United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2024
Or -
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
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(Exact name of registrant as specified in its charter) |
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Maryland |
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36-4150422 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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200 East Randolph Drive |
Chicago, |
IL |
60601 |
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(Address of principal executive offices) |
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(Zip Code) |
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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
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Securities registered pursuant to Section 12(b) of the Act: |
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
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Common Stock, par value $0.01 |
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JLL |
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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.
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Large accelerated filer |
x |
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 August 1, 2024 was 47,464,235.
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Table of Contents |
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Part I |
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Item 1. |
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Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023 |
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Statements of Changes in Equity for the Three and Six Months Ended June 30, 2024 and 2023 |
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Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
26 |
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Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
48 |
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Item 4. |
Controls and Procedures |
48 |
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Part II |
Other Information |
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Item 1. |
Legal Proceedings |
49 |
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Item 1A. |
Risk Factors |
49 |
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Item 6. |
Exhibits |
51 |
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Signature |
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52 |
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2 |
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Part I. Financial Information
Item 1. Financial Statements
JONES LANG LASALLE INCORPORATED
CONSOLIDATED BALANCE SHEETS
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(in millions, except share and per share data) |
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June 30, 2024 |
December 31, 2023 |
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Assets |
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(unaudited) |
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Current assets: |
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|
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Cash and cash equivalents |
$ |
424.4 |
410.0 |
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Trade receivables, net of allowance of $75.4 and $70.7 |
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1,911.5 |
2,095.8 |
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Notes and other receivables |
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417.9 |
446.4 |
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Reimbursable receivables |
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2,345.2 |
2,321.7 |
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Warehouse receivables |
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642.4 |
677.4 |
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Short-term contract assets, net of allowance of $1.5 and $1.6 |
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310.3 |
338.3 |
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Prepaid and other |
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582.3 |
567.4 |
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Total current assets |
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6,634.0 |
6,857.0 |
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Property and equipment, net of accumulated depreciation of $1,099.2 and $1,039.1 |
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596.9 |
613.9 |
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Operating lease right-of-use assets |
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759.4 |
730.9 |
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Goodwill |
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4,609.2 |
4,587.4 |
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Identified intangibles, net of accumulated amortization of $625.9 and $563.0 |
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743.9 |
785.0 |
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Investments, including $744.7 and $740.8 at fair value |
|
819.7 |
816.6 |
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Long-term receivables |
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394.1 |
363.8 |
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Deferred tax assets, net |
|
507.8 |
497.4 |
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Deferred compensation plan |
|
639.8 |
604.3 |
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Other |
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204.2 |
208.5 |
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Total assets |
$ |
15,909.0 |
16,064.8 |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ |
1,154.0 |
1,406.7 |
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Reimbursable payables |
|
1,746.0 |
1,796.9 |
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Accrued compensation and benefits |
|
1,098.0 |
1,698.3 |
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Short-term borrowings |
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126.2 |
147.9 |
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Short-term contract liabilities and deferred income |
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217.9 |
226.4 |
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Warehouse facilities |
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655.5 |
662.7 |
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Short-term operating lease liabilities |
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155.6 |
161.9 |
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Other |
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360.8 |
345.3 |
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Total current liabilities |
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5,514.0 |
6,446.1 |
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Credit facility, net of debt issuance costs of $12.9 and $14.4 |
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1,262.1 |
610.6 |
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Long-term debt, net of debt issuance costs of $7.3 and $8.1 |
|
767.9 |
779.3 |
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Deferred tax liabilities, net |
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42.5 |
44.8 |
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Deferred compensation |
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620.0 |
580.0 |
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Long-term operating lease liabilities |
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779.8 |
754.5 |
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Other |
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424.4 |
439.6 |
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Total liabilities |
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9,410.7 |
9,654.9 |
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Company shareholders' equity: |
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Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,120,548 and 52,120,548 shares issued; 47,497,305 and 47,509,750 outstanding |
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0.5 |
0.5 |
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Additional paid-in capital |
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2,013.3 |
2,019.7 |
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Retained earnings |
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5,941.9 |
5,795.6 |
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Treasury stock, at cost, 4,623,243 and 4,610,798 shares |
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(913.6) |
(920.1) |
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Shares held in trust |
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(11.9) |
(10.4) |
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Accumulated other comprehensive loss |
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(651.0) |
(591.5) |
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Total Company shareholders' equity |
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6,379.2 |
6,293.8 |
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Noncontrolling interest |
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119.1 |
116.1 |
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Total equity |
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6,498.3 |
6,409.9 |
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Total liabilities and equity |
$ |
15,909.0 |
16,064.8 |
See accompanying notes to Consolidated Financial Statements.
3
JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(in millions, except share and per share data) (unaudited) |
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2024 |
2023 |
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2024 |
2023 |
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Revenue |
$ |
5,628.7 |
5,052.5 |
$ |
10,753.2 |
9,768.0 |
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Operating expenses: |
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Compensation and benefits |
$ |
2,599.2 |
2,417.0 |
$ |
5,014.8 |
4,670.0 |
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Operating, administrative and other |
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2,803.3 |
2,414.6 |
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5,335.3 |
4,766.1 |
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Depreciation and amortization |
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62.3 |
59.9 |
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123.3 |
117.4 |
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Restructuring and acquisition charges |
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11.5 |
11.8 |
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13.2 |
47.5 |
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Total operating expenses |
$ |
5,476.3 |
4,903.3 |
$ |
10,486.6 |
9,601.0 |
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Operating income |
$ |
152.4 |
149.2 |
$ |
266.6 |
167.0 |
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Interest expense, net of interest income |
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41.7 |
40.5 |
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72.2 |
66.8 |
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Equity losses |
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(15.4) |
(103.5) |
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(19.1) |
(106.1) |
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Other income (expense) |
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9.7 |
(1.2) |
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11.2 |
(1.1) |
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Income (loss) before income taxes and noncontrolling interest |
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105.0 |
4.0 |
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186.5 |
(7.0) |
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Income tax provision (benefit) |
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20.5 |
0.8 |
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36.4 |
(1.5) |
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Net income (loss) |
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84.5 |
3.2 |
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150.1 |
(5.5) |
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Net income (loss) attributable to noncontrolling interest |
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0.1 |
0.7 |
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(0.4) |
1.2 |
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Net income (loss) attributable to common shareholders |
$ |
84.4 |
2.5 |
$ |
150.5 |
(6.7) |
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Basic earnings (loss) per common share |
$ |
1.77 |
0.05 |
$ |
3.17 |
(0.14) |
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Basic weighted average shares outstanding (in 000's) |
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47,539 |
47,748 |
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47,512 |
47,652 |
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Diluted earnings (loss) per common share |
$ |
1.75 |
0.05 |
$ |
3.12 |
(0.14) |
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Diluted weighted average shares outstanding (in 000's) |
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48,317 |
48,334 |
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48,302 |
47,652 |
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Net income (loss) attributable to common shareholders |
$ |
84.4 |
2.5 |
$ |
150.5 |
(6.7) |
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Change in pension liabilities, net of tax |
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- |
(1.1) |
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0.3 |
(1.1) |
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Foreign currency translation adjustments |
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(22.1) |
11.1 |
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(59.8) |
37.9 |
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Comprehensive income attributable to common shareholders |
$ |
62.3 |
12.5 |
$ |
91.0 |
30.1 |
See accompanying notes to Consolidated Financial Statements.
4
JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
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Company Shareholders' Equity |
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Common Stock |
Additional |
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Shares |
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(in millions, except share and |
Shares Outstanding |
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Amount |
Paid-In |
Retained |
Held in |
Treasury |
AOCI(1) |
NCI(2) |
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Total |
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per share data) (unaudited) |
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Capital |
Earnings |
Trust |
Stock |
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Equity |
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December 31, 2023 |
47,509,750 |
$ |
0.5 |
2,019.7 |
5,795.6 |
(10.4) |
(920.1) |
(591.5) |
116.1 |
$ |
6,409.9 |
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Net income (loss) |
- |
|
- |
- |
66.1 |
- |
- |
- |
(0.5) |
|
65.6 |
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Vesting of shares related to equity compensation |
132,118 |
|
- |
(55.1) |
(4.1) |
- |
38.9 |
- |
- |
|
(20.3) |
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plans, net of amounts withheld for payment of taxes |
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Stock-based compensation |
- |
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- |
11.2 |
- |
- |
- |
- |
- |
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11.2 |
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Shares held in trust |
- |
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- |
- |
- |
0.1 |
- |
- |
- |
|
0.1 |
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Repurchase of common stock |
(144,523) |
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- |
- |
- |
- |
(20.0) |
- |
- |
|
(20.0) |
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Change in pension liabilities, net of tax |
- |
|
- |
- |
- |
- |
- |
0.3 |
- |
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0.3 |
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Foreign currency translation adjustments |
- |
|
- |
- |
- |
- |
- |
(37.7) |
- |
|
(37.7) |
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Decrease in amounts due to noncontrolling interest |
- |
|
- |
- |
- |
- |
- |
- |
(1.5) |
|
(1.5) |
|
March 31, 2024 |
47,497,345 |
$ |
0.5 |
1,975.8 |
5,857.6 |
(10.3) |
(901.2) |
(628.9) |
114.1 |
$ |
6,407.6 |
|
Net income |
- |
|
- |
- |
84.4 |
- |
- |
- |
0.1 |
|
84.5 |
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Vesting of shares related to equity compensation |
|
|
|
|
|
|
|
|
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|
|
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plans, net of amounts withheld for payment of |
103,674 |
|
- |
(8.2) |
(0.1) |
- |
8.0 |
- |
- |
|
(0.3) |
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taxes |
|
|
|||||||||
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Stock-based compensation |
- |
|
- |
45.7 |
- |
- |
- |
- |
- |
|
45.7 |
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Shares held in trust |
- |
|
- |
- |
- |
(1.6) |
- |
- |
- |
|
(1.6) |
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Repurchase of common stock |
(103,714) |
|
- |
- |
- |
- |
(20.4) |
- |
- |
|
(20.4) |
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Foreign currency translation adjustments |
- |
|
- |
- |
- |
- |
- |
(22.1) |
- |
|
(22.1) |
|
Increase in amounts due to noncontrolling interest |
- |
|
- |
- |
- |
- |
- |
- |
4.9 |
|
4.9 |
|
June 30, 2024 |
47,497,305 |
$ |
0.5 |
2,013.3 |
5,941.9 |
(11.9) |
(913.6) |
(651.0) |
119.1 |
$ |
6,498.3 |
- AOCI: Accumulated other comprehensive income (loss)
- NCI: Noncontrolling interest
5
JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
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Company Shareholders' Equity |
|
|
|
|
|
|
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Common Stock |
Additional |
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Shares |
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(in millions, except share and |
Shares Outstanding |
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Amount |
Paid-In |
Retained |
Held in |
Treasury |
AOCI(1) |
NCI(2) |
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Total |
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per share data) (unaudited) |
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Capital |
Earnings |
Trust |
Stock |
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Equity |
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December 31, 2022 |
47,507,758 |
$ |
0.5 |
2,022.6 |
5,590.4 |
(9.8) |
(934.6) |
(648.2) |
121.6 |
$ |
6,142.5 |
|
Net (loss) income |
- |
|
- |
- |
(9.2) |
- |
- |
- |
0.5 |
|
(8.7) |
|
Vesting of shares related to equity compensation |
101,446 |
|
- |
(58.0) |
(14.5) |
- |
51.1 |
- |
- |
|
(21.4) |
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plans, net of amounts withheld for payment of taxes |
|
|
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Stock-based compensation |
- |
|
- |
16.7 |
- |
- |
- |
- |
- |
|
16.7 |
|
Foreign currency translation adjustments |
- |
|
- |
- |
- |
- |
- |
26.8 |
- |
|
26.8 |
|
Decrease in amounts due to noncontrolling interest |
- |
|
- |
- |
- |
- |
- |
- |
(0.7) |
|
(0.7) |
|
March 31, 2023 |
47,609,204 |
$ |
0.5 |
1,981.3 |
5,566.7 |
(9.8) |
(883.5) |
(621.4) |
121.4 |
$ |
6,155.2 |
|
Net income(3) |
- |
|
- |
- |
2.5 |
- |
- |
- |
0.6 |
|
3.1 |
|
Vesting of shares related to equity compensation |
184,068 |
|
- |
(2.3) |
(1.6) |
- |
7.2 |
- |
- |
|
3.3 |
|
plans, net of amounts withheld for payment of taxes |
|
|
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Stock-based compensation |
- |
|
- |
36.3 |
- |
- |
- |
- |
- |
|
36.3 |
|
Shares held in trust |
- |
|
- |
- |
- |
(1.8) |
- |
- |
- |
|
(1.8) |
|
Repurchase of common stock |
(72,322) |
|
- |
- |
- |
- |
(19.5) |
- |
- |
|
(19.5) |
|
Change in pension liabilities, net of tax |
- |
|
- |
- |
- |
- |
- |
(1.1) |
- |
|
(1.1) |
|
Foreign currency translation adjustments |
- |
|
- |
- |
- |
- |
- |
11.1 |
- |
|
11.1 |
|
Decrease in amounts due to noncontrolling interest |
- |
|
- |
- |
- |
- |
- |
- |
(1.8) |
|
(1.8) |
|
June 30, 2023 |
47,720,950 |
$ |
0.5 |
2,015.3 |
5,567.6 |
(11.6) |
(895.8) |
(611.4) |
120.2 |
$ |
6,184.8 |
- AOCI: Accumulated other comprehensive income (loss)
- NCI: Noncontrolling interest
- Excludes net income attributable to redeemable noncontrolling interest of $0.1 million for the three months ended June 30, 2023.
See accompanying notes to Consolidated Financial Statements.
6
JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended June 30, |
|
|
(in millions) (unaudited) |
|
2024 |
2023 |
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
$ |
150.1 |
(5.5) |
|
Reconciliation of net income to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
123.3 |
117.4 |
|
Equity losses |
|
19.1 |
106.1 |
|
Net loss on dispositions |
|
- |
1.8 |
|
Distributions of earnings from investments |
|
7.2 |
6.0 |
|
Provision for loss on receivables and other assets |
|
31.7 |
19.0 |
|
Amortization of stock-based compensation |
|
56.8 |
53.0 |
|
Net non-cash mortgage servicing rights and mortgage banking derivative activity |
|
20.8 |
2.4 |
|
Accretion of interest and amortization of debt issuance costs |
|
2.6 |
2.1 |
|
Other, net |
|
(0.7) |
3.6 |
|
Change in: |
|
|
|
|
Receivables |
|
114.9 |
139.8 |
|
Reimbursable receivables and reimbursable payables |
|
(79.3) |
(51.0) |
|
Prepaid expenses and other assets |
|
16.2 |
(4.9) |
|
Income taxes receivable, payable and deferred |
|
(150.3) |
(116.1) |
|
Accounts payable, accrued liabilities and other liabilities |
|
(139.4) |
(119.8) |
|
Accrued compensation (including net deferred compensation) |
|
(576.6) |
(633.2) |
|
Net cash used in operating activities |
|
(403.6) |
(479.3) |
|
Cash flows from investing activities: |
|
|
|
|
Net capital additions - property and equipment |
|
(81.4) |
(88.2) |
|
Business acquisitions, net of cash acquired |
|
(39.3) |
(13.6) |
|
Capital contributions to investments |
|
(41.0) |
(66.2) |
|
Distributions of capital from investments |
|
9.6 |
12.7 |
|
Other, net |
|
(2.0) |
(5.4) |
|
Net cash used in investing activities |
|
(154.1) |
(160.7) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from borrowings under credit facility |
|
4,713.0 |
4,478.0 |
|
Repayments of borrowings under credit facility |
|
(4,063.0) |
(3,853.0) |
|
Net repayments of short-term borrowings |
|
(15.4) |
(55.3) |
|
Payments of deferred business acquisition obligations and earn-outs |
|
(4.9) |
(21.8) |
|
Repurchase of common stock |
|
(40.4) |
(19.5) |
|
Noncontrolling interest contributions, net |
|
3.3 |
- |
|
Other, net |
|
(26.0) |
(24.5) |
|
Net cash provided by financing activities |
|
566.6 |
503.9 |
|
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash |
|
(14.7) |
3.8 |
|
Net change in cash, cash equivalents and restricted cash |
|
(5.8) |
(132.3) |
|
Cash, cash equivalents and restricted cash, beginning of the period |
|
663.4 |
746.0 |
|
Cash, cash equivalents and restricted cash, end of the period |
$ |
657.6 |
613.7 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Restricted cash, beginning of period |
$ |
253.4 |
226.7 |
|
Restricted cash, end of period |
|
233.2 |
211.2 |
|
Cash paid during the period for: |
|
|
|
|
Interest |
$ |
75.5 |
65.1 |
|
Income taxes, net of refunds |
|
190.5 |
103.1 |
|
Operating leases |
|
98.6 |
96.2 |
|
Non-cash activities: |
|
|
|
|
Business acquisitions (including contingent consideration) |
$ |
11.0 |
- |
|
Deferred business acquisition obligations |
|
5.8 |
- |
See accompanying notes to Consolidated Financial Statements.
7
JONES LANG LASALLE INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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," "we," "us" or "our") for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission ("SEC") and also available on our website (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 2023 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.
Our Consolidated Financial Statements as of June 30, 2024, and for the periods ended June 30, 2024 and 2023, are unaudited. In the opinion of management, we have included all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the Consolidated Financial Statements for these interim periods. As discussed within our 2023 Annual Report on Form 10-K, specific to our Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows, we have made certain presentation changes and recast prior-period information to conform with the current presentation.
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. Growth in our Property Management and Workplace Management businesses as well as other annuity-based services has, to an extent, lessened the seasonality in our revenue and profits during the past several years. Within our Markets Advisory and Capital Markets segments, revenue from transaction-based activities is driven by the size and timing of our clients' transactions and can fluctuate significantly from period to period. 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.
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 can impact our estimated effective tax rate.
As a result of the items mentioned above, the results for the periods ended June 30 are not fully indicative of what our results will be for the full fiscal year.
8
2. SUBSEQUENT EVENTS & NEW ACCOUNTING STANDARDS Subsequent events
In August of 2024, we repurchased a loan, which we originated and sold to Fannie Mae, with an unpaid principal balance ("UPB") of $74.25 million. As this subsequent event represented additional evidence about a matter that existed as of the reporting date, for the period ended June 30, 2024, we recognized $18.0 million within Operating, administrative and other expenses, for the current estimated loss associated with the repurchase in our results. This impact represents the difference between our estimate of the current fair value of the repurchased loan and the repurchase price, including amounts in excess of the UPB for items such as unpaid interest.
Recently issued accounting guidance
In November 2023, the FASB issued ASU 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. The FASB issued the ASU in response to requests from investors for companies to disclose more information about their financial performance at the segment level. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This ASU is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, with early adoption permitted. We are evaluating the effect this guidance will have on our segment disclosures.
In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the income tax disclosures to provide information to better assess how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are evaluating the effect this guidance will have on our tax disclosures.
3. REVENUE RECOGNITION
Capital Markets revenue excluded from the scope of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC Topic 606")
Our mortgage banking and servicing operations, comprised of (i) all Loan Servicing revenue and (ii) activities related to mortgage servicing rights ("MSR" or "MSRs") and loan origination fees (included in Investment Sales, Debt/Equity Advisory and Other), are not considered revenue from contracts with customers, and accordingly are excluded from the scope of ASC Topic 606. Such out- of-scope revenue is presented below.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
||
|
(in millions) |
2024 |
2023 |
|
|
2024 |
2023 |
|
Revenue excluded from scope of ASC Topic 606 |
$ |
67.6 |
77.2 |
$ |
134.8 |
143.4 |
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 Consolidated Balance Sheets. The majority of contract liabilities are recognized as revenue within 90 days. Such contract assets and liabilities are presented below.
|
(in millions) |
|
June 30, 2024 |
December 31, 2023 |
|
Contract assets, gross |
$ |
366.3 |
402.3 |
|
Contract asset allowance |
|
(3.8) |
(1.8) |
|
Contract assets, net |
$ |
362.5 |
400.5 |
|
|
|
|
|
|
Contract liabilities |
$ |
162.2 |
166.2 |
|
|
|
9 |
|
|
|
|
|
|
Remaining performance obligations
Remaining performance obligations represent the aggregate transaction price for contracts where our performance obligations have not yet been satisfied. As of June 30, 2024, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5% of our total revenue. 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. A significant portion of our customer contracts, which are not expected to be fulfilled within 12 months, are represented by the contracts within these businesses.
4. BUSINESS SEGMENTS
We manage and report our operations as five global business segments:
- Markets Advisory,
- Capital Markets,
- Work Dynamics,
- JLL Technologies and
- LaSalle.
Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, advisory and consulting services. Capital Markets service offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing. Our Work Dynamics business provides a broad suite of integrated services to occupiers of real estate, including facility and project management, as well as portfolio and other services. Our JLL Technologies segment offers software products, solutions and services, while LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.
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 functional costs across the globe, which we allocate to the business segments using an expense-specificdriver-based methodology.
The Chief Operating Decision Maker ("CODM") of JLL measures and evaluates the segment results based on Adjusted EBITDA for purposes of making decisions about allocating resources and assessing performance. Adjusted EBITDA does not include (i) Restructuring and acquisition charges, (ii) gain/loss on disposal, (iii) interest on employee loans, net of forgiveness, (iv) Equity earnings/losses for JLL Technologies and LaSalle, (v) net non-cash MSR and mortgage banking derivative activity, (vi) Interest expense, net of interest income, (vii) Income tax provision (benefit) and (viii) Depreciation and amortization, which are otherwise included in Net income on the Consolidated Statements of Comprehensive Income.
In the first quarter of 2024, we revised the definition of segment Adjusted EBITDA to exclude certain Equity earnings/losses from investments. The impact of this revision is limited to the JLL Technologies and LaSalle segments. Comparable periods have been recast to conform to the revised presentation. Equity earnings/losses from unconsolidated operating ventures (not investments) remain included in Adjusted EBITDA.
Our CODM is not provided with total asset information by segment and accordingly does not measure or allocate resources based on total assets information. Therefore, we have not disclosed asset information by segment.
10
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Jones Lang LaSalle Inc. published this content on 06 August 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2024 16:26:38 UTC.
