JLL 10-K & 10-Q changes, risk factors and insider trading

Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our businesses. It includes information management and data protection and security, including cyber securitycybersecurity; supply chain and business disruption; health and safety; and other risks, including human resources and reputation.

Our business is evolving at a rapid pace. Our organizational agility underpins our ability to mitigate many other risks, minimize impacts from adverse events, and capitalize upon opportunities when presented. The sheer size and footprint of our company -with- with over 112,000113,000 employees across more than 80 countries - makes change-management and responsiveness challenging. Any global change is a complex undertaking as we are required to comply with the numerous and often contradictory local regulatory environments while achieving the objective of the change.undertaking. Insufficient proactive and reactive organizational agility and responsiveness to industry trends and other external factors may negatively impact our operationalresults, resultsreputation, and cause loss of market share and negatively impact the differentiated services we provide as compared to our competitors.

Our success largely depends on the expertise of our senior management team and key personnel who possess extensive knowledge of our business and strategy, as well as colleagues critical to developing and retaining client relationships. The competitive nature of our industry presents ongoing challenges for retaining and attracting skilled personnel with relevant industry experience and knowledge. As we continue to grow and expand our workforce, these challenges may intensify.

We rely on third parties, and in some cases subcontractors, to perform activities on behalf of our organization to improve quality, increase efficiencies, reduce costs and lower operational risks across our business and support functions. We continue to use a Vendor Code of Conduct, which is published in multiple languages on our website, to communicate to our vendors the standards of conduct we expect them to uphold. Our contracts with vendors also generally impose a contractual obligation to comply with our Vendor Code. In addition, we leverage technology at an increasing rate to help us better screen vendors, with the aim of gaining a deeper understanding of the risks posed to our business by potential and existing vendors. If our third parties do not have the proper safeguards and controls in place, or if appropriate oversight cannot be provided, or if they fail to comply with service level agreements or regulatory or legal requirements in a high-quality and timely manner, we could be exposed to increased operational, regulatory, financial or reputational risks. InOur addition,reliance theseon third parties faceis theirincreasing, ownparticularly technology,for cybersecurity,critical operating, businesstechnology and economicdata services. This creates heightened exposure to supplier-related risks, including operational disruption from system outages, cybersecurity breaches originating from vendor systems, and anyvendor significantlock-in failuresthat may lead to aggressive pricing or costly migrations. Failures by them,either includingour the improper usetechnology or disclosurenon-technology ofservice ourdelivery confidential client, employee or company information,suppliers could cause damage to our reputation and harm to our business.

However, despite significant investments in our safety platform, management systems and vendor due diligence program, if our health and safety policies, procedures, and programs are not adequate, or if our employees or contractors do not receive or complete adequate training or comply with our policies and procedures, we may bebe, and have previously been, exposed to significant consequences including serious injury or loss of life, which could have a material impact on our financial performance and reputation. In addition,Despite our efforts, we recently experienced an increase in the number of serious safety incidents, including fatalities of both employees and contractors. As a result, we have identified and implemented additional safety measures for our employees and subcontractors including electrical safety and work at heights training, and enhanced controls for approving work. Our contractors and their subcontractors are highly integrated into many aspects of our operations and therefore are involved in a significant proportion of the safety incidents we experience. Additional efforts are necessary to ensure our vendors are aware of our high health and safety expectations and consistently comply with our policies and procedures.

Health epidemics that affect the general conduct of business in one or more urban areas (including as the result of travel restrictions and the inability to conduct face-to-face meetings) have occurred in the past, for example from influenza or COVID-19, and may occur in the future from other types of outbreak.outbreaks. Such instances can adversely affect the volume of business transactions, real estate markets and the cost of operating real estate or providing real estate services.

Our business is highly dependent on our ability to collect, use, store and manage organizational and client data. If any of our significant information and data management systems do not operate properly or are disabled, we could suffer a disruption of our businesses, liability to clients, loss of client or other sensitive data, loss of employee data, regulatory intervention, breach of confidentiality or other contract provisions, or reputational damage. These systems may fail to operate properly or become disabled as a result of events wholly or partially beyond our control, including disruptions of electrical or communications services, as well as disruptions caused by natural disasters, political instability, terrorist attacks, sabotage, computer viruses, deliberate attempts to disrupt our computer systems through "hacking," "phishing," or other forms of both deliberate or unintentional cyber-attack,cyberattack, or our inability to occupy one or more of our office locations. As we outsource significant portions of our information technology functions, such as cloud computing, to third-party providers, we bear the risk of having less direct control over the manner and quality of performance.

Cyber threats are proliferating and advancing the ability to identify and exploit vulnerabilities, requiring continuous evaluation and improvements to our security architecture and cyber defenses. The risk of cyber threats also extends to suppliers and vendors we engage on a principal basis to perform various services. We also face increased cybersecurity risk as we deploy additional mobile and cloud technologies. We service clients across multiple industry verticals - many of which are higher-profile cyber targets themselves - including financial services, technology, government institutions, healthcare and life sciences, and because of this the risk that we are subject to cyber-attackcyberattack incidents may increase. In addition, the rapid evolution and increased adoption of artificial intelligence technologies amplify these risks. We are continuously hardening our infrastructure built on these technologies, monitoring for threats, and evaluating our capability to respond to any incidents to minimize any impact to our systems, data, or business operations. However, we cannot ensure that these measures will be successful in preventing any cyber-attacks.cyberattacks.

We have experienced various types of cyber-attackcyberattack incidents whichwhich, to-dateto date, have been contained and not material to us. As the result of such incidents, we continue to implement new controls, governance, technical protections and other procedures. We maintain a cyber risk insurance policy, but the costs related to cybersecurity threats or disruptions may not be fully insured. We may incur substantial costs and suffer other negative consequences such as liability for damages, reputational harm and significant remediation costs and experience material harm to our business and financial results if we, or vendors or suppliers we engage on behalf of our clients, fall victim to other successful cyber-attacks.cyberattacks.

In addition, the competitive conditions,environment particularlyfor in connection with increasinglyservicing large clients,clients may require us to agree to contractual terms that increase our potential risk and liability. To secure and retain business, we may need to compromise on certain contract terms with respectrelated to the payment of fees, the extent of risk transfer, or acting as principal rather than agent in connection with supplier relationships, liability limitations, indemnification obligations, credit termsterms, and otherthe contractualallocation terms,of or in connection with disputes or potential litigation.risk. Where competitive pressures result in higher levels of potential liability under our contracts, the costfinancial impact of operational errors andor other activitiesmatters for which we have indemnified our clients willcould be greatersignificant and may not be fully insured.covered by our insurance.

The precautions we take to prevent these types of occurrences, which represent a significant commitment of corporate resources, may nevertheless be ineffective in certain cases. Any increased or unexpected costs or unanticipated delays in connection with the performance of these engagements, including delays caused by factors outside our control, could have an adverse effect on profit margins.

The real estate industry continues to be transformed by artificial intelligence (“AI”), including generative AI, advanced analytics, and other emerging technologies. As JLL and the sector increasingly embracesembrace data-driven decision-making, our ability to effectively manage and utilize big data and AI tools is crucial for maintaining our competitive edge. Failure to adapt to these technologies or leverage them effectively could result in loss of market share and revenues, particularly if we are unable to meet evolving client needs or align our offerings with industry standards and client expectations.

The legal and regulatory landscape surrounding AI also is rapidly evolving.evolving and fragmented. Jurisdictions are beginning to implement distinct regulatory frameworks, such as the European Union’s AI Act, which could impose varying and potentially conflicting compliance obligations on our global operations. Navigating these changes may require significant resources to ensure compliance with both U.S. and non-U.S. laws, potentially impacting our operations and financial performance.

ToFrom atime muchto lesser degree,time, we have occasionally entered into joint ventures to conduct certain businesses or enter new geographies, and we will consider doing so in appropriate situations in the future. Joint ventures have many of the same risk characteristics as acquisitions, particularly with respect to the due diligence and ongoing relationship with joint venture partners, given each partner has inherently less control in a joint venture and will be subject to the authority and economics of the particular structure that is negotiated. Accordingly, we may not have the authority to direct the management and policies of the joint venture. If a joint venture participant acts contrary to our interests, it could harm our brand, business, results of operations and financial condition.

WE ARE SUBJECT TO RISKS INHERENT TO INVESTMENT (INCLUDING CO-INVESTMENT) AND REAL ESTATE INVESTMENT BANKING ACTIVITIES.

AnOne important partcomponent of our business strategy includes investing in (i) real estate, both individually and along with our investment management clients, and (ii) proptech funds and early to mid-stage proptech companies. As of December 31, 2024,2025, we have unfunded commitment obligations of up to $299.6$210.8 million to fund future investments across our investment strategies. To remain competitive with well-capitalized financial services firms, we may also use our capital to acquire properties before the related investment management funds have been established or investment commitments have been received from third-party clients.

•We may lose some or all of the capital we invest if the investments underperform.

In certain situations, we raise funds from outside investors where we are the sponsor of real estate investments, developments, or projects. To the extent we return less than the investors' original investments because the investments, developments, or projects have underperformed relative to expectations, the investors could attempt to recoup the full amount of their investments under securities law theories such as lack of adequate disclosure when funds were initially raised. Sponsoring funds into which retail investors can invest, such as the investment funds sponsored by LaSalle,Investment Management, may increase this risk.

Our employees or supplierssupply partners may directly or indirectly engage in unethical, illegal or non-compliant practices related to bribery, corruption, money laundering, fraud, international trade sanctions, modern slavery, violations of applicable data privacy laws, or other acts that constitute a breach of our Code of Ethics. Failure to adequately prevent, monitor, and detect such behavior could lead to significant reputational damage, regulatory consequences, and adversely impact our operations, profitability and enterprise value. The increased utilization of AI by third-party fraudsters also may exacerbate all, or some, of these risks and it can be challenging to keep pace with the emerging technologies third-parties are using to commit fraudulent and other illegal acts targeting JLL and its supply chain partners.

Our global operations must comply with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the UK Bribery Act. These anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage. Such prohibitions exist regardless of whether those practices are legal or culturally expected in a particular jurisdiction. Our compliance program may not prevent violations of such laws, which could result in criminal or civil sanctions and have an adverse effect on our reputation, businessbusiness, and results of operations and financial condition.

Changes in governments or majority political parties may result in significant changes in enforcement priorities with respect to employment, health and safety, tax, securities disclosure and other regulations, which, in turn, could negatively affect our business. The increasing focus on ESG factors by regulators in many geographies may also lead to new compliance requirements and potential liabilities.

WE ARE SUBJECT TO COMPLEX AND EVOLVING LICENSING AND REGULATORY REQUIREMENTS.

Several of our business operations are subject to requirements in various jurisdictions to maintain licenses and comply with particular regulations.licenses. If we fail to maintain our licenses or conduct regulatedlicensed activities without a license or in contravention of applicable regulations,license, we may be required to pay fines, return commissions or investment capital from investors or may have a given license suspended or revoked. Our acquisition activity increases these risks, because we must successfully transfer licenses of acquired entities and their staff, as appropriate. Licensing requirements may also preclude us from engaging in certain types of transactions or change the way in which we conduct business or the cost of doing so. In addition, because the size and scope of real estate sales transactions, the number of countries in which we operate or invest, and the areas we offer services have increased significantly during the past several years, both the difficulty of ensuring compliance with the numerous licensing regimesrequirements and the possible loss resulting from noncompliance, have increased.

LawsLicensing and regulations applicable to our business, bothrequirements in thevarious United States and in other countries,jurisdictions may changechange, inincreasing wayscompliance that materially increase the costs of compliance.costs. Particularly in emerging markets, there can be relatively less transparency around the standards and conditions under which licenses are granted, maintained, or renewed. It also may be difficult to defend against the arbitrary revocation of a license in a jurisdiction where the rule of law is less well developed.

•MarketsLeasing Advisory

•Capital Markets Services

◦Project•Investment Management

•JLLSoftware Technologiesand Technology Solutions

First, we invest in certain real estate ventures that primarily own and operate commercial real estate, historically through co-investments in funds that LaSalleInvestment Management establishes in the ordinary course of business for its clients. These investments include non-controlling ownership interests generally ranging from less than 1% to 10% of the respective ventures. We account for these investments at fair value or under the equity method of accounting.

Second, JLLwe Technologies investsinvest in proptech funds and early to mid-stage companies to improve our strategic position within the real estate technology landscape, including investments through the JLL Spark Global Ventures Funds. We account for a majority of these investments at fair value. Certain investments are accounted for under the measurement alternative, defined as cost minus impairment.impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

For JLL Technologies investments in proptech companies, we primarily estimate the fair value based on the per-share pricing. Subsequent funding rounds or changes in the companies' business strategy/outlook are indicators of a change in fair value. The fair value of certain investments is estimated using significant unobservable inputs which requires judgment due to the absence of market data. In determining the estimated fair value of these investments, we utilize appropriate valuation techniques including discounted cash flow analyses, scorecard method, Black-Scholes models and other methods as appropriate. Key inputs include projected cash flows, discount rates, peer group multiples and volatility.

For all investments reported at fair value, other than such investments where the measurement alternative has been elected, our investment is increased or decreased each reporting period by the difference between the fair value of the investment and the carrying value as of the balance sheet date. Investments for which the measurement alternative has been elected are remeasured if a qualifying observable price change occurs. We reflect these fair value adjustments as gains or losses on the Consolidated Statements of Comprehensive Income within Equity earnings.earnings/losses.

Estimations and judgments relevant to the determination of tax expense, assets, and liabilities require analysis of the tax environment and the future profitability, for tax purposes, of local statutory legal entities rather than business segments. Our statutory legal entity structure generally does not mirror the way we organize, manage,manage and report our business operations. For example, the same legal entity may include Capital Markets Services, Real Estate Management Services and Leasing Advisory businesses in a particular country.

In situations where we believe that there may be uncertainty with respect to the recognition of tax benefits, we provide reserves for those benefits. Changes to the amounts of our unrecognized tax benefits may occur as thea result of ongoing operations, the outcomes of audits or other examinations by tax authorities, or the passing of statutes of limitations. We do not expect changes to our unrecognized tax benefits to have a significant impact on net income, the financial position, or the cash flows of JLL. We do not believe we have material tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

Transaction-Based Revenues and Equity Earnings/Losses

Transaction-based revenues are impacted by the size and timing of our clients' transactions. Such revenues include investment salessales, debt/equity advisory fees and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, which increase the variability of the revenue we earn. Specifically for LaSalle,Investment Management, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following: changes in valuations of the underlying investments; dispositions of managed assets; and the contractual measurement periods with clients. The timing and the magnitude of transaction-based revenues can vary significantly from year to year and quarter to quarter, and also vary geographically.

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

In the normal course of business, we manage these risks through a variety of strategies, including hedging transactions using various derivative financial instruments such as foreign currency forward contracts. We enter into derivative instruments that are short-term in duration with high credit-quality counterparties and diversify our positions across such counterparties in order to reduce our exposure to credit losses. We do not enter into derivative transactions for trading or speculative purposes.

We centrally manage our debt, considering investment opportunities and risks, tax consequences and overall financing strategies. Our overall interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We are primarily exposed to interest rate risk on our Facility, which had a maximum borrowing capacity of $3.30 billion as of December 31, 2024. The Facility consists of revolving credit available for working capital, investments, capital expenditures and acquisitions.2025. We had $88.6 million ofno outstanding borrowings, net of debt issuance costs,borrowings under the Facility as of December 31, 2024.2025. The Facility bears a variable rate of interest that fluctuates based on market rates.

In November 2023, we issued and soldOur $400.0 million of senior unsecured notes are due December 2028 whichand bear interest at a fixed annual rate of 6.875%. Our €350.0 million face value of Euro Notes is split between €175.0 million due in June 2027 and €175.0 million due in June 2029, bearing interest at fixed annual rates of 1.96% and 2.21%, respectively. The issuance of the senior notes and Euro Notes at fixed interest rates has helped to limit our exposure to future movements in interest rates.

OnWe June 27, 2024, we establishedmaintain a commercial paper program (the “"Program”") in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time. We had $199.3 million ofno outstanding borrowings,borrowings netunder ofthe debt issuance costsProgram as of December 31, 2024.2025. Our Program provides us with another source of short-term capital, which may help us mitigate interest rate risk.

We assess interest rate sensitivity to estimate the potential effect of rising interest rates on our variable rate debt. IfFor the year ended December 31, 2025, if interest rates were 50 basis points higher during 2024,higher, Interest expense, net of interest income, would have been $6.9$3.5 million higher.

We mitigate our foreign currency exchange risk principally by (i) establishing local operations in the markets we serve and (ii) invoicing customers in the same currency as the source of the costs. The impact of translating expenses incurred in foreign currencies into U.S. dollars reduces the impact of translating revenue earned in foreign currencies into U.S. dollars. In addition, British pound and Singapore dollar expenses incurred as a result of our regional headquartersemployee hubs being located in London and Singapore, respectively, act as ongoing partial operational hedges against our translation exposures to those currencies.

We enter into forwardcross-currency swaps and foreign currency exchangeforward contracts to manage currency risks associated with net investments in foreign operations and intercompany loan balances.balances, Generally, the maturity of these contracts is less than 60 days.respectively. As of December 31, 2024,2025, we had forwardcross-currency exchangeswap contracts in effect with a gross notional value of $2.21$805.8 billionmillion ($1.08and billionforward oncontracts with a netgross basis).notional Thisvalue of $2.04 billion. For forward contracts, the corresponding net carrying gain/loss is generally offset by a carrying gain/loss in associated intercompany loans.

•Assets under management data for LaSalleInvestment areManagement is primarily reported on a one-quarter lag.

•"n.m.": not meaningful, typically represented by a percentage change of greater than 1,000%, favorable or unfavorable.

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.following:

(i)•Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and (ii)Percentage changes against prior periods presented on a local currency basis.

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

Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in Leasing Advisory and Capital Markets Services) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.

Equity earnings/losses (JLLInvestment TechnologiesManagement and LaSalleProptech Investments) primarily reflects valuation changes on investments reported at fair value.value, Investments reported at fair valuewhich are increased or decreased each reporting period by the change in theas fair value of the investment.changes. Where the measurement alternative has been elected, our investment is increased or decreased upon observable price changes. Such activity is excluded as the amounts are generally non‑cash in nature and not indicative of core operating performance.

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

Credit losses on convertible note investments reflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises. Such losses are similar to the equity investment-related losses included in equity earnings/losses for JLLProptech Technologies' investmentsInvestments and are therefore consistently excluded from adjusted measures.

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

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.

Operating expenses increased 12%10% to $22.6$25.0 billion in 2024.2025. Generally, the net increase in platform operating expenses was largely driven by growth in revenue-related expenses, partiallyincluding offsetpass-through bycosts greater platform leverage. Gross(gross contract costs) and commission expense, and also increasedreflected duehigher torestructuring top-lineand performance.acquisition charges. Greater platform leverage mitigated the revenue-related growth, as evidenced by the, lower, 8% increase in platform operating expenses. Refer to segment operating results for additional detail.

Restructuring and acquisition charges were lower in 2024,higher, compared with 2023,2024, primarily due to (i)significantly anlower expensenet credit in the third quarter of 2024 associated with a reductiondecreases to anearn-out acquisition-relatedliabilities earn-outas well as higher severance and (ii) lowerother employment-related costs over the full year as significant cost-out actions were executed in 2023.charges. Refer to the following table for further detail.

Interest expense, net of interest income, for 20242025 was $136.9$107.3 million, compared to $135.4$136.9 million in 2023.2024. The improvement was primarily due to lower average borrowings with meaningful contributions from a lower average interest rate. The average outstanding borrowings under our credit facilities and commercial paper program was $1,381.4$1,119.7 million this year, with an average effective interest rate of 5.9%,4.9%, in 2024,2025, compared with $1,875.9$1,381.4 million, also with an average effective interest rate of 5.9%, during 2023.2024.

Equity Earnings (/Losses)

The provision for income taxes was $132.5 million and $25.7 million for the years ended December 31, 2024 and 2023, respectively, representing effective tax rates ("ETR") of 19.5% and 10.2%, respectively. The meaningfully lower ETR in 2023 was primarily attributable to the significantly lower pre-tax earnings (compared to 2024) as well as the geographic mix of income. Refer to the Income Tax discussion in the Summary of Critical Accounting Policies and Estimates and Note 8, Income Taxes, of the Notes to Consolidated Financial Statements, included in Item 8, for a further discussion of our effective tax rate.

AdjustedHigher EBITDAprofits expansion waswere primarily attributabledriven toby (i)Leasing higherAdvisory revenues,and bothCapital Markets Services, fueled by strong Transactional and certain Resilient revenue streams,growth, includingwith Workplaceincremental contributions from Real Estate Management withinServices. WorkAll Dynamics,segments and (ii) cost discipline andreflected enhanced platform leverage.leverage Theseand driverscontinued notablycost outpaceddiscipline. theIn $19.5addition, an approximate $25 million expense associated with the Fannie Mae loan repurchase and the $18.1 millionadverse impact associated with anU.S. outsizedemployee prior-yearhealthcare actuarial benefit.deficit was largely offset by discrete cost management actions. Refer to the segment performance highlights for additional detail.

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, for the threesix months ended MarchJune 31,30, 2026, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, 2025, which are included in our 2025 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 2025 Annual Report on Form 10-K.

A discussion of our critical accounting policies and estimates used in the preparation of our 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, 2025. There have been no material changes to these critical accounting policies and estimates during the threesix months ended MarchJune 31,30, 2026.

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 MarchJune 31,30, 2026, and 2025, are not fully indicative of the results we expect to realize for the full fiscal year.

•We define "Resilient" revenue as (i) Workplace Management, Project Management, Property Management and Software and Technology Solutions, within Real Estate Management Services, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets Services,Services and (iii) Advisory Fees,fees, within Investment Management. In addition, we define "Advisory" revenue (previously referred to as "Transactional") as (i) Portfolio Services and Other, within Real Estate Management Services, (ii) Leasing Advisory, (iii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services,Services and (iv) Incentive and transaction fees, within Investment Management.

RevenueFor the second quarter, revenue increased 9%10% compared with the prior-year quarter. Collectively, Advisory revenues grewwere 17%,collectively up 21%, led by Leasing Advisory, up 16%,24%, and Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, up 23%25% (excluding the impact of net non-cash MSR and mortgage banking derivative activity). The collective 7%8% increase in Resilient revenues was highlighted by Workplace Management, up 8%, and Project Management, up 10%, both within Real Estate Management Services.Services, up 10%.

The following highlights Revenue by reporting segmentResilient and type,Advisory revenue as a percentage of total revenue for the firstsecond quarter and first half of 20262026, andfollowed 2025by ($the inyear-over-year millions).change for each of the trailing eight quarters. Refer to segment operating results for further detail.

Consolidated operating expenses were $6.2$6.6 billion for the firstsecond quarter, up 8%9% from the same period in 2025. Gross contract costs were $4.3$4.6 billion, up 8%9% from the prior-year quarter, attributable to growth from businesses with higher client pass-through expenses such as Workplace Management (where higher costs were driven by mandate expansions and new client wins) and Project Management,Management (where increased costs were attributable to changes in contract mix), both within Real Estate Management Services. Platform operating expenses were $1.8$2.0 billion for the firstsecond quarter, ana 8%10% increase from the prior-year quarter, largely due to revenue-relatedhigher variablecommission compensationexpense, expensedriven by Advisory revenue growth.

Interest expense, net of interest income, for the three and six months ended MarchJune 31,30, 2026, was $17.0$26.4 million and $43.4 million, respectively, compared with $24.6$35.3 million and $59.9 million in the prior-year period.periods. Lower expense was primarily due to lower average borrowings and a lower effective interest rate and lower average borrowings compared with the prior-year period.

The following details Net income attributable to common shareholders and Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026, and 2025.

For the second quarter and first quarterhalf of 2026, higher Adjusted EBITDA and margin were primarily driven by Capital Markets Services and Leasing Advisory, led byreflecting strong Advisory revenue growth.growth Profitabilityand also reflected incrementalenhanced platform leverageleverage. andIn continuedaddition, costprofit discipline.growth included the absence of $14 million of loan loss expense recognized in the prior-year quarter associated with an enhanced loss-share agreement with Fannie Mae for a specific three-loan portfolio.

The following chart reflects segment Adjusted EBITDA for the second quarter and first quartersix months of 2026 and 2025. Proptech Investments are reflected outside of the reporting segments in "All Other;" Adjusted EBITDA for the segments, therefore, does not sum to the consolidated total.

IncreasedThe segmentincreases in Segment platform operating expenses for the second quarter and first half of 2026 were primarily driven by incremental revenue-related human capital investments to support future business growth.investments. Higher gross contract costs for both periods correlated to top-line performance inacross the Workplace Management, Project Management and Property Managementsegment's business lines.

Higher Adjusted EBITDA wasimprovements for the second quarter and first half of 2026 were primarily drivenattributable byto the revenue growth described above.above and incremental platform leverage.

The increaseincreases in Leasing Advisory revenue wasfor the second quarter and first half of 2026 were driven by continuedaccelerated momentum in the officeoffice, sectorindustrial and andata accelerationcenter inasset industrial.classes, compared with the prior-year periods. Many geographies achieved double-digit revenue growthincreases for theboth quarter,periods, highlighted by the U.S. andU.S., with a meaningful uptickgrowth infrom Japan and the UK. Broad-basedFor both the second quarter and first half of 2026, broad-based asset class growth across the U.S. was primarily driven by office -and industrial, as ana increasesignificant uptick in average deal size was complemented by higher volume - and industrial, primarily due to larger deal size.volume. Office leasing revenue growth outperformed global office volumes for both the second quarter and first half of 2026 (up 12%20% and 17%, respectively, compared with global market volumes downup 1%2% and 1%, according to JLL Research), highlighted bywith U.S. revenue outperformance for both periods (up 14%24% and 19%, respectively, compared with U.S. market volumes up 7%12% accordingand to JLL Research10%).

HigherThe segmentincreases in Segment platform operating expenses for the second quarter and first half of 2026 were substantiallyprimarily drivenattributable byto higher commission expense, correlateddriven toby the revenue growth. TheConsistent increasewith inthe first quarter, larger average deal size contributed todrove a higher average commission rate,rate comparedfor withboth 2025,periods, as higher commission tiers were achieved earlier this year.

Adjusted EBITDA and margin expansion for the second quarter and first half of 2026 were driven by revenue growth, partiallynet tempered by theof higher commission expenseexpense, notedcoupled above.with incremental platform leverage.

The increaseincreases in segment platform operating expenses wasfor largelythe second quarter and first half of 2026 were substantially driven by higher commission expense, correlated to the growth in Investment Sales, Debt/Equity Advisory and Other. ThisA driverhigher wasaverage partiallycommission offsetrate, byreflecting lowerthe amortizationachievement expenseof versushigher commission tiers earlier this year compared with 2025, contributed to the increase for both periods. Further, in the prior-year quarter, aswe certainrecognized acquisition-relatedapproximately intangible$14.0 assetsmillion fullyof amortizedincremental inexpense mid-2025.associated with an enhanced loss-share agreement with Fannie Mae for a specific three-loan portfolio, which did not recur this year.

Higher Adjusted EBITDA and margin expansionimprovements for the second quarter and first half of 2026 were primarily attributable to the revenue growth described above, augmented by $7.2 millionnet of lowerhigher commission expense, the favorable year-over-year change in loan-related expenses,expenses includingand aincremental reductionplatform in the loan loss reserves.leverage.

Investment Management revenue was largely flat comparedconsistent with the prior-year quarter.periods for both the second quarter and first half of 2026. Advisory fees reflected growth associated with continued capital raise activitymomentum over the trailing twelve months, most notably in North America, offset by anticipated lower fees from funds in Asia Pacific, reflectingas dispositiondiscussed activity andin the conclusionfirst of initial investment periods.quarter.

Current-quarter equityEquity earnings werefor driventhe primarilysecond byquarter assetand first half of 2026 reflected valuation increases inacross Asiathe Pacificunderlying funds.investment Theportfolio, prior-yearcompared quarterwith equity losses in the prior-year periods, which were driven by asset valuation declines in Asia Pacific and North America funds.

AUM increasedwas 1%flat in USD (1%and in local currency) during the quarter, and increased 6%2% in USD (3%and 1% in local currency) over the trailing twelve months. Changes in AUM are detailed in the tables below (in billions):

Operating activities used $755.0$266.9 million of cash in the first threesix months of 2026, compared with $767.6$434.8 million of cash used in operating activities during the same period in 2025. The improvement in operating cash flows was primarily attributable to higher cash provided by earnings, partially offset by higher trade receivables - correlated with the revenue growth - with net working capital (mostadjustments notablyin netaggregate reimbursables).broadly consistent with the prior-year period.

We used $61.3$125.5 million of cash for investing activities during the first threesix months of 2026, compared with $152.8$200.4 million used during the same period in 2025. The decrease in cash used for investing activities was primarily attributable to our January 2025 $100.0 million contribution to JLL Income Property Trust ("JLL IPT"), partially offset by higher capital expenditures. We discuss these and other drivers of investing activity below in further detail.

Financing activities provided $649.4$251.8 million of cash during the first threesix months of 2026, compared with $900.7$617.5 million provided during the same period in 2025. The decrease in cash provided by financing activities reflected lower net borrowings under the Facility and the Program, largely driven by a higher cash balance at the beginning of 2026 and lower cash used for investing activities. We discuss specific drivers of financing activities, including share repurchases, in further detail below.

In addition to our Facility, we had the capacity to borrow up to $58.1$58.0 million under local overdraft facilities as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we had a carrying value of $886.6$873.6 million in Investments, primarily related to Investment Management co-investments and investments in early-to-mid-stage proptech companies as well as proptech funds ("Proptech Investments"). For the threesix months ended MarchJune 31,30, 2026, return of capital exceeded funding of investments by $4.1$0.6 million, and during the same period in 2025, funding of investments exceeded return of capital by $108.0$104.5 million, primarily driven by our $100.0 million investment in JLL IPT. We have maximum potential unfunded commitments to direct investments or investment vehicles of $196.7$305.5 million and $6.6$5.8 million as of MarchJune 31,30, 20262026, for our Investment Management business and Proptech Investments, respectively.

Net capital additions for the threesix months ended MarchJune 31,30, 2026 and 2025 were $64.9$115.0 million and $44.5$88.9 million, respectively. Our capital expenditures in 2026 were primarily for leasehold improvements, purchased/developed software and technology hardware. Leasehold improvement spend led the way, as we continue to invest in our global real estate footprint.

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 $12.9$5.7 million as of MarchJune 31,30, 2026. 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 MarchJune 31,30, 2026, we had the potential to make earn-out payments for a maximum of $75.4$66.8 million on 119 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 Consolidated Financial Statements for further information on Business Acquisitions.

As of MarchJune 31,30, 2026, $2,701.7$2,591.6 million remained authorized for repurchases under our share repurchase program.

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 MarchJune 31,30, 2026 and December 31, 2025, we had total Cash and cash equivalents of $436.2$458.2 million and $599.1 million, respectively, of which approximately $363.8$378.1 million and $386.0 million, respectively, was held by foreign subsidiaries.