JLL 2021 Form 10-K Summary
Business context and reporting period. Jones Lang LaSalle Incorporated (NYSE: JLL) is a global real estate services and investment management firm operating in more than 80 countries. This 10-K covers the fiscal year ended December 31, 2021; the figures below are full-year results, not standalone fourth-quarter results. At year-end, JLL had approximately 98,200 employees and LaSalle managed $76.6 billion in assets.
Financial performance
| Metric | FY 2021 | FY 2020 | Change |
|---|---|---|---|
| Revenue | $19.37 billion | $16.59 billion | +17% |
| Fee revenue (non-GAAP) | $8.10 billion | $6.13 billion | +32% |
| Operating income | $1.04 billion | $559.1 million | +87% |
| Net income attributable to common shareholders | $961.6 million | $402.5 million | +139% |
| Diluted EPS | $18.47 | $7.70 | +140% |
| Adjusted EBITDA (non-GAAP) | $1.50 billion | $859.6 million | +74% |
| Cash from operating activities | $972.4 million | $1.11 billion | Down $142.3 million |
Adjusted EBITDA margin was 18.5% on a U.S.-dollar basis (18.6% local currency), compared with 14.0% in 2020, measured against fee revenue. Management attributed expansion chiefly to strong transaction-based revenue and higher equity earnings, partly offset by renewed investment in people and technology and the fading of temporary 2020 cost savings. The GAAP effective tax rate was 21.6%, versus 20.2%.
Cash, liquidity and debt. Year-end cash and cash equivalents were $593.7 million; cash, cash equivalents and restricted cash totaled $841.6 million. Current assets were $6.39 billion and current liabilities $6.49 billion. Total reported debt was $956.4 million, including $138.2 million outstanding under the $2.75 billion revolving facility and $274.7 million current maturities of 4.4% notes due November 2022. Euro notes totalled €350 million, maturing in 2027 and 2029. The facility matures in April 2026; JLL reported compliance with its covenants and investment-grade ratings of Baa1/BBB+. Operating cash flow was lower year over year, while investing activities used $805.8 million, largely for acquisitions and technology investments.
Material changes versus 2020
- Real Estate Services (RES) revenue rose 17% and RES fee revenue rose 33% in U.S. dollars. Leasing revenue increased 48% and Capital Markets revenue 56%, reflecting a broad recovery in transaction activity.
- LaSalle revenue increased 19%; incentive fees rose to $93.9 million from $41.5 million. Assets under management grew 11% to $76.6 billion.
- Equity earnings increased to $209.4 million from $8.0 million. They included $140.8 million from JLL Technologies investment valuations and $62.6 million from LaSalle; these valuation-related gains may not recur.
- JLL paid $343.3 million to repurchase approximately 1.45 million shares, compared with $100.0 million in 2020. No dividends were paid in either year. In February 2022, the board authorized an additional $1.5 billion for repurchases.
- JLL completed four strategic acquisitions in 2021, including Skyline AI, Building Engines and Hank, and acquired a 50.1% interest in a Sterling Bay property-management joint venture.
Outlook, risks and unusual items
The filing provides no specific earnings or revenue guidance. Management described continued opportunity in real estate outsourcing, capital flows, technology and sustainability services, while noting uncertainty in the economic recovery. COVID-19 continued to affect results in 2021, though less than in 2020; variants, changing restrictions and supply-chain disruption remained uncertain. The company also cited wage and recruitment cost inflation, real estate market and transaction volatility, competitive pricing, foreign exchange, cybersecurity and data privacy, acquisitions and client concentration as risks.
Effective January 1, 2022, RES was reorganized into four product-focused segments: Markets Advisory, Capital Markets, Work Dynamics and JLL Technologies; LaSalle remains a separate segment. JLL said prior-period results would be restated under the new structure. Unfunded commitments for investments were up to $372.4 million. Litigation and claims arise in the ordinary course; management did not expect their resolution to materially harm financial position, results or liquidity. DUS loan loss-sharing exposure covered $15.4 billion of funded and sold loans, with no loan losses reported in 2021.
KPMG issued unqualified opinions on the financial statements and internal control over financial reporting. JLL’s critical audit matter concerned the sufficiency of audit evidence for income taxes, reflecting the company’s global tax structure.
Key facts for investors to verify
- Whether transaction-led leasing and Capital Markets growth and elevated LaSalle incentive fees are sustainable, and how the new segment structure affects comparability.
- The composition and repeatability of the $209.4 million in equity earnings, particularly non-cash investment valuation increases.
- Cash conversion and working-capital trends, given operating cash flow declined despite sharply higher net income.
- Debt maturities and refinancing plans, especially the $275 million notes due in November 2022, alongside planned buybacks, acquisitions and up to $372.4 million of unfunded investment commitments.
- Developments in COVID-19, wage inflation, transaction markets, cyber and privacy risks, tax examinations and DUS loan-loss exposure.