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What changed in JONES LANG LASALLE INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of JONES LANG LASALLE INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+382 added−422 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in JONES LANG LASALLE INC's 2023 10-K

382 paragraphs added · 422 removed · 281 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

121 edited+34 added−30 removed83 unchanged
Biggest changeEnvironmental Protection Agency, for the eleventh consecutive year • One of America's Most Responsible Companies by Newsweek , for the fourth consecutive year • A recipient of the Global Outsourcing 100 by the International Association of Outsourcing Professionals (IAOP), for the second consecutive year • One of the World's Most Ethical Companies by the Ethisphere Institute, every year since 2008 • One of the World's Most Admired Companies by Fortune Magazine , for the seventh consecutive year • A recipient of Procter & Gamble’s (P&G) first-ever Supplier Sustainability Award, recognizing external business partners who play a pivotal role in protecting the planet • To the Human Rights Campaign Foundation's Corporate Equality Index, a benchmarking survey on corporate policies and practices related to LGBTQ workplace equality, with a perfect score, for the eighth consecutive year • One of America's Best Employers for Diversity by Forbes , every year since 2019 • One of the Best Places to Work for Disability Inclusion by the Disability Equality Index, for the fourth consecutive year • A member of Seramount’s Inclusion Index, recognizing our dedication and progress to creating an inclusive workplace • One of America’s 100 Most Sustainable Companies by Barron’s, for the third consecutive year • To the Wall Street Journal's Management Top 250 ranking, for the third consecutive year • Best Compliance and Ethics Program by Corporate Secretary Magazine INTEGRATED REPORTING JLL was one of the first U.S. listed companies to participate in the International Integrated Reporting Council ("IIRC"), and we continue to support the general principles set forth by the Framework, which are designed to promote communications and integrated thinking about how an organization's strategy, governance, and financial and non-financial performance lead to the creation of value over the short, medium and long term.
Biggest changeEnvironmental Protection Agency, for the twelfth consecutive year • One of the World's Most Ethical Companies by the Ethisphere Institute, every year since 2008 • One of the World's Most Admired Companies by Fortune Magazine , for the eighth consecutive year • To the Human Rights Campaign Foundation's Corporate Equality Index, a benchmarking survey on corporate policies and practices related to LGBTQ workplace equality, for the ninth consecutive year • One of America's Best Employers for Diversity by Forbes , every year since 2019 • One of the Best Places to Work for Disability Inclusion by the Disability Equality Index, for the fifth consecutive year • A member of Seramount’s Inclusion Index, recognizing our dedication and progress to creating an inclusive workplace for the second consecutive year • One of America’s 100 Most Sustainable Companies by Barron’s, for the fourth consecutive year • To the Wall Street Journal's Management Top 250 ranking, for the fourth consecutive year • One of America’s Most JUST Companies by Forbes /JUST Capital for the second consecutive year • A Top Company for Executive Women by Seramount • One of U.S.
We are generally compensated by either directly agreeing to a fixed fee, a cost plus fee model, or based upon a percentage of cash collections we make on behalf of our clients, or based on square footage managed; in some cases, management agreements provide for incentive compensation relating to operating expense reductions, gross revenue or occupancy objectives, or tenant satisfaction levels.
We are generally compensated by either directly agreeing to a fixed fee or a cost plus fee model, or a fee based upon a percentage of cash collections we make on behalf of our clients, or based on square footage managed; in some cases, management agreements provide for incentive compensation relating to operating expense reductions, gross revenue or occupancy objectives, or tenant satisfaction levels.
WPM solutions offered to clients range from mobile engineering at a single location to a full-service outsourcing, where we execute day-to-day operations management of client site locations, delivered through a globally integrated platform with standardized processes. Facilities under management cover all real estate asset classes, including corporate headquarters, distribution facilities, hospitals, research & development facilities, data centers and industrial complexes.
WPM solutions offered to clients range from mobile engineering at a single location to a full-service outsourcing, where we execute day-to-day operations management of client site locations, delivered through a globally-integrated platform with standardized processes. Facilities under management cover all real estate asset classes, including corporate headquarters, distribution facilities, hospitals, research and development facilities, data centers and industrial complexes.
Further, we will continue to develop and deploy technology to support our marketing and client development activities and to make our products and services increasingly accessible. Brand The combined strength of our JLL and LaSalle brands represents a significant advantage when we pursue new business opportunities and is also a major motivator for talented people to join our global brand.
Further, we will continue to develop and deploy technology to support our marketing and client development activities and to make our products and services increasingly accessible. Brand The combined strength of our JLL and LaSalle brands represents a significant advantage when we pursue new business opportunities and is also a major motivator for talented people to join our global organization.
Nearly 90,000 employees annually have been able to learn, in seven different languages, through our virtual, on-demand offerings about topics such as, but not limited to, sustainability, technology and the future of work. Our learning platforms have resulted in over 2 million learning assets consumed to accelerate the development of our employees.
Nearly 90,000 employees annually have been able to learn, in seven different languages, through our virtual, on-demand offerings about topics such as, but not limited to, sustainability, technology and the future of work. Our learning platforms have resulted in nearly 2 million learning assets consumed to accelerate the development of our employees.
While work patterns and preferences will continue to rapidly evolve, driven in part by new possibilities created by technology and the widespread adoption of flexible working, cities will thrive as they deliver on people's lifestyle and economic ambitions, characterized by vibrant and reimagined office, cultural, retail and residential profiles.
While work patterns and preferences will continue to evolve, driven in part by new possibilities created by technology and the widespread adoption of flexible working, cities will thrive as they deliver on people's lifestyle and economic ambitions, characterized by vibrant and reimagined office, cultural, retail and residential profiles.
Our globally-integrated delivery team includes our own personnel as well as third-party vendors and subcontractors who meet clients' needs by providing consistent service delivery worldwide and a single point of contact for their real estate service needs.
Our globally-integrated delivery team includes our own personnel as well as third-party vendors and subcontractors who meet clients' requirements by providing consistent service delivery worldwide and a single point of contact for their real estate service needs.
We publish details of our ethics program and ethics statistics in our Ethics Everywhere Annual Report to increase transparency and understanding of the types of concerns and issues raised through our reporting channels. Responsibility for Integrated Reporting.
We publish details of our ethics program and ethics statistics in our Ethics Everywhere Report to increase transparency and understanding of the types of concerns and issues raised through our reporting channels. Responsibility for Integrated Reporting.
The behaviors and standards we expect of our employees and of the suppliers we engage for our own company and on behalf of clients are presented in our Code of Business Ethics and our Vendor Code of Conduct.
The behaviors and standards we expect of our employees and of the suppliers we engage for our own company and on behalf of clients are presented in our Code of Ethics and our Vendor Code of Conduct.
We will continue to file additional patent applications on new inventions, as appropriate, demonstrating our commitment to technology and innovation. CORPORATE GOVERNANCE; CODE OF BUSINESS ETHICS; CORPORATE SUSTAINABILITY AND RELATED MATTERS We are committed to the values of effective corporate governance, operating our business to the highest ethical standards and conducting ourselves in an environmentally and socially responsible manner.
We will continue to file additional patent applications on new inventions, as appropriate, demonstrating our commitment to technology and innovation. CORPORATE GOVERNANCE; CODE OF BUSINESS ETHICS; CORPORATE ESG AND RELATED MATTERS We are committed to the values of effective corporate governance, operating our business to the highest ethical standards and conducting ourselves in an environmentally and socially responsible manner.
As a result, we have adopted the following corporate governance policies and approaches considered to be best practices in corporate governance. • Annual elections of all members of our Board • Annual "say on pay" votes by shareholders with respect to executive compensation • Right of shareholders owning 30% of the outstanding shares of our Common stock to call a special meeting of shareholders for any purpose • Majority voting in Director elections • Separation of Chairman and CEO roles, with the Chairman serving as Lead Independent Director • Required approval by the Nominating, Governance and Sustainability Committee of any related-party transactions • Executive session among the Non-Executive Directors at each in-person meeting • Annual self-assessment by the Board and each of its Committees 24 Table of Contents Code of Ethics.
We have adopted the following corporate governance policies and approaches considered to be best practices in corporate governance. • Annual elections of all members of our Board • Annual "say on pay" votes by shareholders with respect to executive compensation • Right of shareholders owning 30% of the outstanding shares of our Common stock to call a special meeting of shareholders for any purpose • Majority voting in Director elections • Separation of Chairman and CEO roles, with the Chairman serving as Lead Independent Director • Required approval by the Nominating, Governance and Sustainability Committee of any related-party transactions 24 Table of Conte nts • Executive session among the Non-Executive Directors at each in-person meeting • Annual self-assessment by the Board and each of its Committees Code of Ethics.
We offer our real estate services locally, regionally and globally to real estate owners, occupiers, investors and developers for a variety of property types, including (ordered alphabetically): • Critical Environments and Data Centers • Hotels and Hospitality Facilities • Office (including Flex Space) • Cultural Facilities • Industrial and Warehouse • Residential (Individual and Multifamily) • Educational Facilities • Infrastructure Projects • Retail and Shopping Malls • Government Facilities • Logistics (Sort & Fulfillment) • Sports Facilities • Healthcare and Laboratory Facilities • Military Housing • Transportation Centers 4 Table of Contents The following reflects our revenue and fee revenue by segment for the year ended December 31, 2022: To calculate fee revenue, we exclude (i) net non-cash mortgage servicing rights and mortgage banking derivative activity and (ii) gross contract costs associated with client-dedicated labor, and third-party vendors and subcontractors.
We offer our real estate services locally, regionally and globally to real estate owners, occupiers, investors and developers for a variety of property types, including (ordered alphabetically): • Critical Environments and Data Centers • Hotels and Hospitality Facilities • Office (including Flex Space) • Cultural Facilities • Industrial and Warehouse • Residential (Individual and Multifamily) • Educational Facilities • Infrastructure Projects • Retail and Shopping Malls • Government Facilities • Logistics (Sort and Fulfillment) • Sports Facilities • Healthcare and Laboratory Facilities • Military Housing • Transportation Centers 4 Table of Conte nts The following reflects our revenue and fee revenue by segment for the year ended December 31, 2023: To calculate fee revenue, we exclude (i) net non-cash mortgage servicing rights and mortgage banking derivative activity and (ii) gross contract costs associated with client-dedicated labor, and third-party vendors and subcontractors.
Individual projects are generally completed in less than one year, but client contracts may extend multiple years in duration and govern a number of discrete projects. 8 Table of Contents Portfolio Services Through the suite of services our Work Dynamics business provides to clients via our "One JLL" approach, we gain deep knowledge and extensive data about their corporate real estate footprints, business strategies and organizational priorities.
Individual projects are generally completed in less than one year, but client contracts may extend multiple years in duration and govern a number of discrete projects. 8 Table of Conte nts Portfolio Services Through the suite of services our Work Dynamics business provides to clients via our "One JLL" approach, we gain deep knowledge and extensive data about their corporate real estate footprints, business strategies and organizational priorities.
Our work with clients also includes advisory, tenancy management and services focused strategically on reducing energy usage and carbon impact. As of December 31, 2022, we provided property management services for properties totaling approximately 3.0 billion square feet.
Our work with clients also includes advisory, tenancy management and services focused strategically on reducing energy usage and carbon impact. As of December 31, 2023, we provided property management services for properties totaling approximately 3.0 billion square feet.
With operations spanning the globe, our in-depth knowledge of local and regional markets and "One JLL" approach - leveraging the ability and connectivity of our people - can provide services which address the entire life cycle of real estate around the world.
With operations spanning the globe, our in-depth knowledge of local, regional and international markets along with our "One JLL" approach - leveraging the ability and connectivity of our people - can provide services which address the entire life cycle of real estate around the world.
At the heart of our Beyond strategy (discussed below), supported by major ongoing investments and innovations, we continue to accelerate progress toward our goal of becoming the widely-recognized leading user of technology and data in real estate. 12 Table of Contents Sustainability Addressing and managing climate change and the finite nature of global resources are defining issues for our time.
At the heart of our Beyond strategy (discussed below), supported by major ongoing investments and innovations, we continue to accelerate progress toward our goal of becoming the widely-recognized leading user of technology and data in real estate. 12 Table of Conte nts Sustainability Addressing and managing climate change and the finite nature of global resources are defining issues for our time.
Our Finance, Legal and Sustainability functions are primarily responsible for the i ntegrity of our integrated reporting efforts, collaborating in the preparation and presentation of this report and engaging our organization's leadership. 21 Table of Contents SEASONALITY Historically, we have reported a relatively smaller revenue and profit in the first quarter with both measures increasing during each of the following three quarters.
Our Finance, Legal and Sustainability functions are primarily responsible for the i ntegrity of our integrated reporting efforts, collaborating in the preparation and presentation of this report and engaging our organization's leadership. 21 Table of Conte nts SEASONALITY Historically, we have reported a relatively smaller revenue and profit in the first quarter with both measures increasing during each of the following three quarters.
Through our safety vision and our awareness and education programs, like Global Safety Week, the strength of our program is realized in the low accident rates for the year 2022, compared with the U.S.
Through our safety vision and our awareness and education programs, like Global Safety Week, the strength of our program is realized in the low accident rates for the year 2023, compared with the U.S.
We typically negotiate compensation for Advisory and Consulting based on developed work plans that vary based on the scope and complexity of projects. 6 Table of Contents 2. Capital Markets Capital Markets is a full-service global provider of capital solutions creating a world of opportunity for investors and owners of real estate.
We typically negotiate compensation for Advisory and Consulting based on developed work plans that vary based on the scope and complexity of projects. 6 Table of Conte nts 2. Capital Markets Capital Markets is a full-service global provider of capital solutions creating a world of opportunity for investors and owners of real estate.
Through this, we help our clients manage their real estate more effectively and efficiently, promote employment and create value for our shareholders and employees. 17 Table of Contents COMPETITION We operate across a wide variety of highly competitive business lines within the commercial real estate industry globally.
Through this, we help our clients manage their real estate more effectively and efficiently, promote employment and create value for our shareholders and employees. 17 Table of Conte nts COMPETITION We operate across a wide variety of highly-competitive business lines within the commercial real estate industry globally.
"One JLL" enables cross-selling opportunities across geographies and service offerings that we expect will continue to develop new revenue sources and growth. 18 Table of Contents Technology Leadership Technology is transforming commercial real estate and CRE technology strategy is top of mind for our clients.
"One JLL" enables cross-selling opportunities across geographies and service offerings that we expect will continue to develop new revenue sources and growth. 18 Table of Conte nts Technology Leadership Technology is transforming commercial real estate and CRE technology strategy is top of mind for our clients.
For information on recent acquisitions, refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8. 3 Table of Contents A timeline of notable milestones in our history is illustrated below.
For information on recent acquisitions, refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8. 3 Table of Conte nts A timeline of notable milestones in our history is illustrated below.
Our research initiatives investigate emerging trends to help us anticipate future conditions and shape new services to benefit our clients, which in turn help us secure and maintain profitable long-term relationships with the clients we target: the world's leading real estate owners, occupiers, investors and developers. 20 Table of Contents Awards We won numerous awards and recognitions through January 2023 that reflect the quality of the services we provide to our clients, the integrity of our people and our desirability as a place to work.
Our research initiatives investigate emerging trends to help us anticipate future conditions and shape new services to benefit our clients, which in turn help us secure and maintain profitable long-term relationships with the clients we target: the world's leading real estate owners, occupiers, investors and developers. 20 Table of Conte nts Awards We won numerous awards and recognitions through January 2024 that reflect the quality of the services we provide to our clients, the integrity of our people and our desirability as a place to work.
Complementing this, we anticipate increased capital flows across borders and between continents creating new opportunities for advisors and investment managers equipped to source and facilitate these capital flows and execute cross-border transactions. Our real estate investment expertise, linking seamlessly across the world's major markets, is ideally placed to support our clients' investment ambitions.
Complementing this, when we see investment volumes return, we anticipate increased capital flows across borders and between continents, creating new opportunities for advisors and investment managers equipped to source and facilitate these capital flows and execute cross-border transactions. Our real estate investment expertise, linking seamlessly across the world's major markets, is ideally placed to support our clients' investment ambitions.
As of December 31, 2022, WPM managed approximately 1.6 billion square feet of real estate for our clients. WPM contracts are generally structured on a principal basis (a fixed fee, guaranteed maximum, or reimbursement-based pricing model) but may also be on an agency basis.
As of December 31, 2023, WPM managed approximately 1.8 billion square feet of real estate for our clients. WPM contracts are generally structured on a principal basis (a fixed fee, guaranteed maximum, or reimbursement-based pricing model) but may also be on an agency basis.
Refer to our annual Global Sustainability Report, available on our website, for further information. STRATEGIC FRAMEWORK Our GEB has set out the Beyond strategic vision and framework to deliver long-term sustainable and profitable global growth.
Refer to our annual ESG Performance Report, available on our website, for further information. STRATEGIC FRAMEWORK Our GEB has set out the Beyond strategic vision and framework to deliver long-term sustainable and profitable global growth.
Our significant growth over the last decade, and our ability to take advantage of the substantial consolidation which has taken place in our industry, have made us one of the largest commercial real estate services and investment management providers on a global basis.
Our significant growth over the last decade, and our ability to take advantage of the consolidation which has taken place in our industry, have made us one of the largest commercial real estate services and investment management providers on a global basis, though the industry remains fragmented.
Rising investment allocations and globalization of capital flows to real estate In the years following the 2008 Global Financial Crisis, as investors reappraised investment allocations and priorities, real estate emerged out of its previous "alternative investment" classification to become a major defined asset class of its own.
Rising investment allocations and globalization of capital flows to real estate In the years following the 2008 Global Financial Crisis, as investors reassessed investment allocations and priorities, real estate emerged from its previous "alternative investment" classification to become a major defined asset class of its own.
Since we provide a broad range of commercial real estate and investment management services across many geographies, we face significant competition at international, regional and local levels.
As we provide a broad range of commercial real estate and investment management services across many geographies, we face competition at international, regional and local levels.
Some examples of our actions and progress include: • Continued growth of diversity efforts ◦ 36% of our global workforce is female ◦ 83% of our independent board members are female and/or an ethnic minority ◦ Three of our largest eight countries are led by female CEOs ◦ In 2021, signed the Commercial Real Estate Women (CREW) Pledge for Action to support the advancement of women in real estate ◦ Published our fifth Gender Pay Gap report and third Ethnicity Pay Gap report in the United Kingdom • Supported Business Resource Groups to provide supportive and safe platforms to navigate career development and facilitate networking • Continued the rollout of programs to break down financial barriers for underrepresented populations entering the real estate industry, including a college loan repayment program and an investment fund for entry-level compensation to supplement the industry's traditionally commission-based salary models • Continued recognition of our commitment to diversity; refer to the Distinguishing Attributes and Competitive Differentiators section above for awards and recognition during the past year 22 Table of Contents Training and Development Using extensive internal and external research, we have a set of core capabilities that define our leadership behaviors to drive our near and long-term success.
Some examples of our actions and progress include: • Growth of diversity efforts ◦ 36% of our global workforce is female ◦ 83% of our independent board members are female and/or an ethnic minority ◦ Four of our largest ten countries are led by female CEOs ◦ Continued to support the Commercial Real Estate Women (CREW) Pledge for Action, which we were a signatory of in 2021, to support the advancement of women in real estate ◦ Published our sixth Gender Pay Gap report and third Ethnicity Pay Gap report in the United Kingdom • Supported Business Resource Groups to provide supportive and safe platforms to navigate career development and facilitate networking • Continued the rollout of programs to break down financial barriers for underrepresented populations entering the real estate industry, including a college loan repayment program and an investment fund for entry-level compensation to supplement the industry's traditionally commission-based salary models • Continued recognition of our commitment to diversity; refer to the Distinguishing Attributes and Competitive Differentiators section above for awards and recognition during the past year 22 Table of Conte nts Training and Development Using extensive internal and external research, we have redefined the core leadership behaviors that drive our near and long-term success.
Health and Safety Health and safety is at the forefront of JLL's operations. With over 700 health and safety professionals, we are committed to creating an environment that unequivocally protects our employees, clients and supply partners. To effectively manage health and safety, our program is aligned to the principles of the internationally recognized health and safety management standard ISO 45001.
Health and Safety Health and safety is at the forefront of JLL's operations. With over 800 health and safety professionals, we are committed to creating an environment that unequivocally protects our employees, clients and supply partners. To effectively manage health and safety, our program is certified to the internationally recognized health and safety management standard ISO 45001.
JLL is a Fortune 500 company with annual revenue of $20.9 billion, operations in over 80 countries and a global workforce of more than 103,000 as of December 31, 2022. We provide services for a broad range of clients who represent a wide variety of industries and are based in markets throughout the world.
JLL is a Fortune 500 ® company with annual revenue of $20.8 billion, operations in over 80 countries and a global workforce of more than 106,000 as of December 31, 2023. We provide services for a broad range of clients who represent a wide variety of industries and are based in markets throughout the world.
We believe our ability to co-invest alongside our clients' funds aligns our interests and will continue to be an important differentiating factor in maintaining and improving our investment performance and attracting new capital to manage. As of December 31, 2022, we had a total of $366.5 million of co-investments, alongside our clients, in real estate ventures included in total AUM.
We believe our ability to co-invest alongside our clients' funds aligns our interests and will continue to be an important differentiating factor in maintaining and improving our investment performance and attracting new capital to manage. As of December 31, 2023, we had a total of $388.3 million of co-investments, alongside our clients, in real estate ventures included in total AUM.
Our issuer and senior unsecured ratings as of December 31, 2022 are Baa1 from Moody’s and BBB+ from S&P. Accordingly, our ability to present a strong financial condition may distinguish us as we compete for business. We have ample capacity to fund our business.
("Moody’s") and Standard & Poor’s Ratings Services ("S&P"). Our issuer and senior unsecured ratings as of December 31, 2023 are Baa1 from Moody’s and BBB+ from S&P. Accordingly, our ability to present a strong financial condition may distinguish us as we compete for business. We have ample capacity to fund our business.
Our broad array of services include (ordered alphabetically): ● Debt advisory ● Loan sales ● Equity advisory (funds and placement, M&A and corporate advisory) ● Loan servicing ● Investment sales and advisory ● Valuation advisory Investment Sales, Debt/Equity Advisory and Other We provide brokerage and other services for real estate transactions, such as sales or loan originations and refinancing.
Our broad array of services includes (ordered alphabetically): ● Debt advisory ● Loan sales ● Equity advisory (Equity and funds placement, M&A and corporate advisory) ● Loan servicing ● Investment sales and advisory ● Value and risk advisory Investment Sales, Debt/Equity Advisory and Other We provide brokerage and other services for real estate transactions, such as sales or loan originations and refinancing.
Globally Integrated Business Model & "One JLL" Through the combination of a wide range of high-quality, complementary services we deliver at consistently high service levels globally, we develop and implement real estate strategies that meet the increasingly complex and far-reaching needs of our clients.
Globally Integrated Business Model and "One JLL" Through the combination of a wide range of high-quality, complementary services, we develop and implement real estate strategies that meet the increasingly complex and far-reaching needs of our clients.
Our growth strategy and strategic vision places a central focus on diversity, equity and inclusion, ensuring we attract and retain a truly diverse, inclusive and talented global workforce, committed to inspiring each other and delivering outstanding results for our clients. 15 Table of Contents SUSTAINING OUR ENTERPRISE: A BUSINESS MODEL THAT CONSIDERS ALL ASPECTS OF STAKEHOLDER VALUE As referenced above, the built environment is estimated to account for over one-third of global final energy consumption and nearly 40% of total direct and indirect CO 2 emissions, meaning JLL can have a significant impact through the work we do with our clients, as well as in our workplaces and communities.
Our growth strategy and strategic vision places a central focus on diversity, equity and inclusion, ensuring we attract and retain a truly diverse, inclusive and talented global workforce. 15 Table of Conte nts SUSTAINING OUR ENTERPRISE: A BUSINESS MODEL THAT CONSIDERS ALL ASPECTS OF STAKEHOLDER VALUE As referenced above, the built environment is estimated to account for over one-third of global final energy consumption and nearly 40% of total direct and indirect CO 2 emissions, meaning JLL can have a significant impact through the work we do with our clients, as well as efforts in our own workplaces and communities.
For the year ended December 31, 2022, we provided capital markets services for approximately $286 billion of client transactions. Valuation Advisory Our Valuation Advisory professionals provide several services, including valuation, secured lending advisory, transaction support, data and analytics, development advisory, asset and infrastructure advisory, business valuation, property tax advisory, and restructuring.
For the year ended December 31, 2023, we provided capital markets services for approximately $157 billion of client transactions. Value and Risk Advisory Our Value and Risk Advisory professionals provide several services, including valuation, secured lending advisory, transaction support, data and analytics, development advisory, asset and infrastructure advisory, business valuation, property tax advisory, and restructuring.
OUR HISTORY We began to establish our network of services across the globe through the 1999 merger of the Jones Lang Wootton companies ("JLW," founded in England in 1783) with LaSalle Partners Incorporated ("LaSalle Partners," founded in the United States in 1968 and incorporated in 1997).
OUR HISTORY We began to establish our global services platform through the 1999 merger of the Jones Lang Wootton companies ("JLW," founded in England in 1783) with LaSalle Partners Incorporated ("LaSalle Partners," founded in the United States in 1968 and incorporated in 1997).
Beyond: Our Strategic Vision for Long-Term Sustainable and Profitable Growth Clients Since initiating our Beyond strategic plan in 2017, we successfully completed a multi-year transformation program building fully integrated global organizational structures across our business lines and functions.
Beyond: Our Strategic Vision for Long-Term Sustainable and Profitable Growth Since initiating our Beyond strategic plan in 2017, we successfully completed a multi-year transformation program building a fully integrated global organizational and enabling our "One JLL" philosophy across our business lines and functions.
In addition to our trademarks and trade names, we also have proprietary technologies for the provision of complex services and analysis. We also have a number of pending patent applications in the U.S. to further enable us to provide high levels of client service and operational excellence.
Our LaSalle and LaSalle Investment Management marks will expire in 2026. In addition to our trademarks and trade names, we also have proprietary technologies for the provision of complex services and analysis. We also have a number of pending patent applications in the U.S. to further enable us to provide high levels of client service and operational excellence.
As a leading provider of commercial property sales, debt and valuation advisory services, we combine the unique knowledge of our people with the power of collective insight and technology made possible by our fully integrated capital markets platform.
As a leading provider of property sales, debt, value and risk advisory services, and hedging and derivatives, we combine the unique knowledge of our people with the power of collective insight and technology made possible by our fully-integrated capital markets platform.
The SEC maintains www.sec.gov , containing annual, quarterly and current reports, proxy statements and other information we file electronically with the SEC. 25 Table of Contents
The SEC maintains www.sec.gov , containing annual, quarterly and current reports, proxy statements and other information we file electronically with the SEC.
We have grown our business by expanding our client base and the range of our services and products, both organically and through a series of mergers and acquisitions. Our extensive global platform and in-depth knowledge of local real estate markets enable us to serve as a single-source provider of solutions for the full spectrum of our clients' real estate needs.
We have grown our business by expanding our client base as well as service and product offerings, both organically and through a series of mergers and acquisitions. Our extensive global reach and in-depth knowledge of local real estate markets enable us to serve as a single-source provider of solutions for the full spectrum of our clients' real estate needs.
In 2022, we completed approximately 18,200 agency leasing transactions representing 380 million square feet of space. Tenant Representation establishes strategic alliances with occupier clients to define space requirements, identify suitable alternatives, recommend appropriate occupancy solutions, and negotiate lease and ownership terms with landlords.
In 2023, we completed approximately 16,500 agency leasing transactions representing 303 million square feet of space. Tenant Representation establishes strategic alliances with occupier clients to define space requirements, identify suitable alternatives, recommend appropriate occupancy solutions, and negotiate lease and ownership terms with landlords.
Each area is supported by targets and delivered by global business lines and corporate functions. • Climate action for sustainable real estate: We take urgent climate action that accelerates the transition to net zero, enhances performance, mitigates risks and helps shape a better world. • Healthy spaces for all people: We create safe and healthy spaces that promote productivity, well-being and sustainability. • Inclusive places for thriving communities: We provide fair and inclusive places that create positive social impact and equal opportunities.
Each area is supported by targets and delivered by global business lines and corporate functions. • Climate action for sustainable real estate: We support action that accelerates the transition to net zero, enhances performance and mitigates risks. • Healthy spaces for all people: We create safe and healthy spaces that promote productivity, well-being and sustainability. • Inclusive places for thriving communities: We provide fair and inclusive places that support equal opportunities and thriving communities.
Four principles underpin our program and demonstrate how we will deliver a positive impact for our stakeholders and lead our sector on sustainability. 1. Being a responsible business: Being a responsible business is central to our values and everything we do. Leading by example gives us the credibility to talk to our clients and advance industry action on sustainability. 2.
Four principles underpin our program and demonstrate how we deliver a positive impact for our stakeholders and lead our sector on sustainability. 1. Being a responsible business and leading by example, giving us the credibility to talk to our clients and advance industry action on sustainability 2.
As previously noted, we have been named to Ethisphere Institute’s list of the World's Most Ethical Companies™ every year since 2008 and, in 2022, we received an award for "Best Compliance and Ethics Program" by Corporate Secretary magazine. Our Whistleblower and Non-Retaliation Policy and our Human Rights Policy also support our values and our commitment to ethical business practices.
As previously noted, we have also earned Ethisphere's World's Most Ethical Companies ® recognition every year since 2008 and, in 2022, we received an award for "Best Compliance and Ethics Program" by Corporate Secretary magazine. Our Whistleblower and Non-Retaliation Policy and our Human Rights Policy also support our values and our commitment to ethical business practices.
We shape the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities.
Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY SM by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions.
Our involvement helps our clients reduce real estate costs, minimize occupancy risk, improve occupancy control and flexibility, and create more productive office environments. In 2022, we completed approximately 24,400 tenant representation transactions representing 650 million square feet of space.
Our involvement helps our clients reduce real estate costs, minimize occupancy risk, improve occupancy control and flexibility, and create more productive office environments. In 2023, we completed approximately 21,600 tenant representation transactions representing 539 million square feet of space.
Occupational Safety and Health Administration ("OSHA") industry average accident rates for our industry (NAICS Code 531: Real Estate). • Lost Time Incident Rat e was 0.23 (OSHA industry average was 0.70): 12-month average of OSHA recordable illness and injuries per 100 JLL employees that resulted in days away from work. • Total Recordable Incident Rate was 0.49 (OSHA industry average was 1.8): 12-month average of OSHA recordable illness and injuries per 100 JLL employees. • Days Away, Restricted Duty and Transfer was 0.27 (OSHA industry average was 1.00): 12-month average of OSHA recordable illness and injuries per 100 full-time employees that resulted in days away from work or restricted duties. • There were zero JLL employee workplace fatalities reported in 2022.
Occupational Safety and Health Administration ("OSHA") industry average accident rates for our industry (NAICS Code 531: Real Estate). • Lost Time Incident Rat e was 0.22 (OSHA industry average was 1.4): 12-month average of recordable illness and injuries per 100 JLL employees and JLL contractors that resulted in days away from work. • Total Recordable Incident Rate was 0.47 (OSHA industry average was 2.1): 12-month average of recordable illness and injuries per 100 JLL employees and JLL contractors. • Days Away, Restricted Duty and Transfer was 0.29 (OSHA industry average was 1.1): 12-month average of recordable illness and injuries per 100 full-time employees and JLL contractors that resulted in days away from work or restricted duties. • There were zero JLL employee workplace fatalities reported in 2023.
We also face competition from companies who may not traditionally be considered real estate service providers, including institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms, technology firms, software-as-a-service companies, firms providing co-working space, firms providing outsourcing services of various types (including technology, food service and building products) and companies that self-perform their real estate services with in-house capabilities.
Increasingly, we also see companies who may not traditionally be considered real estate service providers, including investment banking firms, investment managers, accounting firms, technology firms, software-as-a-service companies, firms providing co-working space, firms providing outsourcing services of various types (including technology, food service and building products) and companies that self-perform their real estate services with in-house capabilities, entering the market.
As examples, we were named: • A member of the Bloomberg Gender-Equality Index, for the fourth consecutive year • An Energy Star Sustained Excellence Award recipient, by the U.S.
As examples, we were named: • A member of the Bloomberg Gender-Equality Index, every year since 2020 • An Energy Star Sustained Excellence Award recipient, by the U.S.
Our revenue was $20.9 billion and fee revenue was $8.3 billion for 2022, earned geographically as follows: Note: Greater China is defined as China, Hong Kong, Macau and Taiwan. 5 Table of Contents Our five segments, and the services we provide within them, include: 1.
Our revenue was $20.8 billion and fee revenue was $7.4 billion for 2023, earned geographically as follows: Note: Greater China is defined as China, Hong Kong, Macau and Taiwan. 5 Table of Conte nts Our five segments, and the services we provide within them, include: 1.
Our global survey received over 11,500 responses in 2022 and showed our culture continued to be in the 95th percentile when compared against the all-industry scores and exceeded the 2021 highest average scores for Real Estate & Facilities Management organizations.
Our global survey received over 10,000 responses in 2023 and showed our culture continued to be in the 95th percentile when compared against the all-industry scores, and significantly exceeded the 2023 average scores for Real Estate & Facilities Management organizations.
With a comprehensive portfolio of purpose-built solutions, unparalleled industry expertise and leading-edge, venture-backed companies, JLL Technologies enables organizations to achieve exceptional building performance, accelerate the path to net zero and optimize spaces for the future of work.
Technology is core to our growth strategy as reflected in our significant investments in JLL Technologies. With a comprehensive portfolio of purpose-built solutions, unparalleled industry expertise and leading-edge, venture-backed companies, JLL Technologies enables organizations to achieve exceptional building performance, accelerate the path to net zero and optimize spaces for the future of work.
INTELLECTUAL PROPERTY We regard our technology and other intellectual property, including our brands, as a critical part of our business. We hold various trademarks, trade dress and trade names and rely on a combination of patent, copyright, trademark, service mark and trade secret laws, as well as contractual restrictions to establish and protect our proprietary rights.
We hold various trademarks, trade dress and trade names and rely on a combination of patent, copyright, trademark, service mark and trade secret laws, as well as contractual restrictions to establish and protect our proprietary rights.
Our trademark registrations have to be renewed every ten years, which we expect to continue to renew, as necessary. Based on our most recent trademark registrations, the JLL mark would expire in 2024 and the Design (Three Circles) mark would expire in 2031. Our LaSalle and LaSalle Investment Management marks will expire in 2026.
Our trademark registrations have to be renewed every ten years, which we expect to continue to renew, as necessary. Based on our most recent trademark registrations, the JLL mark is set to expire in 2024 and we expect to renew the JLL mark during the course of 2024. The JLL Design (Three Circles) mark will expire in 2031.
The range of investment solutions are offered either through commingled or single investor strategies and include private and public equity investments and real estate debt strategies structured as private or public open-ended funds or private closed-end funds (commingled funds), separate accounts, joint ventures, or co-investments.
The range of investment solutions are offered either through commingled or single investor strategies and include private and public equity investments and real estate debt strategies structured as private or public open-ended funds or private closed-end funds (commingled funds), separate accounts, joint ventures or co-investments. LaSalle's assets under management ("AUM") were $73.9 billion as of December 31, 2023.
We generally report these investments at fair value and include fair value adjustments in our Consolidated Statements of Comprehensive Income within Equity earnings. As of December 31, 2022, the fair value of such investments was $480.4 million. Equity earnings for 2022 were $46.6 million. 9 Table of Contents 5.
We generally report these investments at fair value and include fair value adjustments in our Consolidated Statements of Comprehensive Income within Equity earnings. As of December 31, 2023, the fair value of such investments was $397.6 million. 9 Table of Conte nts 5.
It has served over 10,000 employees worldwide with 10 different programs including partnerships with Harvard, Stanford, Cambridge University, IMD Business School and many other prestigious partners. As our business has evolved, so too have our broader learning and development platform and products.
Real Leadership is an end-to-end platform that helps our employees grow their leadership skills from frontline to executive. It has served over 10,000 employees worldwide with 10 different programs including partnerships with Harvard, Stanford, Cambridge University, IMD Business School and many other prestigious partners. As our business has evolved, so too have our broader learning and development platform and products.
Our purpose guides our strategic growth vision and informs our response to the long-term macro trends which maintain prevalence in the real estate industry at all points in the economic cycle, remaining relevant during and since the COVID-19 pandemic and through the global economic downturn which began in early 2022. These trends and our strategic framework are summarized below.
Our purpose guides our strategic growth vision and informs our response to the long-term macro trends which maintain prevalence in the real estate industry at all points in the economic cycle. These trends and our strategic framework are summarized below.
As we operate in a service industry, the integrity our brand represents is one of our most valuable assets. Since 2008 we have continuously held Ethics Inside™ certification from the Ethisphere Institute, a leading organization dedicated to best practices in ethics, compliance, corporate governance and citizenship.
As we operate in a service industry, the integrity our brand represents is one of our most valuable assets. In 2023, we received Compliance Leader Verification from Ethisphere, a leading organization dedicated to advancing best practices in ethics, compliance, corporate governance and citizenship.
On the Investor Relations page on our website, we make available our Annual Report on Form 10-K, our Proxy Statement on Schedule14A , our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
We intend to post on our website any amendment or waiver of the Code of Ethics with respect to a member of our Board or any of the executive officers named in our proxy statement. 25 Table of Conte nts On the Investor Relations page on our website, we make available our Annual Report on Form 10-K, our Proxy Statement on Schedule14A , our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Components of Our Integrated Reporting. This Annual Report on Form 10-K focuses on our business strategy and our financial performance, including an attempt to illustrate how being a sustainable enterprise is integral to our success. Our citizenship and sustainability efforts for ourselves and our clients are reflected primarily in our annual Global Sustainability Report, available on our website.
Components of Our Integrated Reporting. This Annual Report on Form 10-K focuses on our business strategy and our financial performance, including an attempt to illustrate how being a sustainable enterprise is integral to our success.
Supporting this goal, we are an active strategic partner of the World Economic Forum, playing a key role in its Real Estate and Investment industry groups and its Alliance of CEO Climate Leaders among other areas of engagement.
Supporting this goal, we are a long-standing and active strategic partner of the World Economic Forum, playing a key role in its Real Estate and Investment industry groups and its Alliance of CEO Climate Leaders, among other areas of engagement. Technology JLL embraces technology to deliver value for our clients, people and shareholders.
We continue to strengthen and expand awareness of our brand beyond the traditional real estate sector, with a focused goal in our Beyond strategic vision to reach more CEOs and other senior decision makers.
Refer to the Distinguishing Attributes and Competitive Differentiators section below for additional awards and recognition during the past year. We continue to strengthen and expand awareness of our brand beyond the traditional real estate sector, with a focused goal in our Beyond strategic vision to reach more CEOs and other senior decision makers.
We are dedicated to helping our people SEE A BRIGHTER WAY by enabling them to explore new opportunities, build expertise, create long-term careers, and draw inspiration through working with talented colleagues and clients. Our commitment to promoting and achieving true diversity and inclusion is exemplified by achieving 25% female representation amongst our top 100 leaders.
We are dedicated to helping our people SEE A BRIGHTER WAY by enabling them to explore new opportunities, build expertise, create long-term careers, and draw inspiration through working with talented colleagues and clients.
These are areas in which JLL holds deep expertise and sector-leading specialist experience and resources. Across different industries we are positioned to provide highly adaptive and relevant solutions that promote organizational culture and prioritize health and well-being, flexible working models and technology enablement.
Across different industries, we are positioned to provide highly adaptive and relevant solutions that promote organizational culture and prioritize health and well-being, flexible working models and technology enablement.
Guided by our Beyond strategy, we are making continued investments in advanced client relationship management processes and tools, ensuring we can quickly assemble the best multidisciplinary teams and expertise tailored to meet each client’s requirements. 13 Table of Contents Our “One JLL” philosophy formalizes how our teams engage with each other and enables us to deliver the best capabilities to our clients.
Guided by our Beyond strategy, we are making continued investments in advanced client relationship management processes and tools, ensuring we can quickly assemble the best multidisciplinary teams and expertise tailored to meet each client's requirements.
At present, we are already seeing further growth in the strong and sustained trend for organizations to outsource real estate services while increasingly seeking strategic advice on reimagining their workspaces and workstyles to reinforce culture, attract talent and drive performance.
We see further growth in the strong and sustained trend for organizations to outsource real estate services as our clients increasingly seek strategic advice on reimagining their workspaces and workstyles to reinforce culture, attract talent and drive cost efficiencies.
JLL Technologies is a global leader in proptech, expanding and refining our technology capabilities to deliver significant competitive advantages and value for our company and our clients, across all business lines.
JLL Technologies is a global leader in proptech, expanding and refining our technology capabilities to deliver significant competitive advantages and value for our company and our clients, across all business lines. The technology and data solutions we provide include multiple cloud-based software products and AI-powered platforms.
By focusing their own resources on core competencies and partnering with dedicated service providers like JLL to manage real estate strategy and activities, organizations are better positioned to advance their goals of financial and operational performance, talent attraction, customer experience, employee productivity and environmental sustainability. 11 Table of Contents In corporate boardrooms around the world, the pandemic has significantly enhanced the growing focus on reimagining workplaces and concepts for the future of work.
By focusing their own resources on core competencies and partnering with dedicated service providers like JLL to manage real estate strategy and activities, organizations are better positioned to advance their goals of financial and operational performance, talent attraction, customer experience, employee productivity and environmental sustainability.
We unveiled our global brand idea SEE A BRIGHTER WAY in November 2022 which embodies our commitment to bring optimism, innovative ideas and unmatched intelligence in everything we do for our clients. Employee Engagement Our people are united by our purpose to shape the future of real estate for a better world.
In November 2022, we unveiled our global brand idea, SEE A BRIGHTER WAY, which embodies our commitment to bring optimism, innovative ideas and unmatched intelligence in everything we do for our clients.
Each of these trends has a multi-year lifespan, and while the COVID-19 pandemic and subsequent economic volatility have acted to slow some and accelerate others, we expect all five trends to maintain their long-term trajectory and relevance over the next decade. These macro trends are: 1 Prospects Report - United Nations Department of Economics and Social Affairs, May 2018.
Each of these trends has a multi-year lifespan, and while the COVID-19 pandemic and subsequent economic volatility has slowed some and accelerated others, we expect all five trends to maintain their long-term trajectory and relevance over the next decade.
Our governance and remuneration practices are reported primarily in the Proxy Statement for our Annual Meeting of Shareholders. The mechanisms we use to make our clients comfortable with respect to our transparency and fair dealing are summarized in our Ethics Everywhere Annual Report.
The mechanisms we use to make our clients comfortable with respect to our transparency and fair dealing are summarized in our Ethics Everywhere Report.
A key source of liquidity is our unsecured credit facility (the "Facility") provided by an international syndicate of banks, which as of December 31, 2022 had a maximum borrowing capacity of $3.35 billion and a maturity date in April 2026.
As of December 31, 2023, corporate liquidity was $3.1 billion, the sum of cash and cash equivalents and the available capacity on our unsecured credit facility (the "Facility"). The Facility is provided by an international syndicate of banks, which, as of December 31, 2023, had a maximum borrowing capacity of $3.30 billion and a maturity date in November 2028.
LaSalle's assets under management ("AUM") of $79.1 billion, as of December 31, 2022, by geographic distribution and fund type is detailed in the following graphics ($ in billions).
Under the new methodology, AUM was $89.0 billion as of December 31, 2023. AUM by geographic distribution and fund type under the updated definition as of December 31, 2023 is detailed in the following graphics ($ in billions).
As a result, we are now even better positioned to provide seamless and highly consistent services to our clients across the world, as well as smoothly and rapidly deploy innovations, best practices and new technologies. We continue to enhance our comprehensive service offering to create real value for our clients.
As a result, we are now even better positioned to provide seamless and highly consistent services to our clients across the world, as well as smoothly and rapidly deploy innovations, best practices and new technologies. Clients Our “One JLL” philosophy formalizes how our teams engage with each other and enables us to deliver the best capabilities to our clients.
This strategy ensures JLL is positioned as an employer of choice for top talent, achieving and sustaining a diverse, inclusive and collaborative culture that strongly appeals to our people and our clients alike. Our people are committed to the core values of teamwork, ethics and excellence. These values are the foundation of our organization.
This promise ensures JLL is positioned as an employer of choice for top talent, achieving and sustaining a diverse, inclusive and collaborative culture that strongly appeals to our people and our clients alike. Sustainability Our sustainability program is rooted in our purpose to shape the future of real estate for a better world.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur independent registered public accounting firm has issued an unqualified opinion on the effectiveness of our internal control over financial reporting. However, there can be no assurance we will continue to receive an unqualified opinion in future years, particularly since standards continue to evolve and are not necessarily being applied consistently from one independent registered public accounting firm to another.
Biggest changeWhile our management has concluded that our internal control over financial reporting as required for purposes of this Annual Report on Form 10-K was effective as of December 31, 2023, and our independent registered public accounting firm has issued an unqualified opinion on the effectiveness of our internal control over financial reporting, there can be no assurance our internal controls will be effective or we will continue to receive an unqualified opinion in future years.
In addition, these third parties face their own technology, operating, business and economic risks, and any significant failures by them, including the improper use or disclosure of our confidential client, employee or company information, could cause damage to our reputation and harm to our business.
In addition, these third parties face their own technology, cybersecurity, operating, business and economic risks, and any significant failures by them, including the improper use or disclosure of our confidential client, employee or company information, could cause damage to our reputation and harm to our business.
If any of our 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.
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.
We continue to use a Vendor Code of Conduct, which is published in multiple languages on our website, intended 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.
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, while we attempt to mitigate the impact of inflation in our client agreements, some client agreements may be entered into on a fixed or guaranteed maximum price basis where our ability to make price adjustments to take into account inflation may be limited.
While we attempt to mitigate the impact of inflation in our client agreements, some client agreements may be entered into on a fixed or guaranteed maximum price basis where our ability to make price adjustments to take into account inflation may be limited.
Any inability, or perceived inability, to adequately address data privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us or company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business. 28 Table of Contents CONCENTRATIONS OF BUSINESS WITH CORPORATE AND INVESTOR CLIENTS CAUSE INCREASED CREDIT RISK AND GREATER IMPACT FROM THE LOSS OF CERTAIN CLIENTS AND INCREASED RISKS FROM HIGHER LIMITATIONS OF LIABILITY IN CONTRACTS.
Any inability, or perceived inability, to adequately address data privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us or company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business. 28 Table of Conte nts CONCENTRATIONS OF BUSINESS WITH CORPORATE AND INVESTOR CLIENTS CAUSE INCREASED CREDIT RISK AND GREATER IMPACT FROM THE LOSS OF CERTAIN CLIENTS AND INCREASED RISKS FROM HIGHER LIMITATIONS OF LIABILITY IN CONTRACTS.
In addition, the fund or entity may be negatively impacted by risks they are exposed to (some of which we are also exposed to and are discussed elsewhere in this Item). • We will have fluctuations in earnings and cash flow as we recognize gains or losses, and receive cash upon the disposition of investments, the timing of which may be geared toward the benefit of our clients. 32 Table of Contents • We hold many of our investments in subsidiaries with limited liability; however, in certain circumstances, it is possible this limited exposure may be expanded in the future based on, among other things, changes in applicable laws.
In addition, the fund or entity may be negatively impacted by risks to which they are exposed (some of which we are also exposed to and are discussed elsewhere in this Item). • We will have fluctuations in earnings and cash flow as we recognize gains or losses, and receive cash upon the disposition of investments, the timing of which may be geared toward the benefit of our clients. • We hold many of our investments in subsidiaries with limited liability; however, in certain circumstances, it is possible this limited exposure may be expanded in the future based on, among other things, changes in applicable laws.
We may incur substantial costs and suffer other negative consequences such as liability, 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.
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.
Although we operate globally, we report our results in U.S. dollars, and thus our reported results are impacted by the strengthening or weakening of currencies against the U.S. dollar. Our revenue from outside of the United States approximated 41% of our total revenue for 2022.
Although we operate globally, we report our results in U.S. dollars, and thus our reported results are impacted by the strengthening or weakening of currencies against the U.S. dollar. Our revenue from outside of the United States approximated 41% of our total revenue for 2023.
Weaknesses in the markets in which they themselves compete may lead to additional pricing pressure from clients as they themselves came under financial pressure. THE SEASONALITY IN PARTS OF OUR BUSINESS EXPOSES US TO RISKS.
Weaknesses in the markets in which they themselves compete may lead to additional pricing pressure from clients as they themselves come under financial pressure. THE SEASONALITY IN PARTS OF OUR BUSINESS EXPOSES US TO RISKS.
In addition, as our operations are global, we face challenges in effectively gaining a tax benefit for costs incurred in one country that benefit our operations in other countries. 37 Table of Contents Changes in tax legislation or tax rates may occur in one or more jurisdictions in which we operate that may materially impact the cost of operating our business.
In addition, as our operations are global, we face challenges in effectively gaining a tax benefit for costs incurred in one country that benefit our operations in other countries. Changes in tax legislation or tax rates may occur in one or more jurisdictions in which we operate that may materially impact the cost of operating our business.
In Europe, the EU’s Environmental Liability Directive establishes a comprehensive liability standard, but individual EU countries may have stricter regulations. The risks may not be limited to fines and the costs of remediation. In Brazil, employees risk jail sentences as well as fines in connection with pollution incidents.
In Europe, the European Union's ("EU") Environmental Liability Directive establishes a comprehensive liability standard, but individual EU countries may have stricter regulations. The risks may not be limited to fines and the costs of remediation. In Brazil, employees risk jail sentences as well as fines in connection with pollution incidents.
Future legislation could require specific performance levels for building operations resulting in non- 34 Table of Contents compliant buildings becoming obsolete. This could materially affect investments in properties we have made on behalf of clients, including those in which we may have co-invested.
Future legislation could require specific performance levels for building operations resulting in non-compliant buildings becoming obsolete. This could materially affect investments in properties we have made on behalf of clients, including those in which we may have co-invested.
Growth in our property management and integrated facilities management businesses and other services related to the growth of outsourcing of corporate real estate services has, to an extent, lessened the seasonality in our revenue and profits during the past several years. WE ARE SUBJECT TO RISKS INHERENT IN MAKING ACQUISITIONS AND ENTERING INTO JOINT VENTURES.
Growth in our property management and integrated facilities management businesses and other services related to the growth of outsourcing of corporate real estate services has, to an extent, lessened the seasonality in our revenue and profits during the past several years. 32 Table of Conte nts WE ARE SUBJECT TO RISKS INHERENT IN MAKING ACQUISITIONS AND ENTERING INTO JOINT VENTURES.
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. 33 Table of Contents WE ARE SUBJECT TO COMPLEX AND EVOLVING LICENSING AND REGULATORY REQUIREMENTS.
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. WE ARE SUBJECT TO COMPLEX AND EVOLVING LICENSING AND REGULATORY REQUIREMENTS.
The integration of companies is a complex and time-consuming process that could significantly disrupt the businesses of JLL and the acquired company such as: diversion of management attention, failure to identify certain liabilities and issues during the due diligence process, and the inability to retain personnel and clients of the acquired business.
The integration of companies is a complex and time-consuming process that could significantly disrupt the businesses of JLL and the acquired company such as: diversion of management attention, failure to identify certain liabilities and issues during the due diligence process, including historical instances of misconduct, and the inability to retain personnel and clients of the acquired business.
DISRUPTIONS IN COMPUTER SYSTEMS, OR PRIVACY BREACHES OR CYBERSECURITY ISSUES, COULD IMPACT OUR ABILITY TO SERVICE OUR CUSTOMERS AND ADVERSELY AFFECT OUR BUSINESS, DAMAGE OUR REPUTATION AND EXPOSE US TO FINANCIAL RISK. Our business is highly dependent on our ability to collect, use, store and manage organizational and client data.
DISRUPTIONS IN COMPUTER SYSTEMS, PRIVACY BREACHES OR CYBERSECURITY ISSUES, OR FAILURES TO EXECUTE OUR ENTERPRISE-WIDE DATA STRATEGY, COULD IMPACT OUR ABILITY TO SERVICE OUR CUSTOMERS AND ADVERSELY AFFECT OUR BUSINESS, DAMAGE OUR REPUTATION AND EXPOSE US TO FINANCIAL RISK. Our business is highly dependent on our ability to collect, use, store and manage organizational and client data.
Sponsoring funds into which retail investors can invest, such as the investment funds sponsored by LaSalle, may increase this risk. Legal, Compliance and Regulatory Risk Factors Legal and compliance risk relates to risks arising from the government and regulatory environment and action, and legal proceedings and compliance with integrity policies and procedures.
Sponsoring funds into which retail investors can invest, such as the investment funds sponsored by LaSalle, may increase this risk. 33 Table of Conte nts Legal, Compliance and Regulatory Risk Factors Legal and compliance risk relates to risks arising from the government and regulatory environment and action, and legal proceedings and compliance with integrity policies and procedures.
Adverse or unanticipated tax consequences to the funds can negatively impact fund performance, incentive fees and the value of co-investments we have made. We are uncertain as to the ultimate results of these potential changes or what their effects will be on our business. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Adverse or unanticipated tax consequences to the funds can negatively impact fund performance, incentive fees and the value of co-investments we have made. We are uncertain as to the ultimate results of these potential changes or what their effects will be on our business.
An important part 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-stage proptech companies. As of December 31, 2022, we have unfunded commitment obligations of up to $349.1 million to fund future investments across our investment strategies.
An important part 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, 2023, we have unfunded commitment obligations of up to $354.6 million to fund future investments across our investment strategies.
Recently, we have seen increased supply-chain pressures which may impact our ability to deliver goods and services to our clients and increase the resultant costs in doing so. In 2022, we observed an increased potential for a global economic slowdown or recession, partly driven by increasing interest rates to tackle inflation, which presents an increased risk to our performance.
Recently, we have seen increased supply-chain pressures which may impact our ability to deliver goods and services to our clients and increase the resultant costs in doing so. In 2022 and 2023, we observed the effects of a global economic slowdown or recession, partly driven by increasing interest rates to tackle inflation.
Investing for the above reasons poses the following risks: • We may lose some or all the capital we invest if the investments underperform. ◦ For real estate investments, underperformance may result from many factors outside of our control, including the general reduction in asset values within a particular geography or asset class. ◦ For proptech investments, the concepts and strategic plans underpinning the value of the fund or entity may not be realized or could be poorly executed.
Investing in any of these types of situations exposes us to several risks: • We may lose some or all the capital we invest if the investments underperform. ◦ For real estate investments, underperformance may result from many factors outside of our control, including the general reduction in asset values within a particular geography or asset class. ◦ For proptech investments, the concepts and strategic plans underpinning the value of the fund or entity may not be realized or could be poorly executed.
The possibility that we are unable to identify, attract and retain sufficient talent in key positions, may prevent us from achieving our strategic vision, disrupt our business, impact revenues, increase costs, damage staff morale, and affect the quality and continuity of client service.
The possibility that we are unable to identify, attract, develop and retain sufficient talent in key positions, and maintain a strong pipeline of ready-now successors for important management roles, may prevent us from achieving our strategic vision, disrupt our business, impact revenues, increase costs, damage staff morale, and affect the quality and continuity of client service.
We face significant competition from other real estate service providers, institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms, technology firms, consulting firms, co-locating providers, temporary space providers and firms providing outsourcing of various types (including technology and building products), any of which may be a global, regional or local firm, and from firms that self-perform their real estate services with in-house capabilities.
We face significant competition from other real estate service providers, institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms, technology firms, consulting firms, co-locating providers, temporary space providers and firms providing outsourcing of various types (including technology and building products), any of which may be a global, regional or local firm, and from firms that self-perform their real estate services with in-house capabilities. 31 Table of Conte nts Many of our competitors are local or regional firms, which may be substantially smaller in size than us but hold a larger share of a specific local market.
Our success depends on the continued availability of skilled personnel with industry experience and knowledge, and our ability to recruit, attract and retain senior management and other key employees, including through the implementation of diversity, equity and inclusion initiatives, and the succession of senior management.
Our success depends on the continued availability of skilled personnel with industry experience and 26 Table of Conte nts knowledge, and our ability to recruit, attract and retain senior management and other key employees.
In September 2020, China announced a commitment to be carbon neutral by 2060. This follows environmental protection laws passed in 2014 designed to limit contaminated water, air and soil linked to economic growth and public health. New environmental legislation and regulations may require us to make material changes to our operations, which could adversely affect operating results.
In September 2020, China announced a commitment to be carbon neutral by 2060. This follows environmental protection laws passed in 2014 designed to limit contaminated water, air and soil linked to economic growth and public health.
Regardless of the ultimate merits of these claims, the allegations themselves can cause reputational damage and can be expensive to defend in terms of counsel fees and otherwise. 29 Table of Contents Strategic Risk Factors Strategic risk relates to JLL’s future business plans and strategies, including the risks associated with: the global macro-environment in which we operate; mergers and acquisitions and restructuring activities; intellectual property; and other risks, including the demand for our services, competitive threats, technology and innovation, and public policy.
Strategic Risk Factors Strategic risk relates to JLL’s future business plans and strategies, including the risks associated with: the global macro-environment in which we operate; mergers and acquisitions and restructuring activities; intellectual property; and other risks, including the demand for our services, competitive threats, technology and innovation, and public policy.
As a result, we have had longstanding policies and procedures to restrict or prohibit sales of our services into countries subject to embargoes and sanctions, or to countries designated as state sponsors of terrorism, such as Iran.
U.S. laws and regulations govern the provision of products and services to, and of other trade-related activities involving, certain targeted countries and parties. As a result, we have had longstanding policies and procedures to restrict or prohibit sales of our services into countries subject to embargoes and sanctions, or to countries designated as state sponsors of terrorism, such as Iran.
We may have infringement claims asserted against us or against our clients. These claims may harm our reputation, cost us money and prevent us from offering some services. POLITICAL AND ECONOMIC INSTABILITY COULD ADVERSELY AFFECT OUR BUSINESS. Global events could affect our business.
We may have infringement claims asserted against us or against our clients. These claims may harm our reputation, cost us money and prevent us from offering some services. GEOPOLITICAL VOLATILITY COULD ADVERSELY AFFECT OUR BUSINESS. We provide services in over 80 countries with varying degrees of political and economic stability and transparency.
In addition, 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.
In addition, 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.
To remain competitive with well-capitalized financial services firms, we also may make merchant banking investments for which we may 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.
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. Certain service lines we operate have the acquisition, development, management and sale of real estate and proptech investments as part of their strategy.
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 co-investment equity gains or losses, each of which can vary from period to period. 31 Table of Contents The seasonality of these parts of our business makes it difficult to determine during the course of the year whether planned results will be achieved, and thus to budget, and to adjust to changes in expectations.
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 co-investment equity gains or losses, each of which can vary from period to period.
Some may be providing outsourced facility management services to sell clients products that we do not offer. In some sectors of our business, particularly Work Dynamics, some of our competitors may have greater financial, technical and marketing resources, larger customer bases, and more established relationships with their customers and suppliers than we have.
In some sectors of our business, some of our competitors may have greater financial, technical and marketing resources, larger customer bases, and more established relationships with their customers and suppliers than we have.
We may face costs or liabilities under these laws as a result of our role as an on-site property manager or a manager of construction projects.
We may face liability with respect to environmental issues occurring at properties we manage or occupy, or in which we invest. We may face costs or liabilities under these laws as a result of our role as an on-site property manager or a manager of construction projects.
In addition to the potential negative impact on reported earnings, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of the reported results of operations. We are authorized to use currency-hedging instruments, including foreign currency forward contracts, purchased currency options and borrowings in foreign currency.
In addition to the potential negative impact on reported earnings, fluctuations in currencies 36 Table of Conte nts relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of the reported results of operations.
This may include claims with respect to conflicts of interest where we are acting, or are perceived to be acting, for two or more clients with potentially contrary interests. WE FACE RISKS RELATING TO ENVIRONMENTAL AND CLIMATE MATTERS. We may face liability with respect to environmental issues occurring at properties we manage or occupy, or in which we invest.
This may include claims with respect to conflicts of interest where we are acting, or are perceived to be acting, for two or more clients with potentially contrary interests. WE FACE RISKS RELATING TO ENVIRONMENTAL AND CLIMATE MATTERS, INCLUDING DELIVERING ON OUR 2030 AND 2040 CARBON REDUCTION COMMITMENTS AND COMPLYING WITH EVOLVING CLIMATE CHANGE DISCLOSURE REQUIREMENTS.
In recent years there have been significant political changes in several countries where we have significant operations, resulting in changes to financial, tax, tariffs, healthcare, governance, immigration and other laws that may directly affect our business and continue to evolve. 30 Table of Contents REAL ESTATE SERVICES AND INVESTMENT MANAGEMENT MARKETS ARE HIGHLY COMPETITIVE, WHICH COULD MAKE IT DIFFICULT FOR US TO MAINTAIN OUR MARKET SHARE, GROWTH RATE AND PROFITABILITY.
In recent years there have been significant political changes in several countries where we have significant operations, resulting in changes to financial, tax, tariffs, healthcare, governance, immigration and other laws that may directly affect our business and continue to evolve.
Avoiding regulatory pitfalls as a result of conflicting laws will continue to be a key focus as non-U.S. statutory law and court decisions create more ambiguity. The jurisdictional reach of laws may be unclear as well, such as when laws in one country purport to regulate the behavior of our subsidiaries or affiliates operating in another country.
The legal requirements of U.S. statutes may also conflict with local legal requirements in a particular country. Avoiding regulatory pitfalls as a result of conflicting laws will continue to be a key focus as non-U.S. statutory law and court decisions create more ambiguity.
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 global operations must comply with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. 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.
WE MAY NOT BE ABLE TO RETAIN OUR SENIOR MANAGEMENT, ATTRACT AND RETAIN QUALIFIED AND EXPERIENCED EMPLOYEES, AND DELIVER ON OUR DIVERSITY, EQUITY AND INCLUSION STRATEGY.
Lack of responsiveness in a timely fashion could result in negative financial impact and reputational damage. WE MAY NOT BE ABLE TO RETAIN OUR SENIOR MANAGEMENT, MAINTAIN OUR WORKFORCE CULTURE, ATTRACT, RETAIN AND DEVELOP QUALIFIED AND EXPERIENCED EMPLOYEES, AND DELIVER ON OUR DIVERSITY, EQUITY AND INCLUSION STRATEGY.
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. We have experienced various types of cyber-attack incidents which to-date have been contained and not material to us.
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.
Furthermore, the perspectives of shareholders, employees and other stakeholders regarding these standards may affect our business activities and increase disclosure requirements, which may increase our costs.
New environmental 35 Table of Conte nts legislation and regulations may require us to make material changes to our operations, which could adversely affect operating results. Furthermore, the perspectives of shareholders, employees and other stakeholders regarding these standards may affect our business activities and increase disclosure requirements, which may increase our costs.
Recent legislative changes in the United States include the 2017 Tax Cuts and Jobs Act and the 2022 Inflation Reduction Act, which have introduced limitations on business-related deductions and increased taxation of foreign earnings in the U.S., and a corporate minimum tax, all of which could increase our future tax expense.
Recent legislative changes in the United States include the 2017 Tax Cuts and Jobs Act and the 2022 Inflation Reduction Act, which have introduced limitations on business-related deductions and increased taxation of foreign earnings in the U.S., and a corporate minimum tax, all of which could increase our future tax expense. 38 Table of Conte nts In addition, the potential exists for significant legislative policy change in the taxation of multinational corporations, as has recently been the subject of the “Pillar One” and “Pillar Two” initiatives of the Organization for Economic Co-operation and Development, the European Union Anti-Tax Avoidance Directives, and legislation inspired or required by those initiatives.
With respect to our status as an approved lender for Fannie Mae, Freddie Mac and as a HUD-approved originator and issuer of Ginnie Mae securities (collectively the “Agencies”), we are required to comply with various eligibility criteria established by the Agencies, such as minimum net worth, operational liquidity and collateral requirements.
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 regimes and the possible loss resulting from noncompliance, have increased. 34 Table of Conte nts With respect to our status as an approved lender for Fannie Mae, Freddie Mac and as a HUD-approved originator and issuer of Ginnie Mae securities (collectively the “Agencies”), we are required to comply with various eligibility criteria established by the Agencies, such as minimum net worth, operational liquidity and collateral requirements.
WE MAY NOT ADEQUATELY ADAPT TO DISRUPTIVE TECHNOLOGIES, INNOVATION AND COMPETITION. Mobile technologies and online collaboration tools are transforming how business gets done. Information technology has entered a “big data” era. Within the real estate services industry, managing big data is a critical competitive differentiator and we risk being surpassed if our peers leverage big data more effectively.
WE MAY NOT ADEQUATELY ADAPT TO DISRUPTIVE TECHNOLOGIES, INNOVATION AND COMPETITION, INCLUDING ARTIFICIAL INTELLIGENCE TECHNOLOGY. Artificial intelligence (“AI”), including generative AI, mobile technologies and online collaboration tools, is revolutionizing business operations. As the industry transitions into a “big data” era, effectively managing big data and harnessing AI tools are critical for maintaining a competitive edge in real estate services.
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. Lack of responsiveness in a timely fashion could result in negative financial impact and reputational damage.
The sheer size of our company - with over 106,000 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.
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, business and results of operations and financial condition. U.S. laws and regulations govern the provision of products and services to, and of other trade-related activities involving, certain targeted countries and parties.
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, business and results of operations and financial condition.
As competition is significant for the services of such personnel, the expense of incentives and bonuses may increase and we may be unable to attract or retain such personnel to the same extent we have in the past. The challenge to find and retain sufficiently trained staff is world-wide and, as a result, increases the risk of performance for clients.
As competition is significant for the services of such personnel, corporate payroll, incentives and bonuses may increase and we may be unable to attract or retain such personnel to the same extent we have in the past. Regional and national labor policies are difficult to predict and the indirect implications of changes to them are difficult to assess.
We do not present the risks below in their order of significance, the relative likelihood we will experience a loss, or the magnitude of any such loss.
We do not present the risks below in their order of significance, the relative likelihood we will experience a loss, or the magnitude of any such loss. Certain risks also may give rise to business opportunities for us, but our discussion of risk factors in Item 1A is limited to the adverse effects the risks may have on our business.
As we outsource significant portions of our information technology functions to third-party providers, such as cloud computing, we bear the risk of having somewhat less direct control over the manner and quality of performance. Cyber threats are proliferating and advancing their ability to identify and exploit vulnerabilities, requiring continuous evaluation and improvements to our security architecture and cyber defenses.
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. Our enterprise data governance is responsible for identifying, defining and providing direction and oversight of significant data related business needs.
For example, certain emerging as well as mature countries in which we operate have experienced serious political and economic instability, such as the current geopolitical conflict involving Russia and Ukraine, that will likely continue to arise from time to time.
For example, certain emerging as well as mature countries in which we operate have experienced serious political and economic instability. Geopolitical volatility, including events such as the Russia-Ukraine conflict and the conflict in Israel and Gaza, introduces risks that could have a material adverse effect on our operations, financial performance, and the overall global economy.
There is also the risk of losing top producers who provide meaningful margin contribution. These risks increase as we continue to grow as an organization and increase the number of staff, which has expanded significantly over the past decade. We and our competitors use equity incentives and bonuses to help attract, retain and incentivize key personnel.
There is a further risk of losing talent (and intellectual property and client contacts) to competitors, particularly in the context of increased use of social media networks and transparency of employment information. These risks increase as we continue to grow as an organization and increase the number of staff, which has expanded significantly over the past decade.
Changes in legal and regulatory requirements can impact our ability to engage in business in certain jurisdictions or increase the cost of doing so. The legal requirements of U.S. statutes may also conflict with local legal requirements in a particular country.
Failure to adequately prevent, monitor, and detect such behavior could leave to significant reputational damage, regulatory consequences, and adversely impact our operations, profitability and enterprise value. Changes in legal and regulatory requirements can impact our ability to engage in business in certain jurisdictions or increase the cost of doing so.
It includes information management and data protection and security, including cyber security; supply chain and business disruption, including health and safety; and other risks, including human resources and reputation. INSUFFICIENT ORGANIZATIONAL AGILITY ACROSS OUR STRATEGY, STRUCTURE, PROCESSES, PEOPLE AND TECHNOLOGY MAY IMPACT OUR COMPANY’S SUCCESS. Our business is evolving at a rapid pace.
INSUFFICIENT ORGANIZATIONAL AGILITY ACROSS OUR STRATEGY, STRUCTURE, PROCESSES, PEOPLE AND TECHNOLOGY MAY IMPACT OUR COMPANY’S SUCCESS. 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.
If we do not (or are perceived not to) successfully implement these initiatives, our ability to recruit, attract and retain talent may be adversely impacted and shifts in perspective and expectations about social issues and priorities surrounding DEI may occur at a faster pace than we our capable of managing effectively.
If our organizational values and expectations are not clearly defined and championed by our leadership, this can lead to a lack of employee engagement, which reduces productivity and can result in costly turnover. Shifts in perspectives and expectations about social issues and priorities surrounding DEI may occur at a faster pace than we our capable of managing effectively.
WE FACE BUSINESS DISRUPTION AND RELATED RISKS RESULTING FROM HEALTH EPIDEMICS, INCLUDING THE COVID-19 PANDEMIC.
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. 27 Table of Conte nts WE FACE BUSINESS DISRUPTION AND RELATED RISKS RESULTING FROM HEALTH EPIDEMICS, INCLUDING THE COVID-19 PANDEMIC.
We are working to advance culture change through the continued implementation of diversity, equity and inclusion (“DEI”) initiatives throughout our organization.
In addition, as technology and market demands shift, there is a risk our employees’ skills may become outdated. If we fail to upskill or reskill our workforce with necessary future skills this will reduce our competitiveness and efficiency. We are working to advance culture change through the continued implementation of diversity, equity and inclusion (“DEI”) initiatives throughout our organization.
IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY ADEQUATELY OR INFRINGE UPON THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS, OUR BUSINESS COULD BE MATERIALLY IMPACTED.
Additionally, other unforeseen risks stemming from our use and development of AI tools and technology may arise in the future that could adversely affect our business, financial condition and results of operations. 30 Table of Conte nts IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY ADEQUATELY OR INFRINGE UPON THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS, OUR BUSINESS COULD BE MATERIALLY IMPACTED.
Many of our competitors are local or regional firms, which may be substantially smaller in size than us but hold a larger share of a specific local market. Some of our competitors have expanded the services they offer in an attempt to gain additional business.
Some of our competitors have expanded the services they offer in an attempt to gain additional business. Some may be providing outsourced facility management services to sell clients products that we do not offer.
As the result of such incidents, we continue to implement new controls, governance, technical protections and other procedures.
We have experienced various types of cyber-attack incidents which to-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.
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. 27 Table of Contents At present, efforts to contain and mitigate the COVID-19 pandemic are still occurring in many countries where we operate. For example, during 2022, China had various COVID-19 related restrictions in place.
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.
If we identify one or more material weaknesses in our internal control over financial reporting in the future that we cannot remediate in a timely fashion, we may be unable to receive an unqualified opinion at some time in the future from our independent registered public accounting firm.
If we identify one or more material weaknesses in our internal control over financial reporting in the future that we cannot remediate in a timely fashion, this could restrict our ability to access the capital markets, subject us to fines, penalties, investigations, harm our reputation, or otherwise cause a decline in the trading price of our stock and investor confidence.
We are also seeing increasing levels of labor regulation in emerging markets, such as China, which affect many of our businesses. Our global operations must comply with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.
The jurisdictional reach of laws may be unclear as well, such as when laws in one country purport to regulate the behavior of our subsidiaries or affiliates operating in another country. We are also seeing increasing levels of labor regulation in emerging markets, such as China, which affect many of our businesses.
Certain of these risks also may give rise to business opportunities for us, but our discussion of risk factors in Item 1A is limited to the adverse effects the risks may have on our business. Operational Risk Factors Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our businesses.
Operational Risk Factors 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 security; supply chain and business disruption; health and safety; and other risks, including human resources and reputation.
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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 of our company - with over 103,000 employees across more than 80 countries - makes change-management and responsiveness challenging.
Added
External factors such as sustainability, hybrid working and technology disruption may change our industry and business in ways that we have not yet anticipated. Insufficient proactive and reactive organizational agility to industry trends may negatively impact our operational results and cause loss of market share and negatively impact the differentiated services we provide as compared to our competitors.
Removed
A lack of ready-now or future successors for key roles also may negatively impact our business in a variety of ways. 26 Table of Contents There is a further risk of losing talent (and intellectual property and client contacts) to competitors, particularly in the context of increased use of social media networks and transparency of employment information.
Added
If we do not (or are perceived to not) successfully implement these initiatives, our ability to recruit, attract, develop and retain talent, and our ability to win and retain clients and grow revenues, may be adversely impacted and also lead to reputational damage. OUR RELIANCE ON THIRD PARTIES COULD EXPOSE US TO INCREASED ECONOMIC AND REPUTATIONAL HARM.
Removed
In the current competitive labor market, labor and recruitment costs are rising and are expected to increase further. Corporate payrolls are likely to increase as greater competition for labor and social pressure to raise salaries in line with productivity growth cause even greater wage inflation.
Added
Failure to effectively execute our enterprise-wide data strategy may lead to a loss of sensitive or critical data, costly remediation of data-related issues and possible regulatory or contractual penalties. 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.
Removed
Regional and national labor policies are difficult to predict and the indirect implications of changes to them are difficult to assess. OUR RELIANCE ON THIRD PARTIES COULD EXPOSE US TO INCREASED ECONOMIC AND REPUTATIONAL HARM.
Added
Because 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, this also may increase the risk that we are subject to cyber-attack incidents. In addition, the rapid evolution and increased adoption of artificial intelligence technologies amplify these risks.
Removed
New COVID-19 variants could continue to emerge which may result in continued significant spikes in the number of local, regional, and global cases, and uncertainties as to mitigations that local, state, and federal governments will impose, including closures, travel restrictions, vaccine and testing mandates, among other requirements.
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Regardless of the ultimate merits of these claims, the allegations themselves can cause reputational damage and can be expensive to defend in terms of counsel fees and otherwise. 29 Table of Conte nts IMPACT OF HYBRID WORK AND LOWER OFFICE REAL ESTATE OCCUPANCY RATES COULD ADVERSELY AFFECT OUR BUSINESS.
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If we are unable to provide services that address clients’ needs as well as compete with our competitors’ services, or to align our pricing, licensing and delivery models with client preferences, we could lose clients and/or fail to attract new clients, which could cause us to lose revenue and market share.
Added
Our business may be materially affected by the growing trend of hybrid work arrangements and lower office real estate occupancy rates, particularly in certain geographies. The adoption of hybrid work, where employees split their time between working remotely and working from the office, has gained significant momentum due to advancements in technology, changing employee preferences, and the COVID-19 pandemic.
Removed
These include the possibility of protectionist economic policies of the United States or foreign governments, the escalation of terrorist attacks and their increasing unpredictability, health epidemics and changing immigration policies of the United States or foreign governments. We provide services in over 80 countries with varying degrees of political and economic stability and transparency.
Added
As companies transition to hybrid work models, the demand for traditional office spaces may decrease. Over time, this could lead to lower utilization of our Work Dynamics services, including integrated facilities management, space planning, office design, and workplace strategy consulting.
Removed
Certain service lines we operate have the acquisition, development, management and sale of real estate and proptech investments as part of their strategy. Investing in any of these types of situations exposes us to several risks.
Added
We must adapt our offerings to include services aligned with the needs of clients adopting hybrid work, such as designing flexible workspaces and integrating virtual collaboration tools. Decreased demand for office spaces also could result in lower transaction volumes for property sales, acquisitions, and financing. This may lead to a decline in revenues generated from facilitating property transactions.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe have 328 corporate offices worldwide located in most major cities and metropolitan areas as follows: 132 offices in 9 countries in the Americas (including 111 in the United States), 119 offices in 26 countries in EMEA, and 77 offices in 15 countries in Asia Pacific.
Biggest changeWe have 315 corporate offices worldwide located in most major cities and metropolitan areas as follows: 118 offices in 9 countries in the Americas (including 96 in the United States), 124 offices in 24 countries in EMEA, and 73 offices in 15 countries in Asia Pacific.
ITEM 2. PROPERTIES Our principal corporate holding company headquarters are located at 200 East Randolph Drive, Chicago, Illinois, where we currently occupy over 165,000 square feet of office space under a lease that expires in May 2032. Our regional headquarters for our Americas, EMEA and Asia Pacific businesses are located in Chicago, London and Singapore, respectively.
ITEM 2. PROPERTIES Our principal corporate holding company headquarters are located at 200 East Randolph Drive, Chicago, Illinois, where we currently occupy over 138,000 square feet of office space under a lease that expires in May 2032. Our regional headquarters for our Americas, EMEA and Asia Pacific businesses are located in Chicago, London and Singapore, respectively.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the ultimate liability for these matters cannot be determined, 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 4. MINE SAFETY DISCLOSURES Not applicable. 38 Table of Contents PART II
Biggest changeAlthough the ultimate liability for these matters cannot be determined, 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 4. MINE SAFETY DISCLOSURES Not applicable. 41 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare Repurchases In February 2022, our Board of Directors authorized $1.5 billion for share repurchases, an addition to the $256.8 million remaining as of December 31, 2021 from previous authorizations. During the year ended December 31, 2022, we repurchased approximately 2,923,000 shares for $601.2 million, compared with approximately 1,452,000 shares repurchased for $343.3 million in 2021.
Biggest changeShare Repurchases During the year ended December 31, 2023, we repurchased 410,260 shares for $62.0 million, compared with 2,922,466 shares repurchased for $601.2 million in 2022.
With the exception of Cushman & Wakefield, the following graph assumes the value of the investment in JLL's common stock, the S&P 500 Index, and the peer group (including reinvestment of dividends) was $100 on December 31, 2017. For Cushman & Wakefield, the $100 is assumed to be invested on August 2, 2018, the date of their initial public offering.
With the exception of Cushman & Wakefield, the following graph assumes the value of the investment in JLL's common stock, the S&P 500 Index, and the peer group (including reinvestment of dividends) was $100 on December 31, 2018. For Cushman & Wakefield, the $100 is assumed to be invested on August 2, 2018, the date of their initial public offering.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. 39 Table of Contents Comparison of Cumulative Total Shareholder Return The following graph compares the cumulative 5-year total return to shareholders of JLL's common stock relative to the cumulative total returns of the S&P 500 Index, and a customized peer group comprising: 1) CBRE Group Inc.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. 42 Table of Contents Comparison of Cumulative Total Shareholder Return The following graph compares the cumulative 5-year total return to shareholders of JLL's common stock relative to the cumulative total returns of the S&P 500 Index, and a customized peer group comprising: 1) CBRE Group Inc.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the NYSE under the symbol "JLL." As of February 14, 2023, there were over 450 shareholders of record of our common stock and more than 93,000 additional street name holders whose shares were held of record by banks, brokers and other financial institutions.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the NYSE under the symbol "JLL." As of February 13, 2023, there were approximately 400 shareholders of record of our common stock and more than 80,000 additional street name holders whose shares were held of record by banks, brokers and other financial institutions.
Transfer Agent Computershare P.O. Box 505000 Louisville, KY 40233 Equity Compensation Plan Information For information regarding our equity compensation plans, including both shareholder approved plans and plans not approved by shareholders, see Part III, Item 12.
Any future decision to declare and pay dividends remains subject to the discretion of our Board of Directors. Transfer Agent Computershare P.O. Box 505000 Louisville, KY 40233 Equity Compensation Plan Information For information regarding our equity compensation plans, including both shareholder approved plans and plans not approved by shareholders, see Part III, Item 12.
December 31, 2017 2018 2019 2020 2021 2022 JLL $ 100 $ 86 $ 118 $ 101 $ 182 $ 108 S&P 500 100 94 121 140 178 144 Peer Group 100 90 136 134 232 161 ITEM 6. [Reserved] 40 Table of Contents
December 31, 2018 2019 2020 2021 2022 2023 JLL $ 100 $ 138 $ 118 $ 213 $ 126 $ 150 S&P 500 100 129 150 190 153 190 Peer Group 100 150 148 255 176 216 ITEM 6. [Reserved] 43 Table of Contents
Removed
We made no share repurchases under our repurchase program during the three months ended December 31, 2022. As of December 31, 2022, $1,155.6 million remained authorized for repurchases. Dividends We did not declare or pay any dividends in 2022 or 2021. Any future decision to declare and pay dividends remains subject to the discretion of our Board of Directors.
Added
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 December 31, 2023: 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) October 1, 2023 - October 31, 2023 60,336 $ 130.63 60,336 November 1, 2023 - November 30, 2023 49,408 $ 148.73 49,408 December 1, 2023 - December 31, 2023 38,061 $ 174.76 38,061 $ 1,093.6 Total 147,805 147,805 Dividends We did not declare or pay any dividends in 2023 or 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2022 compared with Year Ended December 31, 2021 Year Ended December 31, Change in % Change in Local Currency ($ in millions) 2022 2021 U.S. dollars Markets Advisory $ 4,415.5 4,188.7 226.8 5 % 8 % Capital Markets 2,488.2 2,620.5 (132.3) (5) (1) Work Dynamics 13,268.5 11,891.5 1,377.0 12 15 JLL Technologies 213.9 166.2 47.7 29 30 LaSalle 476.0 500.1 (24.1) (5) 1 Revenue $ 20,862.1 19,367.0 1,495.1 8 % 11 % Gross contract costs (12,549.1) (11,290.2) (1,258.9) 11 15 Net non-cash MSR and mortgage banking derivative activity (11.0) (59.3) 48.3 (81) (81) Fee revenue $ 8,302.0 8,017.5 284.5 4 % 7 % Markets Advisory 3,360.2 3,201.7 158.5 5 8 Capital Markets 2,430.2 2,513.2 (83.0) (3) — Work Dynamics 1,864.7 1,692.2 172.5 10 15 JLL Technologies 200.2 137.2 63.0 46 47 LaSalle 446.7 473.2 (26.5) (6) 1 Compensation and benefits, excluding gross contract costs $ 5,893.8 5,649.9 243.9 4 % 8 % Operating, administrative and other expenses, excluding gross contract costs 1,218.2 1,081.2 137.0 13 17 Depreciation and amortization 228.1 217.5 10.6 5 8 Restructuring and acquisition charges 104.8 84.7 20.1 24 28 Total fee-based operating expenses 7,444.9 7,033.3 411.6 6 10 Gross contract costs 12,549.1 11,290.2 1,258.9 11 15 Total operating expenses $ 19,994.0 18,323.5 1,670.5 9 % 13 % Operating income $ 868.1 1,043.5 (175.4) (17) % (15) % Equity earnings $ 51.0 209.4 (158.4) (76) % (76) % Adjusted EBITDA $ 1,247.3 1,496.5 (249.2) (17) % (14) % 47 Table of Contents 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.
Biggest changeYear Ended December 31, 2023 compared with Year Ended December 31, 2022 Year Ended December 31, Change in % Change in Local Currency ($ in millions) 2023 2022 U.S. dollars Markets Advisory $ 4,121.6 4,415.5 (293.9) (7) % (6) % Capital Markets 1,778.0 2,488.2 (710.2) (29) (29) Work Dynamics 14,131.1 13,268.5 862.6 7 7 JLL Technologies 246.4 213.9 32.5 15 15 LaSalle 483.7 476.0 7.7 2 2 Revenue $ 20,760.8 20,862.1 (101.3) — % — % Gross contract costs (13,375.9) (12,549.1) (826.8) 7 7 Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) 29.2 (265) (266) Fee revenue $ 7,403.1 8,302.0 (898.9) (11) % (11) % Markets Advisory 2,968.0 3,360.2 (392.2) (12) (11) Capital Markets 1,748.7 2,430.2 (681.5) (28) (28) Work Dynamics 1,999.7 1,864.7 135.0 7 7 JLL Technologies 231.9 200.2 31.7 16 16 LaSalle 454.8 446.7 8.1 2 2 Compensation and benefits, excluding gross contract costs $ 5,310.4 5,893.8 (583.4) (10) % (10) % Operating, administrative and other expenses, excluding gross contract costs 1,158.9 1,218.2 (59.3) (5) (5) Depreciation and amortization 238.4 228.1 10.3 5 5 Restructuring and acquisition charges 100.7 104.8 (4.1) (4) (5) Total fee-based operating expenses 6,808.4 7,444.9 (636.5) (9) (8) Gross contract costs 13,375.9 12,549.1 826.8 7 7 Total operating expenses $ 20,184.3 19,994.0 190.3 1 % 1 % Operating income $ 576.5 868.1 (291.6) (34) % (33) % Equity (losses) earnings $ (194.1) 51.0 (245.1) (481) % (480) % Adjusted EBITDA $ 736.7 1,247.3 (510.6) (41) % (40) % Net income margin attributable to common shareholders (USD basis) 1.1 % 3.1 % (200) bps n/a Adjusted EBITDA margin (local currency basis) 10.0 % 15.0 % (500) bps (500) bps Adjusted EBITDA margin (USD basis) 10.0 % 50 Table of Contents 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.
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. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to owner-occupiers.
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. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to facility occupiers.
Deferred Compensation Deferred compensation obligations are inclusive of amounts attributable to service conditions satisfied as of December 31, 2022, as well as service conditions expected to be satisfied in future periods. The deferred compensation plans include a provision for deferred compensation plans, predominantly in the U.S., that allow employees to defer portions of their compensation.
Deferred Compensation Deferred compensation obligations are inclusive of amounts attributable to service conditions satisfied as of December 31, 2023, as well as service conditions expected to be satisfied in future periods. The deferred compensation plans include a provision for deferred compensation plans, predominantly in the U.S., that allow employees to defer portions of their compensation.
Equity Earnings and Incentive Fees Equity earnings 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.
Equity earnings 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 total assets of these countries in aggregate totaled approximately 4% of our total assets as of both December 31, 2022 and 2021. Leases Our lease obligations primarily consist of operating leases of office space in various buildings for our own use as well as operating leases for equipment.
The total assets of these countries in aggregate totaled approximately 4% of our total assets as of both December 31, 2023 and 2022. Leases Our lease obligations primarily consist of operating leases of office space in various buildings for our own use as well as operating leases for equipment.
In addition, British pound and Singapore dollar expenses incurred as a result of our regional headquarters being located in London and Singapore, respectively, act as ongoing partial operational hedges against our translation exposures to those currencies. We enter into forward foreign currency exchange contracts to manage currency risks associated with intercompany loan balances.
In addition, British pound and Singapore dollar expenses incurred as a result of our regional headquarters being located in London and Singapore, respectively, act as ongoing partial operational hedges against our translation exposures to those currencies. 48 Table of Contents We enter into forward foreign currency exchange contracts to manage currency risks associated with intercompany loan balances.
The comparability of these items can be seen in Note 3, Business Segments, of the Notes to Consolidated Financial Statements, included in Item 8, 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.
The comparability of these items can be seen in Note 3, Business Segments, of the Notes to Consolidated Financial Statements, included in Item 8, and is discussed further in Segment Operating Results included herein. 47 Table of Contents Foreign Currency We conduct business using a variety of currencies, but we report our results in U.S. dollars.
Refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on business acquisitions. Repatriation of Foreign Earnings Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S.
Refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on business acquisitions. 63 Table of Contents Repatriation of Foreign Earnings Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S.
We do not expect changes to our unrecognized tax benefits to have a significant impact on net 43 Table of Contents 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.
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.
We account for these investments at fair value or under the equity method of accounting. Second, JLL Technologies invests in proptech funds and early to mid-stage companies to improve our strategic position within the real estate technology landscape, including investments through the JLL Spark Global Ventures Funds. Generally, we account for these investments at fair value.
We account for these investments at fair value or under the equity method of accounting. 45 Table of Contents Second, JLL Technologies invests in proptech funds and early to mid-stage companies to improve our strategic position within the real estate technology landscape, including investments through the JLL Spark Global Ventures Funds. We account for these investments at fair value.
Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, and advisory and consulting services. Our Capital Markets service offerings include investment sales, equity and debt advisory, loan servicing, and valuations.
Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, and advisory and consulting services. Our Capital Markets service offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing.
The total minimum rentals to be received in the future as sublessor under noncancelable operating subleases as of December 31, 2022 was $37.3 million. Refer to Note 11, Leases, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our lease obligations.
The total minimum rentals to be received in the future as sublessor under noncancelable operating subleases as of December 31, 2023 was $37.6 million. Refer to Note 11, Leases, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our lease obligations.
Terms for our acquisitions have typically included cash paid at closing with provisions for additional consideration and earn-out payments subject to certain contract provisions and performance. Deferred business acquisition obligations totaled $26.2 million and $28.1 million on the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively.
Terms for our acquisitions have typically included cash paid at closing with provisions for additional consideration and earn-out payments subject to certain contract provisions and performance. Deferred business acquisition obligations totaled $13.2 million and $26.2 million on the Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively.
We have historically funded pension costs as actuarially determined and as applicable laws and regulations require. We expect to contribute $7.8 million to our defined benefit pension plans in 2023. As payments to recipients are based on their retirement date, age and other factors, we cannot determine the timing of such payments with precision.
We have historically funded pension costs as actuarially determined and as applicable laws and regulations require. We expect to contribute $6.5 million to our defined benefit pension plans in 2024. As payments to recipients are based on their retirement date, age and other factors, we cannot determine the timing of such payments with precision.
The change was driven by a higher effective interest rate on our credit facilities and a year-over-year increase in the average outstanding borrowings. The average outstanding borrowings under our credit facilities increased to $1,399.1 million, with an average effective interest rate of 2.9%, in 2022, from $432.0 million, with an average effective interest rate of 0.9%, during 2021.
The change was driven by a higher effective interest rate on our credit facilities and a year-over-year increase in the average outstanding borrowings. The average outstanding borrowings under our credit facilities increased to $1,875.9 million, with an average effective interest rate of 5.9%, in 2023, from $1,399.1 million, with an average effective interest rate of 2.9%, during 2022.
Refer to Note 10, Debt in the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our debt. Investment Activity As of December 31, 2022, we had a carrying value of $873.8 million in Investments, primarily related to investments by JLL Technologies in early to mid-stage proptech companies and proptech funds as well as LaSalle co-investments.
Refer to Note 10, Debt in the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our debt. 62 Table of Contents Investment Activity As of December 31, 2023, we had a carrying value of $816.6 million in Investments, primarily related to investments by JLL Technologies in early to mid-stage proptech companies and proptech funds as well as LaSalle co-investments.
Net income margin attributable to common shareholders was 3.1% in 2022, down from 5.0% in the prior year. Adjusted EBITDA margin, calculated on a fee revenue basis, was 15.0% in both USD and local currency for 2022, compared with 18.7% in 2021.
Net income margin attributable to common shareholders was 1.1% in 2023, down from 3.1% in the prior year. Adjusted EBITDA margin, calculated on a fee revenue basis, was 10.0% in both USD and local currency for 2023, compared with 15.0% in 2022.
Year Ended December 31, ($ in millions) 2022 2021 Net income attributable to common shareholders $ 654.5 961.6 Add: Interest expense, net of interest income 75.2 40.1 Provision for income taxes 200.8 264.3 Depreciation and amortization (1) 225.2 217.5 EBITDA $ 1,155.7 1,483.5 Adjustments: Restructuring and acquisition charges 104.8 84.7 Net loss (gain) on disposition 7.5 (12.4) Net non-cash MSR and mortgage banking derivative activity (11.0) (59.3) Interest on employee loans, net (9.7) — Adjusted EBITDA $ 1,247.3 1,496.5 Net income margin attributable to common shareholders 3.1 % 5.0 % Adjusted EBITDA margin 15.0 % 18.7 % (1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders. 49 Table of Contents In discussing our operating results, we report Adjusted EBITDA margins and refer to percentage changes in local currency, unless otherwise noted.
Year Ended December 31, (in millions) 2023 2022 Net income attributable to common shareholders $ 225.4 654.5 Add: Interest expense, net of interest income 135.4 75.2 Income tax provision 25.7 200.8 Depreciation and amortization (1) 234.4 225.2 EBITDA $ 620.9 1,155.7 Adjustments: Restructuring and acquisition charges 100.7 104.8 Net loss on disposition 0.5 7.5 Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) Interest on employee loans, net (3.6) (9.7) Adjusted EBITDA $ 736.7 1,247.3 (1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders. 52 Table of Contents In discussing our operating results, we report Adjusted EBITDA margins and refer to percentage changes in local currency, unless otherwise noted.
Alternatively, we reduce valuation allowances upon (i) specific indications the carrying value of the related tax asset is more-likely-than-not recoverable or (ii) the implementation of tax planning strategies which allow an asset we previously determined to be not realizable to be viewed as realizable. The table below summarizes certain information regarding the gross deferred tax assets and valuation allowance.
Alternatively, we reduce valuation allowances upon (i) specific indications the carrying value of the related tax asset is more-likely-than-not recoverable or (ii) the implementation of tax planning strategies which allow an asset we previously determined to be not realizable to be viewed as realizable.
Had euro-to-U.S. dollar exchange rates been 10% higher throughout the course of 2022, we estimate our reported operating income would have increased by $6.1 million.
Had euro-to-U.S. dollar exchange rates been 10% higher throughout the course of 2023, we estimate our reported operating income would have decreased by $0.3 million.
This included $5.7 million of payments relating to acquisitions that closed in 2022 and $18.1 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flows from financing activities.
This included $13.6 million of payments relating to an acquisition that closed in 2023 and $26.8 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flows from financing activities.
Year Ended December 31, ($ in millions) 2022 % of Total 2021 % of Total United States dollar $ 12,375.9 59.3 % $ 11,283.1 58.3 % British pound 1,575.6 7.6 1,626.6 8.4 Euro 1,535.6 7.4 1,393.3 7.2 Australian dollar 1,183.0 5.7 1,118.7 5.8 Canadian dollar 593.8 2.8 508.3 2.6 Indian rupee 591.0 2.8 508.2 2.6 Hong Kong dollar 532.3 2.6 545.6 2.8 Chinese yuan 506.0 2.4 539.1 2.8 Singapore dollar 368.4 1.8 327.4 1.7 Japanese yen 233.8 1.1 256.8 1.3 Other currencies 1,366.7 6.5 1,259.9 6.5 Total revenue $ 20,862.1 100.0 % $ 19,367.0 100.0 % Had British pound-to-U.S. dollar exchange rates been 10% higher throughout the course of 2022, we estimate our reported operating income would have increased by $10.1 million.
Year Ended December 31, ($ in millions) 2023 % of Total 2022 % of Total United States dollar $ 12,258.9 59.0 % $ 12,375.9 59.3 % British pound 1,640.0 7.9 1,575.6 7.6 Euro 1,436.1 6.9 1,535.6 7.4 Australian dollar 1,036.9 5.0 1,183.0 5.7 Indian rupee 661.4 3.2 591.0 2.8 Canadian dollar 613.8 3.0 593.8 2.8 Hong Kong dollar 544.8 2.6 532.3 2.6 Chinese yuan 480.9 2.3 506.0 2.4 Singapore dollar 425.4 2.0 368.4 1.8 Japanese yen 286.6 1.4 233.8 1.1 Other currencies 1,376.0 6.7 1,366.7 6.5 Total revenue $ 20,760.8 100.0 % $ 20,862.1 100.0 % Had British pound-to-U.S. dollar exchange rates been 10% higher throughout the course of 2023, we estimate our reported operating income would have increased by $2.2 million.
We are primarily exposed to interest rate risk on our Facility, which had a borrowing capacity of $3.35 billion as of December 31, 2022. The Facility consists of revolving credit available for working capital, investments, capital expenditures and acquisitions. We had $1,213.8 million of outstanding borrowings under the Facility as of December 31, 2022.
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, 2023. The Facility consists of revolving credit available for working capital, investments, capital expenditures and acquisitions. We had $610.6 million of outstanding borrowings, net of debt issuance costs, under the Facility as of December 31, 2023.
Our statutory legal entity structure generally does not mirror the way we organize, manage, and report our business operations. For example, the same legal entity may include Capital Markets, Work Dynamics and Markets Advisory businesses in a particular country. As of December 31, 2022, the amount of unrecognized tax benefits was $75.1 million.
Our statutory legal entity structure generally does not mirror the way we organize, manage, and report our business operations. 46 Table of Contents For example, the same legal entity may include Capital Markets, Work Dynamics and Markets Advisory businesses in a particular country.
As of December 31, 2022, we had the potential to make earn-out payments on 17 acquisitions subject to the achievement of certain performance conditions, representing $73.3 million accrued for potential earn-out payments, of a potential maximum of $114.6 million (undiscounted).
As of December 31, 2023, we had the potential to make earn-out payments on 14 acquisitions subject to the achievement of certain performance conditions, representing $57.5 million accrued for potential earn-out payments, of a potential maximum of $100.0 million (undiscounted).
Year ended December 31, (in millions) 2022 2021 Severance and other employment-related charges $ 44.5 14.3 Restructuring, pre-acquisition and post-acquisition charges 63.6 67.8 Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity (3.3) 2.6 Total restructuring and acquisition charges $ 104.8 84.7 The increase in severance and other employment-related charges, compared with 2021, reflected notable cost mitigation actions taken across the globe in late 2022. 51 Table of Contents Interest Expense Interest expense, net of interest income, for 2022 was $75.2 million, compared to $40.1 million in 2021.
Year Ended December 31, (in millions) 2023 2022 Severance and other employment-related charges $ 62.1 44.5 Restructuring, pre-acquisition and post-acquisition charges 43.0 63.6 Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior-period acquisition activity (4.4) (3.3) Restructuring and acquisition charges $ 100.7 104.8 The increase in severance and other employment-related charges, compared with 2022, reflected notable cost mitigation actions taken across the globe in 2023.
We measure deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in 42 Table of Contents which we expect those temporary differences to be recovered or settled.
We measure deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We recognize into income the effect on deferred tax assets and liabilities of a change in tax rates in the period including the enactment date.
The timing and the magnitude of these fees can vary significantly from year to year and quarter to quarter, and from region to region. 44 Table of Contents MARKET RISKS Market Risk The principal market risks we face due to the risk of loss arising from adverse changes in market rates and prices are: • Interest rates on our unsecured credit facility (the "Facility"); and • Foreign exchange risks.
MARKET RISKS Market Risk The principal market risks we face due to the risk of loss arising from adverse changes in market rates and prices are: • Interest rates on our unsecured credit facility (the "Facility"); and • Foreign exchange risks.
Year Ended December 31, (in millions) 2022 2021 Revenue $ 20,862.1 19,367.0 Adjustments: Gross contract costs (12,549.1) (11,290.2) Net non-cash MSR and mortgage banking derivative activity (11.0) (59.3) Fee revenue $ 8,302.0 8,017.5 Operating expenses $ 19,994.0 18,323.5 Less: Gross contract costs (12,549.1) (11,290.2) Fee-based operating expenses $ 7,444.9 7,033.3 Operating income $ 868.1 1,043.5 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), and (iii) the Adjusted EBITDA margin (measured on fee-revenue and presented on a local currency basis).
Year Ended December 31, (in millions) 2023 2022 Revenue $ 20,760.8 20,862.1 Adjustments: Gross contract costs (13,375.9) (12,549.1) Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) Fee revenue $ 7,403.1 8,302.0 Operating expenses $ 20,184.3 19,994.0 Less: Gross contract costs (13,375.9) (12,549.1) Fee-based operating expenses $ 6,808.4 7,444.9 Operating income $ 576.5 868.1 Below is a reconciliation of Net income attributable to common shareholders to EBITDA and Adjusted EBITDA.
For example, in 2020 and 2021, macroeconomic conditions influenced by the COVID-19 pandemic impacted the historical seasonality of our revenue and profits. In the second half of 2022, we experienced disruption to our historical seasonality trends due to rising interest rates and widespread economic uncertainty. Inflation Our operating expenses fluctuate with our revenue and general economic conditions, including inflation.
For example, we experienced disruption to our historical seasonality trends due to rising interest rates and widespread economic uncertainty in 2022 and 2023. Inflation Our operating expenses fluctuate with our revenue and general economic conditions, including inflation.
We evaluate our segment operating performance before tax, and do not consider it meaningful to allocate tax by segment. 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.
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.
Net Income and Adjusted EBITDA Net income attributable to common shareholders was $654.5 million for the year, or $13.27 per diluted common share, compared with $961.6 million for 2021, or $18.47 per diluted common share. Adjusted EBITDA decreased 14% from the prior year to $1,247.3 million in 2022.
Net Income and Adjusted EBITDA Net income attributable to common shareholders was $225.4 million for the year, or $4.67 per diluted common share, compared with $654.5 million for 2022, or $13.27 per diluted common share. Adjusted EBITDA decreased 40% from the prior year to $736.7 million in 2023.
Generally, the maturity of these contracts is less than 60 days. As of December 31, 2022, we had forward exchange contracts in effect with a gross notional value of $1.81 billion ($1.02 billion on a net basis).
Generally, the maturity of these contracts is less than 60 days. As of December 31, 2023, we had forward exchange contracts in effect with a gross notional value of $2.07 billion ($1.21 billion on a net basis). This corresponding net carrying gain is generally offset by a carrying loss in associated intercompany loans.
Some of the contractual terms related to the services we provide, and thus the revenue we recognize, can be complex and so requires us to make judgments about our performance obligations and the timing and extent of revenue to recognize.
Some of the contractual terms related to the services we provide, and thus the revenue we recognize, can be complex, requiring us to make judgments about our performance obligations and the timing and extent of revenue to recognize. In addition, a significant portion of our revenue represents the reimbursement of costs we incur on behalf of clients.
For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income.
For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income. Transaction-Based Revenues and Equity Earnings Transaction-based revenues are impacted by the size and timing of our clients' transactions.
The recognition of tax benefits, and other changes to the amounts of our unrecognized tax benefits, may occur as the result of ongoing operations, the outcomes of audits or other examinations by tax authorities, or the passing of statutes of limitations.
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 the result of ongoing operations, the outcomes of audits or other examinations by tax authorities, or the passing of statutes of limitations.
Revenue Recognition We earn revenue from the following services (segments are bolded). • Markets Advisory ◦ Leasing ◦ Property Management ◦ Advisory, Consulting and Other • Capital Markets ◦ Investment Sales, Debt/Equity Advisory and Other ◦ Loan Servicing ◦ Valuation Advisory • Work Dynamics ◦ Workplace Management ◦ Project Management ◦ Portfolio Services and Other • JLL Technologies • LaSalle Our services are generally earned and billed in the form of transaction commissions, advisory and management fees, and incentive fees.
For additional detail regarding our critical accounting policies and estimates discussed below, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8. 44 Table of Contents Revenue Recognition We earn revenue from the following services (segments are bolded). • Markets Advisory ◦ Leasing ◦ Property Management ◦ Advisory, Consulting and Other • Capital Markets ◦ Investment Sales, Debt/Equity Advisory and Other ◦ Loan Servicing ◦ Value and Risk Advisory • Work Dynamics ◦ Workplace Management ◦ Project Management ◦ Portfolio Services and Other • JLL Technologies • LaSalle Our services are generally earned and billed in the form of transaction commissions, advisory and management fees, and incentive fees.
In contrast, transaction-based businesses, notably Investment Sales and Debt Advisory within Capital Markets as well as Leasing within Markets Advisory, experienced challenges from uncertainty in interest rates and degrading economic sentiment, beginning in the third quarter and continuing through the close of 2022.
In contrast, transaction-based businesses, notably Investment Sales and Debt Advisory within Capital Markets as well as Leasing within Markets Advisory, experienced challenges from a rapid increase in interest rates and negative economic sentiment, consistent with performance starting in the second half of 2022.
In 2020, the $4.8 million gain related to the sale of a property management business in Markets Advisory. 48 Table of Contents Interest on Employee Loans, Net reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in our Leasing and Capital Markets businesses) receive cash payments structured as loans, with interest.
In 2023, we recorded a $0.5 million net loss, versus a $7.5 million net loss in 2022. 51 Table of Contents Interest on Employee Loans, Net reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in our Leasing and Capital Markets businesses) receive cash payments structured as loans, with interest.
The Facility bears a variable rate of interest that fluctuates based on market rates. 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 an annual rate of 1.96% and 2.21%, respectively.
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.
Acquisitions and Dispositions 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. Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions and results may also include gains (losses) on the disposition.
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. Acquisitions and Dispositions 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 conjunction with our new organizational structure described more fully in Note 3, Business Segments, of the Notes to Consolidated Financial Statements, included in Item 8, we reassessed our reporting units as of January 1, 2022, and reassigned goodwill to reflect our new segment structure using a relative fair value allocation approach.
We reassessed our reporting units as of January 1, 2022, the effective date of our current organizational structure, and reassigned goodwill to reflect our new segment structure using a relative fair value allocation approach.
This corresponding net carrying gain is generally offset by a carrying loss in associated intercompany loans. 45 Table of Contents Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar in relation to currencies we are exposed to may positively or negatively impact our reported results.
Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar in relation to currencies we are exposed to may positively or negatively impact our reported results. The following table sets forth the revenue derived from our most significant currencies.
We do not amortize goodwill; instead, we evaluate goodwill for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
Goodwill and Other Intangible Assets Consistent with the services nature of the businesses we have acquired, the largest asset on the Consolidated Balance Sheets is goodwill. We do not amortize goodwill; instead, we evaluate goodwill for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
We expect continued investments by JLL Technologies as well as 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. 68 Table of Contents We have unfunded capital commitments to investment vehicles and direct investments totaling a maximum of $349.1 million as of December 31, 2022.
In 2023 and 2022, funding of investments exceeded returns of capital by $85.7 million and $142.9 million, respectively. We expect continued investments by JLL Technologies as well as 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.
As of December 31, 2022 and 2021, we had total cash and cash equivalents of $519.3 million and $593.7 million, respectively, of which $400.8 million and $487.9 million, respectively, was held by our foreign subsidiaries. 69 Table of Contents 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.
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.
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.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 202 2 . 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.
Subsequent funding rounds or changes in the companies' business strategy/outlook are indicators of a change in fair value. For all investments reported at fair value, 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.
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.
As of December 31, 2022, we had €350.0 million of Euro Notes, evenly divided between maturities of June 2027 (with a fixed interest rate of 1.96%) and June 2029 (with a fixed interest rate of 2.21%). During 2022, we used proceeds from our Facility to redeem all of our outstanding 4.4% Senior Notes due November 2022.
Year Ended December 31, ($ in millions) 2023 2022 Average outstanding borrowings $ 1,875.9 1,399.1 Average effective interest rate 5.9 % 2.9 % As of December 31, 2023, we had €350.0 million of Euro Notes, evenly divided between maturities of June 2027 (with a fixed interest rate of 1.96%) and June 2029 (with a fixed interest rate of 2.21%).
In addition, the cash outflow relating to noncontrolling interest distributions in 2022 included a $142.3 million gain by a consolidated variable interest entity in which the company held no equity interest that was also distributed during the year. The offset to this is included in cash from investing activities, specifically investment activity by less than wholly-owned entities.
In addition, the $400.0 million in proceeds associated with the issuance of senior notes was used to pay down the Facility. Cash outflow relating to noncontrolling interest distributions in 2022 included a $142.3 million gain by a consolidated variable interest entity in which the company held no equity interest that was also distributed during the year.
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. 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.
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. Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S.
We formally assess the likelihood of being able to utilize current tax losses in the future on a country-by-country basis, commensurate with the determination of each quarter’s income tax provision. We establish or increase valuation allowances upon specific indications the carrying value of a tax asset may not be recoverable.
We have established valuation allowances against deferred tax assets where expected future taxable income does not support their realization on a more-likely-than-not basis. We formally assess the likelihood of being able to utilize current tax losses in the future on a country-by-country basis, commensurate with the determination of each quarter’s income tax provision.
We generally provide for taxes in each tax jurisdiction in which we operate based on local tax regulations and rules. Such taxes are provided on pre-tax earnings and include the provision for taxes on substantively all differences between financial statement amounts and amounts used in tax returns, excluding certain non-deductible items and permanent differences.
Such taxes are provided on pre-tax earnings and include the provision for taxes on substantively all differences between financial statement amounts and amounts used in tax returns, excluding certain non-deductible items and permanent differences. Our global effective tax rate is sensitive to the complexity of our operations as well as to changes in the mix of our geographic profitability.
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.
Operating in international markets means we are exposed to movements in foreign exchange rates, most significantly the British pound and the euro. 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.
We had Short-term borrowings (including financing lease obligations, overdrawn bank accounts and local overdraft facilities) of $164.2 million as of December 31, 2022, compared with $147.9 million as of December 31, 2021. In addition, we had the capacity to borrow up to an additional $52.3 million under local overdraft facilities as of December 31, 2022.
December 31, (in millions) 2023 2022 Outstanding borrowings under the Facility $ 625.0 1,225.0 Short-term borrowings 147.9 164.2 In addition to our Facility, we had the capacity to borrow up to $55.2 million under local overdraft facilities as of December 31, 2023.
Capital Expenditures Capital expenditures, excluding those made by a consolidated VIE in which we held no equity interest, were $205.8 million and $175.9 million in 2022 and 2021, respectively. Expenditures in both years were primarily related to office leasehold improvements, hardware and purchased/developed software.
Expenditures in both years were primarily related to office leasehold improvements, hardware and purchased/developed software. Investment Asset Activity of Consolidated Less Than Wholly-Owned Entities Net capital proceeds related to consolidated VIEs in which we held no equity interest were $134.8 million in 2022, as a result of a reconsideration event.
Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S. As of December 31, 2022, we have therefore not provided for withholding tax, dividend distribution tax, capital gains taxes, or other taxes which could arise upon such distribution.
As of December 31, 2023, we have therefore not provided for withholding tax, dividend distribution tax, capital gains taxes, or other taxes which could arise upon such distribution. We believe our policy of permanently reinvesting earnings of foreign subsidiaries does not significantly impact our liquidity.
The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year. LaSalle, our investment management business, is in part compensated through incentive fees where performance of underlying funds' investments exceeds agreed-to return hurdles.
The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year.
The higher expenses were primarily attributable to Markets Advisory, which represented 38% of the increase in fee-based operating expenses on a local currency basis, Work Dynamics represented 31%, Capital Markets represented 14%, JLL Technologies 12% and LaSalle 1%. Refer to segment operating results for additional detail.
The decline in fee-based operating expenses was attributable to Capital Markets, which represented 65% of the decrease on a local currency basis, Markets Advisory, which represented 46% of the decrease, and JLL Technologies, which represented 7% of the decrease. These were partially offset by Work Dynamics, which had an increase in fee-based operating expenses.
The redemption price for the notes was equal to the $275.0 million principal amount plus accrued and unpaid interest on the Notes. We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.
During 2023, we issued $400.0 million of Senior Notes due December 2028 with a fixed interest rate of 6.875% and used the proceeds to pay down our Facility. We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.
The margin expansion was attributable to the fee revenue growth described above, the impact of cost management strategies executed throughout the year, and the net impact of the expense drivers noted above. 55 Table of Contents JLL Technologies % Change Year Ended December 31, Change in in Local ($ in millions) 2022 2021 U.S. dollars Currency Revenue $ 213.9 166.2 47.7 29 % 30 % Gross contract costs (13.7) (29.0) 15.3 (53) (53) Fee revenue $ 200.2 137.2 63.0 46 % 47 % Compensation and benefits, excluding gross contract costs (1) 240.3 169.2 71.1 42 44 Operating, administrative and other expenses, excluding gross contract costs 57.4 55.4 2.0 4 4 Depreciation and amortization 15.4 10.5 4.9 47 48 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 313.1 235.1 78.0 33 35 Gross contract costs 13.7 29.0 (15.3) (53) (53) Segment operating expenses $ 326.8 264.1 62.7 24 % 25 % Equity earnings $ 46.6 140.7 (94.1) (67) % (67) % Adjusted EBITDA $ (50.9) 53.4 (104.3) (195) % (199) % (1) Included in Compensation and benefits expenses for JLL Technologies is carried interest expense related to qualifying equity earnings of the segment.
Margin expansion was driven by the Workplace Management and Project Management revenue growth and the reduction of certain expenses associated with cost management actions over the last year. 59 Table of Contents JLL Technologies % Change Year Ended December 31, Change in in Local ($ in millions) 2023 2022 U.S. dollars Currency Revenue $ 246.4 213.9 32.5 15 % 15 % Gross contract costs (14.5) (13.7) (0.8) 6 6 Fee revenue $ 231.9 200.2 31.7 16 % 16 % Compensation and benefits, excluding gross contract costs (1) 200.7 240.3 (39.6) (16) (16) Operating, administrative and other expenses, excluding gross contract costs 50.3 57.4 (7.1) (12) (12) Depreciation and amortization 15.9 15.4 0.5 3 3 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 266.9 313.1 (46.2) (15) (15) Gross contract costs 14.5 13.7 0.8 6 6 Segment operating expenses $ 281.4 326.8 (45.4) (14) % (14) % Equity (losses) earnings $ (177.0) 46.6 (223.6) (480) % (480) % Adjusted EBITDA $ (196.1) (50.9) (145.2) (285) % (286) % Adjusted EBITDA margin (local currency basis) (84.9) % (25.4) % (5,920) bps (5,950) bps Adjusted EBITDA margin (USD basis) (84.6) % (1) Included in Compensation and benefits expenses for JLL Technologies is a reduction in carried interest expense of $13.8 million for the twelve months ended December 31, 2023, and carried interest expense of $16.6 million for the twelve months ended December 31, 2022, related to Equity earnings of the segment.
In addition to the segment drivers, a net increase in Restructuring and acquisition charges in 2022 contributed to higher operating expenses in 2022 versus 2021; refer to the following table and commentary below for additional detail.
Refer to segment operating results for additional detail. 54 Table of Contents Restructuring and acquisition charges in 2023 were slightly lower than 2022; refer to the following table and commentary below for additional detail.
See Note 5, Investments, of the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our investment activity. Share Repurchase and Dividend Programs In February 2022, our Board of Directors authorized an additional $1.5 billion for the repurchase of our common stock in the open market and privately negotiated transactions.
Share Repurchase and Dividend Programs In February 2022, our Board of Directors authorized an additional $1.5 billion for the repurchase of our common stock in the open market and privately negotiated transactions. As of December 31, 2023, $1,093.6 million remained authorized for repurchases under our repurchase program. The following table outlines share repurchase activity for the last two year.
The margin contraction was primarily due to the expense drivers noted above. 54 Table of Contents Work Dynamics % Change Year Ended December 31, Change in in Local ($ in millions) 2022 2021 U.S. dollars Currency Revenue $ 13,268.5 11,891.5 1,377.0 12 % 15 % Gross contract costs (11,403.8) (10,199.3) (1,204.5) 12 16 Fee Revenue $ 1,864.7 1,692.2 172.5 10 % 15 % Workplace Management 752.8 654.9 97.9 15 18 Project Management 850.7 774.2 76.5 10 15 Portfolio Services and Other 261.2 263.1 (1.9) (1) 3 Compensation and benefits, excluding gross contract costs 1,202.3 1,103.4 98.9 9 14 Operating, administrative and other expenses, excluding gross contract costs 432.9 406.8 26.1 6 12 Depreciation and amortization 71.1 66.2 4.9 7 13 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,706.3 1,576.4 129.9 8 13 Gross contract costs 11,403.8 10,199.3 1,204.5 12 16 Segment operating expenses $ 13,110.1 11,775.7 1,334.4 11 % 15 % Equity earnings $ 1.2 0.4 0.8 200 % 266 % Adjusted EBITDA $ 230.1 182.4 47.7 26 % 24 % The Work Dynamics revenue and fee revenue increases, compared with 2021, were driven by double-digit growth in Workplace Management and Project Management, which were broad-based across geographies.
The margin contraction was predominantly driven by the decline in Investment Sales and Debt/Equity Advisory revenue, net of lower commissions expense, as well as incentive compensation accruals, as described above. 58 Table of Contents Work Dynamics % Change Year Ended December 31, Change in in Local ($ in millions) 2023 2022 U.S. dollars Currency Revenue $ 14,131.1 13,268.5 862.6 7 % 7 % Gross contract costs (12,131.4) (11,403.8) (727.6) 6 7 Fee Revenue $ 1,999.7 1,864.7 135.0 7 % 7 % Workplace Management 806.4 752.8 53.6 7 7 Project Management 928.4 850.7 77.7 9 9 Portfolio Services and Other 264.9 261.2 3.7 1 1 Compensation and benefits, excluding gross contract costs 1,305.1 1,202.3 102.8 9 9 Operating, administrative and other expenses, excluding gross contract costs 431.6 432.9 (1.3) — — Depreciation and amortization 79.2 71.1 8.1 11 12 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,815.9 1,706.3 109.6 6 7 Gross contract costs 12,131.4 11,403.8 727.6 6 7 Segment operating expenses $ 13,947.3 13,110.1 837.2 6 % 7 % Equity earnings $ 1.4 1.2 0.2 17 % 17 % Adjusted EBITDA $ 264.0 230.1 33.9 15 % 14 % Adjusted EBITDA margin (local currency basis) 13.1 % 12.3 % 90 bps 80 bps Adjusted EBITDA margin (USD basis) 13.2 % Work Dynamics revenue and fee revenue growth was broad-based across service lines and geographies, led by strong performance in Workplace Management as recent wins and mandate expansions ramped up in the second half of the year.
Our revenue from outside of the U.S. approximated 41% and 42% of our total revenue for 2022 and 2021, respectively, as outlined in the table below. Operating in international markets means we are exposed to movements in foreign exchange rates, most significantly the British pound and the euro.
Foreign Exchange Foreign exchange risk is the risk we will incur economic losses due to adverse changes in foreign currency exchange rates. Our revenue from outside of the U.S. approximated 41% of our total revenue for both 2023 and 2022, as outlined in the table below.
The remaining margin decline was primarily attributable to the expense drivers noted above, partially offset by higher fee revenue. 56 Table of Contents LaSalle % Change Year Ended December 31, Change in in Local ($ in millions) 2022 2021 U.S. dollars Currency Revenue $ 476.0 500.1 (24.1) (5) % 1 % Gross contract costs (29.3) (26.9) (2.4) 9 9 Fee revenue $ 446.7 473.2 (26.5) (6) % 1 % Advisory fees 380.3 345.7 34.6 10 17 Transaction fees and other 39.8 33.6 6.2 18 27 Incentive fees 26.6 93.9 (67.3) (72) (69) Compensation and benefits, excluding gross contract costs 290.4 310.1 (19.7) (6) — Operating, administrative and other expenses, excluding gross contract costs 59.7 53.1 6.6 12 20 Depreciation and amortization 6.5 8.3 (1.8) (22) (18) Segment fee-based operating expenses (excluding restructuring and acquisition charges) 356.6 371.5 (14.9) (4) 3 Gross contract costs 29.3 26.9 2.4 9 9 Segment operating expenses $ 385.9 398.4 (12.5) (3) % 3 % Equity earnings $ 0.4 62.7 (62.3) (99) % (99) % Adjusted EBITDA $ 96.6 171.0 (74.4) (44) % (40) % Continued momentum in advisory fees more than offset lower incentive fees to drive slight top-line growth for LaSalle on a local currency basis.
The full-year margin contraction was entirely driven by the equity losses, partially offset by (i) fee revenue growth, (ii) the reduction in carried interest expense (associated with equity losses) and (iii) the reduction of certain expenses associated with cost management actions and improved operating efficiency over the last year. 60 Table of Contents LaSalle % Change Year Ended December 31, Change in in Local ($ in millions) 2023 2022 U.S. dollars Currency Revenue $ 483.7 476.0 7.7 2 % 2 % Gross contract costs (28.9) (29.3) 0.4 (1) (2) Fee revenue $ 454.8 446.7 8.1 2 % 2 % Advisory fees 377.2 380.3 (3.1) (1) — Transaction fees and other 30.1 39.8 (9.7) (24) (22) Incentive fees 47.5 26.6 20.9 79 79 Compensation and benefits, excluding gross contract costs 288.7 290.4 (1.7) (1) — Operating, administrative and other expenses, excluding gross contract costs 62.6 59.7 2.9 5 5 Depreciation and amortization 8.1 6.5 1.6 25 26 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 359.4 356.6 2.8 1 1 Gross contract costs 28.9 29.3 (0.4) (1) (2) Segment operating expenses $ 388.3 385.9 2.4 1 % 1 % Equity (losses) earnings $ (24.7) 0.4 (25.1) n.m. n.m.
The margin contraction was primarily due to the expense drivers noted above, partially offset by higher revenue. 53 Table of Contents Capital Markets % Change Year Ended December 31, Change in in Local ($ in millions) 2022 2021 U.S. dollars Currency Revenue $ 2,488.2 2,620.5 (132.3) (5) % (1) % Gross contract costs (47.0) (48.0) 1.0 (2) 7 Net non-cash MSR and mortgage banking derivative activity (11.0) (59.3) 48.3 (81) (81) Fee revenue $ 2,430.2 2,513.2 (83.0) (3) % — % Investment Sales, Debt/Equity Advisory and Other 1,906.7 2,013.2 (106.5) (5) (2) Valuation Advisory 365.6 359.8 5.8 2 9 Loan Servicing 157.9 140.2 17.7 13 13 Compensation and benefits, excluding gross contract costs 1,727.1 1,767.6 (40.5) (2) 1 Operating, administrative and other expenses, excluding gross contract costs 263.2 204.2 59.0 29 35 Depreciation and amortization 61.6 63.1 (1.5) (2) — Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,051.9 2,034.9 17.0 1 5 Gross contract costs 47.0 48.0 (1.0) (2) 7 Segment operating expenses $ 2,098.9 2,082.9 16.0 1 % 5 % Equity earnings $ 3.1 4.9 (1.8) (37) % (33) % Adjusted EBITDA $ 444.0 543.2 (99.2) (18) % (16) % On a local currency basis, higher revenues from Loan Servicing and Valuation Advisory were offset by lower Investment Sales and Debt Advisory fees, as rising interest rates and economic uncertainty adversely impacted market transaction volumes and elongated the deal-cycle time.
Adjusted EBITDA margin contraction was predominantly driven by the lower Leasing revenue (net of lower commissions) and higher incentive compensation accruals in the current year, which overshadowed the revenue growth in Property Management and benefit associated with cost management actions discussed above. 57 Table of Contents Capital Markets % Change Year Ended December 31, Change in in Local ($ in millions) 2023 2022 U.S. dollars Currency Revenue $ 1,778.0 2,488.2 (710.2) (29) % (29) % Gross contract costs (47.5) (47.0) (0.5) 1 1 Net non-cash MSR and mortgage banking derivative activity 18.2 (11.0) 29.2 (265) (266) Fee revenue $ 1,748.7 2,430.2 (681.5) (28) % (28) % Investment Sales, Debt/Equity Advisory and Other 1,245.0 1,906.7 (661.7) (35) (35) Value and Risk Advisory 351.1 365.6 (14.5) (4) (3) Loan Servicing 152.6 157.9 (5.3) (3) (3) Compensation and benefits, excluding gross contract costs 1,337.7 1,727.1 (389.4) (23) (22) Operating, administrative and other expenses, excluding gross contract costs 246.1 263.2 (17.1) (6) (6) Depreciation and amortization 65.6 61.6 4.0 6 7 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,649.4 2,051.9 (402.5) (20) (20) Gross contract costs 47.5 47.0 0.5 1 1 Segment operating expenses $ 1,696.9 2,098.9 (402.0) (19) % (19) % Equity earnings $ 6.7 3.1 3.6 116 % 114 % Adjusted EBITDA $ 173.1 444.0 (270.9) (61) % (61) % Adjusted EBITDA margin (local currency basis) 9.9 % 18.3 % (840) bps (840) bps Adjusted EBITDA margin (USD basis) 9.9 % Lower Capital Markets revenue and fee revenue reflected the meaningful drop in transaction volumes compared with 2022.
Refer to the LaSalle segment discussion for additional detail. Income Taxes The provision for income taxes was $200.8 million and $264.3 million for the years ended December 31, 2022 and 2021, respectively, representing effective tax rates ("ETR") of 20.2% and 21.6%, respectively.
Year Ended December 31, (in millions) 2023 2022 JLL Technologies $ (177.0) 46.6 LaSalle (24.7) 0.4 Other 7.6 4.0 Equity (losses) earnings $ (194.1) 51.0 Income Taxes The provision for income taxes was $25.7 million and $200.8 million for the years ended December 31, 2023 and 2022, respectively, representing effective tax rates ("ETR") of 10.2% and 20.2%, respectively.
In addition, our measure of segment results also excludes Restructuring and acquisition charges. 52 Table of Contents Markets Advisory % Change Year Ended December 31, Change in in Local ($ in millions) 2022 2021 U.S. dollars Currency Revenue $ 4,415.5 4,188.7 226.8 5 % 8 % Gross contract costs (1,055.3) (987.0) (68.3) 7 10 Fee revenue $ 3,360.2 3,201.7 158.5 5 % 8 % Leasing 2,736.7 2,598.5 138.2 5 7 Property Management 500.2 478.7 21.5 4 9 Advisory, Consulting and Other 123.3 124.5 (1.2) (1) 5 Compensation and benefits, excluding gross contract costs 2,433.7 2,299.6 134.1 6 8 Operating, administrative and other expenses, excluding gross contract costs 405.0 361.7 43.3 12 16 Depreciation and amortization 73.5 69.4 4.1 6 9 Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,912.2 2,730.7 181.5 7 9 Gross contract costs 1,055.3 987.0 68.3 7 10 Segment operating expenses $ 3,967.5 3,717.7 249.8 7 % 10 % Equity (losses) earnings $ (0.3) 0.7 (1.0) (143) % (138) % Adjusted EBITDA $ 527.5 546.5 (19.0) (3) % 1 % The increases in Markets Advisory revenue and fee revenue were primarily due to Leasing, where growth over a record 2021 reflected an outstanding first half of 2022 which more than offset economic challenges impacting transaction-based revenue during the second half of the year.
In addition, our measure of segment results also excludes Restructuring and acquisition charges. 56 Table of Contents Markets Advisory % Change Year Ended December 31, Change in in Local ($ in millions) 2023 2022 U.S. dollars Currency Revenue $ 4,121.6 4,415.5 (293.9) (7) % (6) % Gross contract costs (1,153.6) (1,055.3) (98.3) 9 11 Fee revenue $ 2,968.0 3,360.2 (392.2) (12) % (11) % Leasing 2,322.3 2,736.7 (414.4) (15) (15) Property Management 551.7 500.2 51.5 10 11 Advisory, Consulting and Other 94.0 123.3 (29.3) (24) (23) Compensation and benefits, excluding gross contract costs 2,178.2 2,433.7 (255.5) (10) (10) Operating, administrative and other expenses, excluding gross contract costs 368.3 405.0 (36.7) (9) (8) Depreciation and amortization 69.6 73.5 (3.9) (5) (5) Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,616.1 2,912.2 (296.1) (10) (10) Gross contract costs 1,153.6 1,055.3 98.3 9 11 Segment operating expenses $ 3,769.7 3,967.5 (197.8) (5) % (4) % Equity losses $ (0.5) (0.3) (0.2) (67) % (51) % Adjusted EBITDA $ 416.6 527.5 (110.9) (21) % (21) % Adjusted EBITDA margin (local currency basis) 14.1 % 15.7 % (170) bps (160) bps Adjusted EBITDA margin (USD basis) 14.0 % Markets Advisory top-line movements were largely driven by Leasing and reflected a decrease in average deal size and lower transaction volumes across nearly all asset classes, especially the office sector.
The following highlights the proportion of consolidated top-line growth on a local currency basis, compared with 2021, by business line segment ($ in millions). Refer to segment operating results for further detail. Operating Expenses Operating expenses increased 13% to $20.0 billion in 2022 while fee-based operating expenses were $7.4 billion in 2022, up 10% from prior year.
The following highlights Revenue and fee revenue by segment, for the current and prior year ($ in millions). Refer to segment operating results for further detail. Operating Expenses Operating expenses increased 1% to $20.2 billion in 2023 while fee-based operating expenses were $6.8 billion in 2023, down 8% from prior year.
Cash Flows from Financing Activities Financing activities used $13.1 million of cash during 2022, compared with $143.8 million used during 2021.
We discuss key drivers, along with other investing activities, individually below in further detail. Cash Flows from Financing Activities Financing activities used $374.3 million of cash during 2023, compared with $13.1 million used during 2022.
The decrease in cash provided was primarily due to (i) higher commission payments in 2022, reflecting greater payments in early 2022 for commissions earned from the strong performance in the prior-year fourth quarter as well as incremental commissions this year, attributable to the full-year Leasing growth and changes to the Capital Markets incentive compensation structure, (ii) higher annual incentive compensation payments, typically paid in the first quarter, compared with 2021, (iii) lower cash provided by earnings, and (iv) an incremental $59.0 million of cash paid for taxes.
The improvement in cash provided was primarily due to (i) improved collection of receivables (ii) $162.8 million less in cash taxes paid, (iii) lower annual incentive compensation payments, typically paid in the first quarter, compared with the prior year and (iv) lower commission payments in 2023.
Refer to Note 5, Investments, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our consolidated VIE investments. Business Acquisitions In 2022, we paid $23.8 million for business acquisitions.
We have unfunded capital commitments to investment vehicles and direct investments totaling a maximum of $354.6 million as of December 31, 2023. See Note 5, Investments, of the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our investment activity.
The net increase in AUM during the year resulted from (i) $7.6 billion of net valuation increases, (ii) $7.3 billion of acquisitions and (iii) $0.2 billion of foreign currency increases, partially offset by (iv) $7.4 billion of dispositions and withdrawals. 67 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flows from Operating Activities Operating activities provided $199.9 million of cash in 2022, compared with $972.4 million provided in 2021.
The net decrease in AUM during the year resulted from (i) $5.7 billion of dispositions and withdrawals and (ii) $4.0 billion of net valuation decreases, partially offset by (iii) $4.0 billion of acquisitions and $0.5 billion of foreign currency increases. As further described in Item 1, LaSalle will refine the definition of AUM in 2024 to conform with industry standards.
We recognize into income the effect on deferred tax assets and liabilities of a change in tax rates in the period including the enactment date. Because of the global and cross-border nature of our business, our corporate tax position is complex.
Because of the global and cross-border nature of our business, our corporate tax position is complex. We generally provide for taxes in each tax jurisdiction in which we operate based on local tax regulations and rules.
Year Ended December 31, ($ in millions) 2022 % Change Revenue: At current period exchange rates $ 20,862.1 8 % Impact of change in exchange rates 708.4 n/a At comparative period exchange rates $ 21,570.5 11 % Fee revenue: At current period exchange rates $ 8,302.0 4 % Impact of change in exchange rates 282.6 n/a At comparative period exchange rates $ 8,584.6 7 % Operating income: At current period exchange rates $ 868.1 (17) % Impact of change in exchange rates 14.9 n/a At comparative period exchange rates $ 883.0 (15) % Adjusted EBITDA: At current period exchange rates $ 1,247.3 (17) % Impact of change in exchange rates 38.0 n/a At comparative period exchange rates $ 1,285.3 (14) % 50 Table of Contents Revenue Revenue and fee revenue increased 11% and 7%, respectively compared with 2021, as outstanding performance in the first half of 2022 across JLL more than offset headwinds experienced in the second half of the year.
Year Ended December 31, ($ in millions) 2023 % Change Revenue: At current period exchange rates $ 20,760.8 — % Impact of change in exchange rates 74.3 n/a At comparative period exchange rates $ 20,835.1 — % Fee revenue: At current period exchange rates $ 7,403.1 (11) % Impact of change in exchange rates 11.5 n/a At comparative period exchange rates $ 7,414.6 (11) % Operating income: At current period exchange rates $ 576.5 (34) % Impact of change in exchange rates 4.5 n/a At comparative period exchange rates $ 581.0 (33) % Adjusted EBITDA: At current period exchange rates $ 736.7 (41) % Impact of change in exchange rates 7.5 n/a At comparative period exchange rates $ 744.2 (40) % 53 Table of Contents Revenue For the full year, revenue was flat and fee revenue decreased 11% compared with the prior year, as transaction-based businesses lagged the prior year.
If interest rates were 50 basis points higher during 2022, Interest expense, net of interest income, would have been $6.7 million higher. Foreign Exchange Foreign exchange risk is the risk we will incur economic losses due to adverse changes in foreign currency exchange rates.
We assess interest rate sensitivity to estimate the potential effect of rising interest rates on our variable rate debt. If interest rates were 50 basis points higher during 2023, Interest expense, net of interest income, would have been $9.4 million higher.
More specifically, resilient annuity-based businesses delivered solid fee revenue growth as Workplace Management, within Work Dynamics, grew 18%; Property Management, within Markets Advisory, grew 9%; and LaSalle advisory fees grew 17%.
Resilient businesses, collectively, delivered 5% growth for the full year, as Property Management, within Markets Advisory, grew 11%; Workplace Management, within Work Dynamics, grew 7%; and JLL Technologies grew 16%.
Although actual amounts may differ from such estimated amounts, we believe such differences are not likely to be material. For additional detail regarding our critical accounting policies and estimates discussed below, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8.
Although actual amounts may differ from such estimated amounts, we believe such differences are not likely to be material.
In addition, the consolidated margin, and all segment margins, reflected comparatively lower annual incentive compensation accruals this year due to business performance. Segment Operating Results Effective January 1, 2022, we manage and report our operations as five business segments: Markets Advisory, Capital Markets, Work Dynamics, JLL Technologies, and LaSalle.
Partially offsetting these items were margin accretive drivers including resilient revenue growth and the benefit of cost reduction actions executed in the last year. 55 Table of Contents Segment Operating Results We manage and report our operations as five business segments: Markets Advisory, Capital Markets, Work Dynamics, JLL Technologies and LaSalle.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs a result, the ultimate realized gain or loss with respect to interest rate and foreign currency fluctuations will depend on the exposures that arise during the applicable period, the hedging strategies at the time, and interest and foreign currency rates. 70 Table of Contents
Biggest changeAs a result, the ultimate realized gain or loss with respect to interest rate and foreign currency fluctuations will depend on the exposures that arise during the applicable period, the hedging strategies at the time, and interest and foreign currency rates. 64 Table of Contents
Disclosure of Limitations As the information presented above includes only those exposures that exist as of December 31, 2022, it does not consider those exposures or positions which could arise after that date. The information we present has limited predictive value.
Disclosure of Limitations As the information presented above includes only those exposures that exist as of December 31, 2023, it does not consider those exposures or positions which could arise after that date. The information we present has limited predictive value.

Other JLL 10-K year-over-year comparisons