Jones Lang LaSalle Reports Third Quarter 2009 Results
Adjusted EPS of $0.61 per share and adjusted EBITDA of $66 million, excluding Restructuring and certain non-cash co-investment charges
- Press Release
- Source: Jones Lang LaSalle Incorporated
- On 5:29 pm EDT, Tuesday October 27, 2009
CHICAGO, Oct. 27 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated (NYSE: JLL - News), the leading integrated financial and professional services firm specializing in real estate, today reported net income of $20 million on a U.S. GAAP basis, or $0.46 per share, for the quarter ended September 30, 2009, compared with $15 million, or $0.43 per share, for the quarter ended September 30, 2008. Adjusting for Restructuring and certain non-cash co-investment charges in the third quarter of 2009, net income would have been $27 million, or $0.61 per share. The firm's adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") were $66 million for the third quarter of 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| JLL | 54.91 | +1.48 |
On a year-to-date basis, the 2009 net loss was $56 million, or $1.50 per share. Adjusting for Restructuring and co-investment charges, however, the year-to-date net income would have been $15 million, or $0.40 per share. Adjusted EBITDA on a year-to-date basis was $126 million.
Revenue for the third quarter of 2009 was $595 million, a 12 percent decrease in U.S. dollars, 9 percent in local currency, compared with the third quarter of 2008. Revenue for the first nine months of 2009 was $1.7 billion, a 12 percent decrease from $1.9 billion in 2008 but down only 6 percent in local currency.
Third-Quarter 2009 Highlights:
- Reported revenue of $595 million, down only 9 percent in local currency despite generally weak real estate market fundamentals
- Corporate outsourcing trend continues to drive annuity revenue growth
- Over $100 million of net debt repayment driven by strong cash generation, reduced spending and aggressive working capital management
- Semi-annual dividend declared
Third-quarter results included $4 million of Restructuring charges as well as $4 million of non-cash co-investment charges. There were $37 million of Restructuring charges and $48 million of non-cash co-investment charges in the first nine months of 2009. Restructuring charges relate primarily to severance and also include integration costs from the 2008 acquisitions of The Staubach Company and Kemper's. Restructuring charges are excluded from segment operating results although they are included for consolidated reporting. The non-cash charges are primarily impairments of our investments in real estate ventures and are included in Equity losses at the consolidated and segment reporting levels.
"We are pleased with our performance during the third quarter, particularly in our annuity businesses, and with the results of our continued focus on cost control," said Colin Dyer, Chief Executive Officer of Jones Lang LaSalle. "While real estate fundamentals remain generally weak, we see initial signs of recovery in some markets and industry sectors, and our focus remains on growing market share while providing the superior service that our clients have come to expect."
Business Line Revenue Comparison for the periods ending September 30, 2009
and 2008:
(in millions, "LC" = local currency)
Three Months Ended % Nine Months Ended %
Change Change
2009 2008 In LC 2009 2008 In LC
Investor and
Occupier Services
Leasing $181.9 $193.1 (4%) $496.5 $482.9 7%
Capital Markets and
Hotels 53.2 81.1 (30%) 119.2 220.8 (39%)
Advisory, Consulting
and Other 56.3 77.8 (23%) 176.5 259.2 (24%)
Total Transaction
Services 291.4 352.0 (14%) 792.2 962.9 (12%)
Property Management,
Facility Management
and Other 164.3 141.0 18% 452.7 395.4 20%
Project & Development
Services 68.1 91.2 (23%) 205.1 252.2 (13%)
Total Management
Services 232.4 232.2 2% 657.8 647.6 7%
Other 5.6 11.6 (50%) 19.9 27.4 (21%)
Total IOS Revenue $529.4 $595.8 (8%) $1,469.9 $1,637.9 (4%)
LaSalle Investment
Management
Advisory fees $61.2 $70.9 (10%) $180.1 $215.6 (10%)
Transaction and
Incentive fees 4.7 10.4 (55%) 15.7 47.0 (64%)
Total Investment
Management $65.9 $81.3 (16%) $195.8 $262.6 (20%)
Total Firm
Revenue $595.3 $677.1 (9%) $1,665.7 $1,900.5 (6%)
The firm is realizing benefits from the cost actions taken and continues its cost discipline. Excluding Restructuring charges, operating expenses were $546 million, compared with $633 million in the third quarter of 2008. On a local currency basis, operating expenses excluding Restructuring charges were down 14 percent for the quarter, 11 percent in local currency, and down 12 percent for the first nine months of the year, 5 percent in local currency.
On a year-to-date basis, operating expenses excluding Restructuring charges were $1.6 billion in 2009, compared with $1.8 billion for the first nine months of 2008.
Balance Sheet and Dividend
At the end of the third quarter, the outstanding balance on the firm's long-term credit facilities was $292 million, a $106 million reduction from June 30, 2009, resulting from strong cash generation, reduced acquisition and capital spending and aggressive working capital management. The long-term credit facilities balance at the end of the third quarter 2008 was $543 million. The firm was well within the covenant requirements under its bank agreements.
The firm announced that its Board of Directors declared a semi-annual dividend of $0.10 per share of its common stock. This is consistent with the semi-annual dividend paid in June 2009. The dividend payment will be made on Tuesday, December 15, 2009, to holders of record at the close of business on Friday, November 13, 2009.
Business Segment Third-Quarter Performance Highlights
Investor and Occupier Services
Third-quarter revenue in the Americas region was $239 million, a decrease of 6 percent from the prior year. Revenue for the first nine months of 2009 was $687 million, an increase of 11 percent over the first nine months of 2008, primarily as a result of the Staubach acquisition in the third quarter of 2008.
Transaction Services revenue decreased 3 percent in the third quarter, to $130 million, but increased 25 percent year to date, to $377 million. Total Leasing revenue increased 23 percent in the quarter, to $120 million, up from $98 million in 2008. In the first nine months of the year, Leasing revenue increased 53 percent, to $327 million. Management Services revenue for the third quarter of 2009 decreased 10 percent, to $105 million, and 1 percent year to date, to $301 million, as revenue from new corporate outsourcing wins was more than offset by reductions in Project & Development Services with clients remaining cautious about capital expenditures.
Operating expenses were $209 million in the third quarter of 2009, a decrease of 12 percent from the same period of 2008 despite incurring 10 additional days of cost due to the inclusion of Staubach for the full third quarter of 2009 compared with a partial quarter in 2008. Year-to-date operating expenses were $644 million, an increase of 9 percent from $590 million in 2008 primarily due to the additional cost structure from the Staubach acquisition in the third quarter of 2008, which has impacted all of 2009.
The region's EBITDA for the third quarter of 2009 was $39 million compared with $34 million in the third quarter of 2008.
EMEA's third-quarter 2009 revenue was $154 million compared with $209 million in 2008, a decrease of 26 percent, 19 percent in local currency, driven by continued reductions in transaction volumes across the region. Revenue on a year-to-date basis was $418 million, compared with $628 million for the first nine months of 2008, a reduction of 33 percent, 22 percent in local currency. On a U.S. dollar basis, the decreases were driven by Capital Markets and Hotels, down $15 million in the third quarter and $69 million year to date, and Leasing revenue, down $27 million for the quarter and $70 million year to date. Capital Markets and Hotels revenue was down 26 percent in local currency for the quarter and 42 percent on a year-to-date basis. Leasing revenue was down 37 percent in local currency for the quarter and 31 percent for the first nine months of 2009. Management Services revenue, which is primarily annuity revenue, increased 2 percent for the quarter, 10 percent in local currency. For the first nine months of 2009, Management Services revenue was $150 million, down 8 percent compared with the same period of 2008 but up 7 percent in local currency.
Operating expenses were $158 million in the third quarter, $444 million year to date, decreases of 22 and 29 percent, respectively, from the prior year. Third quarter expenses included incentive compensation accruals in the period reflecting improved seasonal performance in certain businesses despite the regional loss. In local currency, the quarterly and year-to-date decreases were 14 percent and 17 percent, respectively. Cost reductions were the result of aggressive actions taken across the region.
The region's EBITDA for the third quarter of 2009 was $1 million compared with $14 million in the third quarter of 2008.
Revenue for the Asia Pacific region was $136 million for the third quarter of 2009, compared with $133 million for the same period in 2008. On a year-to-date basis, revenue was $361 million in 2009 compared with $392 million in 2008. In local currency, revenue was up 5 percent in the quarter and down 1 percent year to date compared with 2008.
Management Services revenue in the region increased to $72 million, a 17 percent increase from the third quarter of 2008, 18 percent in local currency. On a year-to-date basis, Management Services revenue increased 15 percent, 22 percent in local currency. The significant year-over-year increase demonstrates the firm's continued strength in corporate outsourcing, facility management and property management. Transaction Services revenue was $62 million for the quarter, a 12 percent decrease from 2008, 9 percent in local currency. Transaction Services revenue decreased 27 percent for the first nine months of the year, 20 percent in local currency, to $151 million. Within Transaction Services revenue, Capital Markets and Hotels revenue was up 8 percent in local currency in the quarter but down 10 percent year to date. Leasing revenue was down 19 percent in local currency for the quarter and 25 percent in local currency year to date.
Operating expenses for the region were $129 million for the third quarter, $354 million for the first nine months of 2009. Operating expenses decreased 3 percent for the quarter, 1 percent in local currency, and 10 percent year to date, 3 percent in local currency. The decreases were achieved despite incremental costs primarily related to serving more corporate outsourcing clients compared with the same periods of 2008.
The region's EBITDA for the third quarter of 2009 was $10 million compared with $4 million in the third quarter of 2008.
LaSalle Investment Management
LaSalle Investment Management's third-quarter revenue was $61 million, compared with $81 million in the prior year. On a year-to-date basis, revenue was $144 million compared with $261 million in the first nine months of 2008. Equity losses of $5 million and $52 million, primarily from non-cash charges related to co-investments, were included in third-quarter and year-to-date 2009 revenue, respectively. Advisory fees were $61 million in the quarter, down $10 million from the third quarter of 2008 or 14 percent, 10 percent in local currency. Third-quarter 2009 Advisory fees compared favorably with Advisory fees of approximately $60 million in each of the first and second quarters of 2009 despite valuation decline impacts and market fee pressures.
The business recognized $4 million of Incentive fees in the third quarter of 2009 as a result of liquidating a matured fund, and $12 million in the first nine months of the year. Asset purchases, a key driver of Transaction fees, continued to be limited by the cautious view of the market.
LaSalle Investment Management raised $1.5 billion of equity from clients during the third quarter of 2009, $3.1 billion year to date, and assets under management were $37.6 billion.
Summary
The firm continues to benefit from its market-leading positions, strong annuity revenue base and aggressive cost management. Generally weak real estate market fundamentals persist despite early improved global economic indicators. The firm's strong balance sheet provides operating flexibility to protect and enhance market positions and to emerge stronger when real estate markets recover.
Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives, dividend payments and share repurchases may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements, plans and objectives of Jones Lang LaSalle to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's Annual Report on Form 10-K for the year ended December 31, 2008, and in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, and June 30, 2009, and in other reports filed with the Securities and Exchange Commission. There can be no assurance that future dividends will be declared since the actual declaration of future dividends, and the establishment of record and payment dates, remains subject to final determination by the Company's Board of Directors. Statements speak only as of the date of this release. Jones Lang LaSalle expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in Jones Lang LaSalle's expectations or results, or any change in events.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL - News) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.4 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with over $37 billion of assets under management. For further information, please visit our Web site, www.joneslanglasalle.com.
200 East Randolph Drive Chicago Illinois 60601 / 22 Hanover Square London W1A 2BN / 9 Raffles Place #39-00 Republic Plaza Singapore 048619
Conference Call
The firm will conduct a conference call for shareholders, analysts and investment professionals on Wednesday, October 28 at 9:00 a.m. EDT.
To participate in the teleconference, please dial into one of the following phone numbers five to 10 minutes before the start time:
* U.S. callers: +1 877 809 9540
* International callers: +1 706 679 7364
* Pass code: 34518605
Webcast
Follow these steps to listen to the webcast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to http://www.videonewswire.com/event.asp?id=62698 and follow instructions
3. Download free Windows Media Player software: (link located under registration form)
4. If you experience problems listening, send an e-mail to prnwebcast@multivu.com
Supplemental Information
Supplemental information regarding the third quarter 2009 earnings call has been posted to the Investor Relations section of the company's Web site: www.joneslanglasalle.com.
Conference Call Replay
Available: 12:00 p.m. EDT Wednesday, October 28 through 11:59 p.m. EST Wednesday, November 4 at the following numbers:
* U.S. callers: +1 800 642 1687
* International callers: +1 706 645 9291
* Pass code: 34518605
Web Audio Replay
Audio replay will be available for download or stream within 24 hours of the conference call. This information and link is also available on the company's Web site: www.joneslanglasalle.com.
If you have any questions, call Yvonne Peterson of Jones Lang LaSalle's Investor Relations department at +1 312 228 2919.
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2009 and 2008
(in thousands, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenue $595,302 $677,084 $1,665,651 $1,900,519
Operating expenses:
Compensation and benefits 380,029 449,185 1,103,960 1,259,233
Operating, administrative
and other 147,744 154,767 426,020 487,508
Depreciation and
amortization 18,720 29,194 64,608 63,908
Restructuring charges 4,181 10,461 36,608 10,273
Total operating
expenses 550,674 643,607 1,631,196 1,820,922
Operating income 44,628 33,477 34,455 79,597
Interest expense, net of
interest income 16,304 12,496 43,590 17,232
Equity losses from
unconsolidated ventures (4,960) (694) (56,230) (1,938)
Income (loss) before
income taxes and
noncontrolling interest 23,364 20,287 (65,365) 60,427
Provision (benefit) for
income taxes 3,505 5,112 (9,806) 15,228
Net income (loss) 19,859 15,175 (55,559) 45,199
Net income attributable to
noncontrolling interest 88 171 290 1,838
Net income (loss) attributable
to the Company $19,771 $15,004 $(55,849) $43,361
Net income (loss) attributable
to common shareholders $19,771 $15,004 $(56,135) $42,358
Basic earnings (loss) per
common share $0.47 $0.44 $(1.50) $1.30
Basic weighted average shares
outstanding 41,762,451 34,217,379 37,432,242 32,627,905
Diluted earnings (loss)
per common share $0.46 $0.43 $(1.50) $1.25
Diluted weighted average
shares outstanding 43,299,868 35,035,602 37,432,242 33,965,981
EBITDA $58,300 $61,806 $42,257 $138,726
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Nine Months Ended September 30, 2009 and 2008
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
INVESTOR & OCCUPIER SERVICES
AMERICAS
Revenue:
Transaction services $130,346 $134,176 $376,757 $301,599
Management services 105,264 116,332 301,424 304,631
Equity income (losses) 30 - (1,181) 41
Other services 3,124 3,564 9,941 11,538
238,764 254,072 686,941 617,809
Operating expenses:
Compensation, operating
and administrative
expenses 199,816 220,378 605,390 558,773
Depreciation and
amortization 9,672 16,820 38,111 31,363
209,488 237,198 643,501 590,136
Operating income $29,276 $16,874 $43,440 $27,673
EBITDA $38,948 $33,694 $81,551 $59,036
EMEA
Revenue:
Transaction services $98,773 $147,436 $264,735 $454,307
Management services 55,196 54,288 149,675 162,876
Equity income (losses) 19 (3) (940) 99
Other services 254 6,840 4,404 10,441
154,242 208,561 417,874 627,723
Operating expenses:
Compensation, operating
and administrative
expenses 152,909 194,693 428,225 605,652
Depreciation and
amortization 5,265 7,978 15,641 20,864
158,174 202,671 443,866 626,516
Operating (loss)
income $(3,932) $5,890 $(25,992) $1,207
EBITDA $1,333 $13,868 $(10,351) $22,071
ASIA PACIFIC
Revenue:
Transaction services $62,272 $70,384 $150,653 $207,014
Management services 71,943 61,568 206,736 180,087
Equity losses - (556) (2,371) (705)
Other services 2,216 1,159 5,515 5,337
136,431 132,555 360,533 391,733
Operating expenses:
Compensation, operating
and administrative
expenses 126,076 128,978 345,131 384,938
Depreciation and
amortization 3,205 3,634 9,198 9,962
129,281 132,612 354,329 394,900
Operating income (loss) $7,150 $(57) $6,204 $(3,167)
EBITDA $10,355 $3,577 $15,402 $6,795
LASALLE INVESTMENT MANAGEMENT
Revenue:
Transaction and other
services $1,213 $4,047 $3,881 $14,485
Advisory fees 61,177 70,963 180,063 215,647
Incentive fees 3,524 6,327 11,867 32,557
Equity losses (5,009) (135) (51,738) (1,373)
60,905 81,202 144,073 261,316
Operating expenses:
Compensation, operating
and administrative
expenses 48,972 59,903 151,235 197,378
Depreciation and
amortization 578 762 1,657 1,719
49,550 60,665 152,892 199,097
Operating income (loss) $11,355 $20,537 $(8,819) $62,219
EBITDA $11,933 $21,299 $(7,162) $63,938
Total segment revenue 590,342 676,390 1,609,421 1,898,581
Reclassification of
equity losses (4,960) (694) (56,230) (1,938)
Total revenue $595,302 $677,084 $1,665,651 $1,900,519
Total operating
expenses before
restructuring
charges 546,493 633,146 1,594,588 1,810,649
Operating income
before restructuring
charges $48,809 $43,938 $71,063 $89,870
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
September 30, 2009, December 31, 2008, and September 30, 2008
(in thousands)
Sept. 30, Dec. 31, Sept. 30,
2009 2008 2008
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $56,611 $45,893 $63,563
Trade receivables, net of allowances 572,981 718,804 685,639
Notes and other receivables 77,874 89,636 87,906
Prepaid expenses 36,668 32,990 37,734
Deferred tax assets 129,177 102,934 63,576
Other 15,175 9,511 10,819
Total current assets 888,486 999,768 949,237
Property and equipment, net of
accumulated depreciation 216,115 224,845 220,068
Goodwill, with indefinite useful
lives 1,447,611 1,448,663 1,479,596
Identified intangibles, with finite
useful lives, net of accumulated
amortization 39,947 59,319 72,737
Investments in real estate ventures 157,093 179,875 180,589
Long-term receivables 54,009 51,974 53,170
Deferred tax assets 74,733 58,639 38,289
Others, net 115,415 53,942 47,979
Total assets $2,993,409 $3,077,025 $3,041,665
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $305,711 $352,489 $352,262
Accrued compensation 313,999 487,895 352,305
Short-term borrowings 57,161 24,570 18,668
Deferred tax liabilities 3,357 2,698 5,131
Deferred income 35,160 29,213 29,101
Deferred business acquisition
obligations 101,794 13,073 43,332
Other 84,951 77,947 78,466
Total current liabilities 902,133 987,885 879,265
Noncurrent liabilities:
Credit facilities 292,286 483,942 543,209
Deferred tax liabilities 4,511 4,429 5,474
Deferred compensation 28,191 44,888 39,823
Pension liabilities 4,360 4,101 1,765
Deferred business acquisition
obligations 290,518 371,636 370,269
Minority shareholder redemption
liability 45,914 43,313 44,080
Other 84,770 65,026 64,198
Total liabilities 1,652,683 2,005,220 1,948,083
Company Shareholders' Equity:
Common stock, $.01 par value per
share, 100,000,000 shares authorized;
41,834,319, 34,561,648 and
34,491,093 shares issued and
outstanding as of
September 30, 2009, December 31,
2008 and September 30, 2008,
respectively 418 346 345
Additional paid-in capital 841,430 599,742 572,241
Retained earnings 483,654 543,318 510,911
Shares held in trust (5,276) (3,504) (3,480)
Accumulated other comprehensive
income (loss) 16,688 (72,220) 9,595
Total Company shareholders'
equity 1,336,914 1,067,682 1,089,612
Noncontrolling interest 3,812 4,123 3,970
Total equity 1,340,726 1,071,805 1,093,582
Total liabilities and equity $2,993,409 $3,077,025 $3,041,665
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2009 and 2008
(in thousands)
(Unaudited)
Nine Months Ended September 30,
2009 2008
Cash provided by (used in) operating
activities $43,861 $(113,122)
Cash used in investing activities (71,665) (391,798)
Cash provided by financing activities 38,522 489,903
Net increase (decrease) in cash
and cash equivalents 10,718 (15,017)
Cash and cash equivalents, beginning of
period 45,893 78,580
Cash and cash equivalents, end of period $56,611 $63,563
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
1. Charges excluded from GAAP net income (loss) to arrive at adjusted net
income for the three and nine months ended September 30, 2009, are
integration costs related to the Staubach and Kemper's acquisitions
completed in 2008, severance costs and non-cash charges related to co-
investments.
Below are reconciliations of GAAP net income (loss) to adjusted net income
and calculations of earnings (loss) per share ("EPS"), for each net income
(loss) total (in millions after tax, except per share):
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GAAP net income (loss) $19.8 $15.0 $(56.1) $42.4
Shares (in 000's) 43,300 35,036 37,432 33,966
GAAP earnings (loss) per share $0.46 $0.43 $(1.50) $1.25
GAAP net income (loss) $19.8 $15.0 $(56.1) $42.4
Restructuring, net of tax 3.6 7.8 31.1 7.7
Non-cash co-investment charges,
net of tax 3.2 0.2 40.4 0.6
Adjusted net income 26.6 23.0 15.4 50.7
Shares (in 000's) 43,300 35,036 38,880 33,966
Adjusted earnings per share $0.61 $0.66 $0.40 $1.49
Basic shares outstanding are used in the calculation of year-to-date 2009
GAAP EPS as the use of dilutive shares outstanding would cause that EPS
calculation to be anti-dilutive.
2. EBITDA represents earnings before interest expense, net of interest
income, income taxes, depreciation and amortization. Although EBITDA is a
non-GAAP financial measure, it is used extensively by management and is
useful to investors and lenders as one of the primary metrics for
evaluating operating performance and liquidity. The firm believes that
EBITDA is an indicator of ability to service existing debt, to sustain
potential future increases in debt and to satisfy capital requirements.
EBITDA is also used in the calculations of certain covenants related to
the firm's revolving credit facility. However, EBITDA should not be
considered as an alternative either to net income or net cash provided by
operating activities, both of which are determined in accordance with
GAAP. Because EBITDA is not calculated under GAAP, the firm's EBITDA may
not be comparable to similarly titled measures used by other companies.
Below is a reconciliation of net income (loss) to EBITDA and adjusted
EBITDA (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net income (loss) $19,771 $15,004 $(56,135) $42,358
Add (deduct):
Interest expense, net of
interest income 16,304 12,496 43,590 17,232
Provision (benefit) for income
taxes 3,505 5,112 (9,806) 15,228
Depreciation and amortization 18,720 29,194 64,608 63,908
EBITDA $58,300 $61,806 $42,257 $138,726
Add:
Non-cash co-investment charges 3,728 322 47,575 946
Restructuring 4,181 10,461 36,608 10,273
Adjusted EBITDA $66,209 $72,589 $126,440 $149,945
Below is a reconciliation of net cash from operating activities, the most
comparable cash flow measure on the consolidated statements of cash flows,
to EBITDA and adjusted EBITDA (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net cash provided by (used in)
operating activities $127,936 $60,085 $43,861 $(113,122)
Add (deduct):
Interest expense, net of
interest income 16,304 12,496 43,590 17,232
Change in working capital and
non-cash expenses (89,445) (15,887) (35,388) 219,388
Provision (benefit) for income
taxes 3,505 5,112 (9,806) 15,228
EBITDA $58,300 $61,806 $42,257 $138,726
Add:
Non-cash co-investment
charges 3,728 322 47,575 946
Restructuring 4,181 10,461 36,608 10,273
Adjusted EBITDA $66,209 $72,589 $126,440 $149,945
3. For purposes of segment operating results, the allocation of
restructuring charges to our segments has been determined to not be
meaningful to investors, so the performance of segment results has been
evaluated without allocation of these charges.
4. Each geographic region offers our full range of Investor Services,
Capital Markets and Occupier Services. The Investor and Occupier Services
business consists primarily of tenant representation and agency leasing,
capital markets and valuation services (collectively "transaction
services") and property management, facilities management, project and
development management, energy management and sustainability, and
construction management services (collectively "management services").
The Investment Management segment provides investment management services
to institutional investors and high-net-worth individuals.
5. The consolidated statements of cash flows are presented in summarized
form. For complete consolidated statements of cash flows, please refer to
the firm's Quarterly Report on Form 10-Q for the quarter ended September
30, 2009, to be filed with the Securities and Exchange Commission shortly.
6. EMEA refers to Europe, Middle East, and Africa.
7. Certain prior year amounts have been reclassified to conform to the
current presentation.
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