and ~~$664.6~~$702.0 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and included debt issuance costs of ~~$2.7~~$2.3 million and ~~$3.1~~$2.5 million, respectively.

Table of Contents

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

We report a significant portion of our investments in real estate ventures at fair value. For such investments, we increase or decrease our investment each reporting period by the change in the fair value and we report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings.

For the majority of our investments reported at fair value, we estimate the fair value using the NAV per share (or its equivalent) our investees provide. Critical inputs to NAV estimates included 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 instances where the reported NAV per share did not fully incorporate the COVID-19 pandemic’s impact on the fair value of underlying investments, we recognized an adjustment to decrease the reported NAV. As of ~~September 30, 2020~~March 31, 2021, such adjustments totaled $9.3 million. We did not consider any other adjustments to NAV estimates provided by investees, including adjustments for any restrictions to the transferability of ownership interests embedded within investment agreements to which we are a party, to be necessary based upon (i) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level, (ii) consideration of market demand for the specific types of real estate assets held by each venture and (iii) contemplation of real estate and capital markets conditions in the localities in which these ventures operate. As of March 31, 2021 and December 31, ~~2019,~~2020, investments in real estate ventures at fair value using NAV were ~~$192.4~~$222.7 million and ~~$224.8~~$203.8 million, respectively. As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.

~~Table of Contents~~

Recurring Fair Value Measurements

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

September 30, 2020 December 31, 2019
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Investments in real estate ventures - fair value $ 56.4
0
50.2
69.4
0
34.4
Foreign currency forward contracts receivable 0
3.2
0
0
10.5
0
Warehouse receivables 0
1,750.6
0
0
527.1
0
Deferred compensation plan assets 0
410.7
0
0
349.9
0
Mortgage banking derivative assets 0
0
87.0
0
0
36.1
Total assets at fair value $ 56.4
2,164.5
137.2
69.4
887.5
70.5
Liabilities
Foreign currency forward contracts payable 0
10.5
0
0
4.4
0
Deferred compensation plan liabilities 0
388.4
0
0
346.1
0
Earn-out liabilities 0
0
95.0
0
0
148.5
Mortgage banking derivative liabilities 0
0
80.8
0
0
25.9
Total liabilities at fair value $ 0
398.9
175.8
0
350.5
174.4


	March 31, 2021				December 31, 2020
(in millions)	Level 1		Level 2	Level 3	Level 1	Level 2	Level 3
Assets
Investments in real estate ventures - fair value	$	72.6	0	140.1	77.2	0	59.3
Foreign currency forward contracts receivable	0		6.9	0	0	13.1	0
Warehouse receivables	0		832.1	0	0	1,529.2	0
Deferred compensation plan assets	0		480.2	0	0	446.3	0
Mortgage banking derivative assets	0		0	63.9	0	0	87.1
Total assets at fair value	$	72.6	1,319.2	204.0	77.2	1,988.6	146.4
Liabilities
Foreign currency forward contracts payable	$	0	9.4	0	0	3.4	0
Deferred compensation plan liabilities	0		452.0	0	0	427.6	0
Earn-out liabilities	0		0	68.2	0	0	85.7
Mortgage banking derivative liabilities	0		0	31.0	0	0	73.4
Total liabilities at fair value	$	0	461.4	99.2	0	431.0	159.1

Investments in Real Estate Ventures

We classify one investment as Level 1 in the fair value hierarchy as a quoted price is readily available. We increase or decrease our investment each reporting period by the change in the fair value of the investment. We report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings.

Investments classified as Level 3 in the fair value hierarchy represent investments in early-stage non-public entities where we elected the fair value option. The carrying value was deemed to approximate fair value for the majority of these investments due to the proximity of the investment date or date of most recent financing raise to the balance sheet date as well as consideration of investee-level performance updates. To the extent there are changes in fair value, a result of pricing in subsequent funding rounds or changes in business strategy, for example, we recognize such changes through Equity earnings.

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Foreign Currency Forward Contracts

We regularly use foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. We determine the fair values of these contracts based on current market rates. The inputs for these valuations are Level 2 inputs in the fair value hierarchy. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, these contracts had a gross notional value of ~~$2.03~~$2.22 billion ($~~1.05~~1.22 billion on a net basis) and ~~$2.30~~$2.34 billion ($~~1.05~~1.42 billion on a net basis), respectively.

We recognize gains and losses from revaluation of these contracts as a component of Operating, administrative and other expense. They are offset by the gains and losses we recognize on the revaluation of intercompany loans and other foreign currency balances. The impact to net income was not significant for the nine months ended September 30, 2020 or 2019.

We record the asset and liability positions for our foreign currency forward contracts based on the net payable or net receivable position with the financial institutions from which we purchase these contracts. The ~~$3.2~~$6.9 million asset as of ~~September 30, 2020,~~March 31, 2021, was composed of gross contracts with receivable positions of ~~$3.4~~$8.4 million and payable positions of ~~$0.2~~$1.5 million. The ~~$10.5~~$9.4 million liability as of ~~September 30, 2020,~~March 31, 2021, was composed of gross contracts with receivable positions of ~~$1.9~~$0.7 million and payable positions of ~~$12.4~~$10.1 million. As of December 31, ~~2019,~~2020, the ~~$10.5~~$13.1 million asset was composed of gross contracts with receivable positions of ~~$10.6~~$13.5 million and payable positions of ~~$0.1~~$0.4 million. The ~~$4.4~~$3.4 million liability as of December 31, ~~2019,~~2020, was composed of gross contracts with receivable positions of ~~$0.8~~$2.7 million and payable positions of ~~$5.2~~$6.1 million.

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Warehouse Receivables

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, all of our Warehouse receivables were under commitment to be purchased by government-sponsored enterprises ("GSEs") or by a qualifying investor as part of a U.S. government or GSE mortgage-backed security program.

Deferred Compensation Plan

We maintain a deferred compensation plan for certain of our U.S. employees that allows them to defer portions of their compensation. We recorded this plan on our Condensed Consolidated Balance Sheet as of ~~September 30, 2020,~~March 31, 2021, as Deferred compensation plan assets of ~~$410.7~~$480.2 million, long-term deferred compensation plan liabilities of ~~$388.4~~$452.0 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of ~~$5.6~~$5.4 million. We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, ~~2019,~~2020, as Deferred compensation plan assets of ~~$349.9~~$446.3 million, long-term deferred compensation plan liabilities of ~~$346.1~~$427.6 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of ~~$5.7~~$5.6 million.

Earn-Out Liabilities

We classify our earn-out liabilities within Level 3 in the fair value hierarchy because the inputs we use to develop the estimated fair value include unobservable inputs. See Note 5, Business Combinations, Goodwill and Other Intangible Assets, for additional discussion of our earn-out liabilities.

Mortgage Banking Derivatives

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

~~Table of Contents~~

The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Balance as of June 30, 2020 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of September 30, 2020
Investments in real estate ventures $ 44.3
4.3
0
1.6
0
$ 50.2
Mortgage banking derivative assets and liabilities, net (5.5 ) (2.6 ) 0
48.2
(33.9 ) 6.2
Earn-out liabilities 97.8
(0.6 ) 0.7
0
(2.9 ) 95.0

Balance as of June 30, 2019 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of September 30, 2019
Investments in real estate ventures $ 20.0
0.8
0
6.5
(0.8 ) $ 26.5
Mortgage banking derivative assets and liabilities, net (1.3 ) (7.1 ) 0
45.3
(9.9 ) 27.0
Earn-out liabilities 180.3
0.7
(2.4 ) 0
(4.8 ) 173.8

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(in millions) Balance as of December 31, 2019 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of September 30, 2020
Investments in real estate ventures $ 34.4
6.8
0
9.0
0
$ 50.2
Mortgage banking derivative assets and liabilities, net 10.2
(93.2 ) 0
112.9
(23.7 ) 6.2
Earn-out liabilities 148.5
(8.2 ) (0.2 ) 0
(45.1 ) 95.0

(in millions) Balance as of December 31, 2018 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of June 30, 2019
Investments in real estate ventures $ 11.5
0.8
0
15.0
(0.8 ) $ 26.5
Mortgage banking derivative assets and liabilities, net 6.3
(28.8 ) 0
77.8
(28.3 ) 27.0
Earn-out liabilities 192.0
20.7
(2.6 ) 1.5
(37.8 ) 173.8


(in millions)	Balance as of December 31, 2020		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of March 31, 2021
Investments in real estate ventures	$	59.3	31.8	0	49.1	(0.1)	$	140.1
Mortgage banking derivative assets and liabilities, net	13.7		18.9	0	41.1	(40.8)	32.9
Earn-out liabilities	85.7		(0.1)	(0.4)	3.8	(20.8)	68.2


(in millions)	Balance as of December 31, 2019		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of March 31, 2020
Investments in real estate ventures	$	34.4	0	0	7.0	0	$	41.4
Mortgage banking derivative assets and liabilities, net	10.2		(75.2)	0	26.2	(25.2)	(64.0)
Earn-out liabilities	148.5		(8.2)	(2.0)	0	(8.3)	130.0

¹(1) CTA: Currency translation adjustments

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



Category of Assets/Liabilities using Unobservable Inputs			Condensed Consolidated Statements of Comprehensive Income Account Caption
Earn-out liabilities (Short-term and Long-term)			Restructuring and acquisition charges
Investments in real estate ventures			Equity earnings
Other current assets - Mortgage banking derivative assets			Revenue before reimbursements
Other current liabilities - Mortgage banking derivative liabilities			Revenue before reimbursements

~~Table of Contents~~

Non-Recurring Fair Value Measurements

We review our investments in real estate ventures, except those investments otherwise reported at fair value, on a quarterly basis, or as otherwise deemed necessary, for indications of whether we may be unable to recover the carrying value of our investments and whether such investments are other-than-temporarily impaired. When the carrying amount of the investment is in excess of the estimated future undiscounted cash flows, we use a discounted cash flow approach or other acceptable method to determine the fair value of the investment in computing the amount of the impairment. Our determination of fair value primarily relies on Level 3 inputs. We did not recognize any significant investment-level impairment losses during either of the three ~~or nine~~ months ended ~~September 30, 2020~~March 31, 2021 or ~~2019.~~2020. See Note 6, Investments in Real Estate Ventures, for additional information, including information related to impairment charges recorded at the investee level.

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9.	~~DEBT~~

9.DEBT

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

(in millions) September 30, 2020 December 31, 2019
Short-term borrowings:
Local overdraft facilities $ 12.2
44.8
Other short-term borrowings 94.2
75.3
Total short-term borrowings $ 106.4
120.1
Credit facility, net of debt issuance costs of $9.6 and $12.3 390.4
512.7
Long-term senior notes, 4.4%, face amount of $275.0, due November 2022, net of debt issuance costs of $0.8 and $1.2 274.2
273.8
Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.9 and $0.9 204.4
195.4
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $1.0 and $1.0 204.3
195.4
Total debt $ 1,179.7
1,297.4


($ in millions)	March 31, 2021		December 31, 2020
Short-term borrowings:
Local overdraft facilities	$	16.0	12.0
Other short-term borrowings	74.6		50.0
Total short-term borrowings	$	90.6	62.0
Credit facility, net of debt issuance costs of $7.7 and $8.7	342.3		(8.7)
Long-term senior notes, 4.4%, face amount of $275.0, due November 2022, net of debt issuance costs of $0.6 and $0.8	274.4		274.2
Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.8 and $0.8	204.8		213.9
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $0.9 and $0.9	204.8		213.9
Total debt	$	1,116.9	755.3

Credit Facility

~~We have a~~Our $2.75 billion unsecured revolving credit facility (the "Facility") ~~that~~ matures on May 17, 2023. Pricing on the Facility ranges from three-month LIBOR plus 0.875% to 1.35%, with pricing as of ~~September 30, 2020,~~March 31, 2021, at LIBOR plus 0.95%. In addition to outstanding borrowings under the Facility presented in the above table, we had outstanding letters of credit under the Facility of $0.7 million ~~and $0.8 million~~ as of ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019, respectively.~~2020.

On April 14, 2021, we renewed the Facility, which included the extension of the maturity date to April 2026. Refer to Note 13, Subsequent Events for further detail.

The following tables provides additional information on our Facility.

Three Months Ended September 30,
Nine Months Ended
September 30,
($ in millions) 2020 2019 2020 2019
Average outstanding borrowings under the Facility $ 758.9
1,408.5
$ 1,014.3
763.9
Effective interest rate on the Facility 1.1 % 3.1 % 1.6 % 3.2 %


	Three Months Ended March 31,
($ in millions)		2021			2020
Average outstanding borrowings under the Facility		$	184.4		935.2
Effective interest rate on the Facility		1.0		%	2.4	%

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, ~~dividend payments,~~ share repurchases and capital expenditures.

Short-Term Borrowings and Long-Term Debt

In addition to our Facility, we have the capacity to borrow up to an additional ~~$85.9~~$63.4 million under local overdraft facilities. Amounts outstanding are presented in the debt table above.

As of ~~September 30, 2020,~~March 31, 2021, our issuer and senior unsecured ratings are investment grade: Baa1 from Moody’s Investors Service, Inc. and BBB+ from Standard & Poor’s Ratings Services.

~~Table of Contents~~

Covenants

Our Facility and senior notes are subject to customary financial and other covenants, including cash interest coverage ratios and leverage ratios, as well as event of default conditions. We remained in compliance with all covenants as of ~~September 30, 2020.~~March 31, 2021.

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Warehouse Facilities

September 30, 2020 December 31, 2019
($ in millions) Outstanding Balance Maximum Capacity Outstanding Balance Maximum Capacity
Warehouse Facilities:
LIBOR plus 1.15%, October 21, 2020¹
$ 300.2
375.0
104.4
375.0
LIBOR plus 1.40%, expires September 18, 2021²
1,016.0
1,200.0
184.8
775.0
LIBOR plus 1.40%, expires August 27, 2021³
85.1
200.0
11.4
100.0
Fannie Mae ASAP⁴program, LIBOR plus 1.15%
84.3
n/a
53.6
n/a
LIBOR plus 1.25%⁵
239.2
500.0
151.6
1,000.0
LIBOR plus 1.25% 0
0
11.0
175.0
Gross warehouse facilities 1,724.8
2,275.0
516.8
2,425.0
Debt issuance costs (1.0 ) n/a
(0.9 ) n/a
Total warehouse facilities $ 1,723.8
2,275.0
515.9
2,425.0


	March 31, 2021			December 31, 2020
($ in millions)	Outstanding Balance		Maximum Capacity	Outstanding Balance	Maximum Capacity
Warehouse Facilities:
LIBOR plus 1.40%, expires September 20, 2021	$	171.5	400.0	144.4	400.0
LIBOR plus 1.40%, expires September 18, 2021(1)	516.6		1,200.0	768.9	1,600.0
LIBOR plus 1.40%, expires August 27, 2021(2)	87.3		200.0	195.9	900.0
Fannie Mae ASAP(3) program, LIBOR plus 1.15%	58.9		n/a	128.8	n/a
LIBOR plus 1.50%	0		300.0	261.6	300.0

Gross warehouse facilities	834.3		2,100.0	1,499.6	3,200.0
Debt issuance costs	(0.8)		n/a	(1.2)	n/a
Total warehouse facilities	$	833.5	2,100.0	1,498.4	3,200.0

¹In the third quarter of 2020, JLL extended the Warehouse facility; previously, the facility had a maturity date of September 21, 2020. In October 2020, JLL extended the Warehouse facility to September 20, 2021 with a(1) The temporary maximum capacity ~~of $400 million and an~~ increase to $1,600.0 million expired on January 31, 2021; thereafter, the ~~interest rate (to LIBOR plus 1.40%).~~maximum capacity reverted to its original contractual amount.

²~~In the third quarter of 2020, JLL extended the Warehouse facility with an~~(2) The temporary maximum capacity increase to $900.0 million expired on January 6, 2021; thereafter, the ~~interest rate; previously, the facility had a maturity date of September 19, 2020 and an interest rate of LIBOR plus 1.15%.~~maximum capacity reverted to its original contractual amount.

³In the third quarter of 2020, JLL extended the Warehouse facility with an increase to the interest rate; previously, the facility had a maturity date of August 31, 2020 and an interest rate of LIBOR plus 1.15%.

⁴(3) As Soon As Pooled ("ASAP") funding ~~program~~

⁵ ~~In the third quarter of 2020, the maximum capacity was reduced from $1.0 billion to $500 million.~~program.

We have lines of credit established for the sole purpose of funding our Warehouse receivables. These lines of credit exist with financial institutions and are secured by the related warehouse receivables. Pursuant to these warehouse facilities, we are required to comply with certain financial covenants regarding ~~(1)~~(i) minimum net worth, ~~(2)~~(ii) minimum servicing-related loans and ~~(3)~~(iii) minimum adjusted leverage ratios. We remained in compliance with all covenants under our Warehouse facilities as of ~~September 30, 2020.~~

March 31, 2021.

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10.COMMITMENTS AND CONTINGENCIES


~~10.~~	~~COMMITMENTS AND CONTINGENCIES~~

We are a defendant in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount.

Professional Indemnity Insurance

When a potential loss event occurs, we estimate the ultimate cost of the claim and accrue the amount in Other current and long-term liabilities on our Condensed Consolidated Balance Sheets when probable and estimable. In addition, we have established receivables from third-party insurance providers for claim amounts in excess of the risk retained by our captive insurance company. In total, these receivables were ~~$41.0~~$14.5 million and ~~$37.7~~$44.0 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

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


(in millions)
December 31, 2020	$	48.2
New claims	0
Prior year claims adjustments (including foreign currency changes)	(30.2)
Claims paid	(0.4)
March 31, 2021	$	17.6

December 31, 2019	$	38.1
New claims	0.3
Prior year claims adjustments (including foreign currency changes)	(4.8)
Claims paid	0
March 31, 2020	$	33.6

(in millions)
December 31, 2019 $ 38.1
New claims 5.8
Prior year claims adjustments (including foreign currency changes) 0.8
Claims paid 0
September 30, 2020 $ 44.7

December 31, 2018 $ 43.1
New claims 0.1
Prior year claims adjustments (including foreign currency changes) (4.4 )
Claims paid (1.1 )
September 30, 2019 $ 37.7

DUS Program Loan Loss-Sharing

As a participant in the DUS program, we retain a portion of the risk of loss for loans that are originated and sold under the DUS program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios. Generally, we share approximately one-third of incurred losses, subject to a cap of 20% of the principal balance of the mortgage at origination. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of ~~$11.0~~$12.9 billion and ~~$9.7~~$12.2 billion, respectively.

For all DUS program loans with loss-sharing obligations, we record a non-contingent liability equal to the estimated fair value of the guarantee obligations undertaken upon sale of the loan, which reduces our gain on sale of the loan. Subsequently, this liability is amortized over the estimated life of the loan and recognized as Revenue on the Condensed Consolidated Statements of Comprehensive Income. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the loss-sharing guarantee obligations were ~~$20.7~~$23.5 million and ~~$20.6~~$22.1 million, respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets. There were no loan losses incurred for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020.

The loss-sharing aspect of the program represents an off-balance sheet credit exposure. We record a separate contingent reserve for this risk calculated on an individual loan level. As of March 31, 2021 and December 31, 2020, the loan loss guarantee reserve was $28.6 million and ~~2019.~~$36.7 million, respectively, and are included within Other liabilities on our Condensed Consolidated Balance Sheets.

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11.RESTRUCTURING AND ACQUISITION CHARGES


~~11.~~	~~RESTRUCTURING AND ACQUISITION CHARGES~~

Restructuring and acquisition charges include cash and non-cash expenses. Cash-based charges primarily consist of (1) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership, or transformation of business processes, (2) acquisition, transaction and integration-related charges, and (3) other restructuring including lease exit charges. Non-cash charges include (1) stock-based compensation expense for retention awards issued in conjunction with the HFF acquisition and (2) fair value adjustments to earn-out liabilities relating to prior-period acquisition activity. Restructuring and acquisition charges are presented in table below.

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Severance and other employment-related charges $ 19.3
7.2
$ 27.6
17.6
Restructuring, pre-acquisition and post-acquisition charges 8.6
48.1
25.9
62.0
Stock-based compensation expense for HFF retention awards 6.2
14.0
30.5
14.0
Fair value adjustments to earn-out liabilities (0.6 ) 0.7
(8.2 ) 20.7
Restructuring and acquisition charges $ 33.5
70.0
$ 75.8
114.3


	Three Months Ended March 31,
(in millions)		2021		2020
Severance and other employment-related charges		$	1.8	1.3
Restructuring, pre-acquisition and post-acquisition charges		9.5		9.8
Stock-based compensation expense for HFF retention awards		6.0		11.2
Fair value adjustments to earn-out liabilities		(0.1)		(8.2)
Restructuring and acquisition charges		$	17.2	14.1

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


(in millions)	Severance & Employment-Related		Lease Exit	Restructuring, Acquisition and Integration Costs	Total
December 31, 2020	$	41.3	2.5	1.2	$	45.0
Accruals	1.8		3.3	6.2	11.3
Payments made	(18.9)		(4.8)	(5.6)	(29.3)
March 31, 2021	$	24.2	1.0	1.8	$	27.0

(in millions) Severance & Employment-Related
Lease
Exit
Restructuring, Acquisition and
Integration Costs Total
December 31, 2019 $ 24.3
8.4
3.8
$ 36.5
Accruals 27.6
9.3
16.6
53.5
Payments made (22.1 ) (16.0 ) (20.4 ) (58.5 )
September 30, 2020 $ 29.8
1.7
0
$ 31.5

(in millions) Severance & Employment-Related Lease
Exit Other Restructuring,
Acquisition and Integration Costs Total
December 31, 2018 $ 14.0
0.6
0.5
$ 15.1
Accruals 17.6
5.8
56.2
79.6
Payments made (21.2 ) (1.5 ) (54.8 ) (77.5 )
September 30, 2019 $ 10.4
4.9
1.9
$ 17.2


(in millions)	Severance & Employment-Related		Lease Exit	Other Restructuring, Acquisition and Integration Costs	Total
December 31, 2019	$	24.3	8.4	3.8	$	36.5
Accruals	1.3		2.4	7.4	11.1
Payments made	(14.3)		(9.6)	(6.9)	(30.8)
March 31, 2020	$	11.3	1.2	4.3	$	16.8

We expect the majority of accrued severance and other accrued acquisition costs as of ~~September 30, 2020~~March 31, 2021 will be paid during the next twelve months. Lease exit payments depend on the terms of various leases, which extend as far out as ~~2022.~~2026.

HFF Acquisition

Included in Restructuring and acquisition charges were ~~$13.8~~$11.5 million ~~and $55.2 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$60.1~~$21.3 million ~~and $69.8 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 of charges relating to the acquisition and integration of HFF (including ~~transaction/deal costs,~~ retention and severance expense, early lease termination costs, and other integration expenses).

During the integration of HFF, we expect to incur significant charges over the two years following the acquisition in an effort to maximize the value of the combined organization. We expect to recognize approximately $100 million of expense over this two-year window relating to retention awards which have already been paid or granted (in the case of RSUs). In addition, we may incur other costs in connection with the integration including, but not limited to, lease termination charges and other employee-related costs, but are unable to estimate these amounts.We anticipate that other than RSU retention awards granted, substantially all of these cumulative charges will result in cash expenditures.

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12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT


~~12.~~	~~ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT~~

The tables below present the changes in Accumulated other comprehensive income (loss) ("AOCI") by component.


(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2020	$	(81.2)	(296.0)	$	(377.2)
Other comprehensive loss before reclassification	0		(6.2)	(6.2)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	(0.2)		0	(0.2)
Other comprehensive loss after tax expense of $ - , $ - and $ -	(0.2)		(6.2)	(6.4)
Balance as of March 31, 2021	$	(81.4)	(302.2)	$	(383.6)

(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2019	$	(72.0)	(355.8)	$	(427.8)
Other comprehensive loss before reclassification	0		(143.4)	(143.4)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	0		0	0
Other comprehensive loss after tax expense of $ - , $ - and $ -	0		(143.4)	(143.4)
Balance as of March 31, 2020	$	(72.0)	(499.2)	$	(571.2)

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

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of June 30, 2020 $ (72.0 ) (465.4 ) $ (537.4 )
Other comprehensive income before reclassification 0
59.3
59.3
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
0.7
0
0.7
Other comprehensive income after tax expense of $ - , $ - and $ - 0.7
59.3
60.0
Balance as of September 30, 2020 $ (71.3 ) (406.1 ) $ (477.4 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of June 30, 2019 $ (59.2 ) (390.8 ) $ (450.0 )
Other comprehensive loss before reclassification 0
(34.6 ) (34.6 )
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
0.1
0
0.1
Other comprehensive loss after tax expense of $ - , $ - and $ - 0.1
(34.6 ) (34.5 )
Balance as of September 30, 2019 $ (59.1 ) (425.4 ) $ (484.5 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of December 31, 2019 $ (72.0 ) (355.8 ) $ (427.8 )
Other comprehensive loss before reclassification 0
(50.3 ) (50.3 )
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
0.7
0
0.7
Other comprehensive loss after tax expense of $ - , $ - and $ - 0.7
(50.3 ) (49.6 )
Balance as of September 30, 2020 $ (71.3 ) (406.1 ) $ (477.4 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of December 31, 2018 $ (57.4 ) (398.8 ) $ (456.2 )
Other comprehensive income before reclassification 0
(26.6 ) (26.6 )
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
(1.7 ) 0
(1.7 )
Other comprehensive (loss) income after tax expense of $ - , $ - and $ - (1.7 ) (26.6 ) (28.3 )
Balance as of September 30, 2019 $ (59.1 ) (425.4 ) $ (484.5 )

13. SUBSEQUENT EVENTS

On April 14, 2021, we executed Amendment No. 2 ("Amendment No. 2") to the Second Amended and Restated Multicurrency Credit Agreement dated as of June 21, 2016 (as amended, the "Credit Agreement") with a syndicate of lenders. The borrowing capacity under the Credit Agreement remains at $2.75 billion. The features to the Credit Agreement, as amended, provide for (i) an extension of the maturity date from May 2023 to April 2026, (ii) incremental flexibility of cash add-backs, all capped at the greater of $175.0 million or 20% of Bank Adjusted EBITDA for any twelve-month period, (iii) incorporating non-cash add-backs to Bank Adjusted EBITDA, (iv) certain sustainability-linked metrics incorporating KPI's with incentive pricing, and (v) auto-adjustment to new benchmark interest rates.

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

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements, including the notes thereto, for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, ~~2019,~~2020, which are included in our ~~2019~~2020 Annual Report on Form 10-K, filed with the SEC and also available on our website (www.jll.com). You should also refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our ~~2019~~2020 Annual Report on Form 10-K.

The following discussion and analysis contains certain forward-looking statements generally identified by the words anticipates, believes, estimates, expects, forecasts, plans, intends and other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause JLL's actual results, performance, achievements, plans and objectives to be materially different from any future results, performance, achievements, plans and objectives expressed or implied by such forward-looking statements. See the Cautionary Note Regarding Forward-Looking Statements included within this section for further information.

We present our quarterly Management's Discussion and Analysis in the following sections:


~~(1)~~	~~A summary of our critical accounting policies and estimates;~~


~~(2)~~	~~Certain items affecting the comparability of results and certain market and other risks we face;~~


~~(3)~~	~~The results of our operations, first on a consolidated basis and then for each of our business segments; and~~


~~(4)~~	~~Liquidity and capital resources.~~

(1)A summary of our critical accounting policies and estimates;

(2)Certain items affecting the comparability of results and certain market and other risks we face;

(3)The results of our operations, first on a consolidated basis and then for each of our business segments; and

(4)Liquidity and capital resources.

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

An understanding of our accounting policies is necessary for a complete analysis of our results, financial position, liquidity and trends. See Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in our ~~2019~~2020 Annual Report on Form 10-K for a complete summary of our significant accounting policies.

The preparation of our financial statements requires management to make certain critical accounting estimates and judgments that impact (1) the stated amount of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the financial statements, and (3) the reported amount of revenue and expenses during the reporting periods. These accounting estimates are based on management's judgment. We consider them to be critical because of their significance to the financial statements and the possibility that future events may differ from current judgments or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts likely differ from such estimated amounts, we believe such differences are not likely to be material.

A discussion of our critical accounting policies and estimates used in the preparation of our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q 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, ~~2019.~~2020. There have been no material changes to these critical accounting policies and estimates during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

The following are the critical accounting policies and estimates discussed 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, 2019:

~~Revenue Recognition;~~

~~Business Combinations, Goodwill and Other Intangible Assets;~~

~~Investments in Real Estate Ventures; and~~

~~Income Taxes.~~

In addition to the aforementioned critical accounting policies, we believe the calculation of our quarterly tax provision is critical to understanding the estimates and assumptions used in preparing the Condensed Consolidated Financial Statements in Item 1.

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~~Quarterly Income Tax Provision~~

We base our fiscal year estimated effective tax rate on estimates we update each quarter. Our effective tax rate for the nine months ended September 30, 2020 was 16.2%, resulting in an effective tax rate of 16.0% for the third quarter of 2020. We provide for the effects of income taxes on interim financial statements based on our estimate of the effective tax rate for the full year, which we base on forecasted income by country and expected enacted tax rates; as required, we adjust for the impact of discrete items in the quarters in which they occur. We evaluate our estimated effective tax rate on a quarterly basis to reflect forecast changes in our geographic mix of income and legislative actions on statutory tax rates and other relevant matters effective in the quarter in which the legislation is enacted. Changes in the impact of the COVID-19 pandemic on our forecasted income may affect our forecasted full-year effective tax rate for the remainder of 2020.

The geographic mix of our income can significantly impact our effective tax rate. Very low tax rate jurisdictions (those with effective national and local combined tax rates of 25% or lower) that provide the most significant contributions to our effective tax rate include: Hong Kong (16.5%), Singapore (17%), the United Kingdom (19%) and Saudi Arabia (20%). We do not project any other jurisdictions with effective rates of 25% or lower to materially impact our 2020 global effective tax rate.

ITEMS AFFECTING COMPARABILITY

Macroeconomic Conditions

Our results of operations and the variability of these results are significantly influenced by (1) macroeconomic trends, (2) the geopolitical environment, (3) the global and regional real estate markets, and (4) the 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. ~~Specifically in~~In 2020 ~~we are experiencing~~and the three months ended March 31, 2021, macroeconomic ~~impact of~~conditions influenced by the COVID-19 ~~pandemic.~~pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

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Acquisitions

The timing of acquisitions may impact the comparability of our results on a year-over-year basis. Our results include incremental revenues and expenses following the completion date of an acquisition. 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.

LaSalle Revenue

Our investment management business is, in part, compensated through incentive fees where performance of underlying funds' investments exceeds agreed-to benchmark levels. Depending upon performance, disposition activity, and the contractual timing of measurement periods with clients, these fees can be significant and vary substantially from period to period.

Equity earnings also may vary substantially from period to period for a variety of reasons, including as a result of: (1) gains (losses) on investments reported at fair value, (2) gains (losses) on asset dispositions, and (3) impairment charges. The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year.

The comparability of these items can be seen in Note 4, Business Segments, of the Notes to Condensed Consolidated Financial Statements and is discussed further in Segment Operating Results included herein.

Foreign Currency

We conduct business using a variety of currencies, but we report our results in U.S. dollars. As a result, the volatility of currencies against the U.S. dollar may positively or negatively impact our results. This volatility can make it more difficult to perform period-to-period comparisons of the reported U.S. dollar results of operations, because such results may indicate a growth or decline rate that might not have been consistent with the real underlying growth or decline rates in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our discussion and analysis of financial condition in the Results of Operations section below.

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Transactional-Based Revenue

Transactional-based fees, that are impacted by the size and timing of our clients' transactions, from real estate investment banking, capital markets activities and other services within our RES businesses, and LaSalle, increase the variability of the revenue we earn. The timing and the magnitude of these fees can vary significantly from year to year and quarter to quarter, and from region to region.

Seasonality

Historically, our quarterly revenue and profits have tended to increase from quarter to quarter as the year progresses. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and the fact that certain expenses are constant through the year. Historically, we have reported a relatively smaller profit in the first quarter and then increasingly larger profits during each of the following three quarters, excluding the recognition of investment-generated performance fees and realized and unrealized co-investment equity earnings and losses (each of which can be unpredictable). Generally, we recognize incentives fees when assets are sold, the timing of which is geared toward the benefit of our clients. In addition, co-investment equity gains and losses are primarily dependent on valuations of underlying investments, the direction and magnitude of changes to such valuations are not predictable. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis. ~~The~~In 2020 and the three months ended March 31, 2021, macroeconomic conditions influenced by the COVID-19 pandemic ~~may have a material impact on~~impacted the historical seasonality of our revenue and ~~profits.~~profits and may continue to do so during the remainder of 2021.

A significant portion of our Compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets. This quarterly estimation can result in significant fluctuations in quarterly Compensation and benefits expense from period to period. Consequently, the results for the periods ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are not fully indicative of the results we expect to realize for the full fiscal year.

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RESULTS OF OPERATIONS

Definitions

•We define market volumes for Leasing as gross absorption of office real estate space in square feet for the U.S., Europe and selected markets in Asia Pacific. We define market volumes for Capital Markets as investment sales transactions globally.

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

•MENA: Middle East and North Africa. Greater China: China, Hong Kong, Macau and Taiwan.

•n.m.: not meaningful, represented by a percentage change of greater than 100% favorable or unfavorable.

Consolidated Operating Results


	Three Months Ended September 30,					Change in				% Change in Local Currency			Three Months Ended March 31,			Change in			% Change in Local Currency
($ in millions)	2020			2019		U.S. dollars				% Change in Local Currency		($ in millions)	2021		2020	U.S. dollars			% Change in Local Currency
Leasing	$	430.3		604.3		(174.0	)	(29	)%	(29	)%	Leasing	$	449.5	492.4	(42.9)	(9)	%	(10)	%
Capital Markets	284.5			480.0		(195.5	)	(41	)	(41	)	Capital Markets	320.4		342.3	(21.9)	(6)		(9)
Property & Facility Management	2,303.3			2,312.8		(9.5	)	0		(1	)	Property & Facility Management	2,414.0		2,365.8	48.2	2		(1)
Project & Development Services	631.5			785.9		(154.4	)	(20	)	(21	)	Project & Development Services	551.8		604.4	(52.6)	(9)		(12)
Advisory, Consulting and Other	218.2			201.0		17.2		9		7		Advisory, Consulting and Other	210.2		186.2	24.0	13		8
Real Estate Services ("RES") revenue	$	3,867.8		4,384.0		(516.2	)	(12	)%	(12	)%	Real Estate Services ("RES") revenue	$	3,945.9	3,991.1	(45.2)	(1)	%	(4)	%
LaSalle	110.3			111.6		(1.3	)	(1	)	(3	)	LaSalle	91.2		104.9	(13.7)	(13)		(16)
Revenue	$	3,978.1		4,495.6		(517.5	)	(12	)%	(12	)%	Revenue	$	4,037.1	4,096.0	(58.9)	(1)	%	(4)	%
Reimbursements	(1,886.7		)	(1,949.8	)	(63.1	)	(3	)	(4	)	Reimbursements	(1,907.5)		(1,863.0)	(44.5)	2		—
Revenue before reimbursements	$	2,091.4		2,545.8		(454.4	)	(18	%)	(19	%)	Revenue before reimbursements	$	2,129.6	2,233.0	(103.4)	(5)	%	(8)	%
Gross contract costs	(659.1		)	(717.7	)	58.6		(8	)	(9	)	Gross contract costs	(677.2)		(729.4)	52.2	(7)		(11)
Net non-cash MSR and mortgage banking derivative activity	(14.7		)	(12.7	)	(2.0	)	16		16		Net non-cash MSR and mortgage banking derivative activity	(9.7)		1.6	(11.3)	n.m.
Fee revenue	$	1,417.6		1,815.4		(397.8	)	(22	)%	(23	)%	Fee revenue	$	1,442.7	1,505.2	(62.5)	(4)	%	(7)	%
Leasing	412.9			588.3		(175.4	)	(30	)	(30	)	Leasing	429.5		475.2	(45.7)	(10)		(11)
Capital Markets	262.8			458.6		(195.8	)	(43	)	(43	)	Capital Markets	305.3		334.1	(28.8)	(9)		(11)
Property & Facility Management	302.4			293.1		9.3		3		2		Property & Facility Management	304.7		279.9	24.8	9		5
Project & Development Services	188.0			216.1		(28.1	)	(13	)	(14	)	Project & Development Services	170.1		188.3	(18.2)	(10)		(13)
Advisory, Consulting and Other	145.7			153.6		(7.9	)	(5	)	(7	)	Advisory, Consulting and Other	147.8		129.1	18.7	14		9
RES fee revenue	$	1,311.8		1,709.7		(397.9	)	(23	)%	(24	)%	RES fee revenue	$	1,357.4	1,406.6	(49.2)	(3)	%	(6)	%
LaSalle	105.8			105.7		0.1		0		(2	)	LaSalle	85.3		98.6	(13.3)	(13)		(17)

Compensation and benefits excluding gross contract costs	970.3			1,270.5		(300.2	)	(24	)	(24	)	Compensation and benefits excluding gross contract costs	$	1,072.2	1,064.3	7.9	1	%	(2)	%
Operating, administrative and other expenses excluding gross contract costs	218.7			262.4		(43.7	)	(17	)	(17	)	Operating, administrative and other expenses excluding gross contract costs	229.3		305.6	(76.3)	(25)		(27)
Depreciation and amortization	54.9			53.6		1.3		2		2		Depreciation and amortization	53.0		55.0	(2.0)	(4)		(6)
Restructuring and acquisition charges												Restructuring and acquisition charges	17.2		14.1	3.1	22		21
Total fee-based operating expenses	1,243.9			1,586.5		(342.6	)	(22	)	(22	)	Total fee-based operating expenses	1,371.7		1,439.0	(67.3)	(5)		(7)
Restructuring and acquisition charges	33.5			70.0		(36.5	)	(52	)	(53	)
Gross contract costs	659.1			717.7		(58.6	)	(8	)	(9	)	Gross contract costs	677.2		729.4	(52.2)	(7)		(11)
Total operating expenses, excluding reimbursed expenses	$	1,936.5		2,374.2		(437.7	)	(18	)%	(19	)%	Total operating expenses, excluding reimbursed expenses	$	2,048.9	2,168.4	(119.5)	(6)	%	(9)	%
Operating income	$	154.9		171.6		(16.7	)	(10	)%	(10	)%	Operating income	$	80.7	64.6	16.1	25	%	23	%
Equity earnings	$	15.0		17.1		(2.1	)	(12	)%	(13	)%
Equity earnings (losses)												Equity earnings (losses)	$	48.5	(28.3)	76.8	n.m.
Adjusted EBITDA	$	243.6		299.9		(56.3	)	(19	)%	(19	)%	Adjusted EBITDA	$	190.1	95.6	94.5	99	%	96	%

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~~Consolidated Operating Results (continued)~~

Nine Months Ended September 30, Change in % Change in Local Currency
($ in millions) 2020 2019 U.S. dollars
Leasing $ 1,281.3
1,706.1
(424.8 ) (25 )% (25 )%
Capital Markets 841.6
930.0
(88.4 ) (10 ) (9 )
Property & Facility Management 6,944.3
6,886.8
57.5
1
2
Project & Development Services 1,772.7
2,119.3
(346.6 ) (16 ) (16 )
Advisory, Consulting and Other 589.5
601.1
(11.6 ) (2 ) (1 )
Real Estate Services ("RES") revenue $ 11,429.4
12,243.3
(813.9 ) (7 )% (6 )%
LaSalle 315.1
339.4
(24.3 ) (7 ) (7 )
Revenue $ 11,744.5
12,582.7
(838.2 ) (7 )% (6 )%
Reimbursements (5,591.6 ) (5,727.1 ) (135.5 ) (2 ) (2 )
Revenue before reimbursements $ 6,152.9
6,855.6
(702.7 ) (10 )% (10 )%
Gross contract costs (1,963.5 ) (2,073.7 ) 110.2
(5 ) (4 )
Net non-cash MSR and mortgage banking derivative activity (21.7 ) (17.4 ) (4.3 ) 25
25
Fee revenue $ 4,167.7
4,764.5
(596.8 ) (13 )% (12 )%
Leasing 1,231.9
1,655.5
(423.6 ) (26 ) (25 )
Capital Markets 796.3
884.7
(88.4 ) (10 ) (10 )
Property & Facility Management 870.2
864.6
5.6
1
2
Project & Development Services 554.9
599.5
(44.6 ) (7 ) (7 )
Advisory, Consulting and Other 415.0
437.5
(22.5 ) (5 ) (4 )
RES fee revenue $ 3,868.3
4,441.8
(573.5 ) (13 )% (12 )%
LaSalle 299.4
322.7
(23.3 ) (7 ) (7 )
Compensation and benefits excluding gross contract costs 2,963.3
3,366.2
(402.9 ) (12 ) (11 )
Operating, administrative and other expenses excluding gross contract costs 753.2
808.7
(55.5 ) (7 ) (6 )
Depreciation and amortization 166.8
145.6
21.2
15
15
Total fee-based operating expenses 3,883.3
4,320.5
(437.2 ) (10 ) (10 )
Restructuring and acquisition charges 75.8
114.3
(38.5 ) (34 ) (34 )
Gross contract costs 1,963.5
2,073.7
(110.2 ) (5 ) (4 )
Total operating expenses, excluding reimbursed expenses $ 5,922.6
6,508.5
(585.9 ) (9 )% (8 )%
Operating income $ 230.3
347.1
(116.8 ) (34 )% (34 )%
Equity (losses) earnings $ 1.4
32.3
(30.9 ) (96 )% (96 )%
Adjusted EBITDA $ 442.5
622.0
(179.5 ) (29 )% (29 )%

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Non-GAAP Financial Measures

Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. 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)~~a.Fee revenue and Fee-based operating expenses;

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

~~(iii)~~c.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. generally accepted accounting principles (“GAAP”). Any measure that eliminates components of a company’s capital structure, cost of operations or investment, or other results has limitations as a performance measure. In light of these limitations, management also considers GAAP financial measures and does not rely solely on non-GAAP financial measures. Because our non-GAAP financial measures are not calculated in accordance with GAAP, they may not be comparable to similarly titled measures used by other companies.

Adjustments to 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 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 before reimbursements. Consistent with our treatment of directly reimbursed expenses, 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, including those with direct versus indirect reimbursement of such costs.

Net non-cash mortgage servicing rights ("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. Non-cash derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity are calculated as the estimated fair value of loan commitments and subsequent changes thereof, primarily represented by the estimated net cash flows associated with future servicing rights. MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods. The above activity is reported entirely within Revenue of the Capital Markets service line of the Americas segment. 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 fair value adjustments, which are generally non-cash in the periods such adjustments are made, to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) other restructuring, including 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. Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments’ reconciliation to Adjusted EBITDA.

Gain on Disposition reflects the ~~net~~ gain recognized on the sale of ~~property management businesses in continental Europe.~~a business within Americas. Given the low frequency of business disposals by the company historically, the gain directly associated with such activity is excluded as it is not considered indicative of core operating performance.

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Reconciliation of Non-GAAP Financial Measures

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


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
(in millions)	2020			2019		2020			2019		(in millions)		2021		2020
Revenue	$	3,978.1		4,495.6		$	11,744.5		12,582.7		Revenue		$	4,037.1	4,096.0
Less: Reimbursements	(1,886.7		)	(1,949.8	)	(5,591.6		)	(5,727.1	)	Less: Reimbursements		(1,907.5)		(1,863.0)
Revenue before reimbursements	2,091.4			2,545.8		6,152.9			6,855.6		Revenue before reimbursements		2,129.6		2,233.0
Adjustments:											Adjustments:
Gross contract costs	(659.1		)	(717.7	)	(1,963.5		)	(2,073.7	)	Gross contract costs		(677.2)		(729.4)
Net non-cash MSR and mortgage banking derivative activity	(14.7		)	(12.7	)	(21.7		)	(17.4	)	Net non-cash MSR and mortgage banking derivative activity		(9.7)		1.6
Fee revenue	$	1,417.6		1,815.4		$	4,167.7		4,764.5		Fee revenue		$	1,442.7	1,505.2

Operating expenses	$	3,823.2		4,324.0		$	11,514.2		12,235.6		Operating expenses		$	3,956.4	4,031.4
Less: Reimbursed expenses	(1,886.7		)	(1,949.8	)	(5,591.6		)	(5,727.1	)	Less: Reimbursed expenses		(1,907.5)		(1,863.0)
Operating expenses, excluding reimbursed expenses	1,936.5			2,374.2		5,922.6			6,508.5		Operating expenses, excluding reimbursed expenses		2,048.9		2,168.4
Less: Gross contract costs	(659.1		)	(717.7	)	(1,963.5		)	(2,073.7	)	Less: Gross contract costs		(677.2)		(729.4)
Fee-based operating expenses	$	1,277.4		1,656.5		$	3,959.1		4,434.8		Fee-based operating expenses		$	1,371.7	1,439.0

Operating income	$	154.9		171.6		$	230.3		347.1		Operating income		$	80.7	64.6

Below is (i) a reconciliation of Net income attributable to common shareholders to EBITDA and Adjusted EBITDA, (ii) the Net income margin attributable to common shareholders (measured on Revenue before reimbursements), and (iii) the Adjusted EBITDA margin (measured on fee-revenue and presented on a local currency basis).


	Three Months Ended March 31,
(in millions)		2021			2020
Net income attributable to common shareholders		$	103.0		5.3
Add:
Interest expense, net of interest income		10.4			14.6
Provision for income taxes		28.2			5.0
Depreciation and amortization		53.0			55.0
EBITDA		$	194.6		79.9
Adjustments:
Restructuring and acquisition charges		17.2			14.1
Gain on disposition		(12.0)			—
Net non-cash MSR and mortgage banking derivative activity		(9.7)			1.6
Adjusted EBITDA		$	190.1		95.6

Net income margin attributable to common shareholders		4.8		%	0.2	%

Adjusted EBITDA margin		13.4		%	6.4	%

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Net income attributable to common shareholders $ 131.9
128.9
$ 152.4
260.7
Add:
Interest expense, net of interest income 12.3
18.0
41.8
41.2
Provision for income taxes 25.7
42.1
32.2
77.6
Depreciation and amortization 54.9
53.6
166.8
145.6
EBITDA $ 224.8
242.6
$ 393.2
525.1
Adjustments:
Restructuring and acquisition charges 33.5
70.0
75.8
114.3
Gain on disposition —
—
(4.8 ) —
Net non-cash MSR and mortgage banking derivative activity (14.7 ) (12.7 ) (21.7 ) (17.4 )
Adjusted EBITDA $ 243.6
299.9
$ 442.5
622.0

Net income margin attributable to common shareholders 6.3 % 5.1 % 2.5 % 3.8 %

Adjusted EBITDA margin 17.4 % 16.5 % 10.6 % 13.1 %

Table of Contents

In discussing our operating results, we report Adjusted EBITDA margins and refer to percentage changes in local currency, unless otherwise noted. Amounts presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the comparative period. 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.


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
($ in millions)	2020			% Change		2020			% Change		($ in millions)		2021	% Change
Revenue:											Revenue:
At current period exchange rates	$	3,978.1		(12	)%	$	11,744.5		(7	)%	At current period exchange rates			$	4,037.1	(1)	%
Impact of change in exchange rates	(28.5		)	n/a		81.4			n/a		Impact of change in exchange rates			(110.2)		n/a
At comparative period exchange rates	$	3,949.6		(12	)%	$	11,825.9		(6	)%	At comparative period exchange rates			$	3,926.9	(4)	%

Fee Revenue:
Fee revenue:											Fee revenue:
At current period exchange rates	$	1,417.6		(22	)%	$	4,167.7		(13	)%	At current period exchange rates			$	1,442.7	(4)	%
Impact of change in exchange rates	(14.5		)	n/a		23.3			n/a		Impact of change in exchange rates			(40.5)		n/a
At comparative period exchange rates	$	1,403.1		(23	)%	$	4,191.0		(12	)%	At comparative period exchange rates			$	1,402.2	(7)	%

Operating Income:
Operating income:											Operating income:
At current period exchange rates	$	154.9		(10	)%	$	230.3		(34	)%	At current period exchange rates			$	80.7	25	%
Impact of change in exchange rates	(1.2		)	n/a		(1.5		)	n/a		Impact of change in exchange rates			(1.3)		n/a
At comparative period exchange rates	$	153.7		(10	)%	$	228.8		(34	)%	At comparative period exchange rates			$	79.4	23	%

Adjusted EBITDA:											Adjusted EBITDA:
At current period exchange rates	$	243.6		(19	)%	$	442.5		(29	)%	At current period exchange rates			$	190.1	99	%
Impact of change in exchange rates	(0.1		)	n/a		0.3			n/a		Impact of change in exchange rates			(2.6)		n/a
At comparative period exchange rates	$	243.5		(19	)%	$	442.8		(29	)%	At comparative period exchange rates			$	187.5	96	%

Table of Contents

~~COVID-19 Pandemic~~Revenue

The continued impact of the COVID-19 pandemic (the "pandemic") ~~continued~~contributed to disrupt our operations, most significantly in transaction-based service lines. As with the second quarter, our personnel across the globe, notably in Corporate Solutions and other annuity businesses, partnered with clients to ensure continuity of operations in response to the evolving conditions as well as develop and implement safe return-to-work measures. In response to the pandemic's sustained disruptions to revenue and business operations, we meaningfully expanded both fixed and variable cost mitigation efforts. With actions taken through October, we reduced fixed costs by approximately $135 million on an annualized basis, primarily compensation and benefits expense. In addition, our expense management actions delivered nearly $120 million of non-permanent cost savings this quarter (over $240 million year-to-date), including $34 million related to various government relief programs around the world ($67 million year-to-date). These non-permanent savings represent costs likely to return in future periods as business volumes recover.

~~Revenue~~

~~For the third quarter of 2020 compared with 2019,~~lower consolidated RES revenue, ~~decreased 12%~~down 4% to $3.9 billion, and ~~consolidated RES~~ fee revenue, ~~decreased 24% to $1.3 billion, a result of the pandemic's significant impact, especially on transaction-based service lines. For the first nine months of 2020, consolidated RES revenue decreased~~down 6% to ~~$11.4~~$1.4 billion, ~~and consolidated RES fee revenue decreased 12% to $3.9 billion.~~

The revenue and fee revenue declines were across all three geographic segments and in all service lines except Property & Facility Management, which delivered steady fee revenue driven by our property management and Corporate Solutions teams. Capital Markets experienced the most significant decrease in third-quarter revenue, down 43% over the prior-year quarter, in line with the decline in investment sales market volumes globally according to JLL Research. Capital Markets year-to-date results included $215.2 million of incremental revenue from the first six months of 2020 related to HFF compared with the prior-year ~~period due~~quarter, as strong growth in Asia Pacific was more than offset by declines in Americas and EMEA. Notably, the consolidated RES revenue decreases in transaction-based service lines were less significant than the trailing three quarters, with encouraging economic indicators present in many geographies. Corporate Solutions continued to ~~the July 1, 2019, timing of the acquisition. Leasing was down 30% for the quarter and 25% for the first nine months, compared with the prior-year periods, against the backdrop of an over 45% decline~~deliver stable fee revenue performance as strength in ~~global office market gross absorption for the third quarter (over 40% year-to-date) according to JLL Research.~~facilities management offset a decrease in Project & Development Services.

Geographically across service lines, ~~Americas~~EMEA represented ~~65%~~60% of the RES ~~fee~~ revenue decline for the ~~second~~first quarter on a local currency ~~basis; EMEA~~basis, Americas represented ~~22%~~54% and Asia Pacific partially offset these decreases. With respect to RES fee revenue, Americas represented ~~13%.~~nearly all of the decline for the first quarter on a local currency basis, as growth in Asia Pacific offset the decline in EMEA. Refer to the segment results discussion for further ~~details.~~detail.

LaSalle ~~achieved solid advisory fee growth for the quarter and year-to-date,~~revenue decreased 16% compared with ~~2019. The overall decline in revenue for~~ the ~~first nine months was primarily due to expected lower incentive fees following a near-record 2019.~~prior-year quarter. Refer to the LaSalle segment ~~results~~ discussion for further ~~discussion.~~detail.

Our consolidated fee revenue decreased ~~22%~~4% in U.S. dollars (“USD”) and ~~23%~~7% in local currency for the ~~third~~first quarter of ~~2020,~~2021, compared with ~~2019.~~2020. The spread was driven by the weakening of the U.S. dollar against several major currencies, especially the British pound sterling, euro and Australian dollar. Our consolidated fee revenue decreased 13% in USD and 12% in local currency for the nine months ended September 30, 2020, compared with the prior year. The strengthening of the U.S. dollar against the Indian rupee, Australian dollar and Chinese yuan drove the spread on year-to-date percentages.

Operating Expenses

In the ~~third~~first quarter of ~~2020,~~2021, consolidated operating expenses, excluding reimbursed expenses, were ~~$1.9~~$2.0 billion, down ~~19%~~9% from ~~2019,~~2020, and consolidated fee-based operating expenses, were ~~$1.3~~$1.4 billion, down ~~24%~~7% from the prior-year quarter. For the ~~third~~first quarter, the decrease in fee-based operating expenses was driven by Americas ~~(64%~~(97% of the reduction on a local currency basis)~~, EMEA (20%) and Asia Pacific (16%)~~.

Americas results reflected an $8.1 million non-cash reduction to loan loss credit reserves, compared with a $30.6 million increase in reserves during the prior-year quarter.

Restructuring and acquisition charges ~~were down~~increased compared with the ~~prior-year periods;~~prior year; refer to following table for further detail.


	Three Months Ended March 31,
(in millions)		2021		2020
Severance and other employment-related charges		$	1.8	1.3
Restructuring, pre-acquisition and post-acquisition charges		15.5		21.0
Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior-period acquisition activity		(0.1)		(8.2)
Total restructuring & acquisition charges		$	17.2	14.1
Portion of total restructuring & acquisition charges related to the acquisition and integration of HFF		$	11.5	21.3

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Severance and other employment-related charges $ 19.3
7.2
$ 27.6
17.6
Restructuring, pre-acquisition and post-acquisition charges 14.8
62.1
56.4
76.0
Fair value adjustments that resulted in a net increase (decrease) to earn-out liabilities from prior-period acquisition activity (0.6 ) 0.7
(8.2 ) 20.7
Total restructuring & acquisition charges $ 33.5
70.0
$ 75.8
114.3

~~Table of Contents~~

~~Included in~~Charges associated with the ~~preceding table was $13.8 million and $55.2 million for the third quarter and first nine months of 2020, respectively, of~~ acquisition and integration charges relating to HFF. In the prior-year periods, such activity was $60.1 million and $69.8 million, respectively. Charges in 2020 include retention expense, early lease termination costs and other integration expenses, while charges in 2019 primarilyof HFF included ~~transaction/deal costs as well as~~ retention and severance expense, early lease termination costs, and other integration expenses. ~~Refer to Note 11, Restructuring and Acquisition Charges, in the Notes to the Condensed Consolidated Financial Statements for further information on Restructuring and acquisition charges.~~

Equity Earnings

For the ~~third~~first quarter of ~~2020,~~2021, we recognized equity earnings of ~~$15.0~~$48.5 million, compared with ~~$17.1~~equity losses of $28.3 million in the prior-year quarter. ~~For~~

Valuation increases of JLL Technologies' investments contributed $34.7 million this quarter, reflecting progress in the ~~first nine months of 2020, we recognized equity earnings of $1.4 million, compared with earnings of $32.3 million~~strategy to invest in ~~2019. LaSalle was a key driver of activity in all periods;~~early-stage proptech companies; refer to the ~~LaSalle~~Americas segment ~~results~~ discussion for additional ~~details.~~detail. In addition, substantially all of the $12.7 million of equity earnings ~~were recognized~~ in ~~the first quarter of 2020 for~~ the Americas segment ~~which~~in 2020 were ~~substantially~~ attributable to gains by consolidated variable interest entities in which we held no equity ~~interest. These~~interest; these gains are also reflected in net income attributable to noncontrolling interest and, therefore, ~~had~~have no impact to ~~our Net~~net income attributable to common shareholders.

LaSalle recognized $13.0 million of equity earnings in 2021, compared with $40.3 million of equity losses last year. Refer to the LaSalle segment discussion for additional detail.

Table of Contents

Income Taxes

The provision for income taxes was ~~$25.7 million and $32.2~~$28.2 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, representing an effective tax ~~rates~~rate of ~~16.0% and 16.2%, respectively.~~21.6%. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, the provision was ~~$42.1~~$5.0 million, ~~and $77.6 million, respectively,~~ representing an effective tax ~~rates~~rate of 24.5% and 22.9%, respectively. The tax provision for the nine months ended September 30, 2019, included a $5.7 million discrete benefit due to a reduction to our reserve for uncertain tax positions during the first quarter of 2019. The lower effective tax rates in 2020 resulted from changes in the geographic distribution of pretax earnings compared to 2019.22.0%.

Net Income and Adjusted EBITDA

Net income attributable to common shareholders for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 was ~~$131.9~~$103.0 million, ~~and $152.4 million, respectively,~~ compared with ~~$128.9 million and $260.7~~$5.3 million in ~~the respective prior-year periods.~~2020. Adjusted EBITDA was ~~$243.6 million and $442.5~~$190.1 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2020, respectively, decreases~~2021, an increase of ~~19% and 29%~~96% from the prior-year ~~periods.~~ period. Net income attributable to common shareholders in 2021 included a $12.0 million gain recognized on the sale of a business as part of a broader investment made in Roofstock, a marketplace for investing in the dynamic single-family rental sector. This gain on sale is excluded from adjusted measures.

Net income margin attributable to common shareholders for the ~~third~~first quarter (against Revenue before reimbursements) was ~~6.3%~~4.8%, compared with ~~5.1%~~0.2% in the prior-year quarter. Adjusted EBITDA margin for the ~~third~~first quarter, calculated on a fee-revenue basis, was ~~17.2%~~13.2% in USD ~~(17.4%~~(13.4% in local currency), compared with ~~16.5%~~6.4% in ~~2019.~~2020. The net margin expansion was primarily due to the year-over-year non-cash changes in LaSalle equity earnings and loan loss credit reserves discussed above. Remaining margin expansion was driven by ~~cost mitigation efforts, including government relief programs,~~JLL Technologies' investments as well as strong contributions from Asia Pacific, partially offset by ~~net dilution from RES, reflecting the~~a decline in ~~fee revenue, specifically transactional service lines.~~

~~Table of Contents~~

EMEA. Refer to the segment operating results discussions for additional detail.

Segment Operating Results

We manage and report our operations as four business segments. Our three geographic RES segments include Americas, EMEA and Asia Pacific. Our fourth segment is LaSalle, our investment management business.

Each geographic region offers our full range of real estate services, including tenant representation and agency leasing, capital markets, property management, facility management, project and development services, and advisory, consulting and valuation services. We consider "property management" to be services provided to non-occupying property investors and "facility management" to be services provided to owner-occupiers. LaSalle provides investment management services 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.

Table of Contents

Americas - Real Estate Services


							% Change
	Three Months Ended March 31,			Change in			in Local
($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	2,443.9	2,523.1	(79.2)	(3)	%	(3)	%
Reimbursements	(1,385.7)		(1,393.5)	7.8	(1)		(1)
Revenue before reimbursements	$	1,058.2	1,129.6	(71.4)	(6)	%	(6)	%
Gross contract costs	(215.8)		(212.8)	(3.0)	1		2
Net non-cash MSR and mortgage banking derivative activity	(9.7)		1.6	(11.3)	n.m.		n.m.
Fee revenue	$	832.7	918.4	(85.7)	(9)	%	(9)	%
Leasing	351.4		405.6	(54.2)	(13)		(14)
Capital Markets	206.6		246.6	(40.0)	(16)		(16)
Property & Facility Management	146.5		128.7	17.8	14		14
Project & Development Services	81.3		93.4	(12.1)	(13)		(13)
Advisory, Consulting and Other	46.9		44.1	2.8	6		6
Compensation, operating and administrative expenses excluding gross contract costs	$	698.8	797.5	(98.7)	(12)	%	(12)	%


Depreciation and amortization	33.1		37.4	(4.3)	(11)		(11)
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	731.9		834.9	(103.0)	(12)		(12)
Gross contract costs	215.8		212.8	3.0	1		2
Segment operating expenses (excluding reimbursed expenses)	$	947.7	1,047.7	(100.0)	(10)	%	(10)	%

Equity earnings	$	34.5	12.7	21.8	n.m.		n.m.
Segment income	$	145.0	94.6	50.4	53	%	53	%
Adjusted EBITDA	$	169.0	121.3	47.7	39	%	39	%

% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 2,380.8
2,687.6
(306.8 ) (11 )% (11 )%
Reimbursements (1,389.6 ) (1,430.3 ) 40.7
(3 ) (3 )
Revenue before reimbursements $ 991.2
1,257.3
(266.1 ) (21 %) (21 %)
Gross contract costs (202.8 ) (200.8 ) (2.0 ) 1
3
Net non-cash MSR and mortgage banking derivative activity (14.7 ) (12.7 ) (2.0 ) 16
16
Fee Revenue $ 773.7
1,043.8
(270.1 ) (26 )% (26 )%
Leasing 313.6
460.9
(147.3 ) (32 ) (32 )
Capital Markets 175.5
308.8
(133.3 ) (43 ) (43 )
Property & Facility Management 149.6
121.7
27.9
23
24
Project & Development Services 88.7
103.3
(14.6 ) (14 ) (13 )
Advisory, Consulting and Other 46.3
49.1
(2.8 ) (6 ) (5 )
Compensation, operating and administrative expenses excluding gross contract costs 616.8
844.8
(228.0 ) (27 ) (27 )
Depreciation and amortization 36.4
35.3
1.1
3
4
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 653.2
880.1
(226.9 ) (26 ) (25 )
Gross contract costs 202.8
200.8
2.0
1
3
Segment operating expenses (excluding reimbursed expenses) $ 856.0
1,080.9
(224.9 ) (21 )% (20 )%
Equity earnings $ 4.8
1.5
3.3
n.m.
n.m.
Segment income $ 140.0
177.9
(37.9 ) (21 )% (21 )%
Adjusted EBITDA $ 161.9
201.0
(39.1 ) (19 )% (19 )%

~~Table of Contents~~

~~Americas - Real Estate Services (continued)~~

% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 7,132.9
7,401.3
(268.4 ) (4 )% (3 )%
Reimbursements (4,128.1 ) (4,184.8 ) 56.7
(1 ) (1 )
Revenue before reimbursements $ 3,004.8
3,216.5
(211.7 ) (7 )% (6 )%
Gross contract costs (607.9 ) (580.3 ) (27.6 ) 5
7
Net non-cash MSR and mortgage banking derivative activity (21.7 ) (17.4 ) (4.3 ) 25
25
Fee Revenue $ 2,375.2
2,618.8
(243.6 ) (9 )% (9 )%
Leasing 986.2
1,318.0
(331.8 ) (25 ) (25 )
Capital Markets 553.6
533.0
20.6
4
4
Property & Facility Management 425.6
348.9
76.7
22
23
Project & Development Services 273.2
283.7
(10.5 ) (4 ) (3 )
Advisory, Consulting and Other 136.6
135.2
1.4
1
2
Compensation, operating and administrative expenses excluding gross contract costs 2,027.3
2,189.8
(162.5 ) (7 ) (7 )
Depreciation and amortization 112.9
88.9
24.0
27
27
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,140.2
2,278.7
(138.5 ) (6 ) (6 )
Gross contract costs 607.9
580.3
27.6
5
7
Segment operating expenses (excluding reimbursed expenses) $ 2,748.1
2,859.0
(110.9 ) (4 )% (3 )%
Equity earnings $ 20.4
1.6
18.8
n.m.
n.m.
Segment income $ 277.1
359.1
(82.0 ) (23 )% (23 )%
Adjusted EBITDA $ 357.2
431.1
(73.9 ) (17 )% (17 )%

~~Similar~~The pandemic continued to ~~the second quarter, the pandemic~~ negatively ~~affected~~impact the Americas transaction-based service lines, ~~this quarter. Although~~although the decline in U.S. Leasing ~~revenue for the quarter reflected a notable decrease in office leasing activity, we again outperformed substantial market declines in gross absorption.~~was notably less significant than recent quarters. Continued ~~strong~~ growth in industrial partially offset ~~the reduced~~a decline in office leasing activity, in office. For the first nine months of 2020, Leasing fee revenue reflected factors largely consistent with the third-quarter drivers and also included our strong first-quarter performance. Notably lowerhowever, U.S. office leasing again outperformed market gross absorption, which was down 45% according to JLL Research. Lower investment sales and debt placement activity ~~led to a~~drove the decline in Capital Markets revenue ~~for the quarter. Year-to-date, Capital Markets included $211.5 million of incremental~~while our multifamily business continued to deliver stable revenue ~~contributions from HFF from the first six months of 2020 ($216.6 million of fee revenue). Property & Facility Management achieved significant~~performance. Strong revenue and fee revenue growth ~~for the third quarter~~in Property & Facility Management was attributable to new client wins and ~~first nine months of 2020 driven by new property management and CS clients as well as~~ expansions of existing CSCorporate Solutions client relationships.

Equity earnings were entirely driven by valuation increases to JLL Technologies' investments, a reflection of subsequent financing rounds at increased per-share values for certain investments. In the prior year, equity earnings were largely attributable to gains by consolidated variable interest entities in which the company held no equity interest, and therefore, these gains had no net impact to Adjusted EBITDA.

The ~~decrease~~decreases in segment operating expenses and segment fee-based operating expenses for the ~~third~~first quarter of ~~2020~~2021 compared with ~~2019 primarily reflected lower fixed and variable expenses associated with both~~2020 were driven by savings resulting from cost mitigation ~~actions taken in 2020. For~~efforts during the ~~first nine~~trailing twelve months of 2020, the decrease in expenses was less in magnitude compared with the third quarter alone primarily due to the incremental expenses in the first six months of 2020 associated with HFF operations (HFF was acquired July 1, 2019).and lower revenue-related expenses.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was ~~20.9%~~20.3% in USD and in local currency, compared with ~~19.3%~~13.2% in ~~2019. An estimated $56 million of non-permanent~~2020. The equity earnings noted above and year-over-year change in loan loss credit reserves substantially drove the margin expansion. The residual nominal improvement reflected cost mitigation savings ~~including government relief programs, coupled with growth in Property & Facility Management more than~~noted above which offset the ~~decline attributable to transaction-based service lines.~~impact of lower revenue.

Table of Contents

EMEA - Real Estate Services

% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 743.8
862.6
(118.8 ) (14 )% (17 )%
Reimbursements (149.1 ) (174.1 ) 25.0
(14 ) (18 )
Revenue before reimbursements $ 594.7
688.5
(93.8 ) (14 )% (17 )%
Gross contract costs (270.1 ) (287.5 ) 17.4
(6 ) (10 )
Fee Revenue $ 324.6
401.0
(76.4 ) (19 )% (22 )%
Leasing 56.6
71.0
(14.4 ) (20 ) (24 )
Capital Markets 69.1
102.0
(32.9 ) (32 ) (35 )
Property & Facility Management 76.9
95.3
(18.4 ) (19 ) (23 )
Project & Development Services 68.1
72.4
(4.3 ) (6 ) (9 )
Advisory, Consulting and Other 53.9
60.3
(6.4 ) (11 ) (14 )
Compensation, operating and administrative expenses excluding gross contract costs 317.5
377.1
(59.6 ) (16 ) (19 )
Depreciation and amortization 9.8
10.1
(0.3 ) (3 ) (7 )
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 327.3
387.2
(59.9 ) (15 ) (18 )
Gross contract costs 270.1
287.5
(17.4 ) (6 ) (10 )
Segment operating expenses (excluding reimbursed expenses) $ 597.4
674.7
(77.3 ) (11 )% (15 )%
Equity earnings $ 0.8
—
0.8
n.m.
n.m.
Segment (loss) income $ (1.9 ) 13.8
(15.7 ) n.m.
n.m.
Adjusted EBITDA $ 7.7
24.6
(16.9 ) (69 )% (66 )%

~~Table of Contents~~

~~EMEA - Real Estate Services (continued)~~


										% Change									% Change
	Nine Months Ended September 30,					Change in				in Local			Three Months Ended March 31,			Change in			in Local
($ in millions)	2020			2019		U.S. dollars				Currency		($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	2,125.9		2,404.3		(278.4	)	(12	)%	(11	)%	Revenue	$	716.2	755.9	(39.7)	(5)	%	(12)	%
Reimbursements	(500.7		)	(492.4	)	(8.3	)	2		2		Reimbursements	(153.4)		(182.8)	29.4	(16)		(23)
Revenue before reimbursements	$	1,625.2		1,911.9		(286.7	)	(15	)%	(15	)%	Revenue before reimbursements	$	562.8	573.1	(10.3)	(2)	%	(9)	%
Gross contract costs	(722.1		)	(814.9	)	92.8		(11	)	(11	)	Gross contract costs	(251.3)		(262.6)	11.3	(4)		(11)
Fee Revenue	$	903.1		1,097.0		(193.9	)	(18	)%	(17	)%
Fee revenue												Fee revenue	$	311.5	310.5	1.0	—	%	(7)	%
Leasing	149.1			185.5		(36.4	)	(20	)	(19	)	Leasing	50.3		47.0	3.3	7		(1)
Capital Markets	184.2			235.0		(50.8	)	(22	)	(21	)	Capital Markets	70.3		68.8	1.5	2		(5)
Property & Facility Management	221.0			291.6		(70.6	)	(24	)	(24	)	Property & Facility Management	77.0		77.9	(0.9)	(1)		(8)
Project & Development Services	193.0			205.3		(12.3	)	(6	)	(6	)	Project & Development Services	59.2		66.1	(6.9)	(10)		(16)
Advisory, Consulting and Other	155.8			179.6		(23.8	)	(13	)	(13	)	Advisory, Consulting and Other	54.7		50.7	4.0	8		—
Compensation, operating and administrative expenses excluding gross contract costs	931.7			1,081.2		(149.5	)	(14	)	(13	)	Compensation, operating and administrative expenses excluding gross contract costs	$	336.4	321.8	14.6	5	%	(2)	%

Depreciation and amortization	28.0			32.7		(4.7	)	(14	)	(14	)	Depreciation and amortization	10.9		9.2	1.7	18		11
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	959.7			1,113.9		(154.2	)	(14	)	(13	)	Segment fee-based operating expenses (excluding restructuring and acquisition charges)	347.3		331.0	16.3	5		(2)
Gross contract costs	722.1			814.9		(92.8	)	(11	)	(11	)	Gross contract costs	251.3		262.6	(11.3)	(4)		(11)
Segment operating expenses (excluding reimbursed expenses)	$	1,681.8		1,928.8		(247.0	)	(13	)%	(13	)%	Segment operating expenses (excluding reimbursed expenses)	$	598.6	593.6	5.0	1	%	(6)	%
Equity earnings (losses)	$	0.8		(1.0	)	1.8		n.m.		n.m.

Equity earnings												Equity earnings	$	—	—	—	n.m.
Segment loss	$	(55.8	)	(17.9	)	(37.9	)	n.m.		n.m.		Segment loss	$	(35.8)	(20.5)	(15.3)	75	%	69	%
Adjusted EBITDA	$	(26.6	)	16.0		(42.6	)	n.m.		n.m.		Adjusted EBITDA	$	(24.8)	(10.6)	(14.2)	n.m.

EMEA’s revenue and fee revenue in 2021 continued to be ~~impacted~~affected by the pandemic, this quarter. Transaction-based revenues for the third quarter were meaningfully lower, especially in Germany, the UK and France; however, our Leasing outperformed the drop in market gross absorption. The declines in Property & Facility Management fee revenue, compared with the prior-year ~~periods,~~quarter which had not yet been meaningfully impacted. Transaction-based revenues were largely stable as significant growth in certain geographies, highlighted by Switzerland, was offset by geographies that experienced more restrictive lock-down measures, such as Germany and the UK. Lower activity in our fit-out business and significant prior-year project activity in MENA that did not recur this quarter primarily drove the decline in Project & Development Services. A decrease in fee revenue from the UK mobile engineering business impacted Property & Facility Management.

The decreases (in local currency) in segment operating expenses and segment fee-based operating expenses, compared with the prior-year quarter, were primarily due to ~~(i) approximately $11 million~~savings resulting from cost mitigation efforts during the trailing twelve months and lower ~~fee revenue this quarter~~revenue-related expenses, partially offset by a contract loss in our UK mobile engineering business ($31 million year-to-date) and (ii) the absence of approximately $9 million of prior-year fee revenue relating to property management businesses in continental Europe that were sold in late 2019 ($27 million year-to-date).

The decreases in operating expenses, excluding reimbursed expenses, and fee-based operating expenses, excluding restructuring and acquisition charges, compared with the prior-year periods were primarily due to lower variable and revenue-related expenses as well as the benefit from government relief programs ($4 million for the third quarter and $18 million year-to-date). In addition, the impact of cost mitigation actions taken in 2020 was more prominent this quarter.business.

Adjusted EBITDA margin for the ~~third~~first quarter, calculated on a fee-revenue basis, was ~~2.4%~~negative 8.0% in USD ~~(2.7%~~(negative 8.4% in local currency), compared with ~~6.1%~~negative 3.4% in the prior-year quarter. The decline in ~~profitability resulted primarily from transaction-based~~ revenue ~~declines, partially offset by an estimated $23 million of non-permanent~~as well as the above-noted contract loss contributed to the lower margin performance, more than offsetting the cost ~~savings, including government relief programs.~~mitigation expense savings.

Table of Contents

Asia Pacific - Real Estate Services


							% Change
	Three Months Ended March 31,			Change in			in Local
($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	785.8	712.1	73.7	10	%	3	%
Reimbursements	(366.9)		(284.9)	(82.0)	29		19
Revenue before reimbursements	$	418.9	427.2	(8.3)	(2)	%	(8)	%
Gross contract costs	(205.7)		(249.5)	43.8	(18)		(21)
Fee revenue	$	213.2	177.7	35.5	20	%	12	%
Leasing	27.8		22.6	5.2	23		16
Capital Markets	28.4		18.7	9.7	52		39
Property & Facility Management	81.2		73.3	7.9	11		4
Project & Development Services	29.6		28.8	0.8	3		(4)
Advisory, Consulting and Other	46.2		34.3	11.9	35		24
Compensation, operating and administrative expenses excluding gross contract costs	$	189.1	168.0	21.1	13	%	5	%


Depreciation and amortization	7.3		6.6	0.7	11		4
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	196.4		174.6	21.8	12		5
Gross contract costs	205.7		249.5	(43.8)	(18)		(21)
Segment operating expenses (excluding reimbursed expenses)	$	402.1	424.1	(22.0)	(5)	%	(10)	%

Equity earnings (losses)	$	1.0	(0.7)	1.7	n.m.		n.m.
Segment income	$	17.8	2.4	15.4	n.m.		n.m.
Adjusted EBITDA	$	25.0	9.4	15.6	n.m.		n.m.

% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 743.2
833.8
(90.6 ) (11 )% (12 )%
Reimbursements (347.2 ) (343.6 ) (3.6 ) 1
(1 )
Revenue before reimbursements $ 396.0
490.2
(94.2 ) (19 )% (20 )%
Gross contract costs (182.5 ) (225.3 ) 42.8
(19 ) (19 )
Fee Revenue $ 213.5
264.9
(51.4 ) (19 )% (20 )%
Leasing 42.7
56.4
(13.7 ) (24 ) (25 )
Capital Markets 18.2
47.8
(29.6 ) (62 ) (63 )
Property & Facility Management 75.9
76.1
(0.2 ) —
(2 )
Project & Development Services 31.2
40.4
(9.2 ) (23 ) (23 )
Advisory, Consulting and Other 45.5
44.2
1.3
3
1
Compensation, operating and administrative expenses excluding gross contract costs 171.7
227.6
(55.9 ) (25 ) (26 )
Depreciation and amortization 6.9
6.5
0.4
6
5
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 178.6
234.1
(55.5 ) (24 ) (25 )
Gross contract costs 182.5
225.3
(42.8 ) (19 ) (19 )
Segment operating expenses (excluding reimbursed expenses) $ 361.1
459.4
(98.3 ) (21 )% (22 )%
Equity earnings $ 0.9
0.7
0.2
29 % 36 %
Segment income $ 35.8
31.5
4.3
14 % 14 %
Adjusted EBITDA $ 42.7
37.7
5.0
13 % 13 %

~~Table of Contents~~

~~Asia Pacific - Real Estate Services (continued)~~

% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 2,170.6
2,437.7
(267.1 ) (11 )% (9 )%
Reimbursements (959.1 ) (1,044.3 ) 85.2
(8 ) (6 )
Revenue before reimbursements $ 1,211.5
1,393.4
(181.9 ) (13 )% (11 )%
Gross contract costs (621.5 ) (667.4 ) 45.9
(7 ) (5 )
Fee Revenue $ 590.0
726.0
(136.0 ) (19 )% (17 )%
Leasing 96.6
152.0
(55.4 ) (36 ) (36 )
Capital Markets 58.5
116.7
(58.2 ) (50 ) (49 )
Property & Facility Management 223.6
224.1
(0.5 ) —
1
Project & Development Services 88.7
110.5
(21.8 ) (20 ) (18 )
Advisory, Consulting and Other 122.6
122.7
(0.1 ) —
2
Compensation, operating and administrative expenses excluding gross contract costs 512.8
648.6
(135.8 ) (21 ) (19 )
Depreciation and amortization 20.5
19.3
1.2
6
8
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 533.3
667.9
(134.6 ) (20 ) (19 )
Gross contract costs 621.5
667.4
(45.9 ) (7 ) (5 )
Segment operating expenses (excluding reimbursed expenses) $ 1,154.8
1,335.3
(180.5 ) (14 )% (12 )%
Equity earnings $ 0.7
1.4
(0.7 ) (50 )% (47 )%
Segment income $ 57.4
59.5
(2.1 ) (4 )% (5 )%
Adjusted EBITDA $ 78.2
78.6
(0.4 ) (1 )% (1 )%

~~Consistent with the second quarter,~~ Asia Pacific's double-digit fee revenue increase reflected strong growth in transaction-based revenue along with continued stability in Corporate Solutions. An increase in large-deal transactions, particularly in Singapore and Australia, drove revenue expansion in Capital Markets. Growth in Leasing was ~~meaningfully impacted~~led by ~~the pandemic this quarter. Capital Markets third-quarter revenue reflected~~ a ~~shift~~pick-up in ~~deal activity away from large transactions. For the quarter, the declines were most notable~~office volumes, especially in ~~Japan~~Greater China. Significant growth in valuations services, notably in Greater China and Greater China; year-to-date, Singapore also experienced a notable decline. Leasing fee revenue improved from the second quarter as office leasing activity increased. Property & Facility Management revenueAustralia, led Advisory, Consulting and ~~fee revenue demonstrated continued resiliency as property management and CS teams partnered with clients to execute on enhanced facilities management and reentry plans.~~Other.

~~Segment operating expenses, excluding reimbursed expenses, and~~Higher segment fee-based operating expenses, ~~excluding restructuring and acquisition charges, for the third quarter and first nine months of 2020 were lower~~ compared with 2020, was primarily attributable to revenue-related expense increases, partially offset by savings resulting from cost mitigation efforts during the ~~prior-year periods~~trailing twelve months. Lower segment operating expenses, compared with last year, was due to ~~reduced fixed and variable costs as well as the impact of grants and subsidies from certain government relief programs established~~a decrease in ~~response to the pandemic (approximately $15 million for the third quarter and $35 million year-to-date).~~gross contract costs.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was ~~20.0%~~11.7% in USD ~~(20.2%~~(11.3% in local currency), compared with ~~14.2%~~5.3% last year. ~~Asia Pacific's~~The significant margin expansion was ~~driven by an estimated $35 million of non-permanent cost savings, including government relief programs, which more than offset the decline~~ attributable to growth in transaction-based ~~revenue.~~revenue and expense savings noted above.

Table of Contents

LaSalle


										% Change									% Change
	Three Months Ended September 30,					Change in				in Local			Three Months Ended March 31,			Change in			in Local
($ in millions)	2020			2019		U.S. dollars				Currency		($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	110.3		111.6		(1.3	)	(1	)%	(3	)%	Revenue	$	91.2	104.9	(13.7)	(13)	%	(16)	%
Reimbursements	(0.8		)	(1.8	)	1.0		(56	)	(57	)	Reimbursements	(1.5)		(1.8)	0.3	(17)		(24)
Revenue before reimbursements	$	109.5		109.8		(0.3	)	—	%	(2	)%	Revenue before reimbursements	$	89.7	103.1	(13.4)	(13)	%	(16)	%
Gross contract costs	(3.7		)	(4.1	)	0.4		(10	)	(9	)	Gross contract costs	(4.4)		(4.5)	0.1	(2)		(3)
Fee Revenue	$	105.8		105.7		0.1		—	%	(2	)%
Fee revenue												Fee revenue	$	85.3	98.6	(13.3)	(13)	%	(17)	%
Advisory fees	81.0			76.6		4.4		6		4		Advisory fees	79.3		82.0	(2.7)	(3)		(8)
Transaction fees & other	16.8			11.7		5.1		44		41		Transaction fees & other	6.0		10.9	(4.9)	(45)		(47)
Incentive fees	8.0			17.4		(9.4	)	(54	)	(55	)	Incentive fees	—		5.7	(5.7)	(100)		(100)
Compensation, operating and administrative expenses excluding gross contract costs	83.0			83.4		(0.4	)	—		(2	)	Compensation, operating and administrative expenses excluding gross contract costs	$	77.2	82.6	(5.4)	(7)	%	(10)	%

Depreciation and amortization	1.8			1.7		0.1		6		7		Depreciation and amortization	1.7		1.8	(0.1)	(6)		(10)
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	84.8			85.1		(0.3	)	—		(2	)	Segment fee-based operating expenses (excluding restructuring and acquisition charges)	78.9		84.4	(5.5)	(7)		(10)
Gross contract costs	3.7			4.1		(0.4	)	(10	)	(9	)	Gross contract costs	4.4		4.5	(0.1)	(2)		(3)
Segment operating expenses (excluding reimbursed expenses)	$	88.5		89.2		(0.7	)	(1	)%	(2	)%	Segment operating expenses (excluding reimbursed expenses)	$	83.3	88.9	(5.6)	(6)	%	(9)	%
Equity earnings	$	8.5		14.9		(6.4	)	(43	)%	(43	)%
Segment income	$	29.5		35.5		(6.0	)	(17	)%	(19	)%

Equity earnings (losses)												Equity earnings (losses)	$	13.0	(40.3)	53.3	n.m.
Segment income (loss)												Segment income (loss)	$	19.4	(26.1)	45.5	n.m.
Adjusted EBITDA	$	31.3		36.5		(5.2	)	(14	)%	(17	)%	Adjusted EBITDA	$	20.9	(24.4)	45.3	n.m.

~~Table of Contents~~

Lower LaSalle ~~(continued)~~

% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 315.1
339.4
(24.3 ) (7 )% (7 )%
Reimbursements (3.7 ) (5.6 ) 1.9
(34 ) (33 )
Revenue before reimbursements $ 311.4
333.8
(22.4 ) (7 )% (7 )%
Gross contract costs (12.0 ) (11.1 ) (0.9 ) 8
8
Fee Revenue $ 299.4
322.7
(23.3 ) (7 )% (7 )%
Advisory fees 239.5
227.2
12.3
5
5
Transaction fees & other 32.0
36.9
(4.9 ) (13 ) (14 )
Incentive fees 27.9
58.6
(30.7 ) (52 ) (53 )
Compensation, operating and administrative expenses excluding gross contract costs 244.7
255.3
(10.6 ) (4 ) (4 )
Depreciation and amortization 5.4
4.7
0.7
15
15
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 250.1
260.0
(9.9 ) (4 ) (4 )
Gross contract costs 12.0
11.1
0.9
8
8
Segment operating expenses (excluding reimbursed expenses) $ 262.1
271.1
(9.0 ) (3 )% (3 )%
Equity (losses) earnings $ (20.5 ) 30.3
(50.8 ) n.m.
n.m.
Segment income $ 28.8
93.0
(64.2 ) (69 )% (70 )%
Adjusted EBITDA $ 33.7
96.4
(62.7 ) (65 )% (66 )%

~~LaSalle achieved solid~~ advisory ~~fee growth for the third quarter and first nine months of 2020, driven by strong private equity capital raising~~fees were largely attributable to pandemic-driven valuation declines in assets under management over the trailing twelve months. ~~An outsized 2019 performance drove the expected decline~~Transaction and Incentive fees reflected decreased acquisition/transaction activity in ~~incentive fees during the first nine months of 2020.~~2021.

Equity earnings in the ~~third~~current quarter ~~of 2020~~ were substantially ~~attributable to an increased share price of a co-investment in a LaSalle-managed publicly traded REIT in Japan. Equity losses for the first nine months of 2020 were~~ driven by ~~decreases~~increases to the estimated fair value of underlying real estate investments within LaSalle's co-investment ~~portfolio, a direct result of~~portfolio. In the prior year, equity losses were largely driven by the pandemic's ~~expected~~ impact on real estate ~~prices. This decrease~~prices which drove lower estimated fair values within the portfolio.

The decreases in segment operating expenses and segment fee-based operating expenses, compared with the prior-year quarter, was ~~partially offset~~driven by ~~the net year-to-date increase in the share price of the aforementioned co-investment in Japan.~~lower revenue-related variable expenses.

Adjusted EBITDA margin for the quarter was ~~29.5%~~24.5% in USD ~~(29.3%~~(24.7% local currency), compared with ~~34.5%~~negative 24.8% last year. ~~The margin decline~~Margin improvement was attributable to ~~lower Equity~~the year-over-year change in equity earnings, ~~(approximately a 600 basis point impact on margin),~~ partially offset by ~~improved profitability of LaSalle's annuity revenues (Advisory fees plus Transaction fees).~~lower revenue.

AUM was ~~$65.7~~$70.9 billion as of ~~September 30, 2020,~~March 31, 2021, an increase of 1%3% in USD ~~and~~(no change in local ~~currency~~currency) from ~~$65.0~~$68.9 billion as of ~~June 30,~~December 31, 2020. The AUM increase resulted from (i) ~~$1.4 billion of acquisitions and (ii) $0.5~~$1.9 billion of foreign currency increases, ~~partially offset by~~(ii) $1.1 billion of acquisitions, and (iii) ~~$1.0 billion dispositions and withdrawals and (iv) $0.2~~$0.9 billion of net valuation ~~decreases.~~

increases, partially offset by $1.9 billion dispositions and withdrawals.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

We finance our operations, co-investment activity, share repurchases and dividend payments, capital expenditures and business acquisitions with internally generated funds, borrowings on our Facility, and through issuance of Long-term debt.

Cash Flows from Operating Activities

Operating activities ~~provided $363.1~~used $461.8 million of cash in the first ~~nine~~three months of ~~2020,~~2021, compared with ~~$251.5~~$546.1 million of cash used during the same period in ~~2019.~~2020. The ~~substantial change~~decrease in cash ~~flows from operating activities is driven by strong cash collection on trade receivables~~used was primarily due to less incentive compensation paid in ~~the last six months and our participation in government relief programs this year (including deferral~~2021, compared with 2020, a result of ~~payments to governments for payroll tax and other social charges). These items were~~2020 business performance compared with 2019. This was partially offset by lower ~~year-to-date net income~~collections of trade receivables, reflecting higher revenue in ~~2020 as well as increased annual incentive compensation paid in the first quarter of 2020~~2019 compared with ~~2019.~~2020.

Cash Flows from Investing Activities

We used ~~$124.2~~$97.8 million of cash for investing activities during the first ~~nine~~three months of ~~2020,~~2021, as compared to ~~$994.1~~$90.5 million used during the same period in ~~2019.~~2020. The ~~decrease~~slight increase in cash used was driven by an ~~absence of business acquisitions (HFF, Inc. was acquired in July 2019) and a decrease~~increase in acquisitions ofin investment properties (less than wholly-owned) ~~this year.~~, partially offset by a decrease in net capital contributions to real estate ventures and lower capital expenditures in 2021. We discuss these key drivers individually below in further detail.

Cash Flows from Financing Activities

Financing activities ~~used $243.8~~provided $376.7 million of cash during the first ~~nine~~three months of ~~2020,~~2021, as compared to ~~$1,194.6~~$883.3 million provided by financing activities during the same period in ~~2019.~~2020. The net decrease of ~~$1,438.4~~$506.6 million in cash flows from financing activities is substantially driven by ~~greater net repayments~~a decrease in borrowings on our ~~Facility, the result of strong operating cash inflows during the second and third quarter of 2020. In 2019, financing activities was substantially driven by the increase in the outstanding~~Facility. The borrowings on our Facility toin the first quarter fund seasonal liquidity needs, specifically annual incentive compensation payments made in the first quarter, which were notably lower in 2021 as discussed in the cash ~~consideration for acquisitions.~~flows from operating activities section above.

Debt

Our $2.75 billion Facility matures on May 17, 2023. As of ~~September 30, 2020,~~March 31, 2021, we had outstanding borrowings under the Facility of ~~$400.0~~$350.0 million and outstanding letters of credit of $0.7 million. As of December 31, ~~2019,~~2020, we had ~~$525.0 million of~~no outstanding borrowings under the Facility and outstanding letters of credit of ~~$0.8~~$0.7 million. The average outstanding borrowings under the Facility were ~~$758.9~~$184.4 million and ~~$1,408.5~~$935.2 million during the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019, respectively, and $1,014.3 million and $763.9 million during the nine months ended September 30, 2020 and 2019.~~2020.

In addition to our Facility, we had the capacity to borrow up to ~~$85.9~~$63.4 million under local overdraft facilities as of ~~September 30, 2020.~~March 31, 2021. We had Short-term borrowings (including financing lease obligations, overdrawn bank accounts and local overdraft facilities) of ~~$106.4~~$90.6 million and ~~$120.1~~$62.0 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, of which ~~$12.2~~$16.0 million and ~~$44.8~~$12.0 million, respectively, were attributable to local overdraft facilities.

We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, ~~dividend payments,~~ share repurchases, capital expenditures and ~~business~~ acquisitions. See Note 9, Debt, in the Notes to Condensed Consolidated Financial Statements for additional information on our Facility, Long-term debt and Short-term borrowings.

On April 14, 2021, we renewed our Facility and extend its maturity date to April 2026. See Note 13, Subsequent Events, in the Notes to Condensed Consolidated Financial Statement for additional information about the Amendment.

Investment Activity

As of ~~September 30, 2020,~~March 31, 2021, we had a carrying value of ~~$389.6~~$545.1 million in investments, primarily related to LaSalle co-investments in real estate ~~ventures.~~ventures and investments by JLL Technologies in early-stage proptech companies. For the ~~nine~~three months ended ~~September 30,~~March 31, 2021, and 2020,~~, and 2019,~~ funding of investments exceeded return of capital by ~~$32.7~~$29.8 million, and ~~$41.2~~$40.6 million, respectively. We expect to continue to pursue strategic co-investment opportunities with our investment management clients globally as co-investment remains an important foundation to the continued growth of LaSalle's business. In addition, we expect continued investments by JLL ~~Spark venture funds.~~Technologies.

See Note 6, Investments in Real Estate Ventures, in the Notes to Condensed Consolidated Financial Statements for additional information on our investment activity.

Table of Contents

Share Repurchase and Dividend Programs

On ~~October 31, 2019,~~February 21, 2021, our Board of Directors ~~approved a new share repurchase program (the "Program") authorizing~~authorized an additional $500.0 million for the repurchase ~~of up to $200 million~~ of our common stock in the open market and privately negotiated transactions. During the three months ended ~~September 30, 2020~~March 31, 2021 we ~~repurchased approximately 258,000 shares for $25.0 million; during~~did not repurchase any shares. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020 we repurchased nearly ~~446,000~~188,000 shares for ~~$50.0~~$25.0 million. As of ~~September 30, 2020, $150.0~~March 31, 2021, $600.0 million remained authorized for repurchases under ~~the Program.~~ ~~There were no shares repurchased in 2019~~.our share repurchase program.

Capital Expenditures

Net capital additions for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ were ~~$112.5~~$34.6 million and ~~$131.1~~$44.4 million, respectively. Our capital expenditures in ~~2020~~2021 were primarily for ~~software, computer-related hardware, and improvements to~~ leased office ~~spaces.~~spaces improvements and purchased/developed software.

~~In addition, net~~Investment Asset Activity of Less Than Wholly-Owned Entities

Net capital additions made by consolidated VIEs in which we held no equity interest for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ were ~~$10.2~~$37.2 million and ~~$67.6~~$3.2 million, respectively, primarily to acquire real estate (net of real estate sales).

Business Acquisitions

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we ~~completed no new~~paid $26.4 million for business acquisitions. This included $0.2 million of payments relating to acquisitions in 2021 and ~~paid $58.5~~$26.2 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. During the nine months ended September 30, 2019, we paid $789.2 million for business acquisitions, predominantly relating to the acquisition of HFF in the third quarter of 2019, and $59.9 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years.

Terms for many of our past acquisitions have typically included cash paid at closing with provisions for additional deferred consideration and earn-out payments subject to certain contract requirements, including the passage of time and performance, respectively. Deferred business acquisition obligations totaled ~~$37.2~~$26.9 million as of ~~September 30, 2020.~~March 31, 2021. These obligations represent the current discounted values of payments due to sellers of businesses for which our acquisition had been completed as of the balance sheet date and for which the only remaining condition on those payments is the passage of time. As of ~~September 30, 2020,~~March 31, 2021, we had the potential to make earn-out payments for a maximum of ~~$221.3~~$157.8 million on 4224 completed acquisitions subject to the achievement of certain performance conditions. Refer to Note 5, Business Combinations, Goodwill and Other Intangible Assets, in the Notes to the Condensed Consolidated Financial Statements for further information on Business Acquisitions.

We will continue to consider acquisitions that we believe will strengthen our market position, increase our profitability, and supplement our organic growth.

Repatriation of Foreign Earnings

Based on our historical experience and future business plans, we do not expect to repatriate our foreign-sourced earnings to the United States. We believe our policy of permanently investing earnings of foreign subsidiaries does not significantly impact our liquidity. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had total cash and cash equivalents of ~~$440.0~~$456.6 million and ~~$451.9~~$574.3 million, respectively, of which approximately ~~$351.7~~$375.4 million and ~~$385.4~~$445.2 million, respectively, was held by 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 assets of these countries aggregated to approximately 4% ~~and 5%~~ of our total assets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019, respectively.~~2020.

Off-Balance Sheet Arrangements

We have unfunded capital commitments to investment vehicles and direct investments for future co-investments, totaling a maximum of ~~$338.8~~$309.9 million as of ~~September 30, 2020.~~March 31, 2021. See our discussion of unfunded commitments in Note 6, Investments in Real Estate Ventures, in the Notes to Condensed Consolidated Financial Statements.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including this Management's Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of the federal securities laws. All such statements are qualified by this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may also be included in our other public filings, press releases, our website, and oral and written presentations by management.

Statements in the future tense, and all statements accompanied by terms such as “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan” and variations thereof and similar terms, are intended to be forward-looking statements. Such statements do not relate strictly to historical or current facts as they relate to our intent, belief and current expectations about our strategic direction, prospects and future results, and give our current expectations or forecasts of future ~~events, including,~~events. This includes, but is not limited to, our expectations regarding the potential impact of the COVID-19 outbreak and the efficacy of vaccines and therapeutics on reducing the spread of the virus, as well as any further impacts to us, the economy as a whole, and/or related government and regulatory restrictions issued to combat the global ~~pandemic; they do not relate strictly to historical or current facts.~~pandemic, including any adverse changes in such restrictions that may impact us. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made.

Forward-looking statements are subject to certain risks ~~uncertainties, assumptions,~~ and ~~other factors~~uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. ~~Some of these~~These risks ~~uncertainties, assumptions,~~ and ~~other factors~~uncertainties are described in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 in Part I, Item 1A. Risk Factors ~~and in our Quarterly Report on Form 10-Qfor the quarters ended March 31, 2020 and June 30, 2020,~~ and may also be described from time to time in our subsequent filings with the Securities and Exchange Commission. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update ~~any~~ forward-looking statements to reflect events, circumstances, ~~developments,~~ changes in expectations or the occurrence of unanticipated events after the date of those statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

MARKET AND OTHER RISK FACTORS

Interest Rates

We assess interest rate sensitivity to estimate the potential effect of rising short-term interest rates on our variable-rate debt. If short-term interest rates were 50 basis points higher during ~~2020~~2021 on our variable-rate debt, our results would reflect an increase of ~~$3.8~~$0.2 million to Interest expense, net of interest income, for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Foreign Exchange

The following outlines the significant functional currencies of our revenue, highlighting where exposure to movements in foreign exchange impact our operations in international markets.


	Nine Months Ended September 30,					Three Months Ended March 31,
	2020		2019				2021		2020
British Pound	8	%	9	%	British Pound		9	%	8	%
Euro	8		8		Euro		7		8
Other	26		27		Other		27		25
Revenue exposed to foreign exchange rates	42	%	44	%	Revenue exposed to foreign exchange rates		43	%	41	%
United States Dollar	58		56
United States dollar					United States dollar		57		59
Total Revenue	100	%	100	%	Total Revenue		100	%	100	%

To show the impact foreign currencies have on our results of operations, we present the change in local currency for revenue and operating expenses on a consolidated basis and by operating segment in Management's Discussion and Analysis of Financial Condition and Results of Operations included herein. For additional detail of the impact of foreign exchange rates on our results of operations, see Management's Discussion and Analysis of Financial Condition and Results of Operations included herein.

We enter into forward foreign currency exchange contracts to manage currency risks associated with intercompany lending and cash management practices. See Note 8, Fair Value Measurements, for further discussion of our forward contracts.

Item 4. Controls and Procedures

The Company has established disclosure controls and procedures to ensure material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company's financial reports and to the other members of senior management and the Board of Directors.

Under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective as of the end of the period covered by this report. There were no changes in the Company's internal control over financial reporting during the quarter ended ~~September 30, 2020,~~March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

We are a defendant or plaintiff in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Many of these litigation matters are covered by insurance (including insurance provided through a captive insurance company), although they may nevertheless be subject to large deductibles and the amounts being claimed may exceed the available insurance. Although we cannot determine the ultimate liability for these matters based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

Item 1A. Risk Factors

There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

~~The following table provides information about our purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the quarter ended September 30, 2020:~~

Period Total number of shares purchased Weighted average price paid per share Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may yet be purchased under the plan (in millions)
July 1, 2020 - July 31, 2020 —
$ —
—
$ 175.0
August 1, 2020 - August 31, 2020 —
$ —
—
$ 175.0
September 1, 2020 - September 30, 2020 258,131
$ 96.82
258,131
$ 150.0
Total 258,131
258,131

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Item 6. Exhibits


Exhibit Number			Description
10 .1			Form Change in Control Agreement for Global Executive Board (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K dated March 4, 2021 (File No. 001-13145))

10.2			Amendment No. 2 to the Second Amended and Restated Multicurrency Credit Agreement, dated as of April 14, 2021 (Incorporated by reference to Exhibit ~~Number~~10.1 to the Current Report on Form 8-K dated April 16, 2021 (File No. 001-13145))
			~~Description~~
31.1*			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*			Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith

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Signature

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the ~~2nd~~6th day of ~~November, 2020.~~May, 2021.



JONES LANG LASALLE INCORPORATED

By:						/s/ Karen Brennan
						Karen Brennan
						Chief Financial Officer
						(Authorized Officer and Principal Financial Officer)

5241



	Company Shareholder's Equity
											Accumulated
					Additional				Shares		Other
(in millions, except share and per share data) (unaudited)	Common Stock				Paid-In		Retained		Held in		Comprehensive		Noncontrolling		Total
(in millions, except share and per share data) (unaudited)	Shares		Amount		Capital		Earnings		Trust		Loss		Interest		Equity
December 31, 2018	45,599,418		$	0.5	1,057.3		3,095.7		(5.8	)	(456.2	)	43.0		$	3,734.5
Net income	—		—		—		21.3		—		—		(0.1	)	21.2
Shares issued under stock-based compensation programs	198,575		—		2.0		—		—		—		—		2.0
Shares repurchased for payment of taxes on stock-based compensation	(58,750	)	—		(9.7	)	—		—		—		—		(9.7		)
Amortization of stock-based compensation	—		—		7.0		—		—		—		—		7.0
Change in pension liabilities, net of tax	—		—		—		—		—		(1.0	)	—		(1.0		)
Foreign currency translation adjustments	—		—		—		—		—		31.3		—		31.3
Increase in amounts attributable to noncontrolling interest	—		—		—		—		—		—		9.8		9.8
March 31, 2019	45,739,243		$	0.5	1,056.6		3,117.0		(5.8	)	(425.9	)	52.7		$	3,795.1
Net income⁽³⁾	—		—		—		110.7		—		—		0.5		111.2
Shares issued under stock-based compensation programs	31,820		—		0.8		—		—		—		—		0.8
Shares repurchased for payment of taxes on stock-based compensation	(8,375	)	—		(0.7	)	—		—		—		—		(0.7		)
Amortization of stock-based compensation	—		—		12.9		—		—		—		—		12.9
Dividends paid	—		—		—		(19.9	)	—		—		—		(19.9		)
Shares held in trust	—		—		—		—		(0.1	)	—		—		(0.1		)
Change in pension liabilities, net of tax	—		—		—		—		—		(0.8	)	—		(0.8		)
Foreign currency translation adjustments	—		—		—		—		—		(23.3	)	—		(23.3		)
Increase in amounts attributable to noncontrolling interest	—		—		—		—		—		—		0.1		0.1
June 30, 2019	45,762,688		$	0.5	1,069.6		3,207.8		(5.9	)	(450.0	)	53.3		$	3,875.3
Net income	—		—		—		128.9		—		—		0.4		129.3
Shares issued under stock-based compensation programs	49,292		—		0.9		—		—		—		—		0.9
Acquisition of HFF	5,733,603		—		841.2		—		—		—		—		841.2
Shares repurchased for payment of taxes on stock-based compensation	(11,464	)	—		(2.1	)	—		—		—		—		(2.1		)
Amortization of stock-based compensation	—		—		27.7		—		—		—		—		27.7
Shares held in trust	—		—		—		—		0.2		—		—		0.2
Change in pension liabilities, net of tax	—		—		—		—		—		0.1		—		0.1
Foreign currency translation adjustments	—		—		—		—		—		(34.6	)	—		(34.6		)
Increase in amounts attributable to noncontrolling interest	—		—		—		—		—		—		20.1		20.1
September 30, 2019	51,534,119		$	0.5	1,937.3		3,336.7		(5.7	)	(484.5	)	73.8		$	4,858.1



	Published			Adjustment due to		As Reported Under
	December 31, 2019			adoption of		ASC Topic 326 on January 1, 2020
(in millions)	(audited)			ASC Topic 326		(unaudited)
Assets
Allowance for trade receivables	$	(68.1	)	(3.6	)	$	(71.7	)
Deferred tax assets, net	245.4			5.5		250.9
Allowance for contract assets ⁽¹⁾	—			(1.7	)	(1.7		)
Liabilities and equity
Loan loss guarantee reserve ⁽²⁾	$	—		15.1		$	15.1
Retained earnings	3,588.3			(14.9	)	3,573.4



	Three Months Ended September 30,			Nine months ended September 30,
(in millions)	2020		2019	2020		2019
Revenue excluded from scope of ASC Topic 606	$	72.0	74.3	$	174.7	137.6



	Balance as of June 30, 2020			Net change in fair value		Foreign CTA¹	Purchases / Additions	Settlements		Balance as of September 30, 2020
Investments in real estate ventures	$	44.3		4.3		0	1.6	0		$	50.2
Mortgage banking derivative assets and liabilities, net	(5.5		)	(2.6	)	0	48.2	(33.9	)	6.2
Earn-out liabilities	97.8			(0.6	)	0.7	0	(2.9	)	95.0



	Balance as of June 30, 2019			Net change in fair value		Foreign CTA¹		Purchases / Additions	Settlements		Balance as of September 30, 2019
Investments in real estate ventures	$	20.0		0.8		0		6.5	(0.8	)	$	26.5
Mortgage banking derivative assets and liabilities, net	(1.3		)	(7.1	)	0		45.3	(9.9	)	27.0
Earn-out liabilities	180.3			0.7		(2.4	)	0	(4.8	)	173.8



Period	Total number of shares purchased	Weighted average price paid per share			Total number of shares purchased as part of publicly announced plan	Approximate dollar value of shares that may yet be purchased under the plan (in millions)
July 1, 2020 - July 31, 2020	—		$	—	—		$	175.0
August 1, 2020 - August 31, 2020	—		$	—	—		$	175.0
September 1, 2020 - September 30, 2020	258,131		$	96.82	258,131		$	150.0
Total	258,131				258,131