Jones Lang LaSalle Inc.

Company Overview

Business Model: Jones Lang LaSalle Incorporated (JLL) is a leading global commercial real estate services and investment management company. JLL's core value proposition involves assisting clients in confidently buying, building, occupying, managing, and investing across a diverse range of property types, including office, industrial, hotel, multi-family, retail, and data center properties. The company leverages rich global datasets and leading technology capabilities to provide coordinated, end-to-end real estate services. Through LaSalle Investment Management, a wholly-owned subsidiary, JLL invests institutional and individual capital globally in both private assets and publicly traded real estate securities. Primary revenue generation mechanisms include transaction commissions, advisory and management fees, and incentive fees.

Market Position: JLL holds a leading global position in commercial real estate services and investment management, with annual revenue of $26.1 billion and operations spanning over 80 countries, supported by a global workforce exceeding 113,000 as of December 31, 2025. The company is a Fortune 500 company with a heritage tracing back over 200 years. JLL is recognized for its technology leadership, being a leading user of technology and data in real estate, and has received numerous accolades, including being named one of the World's Most Ethical Companies for 18 consecutive years and a World's Most Admired Company by Fortune Magazine for nine consecutive years. Its global platform and diverse offerings position it to capitalize on opportunities within a consolidating industry.

Recent Strategic Developments:

• Proptech Investment Reclassification: Effective July 1, 2025, JLL reclassified balances and activities associated with investments in proptech funds and early to mid-stage proptech companies (Proptech Investments) from the Software and Technology Solutions segment to "All Other," noting these do not constitute an operating or reporting segment.
• Segment Merger: Effective January 1, 2026, the Software and Technology Solutions segment will merge into Real Estate Management Services, with its results of operations reported as a subsegment.
• "Beyond" Strategic Vision: JLL continues to execute its "Beyond" strategic vision, launched in 2017, focusing on Clients, Brand, Technology, People & Values, and Sustainability. This multi-year transformation aims to build a fully-integrated global organization, enhance client service, and deploy innovations and technologies.
• Strategic Investments: The company continues to make strategic investments in its platform, products, and people, including through JLL Spark Global Ventures Funds, to drive innovation in property technology.

Geographic Footprint: JLL operates in over 80 countries worldwide. For the year ended December 31, 2025, 38% of total revenue was generated from outside the United States. Key revenue contributions by currency include:

• United States dollar: 62.4%
• British pound: 7.5%
• Euro: 6.4%
• Australian dollar: 4.4%
• Indian rupee: 3.5%
• Canadian dollar: 2.4%
• Hong Kong dollar: 2.2%
• Chinese yuan: 2.0%
• Singapore dollar: 1.8%
• Japanese yen: 1.4%
• Other currencies: 6.0% JLL maintains 318 corporate offices globally, with 138 in the Americas, 102 in EMEA (Europe, Middle East and Africa), and 78 in Asia Pacific.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 34.3% (2025)
• Operating Margin: 4.2% (2025)
• Net Margin: 3.0% (2025)

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item. JLL capitalizes certain direct costs related to internal-use software during the development phase.
• Capital Expenditures: $215.6 million (2025), an increase from $185.5 million in 2024. These expenditures were primarily allocated to office leasehold improvements, hardware, and purchased/developed software.
• Strategic Investments: JLL made a $100.0 million contribution to JLL Income Property Trust, an Investment Management core open-end flagship fund, in January 2025. As of December 31, 2025, JLL had maximum potential unfunded commitments of $203.5 million for its Investment Management business and $7.3 million for Proptech Investments. The carrying value of total investments was $892.9 million as of December 31, 2025.

Business Segment Analysis

Real Estate Management Services

Financial Performance:

• Revenue: $20,001.2 million (+11% YoY in local currency)
• Operating Margin: 2.2% (Adjusted EBITDA margin)
• Key Growth Drivers: Growth was primarily driven by Workplace Management (+10% in local currency) and Project Management (+20% in local currency). Workplace Management benefited from mandate expansions and new client wins, while Project Management saw broad-based contributions across most geographies, augmented by higher pass-through costs and a low double-digit management fee increase. Product Portfolio: Comprehensive, on-site day-to-day real estate management services, including facility and property management, project management, and portfolio and other services. This includes consulting, design, management, and build services for tenants and owners, as well as property management for various asset types. Market Dynamics: Services are provided to both occupiers of real estate (Workplace Management) and non-occupying property investors (Property Management). The segment leverages technology and digital capabilities to optimize operations and enhance the tenant experience. Sub-segment Breakdown:
• Workplace Management: $13,848.5 million revenue (+10% YoY local currency)
• Project Management: $3,797.9 million revenue (+20% YoY local currency)
• Property Management: $1,841.3 million revenue (+3% YoY local currency)
• Portfolio Services and Other: $513.5 million revenue (-1% YoY local currency)

Leasing Advisory

Financial Performance:

• Revenue: $3,009.9 million (+11% YoY in local currency)
• Operating Margin: 19.3% (Adjusted EBITDA margin)
• Key Growth Drivers: The increase was primarily attributable to strong performance in Leasing (+11% in local currency), driven by continued momentum in the office sector. Significant growth was observed in the U.S., Germany, and Canada, with broad-based growth in the U.S. primarily from office (increased average deal size and higher volume) and industrial (higher deal volume). Product Portfolio: Offers local expertise across asset types, including agency leasing (marketing and leasing programs for property owners) and tenant representation (strategic alliances with occupier clients to define space requirements and negotiate terms). Also provides advisory, consulting, and other specialized real estate consulting services. Market Dynamics: Businesses anchor to the workplace of the future, helping owners and occupiers achieve sustainability commitments and goals. Sub-segment Breakdown:
• Leasing: $2,901.6 million revenue (+11% YoY local currency)
• Advisory, Consulting and Other: $108.3 million revenue (-2% YoY local currency)

Capital Markets Services

Financial Performance:

• Revenue: $2,422.1 million (+17% YoY in local currency)
• Operating Margin: 15.0% (Adjusted EBITDA margin)
• Key Growth Drivers: Top-line growth was fueled by investment sales and debt advisory transactions across nearly all sectors, with the most significant contributions from multifamily and office. Geographically, growth was led by the U.S., UK, and Spain. Globally, investment sales revenues increased 21%, outpacing the broader market growth of 18%. Product Portfolio: A full-service global provider of capital solutions, including investment sales and advisory, debt advisory, equity advisory, loan sales, loan servicing, and value and risk advisory services. Market Dynamics: Combines local market knowledge with access to global capital sources to raise capital for real estate transactions. The company serviced a loan portfolio of approximately $140.3 billion as of December 31, 2025. Sub-segment Breakdown:
• Investment Sales, Debt/Equity Advisory and Other: $1,874.5 million revenue (+23% YoY local currency)
• Value and Risk Advisory: $379.6 million revenue (0% YoY local currency)
• Loan Servicing: $168.0 million revenue (+4% YoY local currency)

Investment Management

Financial Performance:

• Revenue: $450.1 million (-5% YoY in local currency)
• Operating Margin: 18.6% (Adjusted EBITDA margin)
• Key Growth Drivers: The decrease in revenue was predominantly due to lower incentive fees. Transaction fees increased (+11% in local currency), reflecting improved transaction volume, while Advisory fees remained relatively steady (-1% in local currency). The segment reported equity earnings of $12.3 million for the year, compared to losses of $22.6 million in the prior year, as property valuation adjustments stabilized and in some cases rose. Product Portfolio: Global real estate investment management firm offering a broad range of investment products and services, including private and public equity investments and real estate debt strategies through commingled funds, separate accounts, joint ventures, or co-investments. Market Dynamics: Manages institutional and individual capital with a strategic priority to meet client objectives and deliver superior risk-adjusted returns. Assets under management (AUM) totaled $86.4 billion as of December 31, 2025, a 3% decrease in both USD and local currency over the trailing twelve months. JLL had $505.8 million of co-investments alongside client funds. Sub-segment Breakdown:
• Advisory fees: $373.7 million revenue (-1% YoY local currency)
• Transaction fees and other: $37.3 million revenue (+11% YoY local currency)
• Incentive fees: $39.1 million revenue (-37% YoY local currency)

Software and Technology Solutions

Financial Performance:

• Revenue: $232.3 million (+2% YoY in local currency)
• Operating Margin: -6.1% (Adjusted EBITDA margin)
• Key Growth Drivers: The increase in revenue reflected double-digit growth in software, which outpaced declines in technology solutions due to lower activity associated with large existing clients. The improvement in Adjusted EBITDA was driven by increased revenue and cost management actions. Product Portfolio: Leverages a comprehensive technology portfolio of software platforms, apps, hardware, and technology services. Offers cloud-based software solutions (e.g., Building Engines, Corrigo) and professional services including program and project management, implementation and support, managed services, and advisory/consulting services. Market Dynamics: Focuses on driving property technology (proptech) innovation across the real estate spectrum, supporting the development of products and data analytics tools. Strategic Note: Effective January 1, 2026, this segment will merge into Real Estate Management Services, with results reported as a subsegment.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: JLL repurchased 747,500 shares for $211.5 million during the year ended December 31, 2025, an increase from 373,100 shares for $80.4 million in 2024.
• Dividend Payments: No dividends were declared or paid in 2025 or 2024.
• Future Capital Return Commitments: As of December 31, 2025, $801.7 million remained authorized for repurchases under the company's repurchase program.

Balance Sheet Position: (as of December 31, 2025)

• Cash and Equivalents: $599.1 million
• Total Debt: $889.9 million (net of debt issuance costs)
• Net Cash Position: -$290.8 million (Net Debt)
• Credit Rating: Baa1 from Moody’s Investors Service, Inc. and BBB+ from Standard & Poor’s Ratings Services, both considered investment grade.
• Debt Maturity Profile:
  • $400.0 million senior unsecured notes due December 2028, bearing a fixed annual rate of 6.875%.
  • €175.0 million Euro Notes due June 2027, bearing a fixed annual rate of 1.96%.
  • €175.0 million Euro Notes due June 2029, bearing a fixed annual rate of 2.21%.
  • A $3.3 billion unsecured revolving credit facility matures on November 3, 2028, bearing a variable interest rate (Adjusted Term SOFR plus 0.875% to 1.35%). No outstanding borrowings under this facility as of December 31, 2025.
  • A commercial paper program allows for the issuance of up to $2.5 billion of short-term notes, with no outstanding borrowings as of December 31, 2025.

Cash Flow Generation:

• Operating Cash Flow: $1,194.1 million (2025), an improvement from $785.3 million in 2024. This increase was primarily driven by higher cash provided by earnings, the absence of a 2024 cash outflow related to a loan repurchase from Fannie Mae, and lower cash taxes paid.
• Free Cash Flow: $978.5 million (2025), calculated as operating cash flow less net capital additions.

Operational Excellence

Production & Service Model: JLL employs a globally-integrated delivery team and a "One JLL" philosophy to provide seamless and consistent services. For Project Management, a "life cycle" perspective is applied, encompassing consulting, capital management, design, construction, and occupancy services. Property Management services are delivered through local, often on-site, teams supported by regional and central resources, leveraging market share, buying power, and new technology to optimize operations and enhance tenant experience.

Supply Chain Architecture: Key Suppliers & Partners: JLL relies on third parties and subcontractors to perform activities across its business and support functions. The company communicates its expected standards of conduct through a Vendor Code of Conduct, published in multiple languages, and increasingly uses technology to screen vendors for risk. Facility Network:

• Manufacturing: Not explicitly detailed in the filing.
• Research & Development: While specific R&D facilities are not detailed, JLL emphasizes its "industry-leading research capabilities, data intelligence" and ongoing strategic investments in its platform, products, and people to lead technological change.
• Distribution: Not explicitly detailed in the filing.

Operational Metrics:

• Properties Managed: Approximately 2.9 billion square feet (as of December 31, 2025).
• Agency Leasing Transactions: Approximately 19,500 transactions, representing 340 million square feet of space in 2025.
• Tenant Representation Transactions: Approximately 23,500 transactions, representing 569 million square feet of space in 2025.
• Capital Markets Client Transactions: Approximately $258 billion of client transactions in 2025.
• Loan Portfolio Serviced: Approximately $140.3 billion as of December 31, 2025.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: JLL engages clients directly through its enterprise sales force and direct customer relationships.
• Channel Partners: The company utilizes channel partners, including third-party vendors and subcontractors, to deliver services.
• Digital Platforms: JLL offers digital platforms and cloud-based software solutions, such as Building Engines and Corrigo, to enable online sales and enhance client decision-making.

Customer Portfolio: Enterprise Customers: JLL serves a broad range of global clients, including large and sophisticated for-profit and not-for-profit entities, public-private partnerships, and governmental (public sector) entities across various industries. Strategic Partnerships: The company establishes strategic alliances with occupier clients to define space requirements and optimize occupancy solutions. Customer Concentration: While not quantified, JLL acknowledges the risk of adverse effects from the loss of a major client or disruption of key client relationships, particularly with large enterprise clients.

Geographic Revenue Distribution:

• United States dollar: 62.4% of total revenue
• British pound: 7.5% of total revenue
• Euro: 6.4% of total revenue
• Australian dollar: 4.4% of total revenue
• Indian rupee: 3.5% of total revenue
• Canadian dollar: 2.4% of total revenue
• Hong Kong dollar: 2.2% of total revenue
• Chinese yuan: 2.0% of total revenue
• Singapore dollar: 1.8% of total revenue
• Japanese yen: 1.4% of total revenue
• Other currencies: 6.0% of total revenue

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The commercial real estate services industry is highly competitive and undergoing consolidation, with large players like JLL gaining market share. Key macro trends influencing the sector include:

• Growth in corporate outsourcing: A sustained global trend as organizations focus on core competencies.
• Rising investment allocations to real estate: Real estate has become a major asset class, with allocations increasing approximately 110 basis points since 2015.
• Demographics and urbanization: Long-term global migration into major cities drives demand for real estate services.
• AI and technology's next frontier: Advances in technology, data, and artificial intelligence are transforming the industry, leading to the rise of "proptech."
• Energy and sustainability: Climate change and resource constraints are reshaping property valuation, operation, and occupancy, driving demand for sustainable solutions.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: JLL faces significant competition from other global commercial real estate service providers such as CBRE Group Inc., Cushman & Wakefield plc, Colliers International Group Inc., and Savills plc. Competition also comes from institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms, technology firms, consulting firms, co-locating providers, temporary space providers, outsourcing firms, and companies that self-perform real estate services. Emerging Competitive Threats: New market entrants, disruptive technologies (e.g., proptech start-ups), information aggregators, and digital technology firms pose emerging competitive threats. Competitive Response Strategy: JLL's strategy includes lowering prices, loosening contractual terms, developing innovative data mining and disruptive technologies, increasing compensation to attract talent, and enhancing productivity and efficiency. The company also pursues growth through selective mergers and acquisitions to strengthen its market position.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Evolving Workplace Strategies: The ongoing evolution of corporate workplace strategies, including varying office real estate occupancy rates, may affect demand for JLL's services and client portfolios. A sustained "flight-to-quality" could lead to bifurcated market performance, impacting transaction volumes and asset values for older properties, while a supply shortage in premium office space could limit overall market activity.
• Geopolitical Volatility and Trade Tensions: Global operations expose JLL to risks from geopolitical volatility, conflicts, and shifting international relations, which can disrupt energy markets, global supply chains, and international trade (e.g., tariffs, sanctions). This can increase project costs, delay transactions, reduce investor confidence, and impact revenues.
• Competitive Markets: The highly competitive real estate services and investment management markets could make it difficult for JLL to maintain market share, growth rate, and profitability, especially from competitors with aggressive pricing, lower cost structures, or disruptive technologies. Technology Disruption:
• Rapidly Evolving Technologies: Failure to adapt to and leverage rapidly evolving technologies, including artificial intelligence (AI) and generative AI, could impact JLL's competitive position and financial performance. Risks include inaccurate AI-generated outputs, data privacy and security breaches, intellectual property ownership uncertainty, and challenges in complying with rapidly evolving AI regulations across multiple jurisdictions. Customer Concentration:
• Reliance on Large Clients: JLL's business could be adversely affected by the loss of a major client or the disruption of key client relationships, as deepening relationships with large enterprise clients may intensify client concentration risk.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Reliance: Reliance on third parties and subcontractors exposes JLL to increased operational, regulatory, financial, or reputational harm if these parties lack proper safeguards, fail to comply with service level agreements, or experience operational disruptions or cybersecurity breaches. Health & Safety:
• Program Adequacy: Despite significant investments, JLL's health, safety, security, and environment programs, policies, and procedures (including those of contractors) may not be adequate, leading to serious safety incidents, including fatalities, and potential material impacts on financial performance and reputation. Computer Systems, Privacy, Cybersecurity:
• Data Dependence: JLL's business is highly dependent on its ability to collect, use, store, and manage data. Disruptions in computer systems, privacy breaches, or cybersecurity issues could impact service delivery, damage reputation, and expose the company to financial risk. The rapid evolution of AI technologies amplifies these risks. Fiduciary Obligations:
• Breach of Fiduciary Duties: JLL is exposed to legal and reputational risks arising from claims of breach of fiduciary obligations under client contracts, particularly concerning asset management, third-party product/service purchases, or handling substantial client funds. Corporate Conflicts of Interest:
• Conflict Claims: JLL is subject to actual or perceived corporate conflicts of interest claims, which, if not identified, disclosed, and resolved, could have a material adverse effect on the business and reputation. Loan Origination and Servicing Risks:
• Representations and Warranties: For loans originated and serviced under programs like Fannie Mae DUS and Freddie Mac Optigo, JLL faces the risk of potential breaches of representations and warranties, which could lead to repurchase obligations, indemnification for losses, or regulatory penalties.

Financial & Regulatory Risks

Market & Financial Risks:

• Transactional Revenue Volatility: Volatility in transactional-based revenue (e.g., leasing, capital markets activities, Investment Management incentive fees) can significantly impact profitability due to the unpredictable timing and size of transactions.
• Currency and Inflation: Currency restrictions, exchange rate fluctuations (38% of 2025 revenue from outside the U.S.), and inflationary pressures on wages, salaries, and operating costs may materially impact financial results, especially with fixed-price client agreements.
• Financial Resilience: A failure to maintain financial resilience could impair JLL's balance sheet, liquidity, and ability to execute its strategy, stemming from potential losses on co-investments, debt covenant breaches, challenges in adjusting cost bases, or issues with managing receivables.
• Credit Rating Downgrades: Downgrades in JLL's investment-grade credit ratings could increase borrowing costs or reduce access to funding sources. Regulatory & Compliance Risks:
• Conflicting Laws and Regulations: Compliance with multiple and potentially conflicting laws and regulations across diverse jurisdictions, including evolving sanctions and anti-money laundering (AML) requirements, is difficult and expensive, carrying risks of regulatory actions and fines.
• Licensing Requirements: JLL is subject to complex and evolving licensing requirements in various jurisdictions. Failure to maintain licenses or comply with program requirements (e.g., Fannie Mae, Freddie Mac) could result in fines, loss of business ability, or termination of approvals.
• Environmental and Climate Matters: JLL faces liability for environmental issues at managed properties and risks related to climate change impacts on asset valuations. Failure to meet carbon reduction commitments or comply with evolving environmental regulations and disclosure requirements (e.g., TCFD, CSRD) could lead to reputational damage, penalties, and increased costs. Tax Strategy & Considerations:
• Tax Liabilities: Exposure to additional tax liabilities stems from global operations and potential changes in tax legislation, regulation, and tax rates (e.g., U.S. One Big Beautiful Bill Act, OECD Pillar One/Two initiatives), which could adversely affect financial results.

Geopolitical & External Risks

Geopolitical Exposure: JLL's global operations are inherently exposed to risks arising from geopolitical volatility, conflicts, and shifting international relations, which can disrupt global supply chains, trade, and economic stability, impacting client decisions and operational costs. Trade Relations: The imposition of tariffs, investment restrictions, and sanctions due to trade tensions could directly increase the cost and complexity of real estate projects and limit JLL's ability to provide services in certain countries. Sanctions & Export Controls: Compliance with complex and rapidly changing international sanctions regimes and export controls is critical. Inadvertent engagement with sanctioned entities or individuals could result in severe penalties and reputational damage.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: JLL's R&D focus is on leveraging artificial intelligence (AI), including generative AI, advanced analytics, and cloud-based software products and AI-powered platforms. These technologies are aimed at transforming how organizations acquire, manage, operate, and experience space, improving decision-making through enhanced data and analytics. Innovation Pipeline: JLL actively supports proptech innovation through strategic investments in proptech funds and early to mid-stage proptech companies, including through its JLL Spark Global Ventures Funds.

Intellectual Property Portfolio: Patent Strategy: JLL holds a number of pending patent applications in the U.S. to further enhance client service and operational excellence, demonstrating a commitment to technology and innovation. The company intends to continue filing additional patent applications for new inventions. Licensing Programs: Not explicitly detailed in the filing. IP Litigation: While not detailed, JLL acknowledges the risk of infringement claims being asserted against it or its clients.

Technology Partnerships: JLL forms strategic alliances and research collaborations, including with venture-backed companies, to expand and refine its technology capabilities and deliver competitive advantages.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: JLL's success depends on retaining senior management and key personnel, and the company focuses on identifying, attracting, developing, and retaining talent in key positions to ensure a strong pipeline of successors for important management roles.

Board Composition: JLL's Board of Directors is committed to effective corporate governance, with annual elections for all Board members and majority voting in Director elections. The roles of Chairman and CEO are separated, with the Chairman serving as Lead Independent Director. The Board and its committees conduct annual self-assessments. The Audit and Risk Committee's charter was expanded in 2022 to include cybersecurity and information technology readiness, and a Cybersecurity Subcommittee was formally established in 2024, meeting quarterly to provide specialized oversight.

Human Capital Strategy

Workforce Composition:

• Total Employees: 113,200 as of December 31, 2025, an increase from 112,100 in 2024.
• Geographic Distribution: Approximately two-thirds of JLL's employees were based in countries other than the United States as of December 31, 2025 and 2024.
• Skill Mix: The workforce includes 58,600 professional non-reimbursable employees and 54,600 directly reimbursable employees (primarily in Real Estate Management Services, including building maintenance).

Talent Management: Acquisition & Retention: JLL operates in highly fluid and competitive recruitment markets, particularly for niche and emerging skills. The company aims to be an employer of choice for top talent, fostering an inclusive and collaborative culture. Retention Metrics: The annual People Survey in 2025 saw 90,000 (81%) employees participate, resulting in an engagement score of 80%, surpassing the high-performance organizations benchmark by 1 point. Employee Value Proposition: JLL's "people promise" commits to empowering employees with opportunities, knowledge, and tools for success, while celebrating individual uniqueness.

Diversity & Development:

• Diversity Metrics: JLL has been recognized by the Human Rights Campaign Foundation's Corporate Equality Index every year since 2015 and as one of the Best Places to Work for Disability Inclusion for seven consecutive years.
• Development Programs: Over 100,000 employees annually utilize the MyLearning platform, consuming over 2 million learning assets in 2025 across seven languages. The "Leading the Way" platform supports leadership development from frontline to executive levels, with over 1,400 graduates in nomination programs and over 8,000 completions of on-demand learning in 2025. AI tools are integrated into the goal-setting platform to personalize career paths.
• Culture & Engagement: JLL fosters a vibrant workplace culture through various employee engagement efforts, including volunteering, community groups, and well-being programs.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: JLL's sustainability program is rooted in its purpose to shape the future of real estate for a better world, focusing on climate action, healthy spaces, and inclusive places. The company helps clients develop carbon baselines, actionable sustainability strategies, execute targeted initiatives, and optimize performance through ongoing management and compliance reporting. Supply Chain Sustainability: JLL engages suppliers on ESG requirements and supplier diversity programs, and focuses on responsible sourcing, including conflict minerals compliance.

Social Impact Initiatives:

• Community Investment: JLL supports communities through philanthropic programs and local community initiatives.
• Product Impact: The company considers product impact in areas such as accessibility, bridging the digital divide, and social benefit applications.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Historically, JLL reports relatively smaller revenue and profit in the first quarter, with both measures increasing during the subsequent three quarters. This pattern is influenced by the real estate industry's focus on completing transactions by calendar year-end and the relatively constant nature of certain expenses throughout the year. This seasonality excludes investment-generated performance fees and realized/unrealized investment equity earnings and losses, which are less predictable.
• Economic Sensitivity: The success of JLL's business is significantly tied to general economic conditions, as well as local, national, and regional economic and political conditions. Factors such as interest rate volatility, tighter lending standards, and elevated price uncertainty can exert downward pressure on transaction volumes and impact fees.
• Industry Cycles: JLL's business and financial conditions correlate strongly to the cyclicality of real estate markets.

Planning & Forecasting: The inherent seasonality in parts of the business makes it challenging to determine whether planned results will be achieved during the year and to adjust to changes in expectations.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: JLL operates in a broad range of legal and regulatory environments across its global footprint. This includes compliance with eligibility criteria established by agencies such as Fannie Mae, Freddie Mac, and Housing and Urban Development/Ginnie Mae for its loan origination and servicing activities. International Compliance: JLL is subject to evolving and increasingly complex sanctions regimes and anti-money laundering (AML) regulations imposed by various jurisdictions, including the U.S., EU, and UK. The company must also comply with anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, across its global operations. Trade & Export Controls: U.S. laws and regulations govern the provision of products and services to, and trade-related activities involving, certain targeted countries and parties, requiring JLL to implement policies and procedures to restrict or prohibit sales in sanctioned countries and screen for designated entities.

Legal Proceedings: JLL has contingent liabilities from various pending claims and litigation matters arising in the ordinary course of business, some involving substantial damages. While many are covered by insurance, they may be subject to large deductibles or exceed available coverage. Based on current information, the ultimate resolution of these matters is not expected to have a material adverse effect on JLL's financial position, results of operations, or liquidity.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: JLL's effective tax rate for 2025 was 19.3%, a slight decrease from 19.5% in 2024.
• Geographic Tax Planning: JLL's corporate tax position is complex due to its global operations. The company generally provides for taxes in each jurisdiction based on local regulations. JLL intends to permanently reinvest its foreign source earnings outside of the U.S. and has not provided for deferred tax liabilities on these unremitted earnings.
• Tax Reform Impact: The U.S. One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, includes provisions altering the timing of deductions for certain depreciable assets, research and experimental expenses, and interest expense, with some effective in 2025 and others in 2026. The OBBBA also alters the taxation of international earnings, primarily effective in 2026. The impact of 2025 provisions was not material to income tax expense or the financial statements. JLL also faces potential impacts from significant legislative policy changes in multinational corporation taxation inspired by OECD Pillar One and Pillar Two initiatives and EU Anti-Tax Avoidance Directives.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: JLL maintains professional, auto, and general liability insurance programs. The company utilizes a wholly-owned captive insurance company to supplement traditional coverage for certain claims, retaining risk up to $10.0 million per professional indemnity claim, with third-party insurers providing excess coverage.
• Risk Transfer Mechanisms: JLL employs hedging transactions, including foreign currency forward contracts and cross-currency swaps, to manage foreign currency exchange rate risk. As a participant in the Fannie Mae Delegated Underwriting and Servicing (DUS) program, JLL retains a portion of the risk of loss for originated and sold loans, generally sharing approximately one-third of incurred losses, subject to a cap of 20% of the principal balance at origination.