JLL Reports Second-Quarter 2014 Adjusted Earnings Per Share of $1.68, Up 46 Percent Over Last Year

Record second-quarter fee revenue of $1.1 billion, up 18 percent

Marketwired
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CHICAGO, IL--(Marketwired - Jul 31, 2014) - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $1.68 for the second quarter of 2014. Second-quarter fee revenue totaled $1.1 billion, up 18 percent from the second quarter of 2013. All percentage variances are calculated on a local currency basis.

  • Fee revenue reached second-quarter high of $1.1 billion, led by Leasing and Property & Facility Management

  • Margins expanded in all geographic segments while investments for future revenue growth continue

  • LaSalle Investment Management assets under management reached $50.0 billion

  • Standard & Poor's raised JLL's investment-grade rating outlook to positive

Summary Financial Results
($ in millions, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

Revenue

$

1,277

$

989

$

2,315

$

1,845

Fee Revenue1

$

1,086

$

908

$

1,964

$

1,689

Adjusted Net Income2

$

76

$

52

$

94

$

68

U.S. GAAP Net Income

$

72

$

46

$

88

$

59

Adjusted Earnings per Share2

$

1.68

$

1.15

$

2.07

$

1.50

Earnings per Share

$

1.58

$

1.03

$

1.94

$

1.32

Adjusted EBITDA3

$

132

$

102

$

184

$

150

Adjusted EBITDA, Real Estate Services

$

109

$

82

$

144

$

116

Adjusted EBITDA, LaSalle Investment Management

$

23

$

20

$

40

$

34

See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release

"Our strong performance was driven by record second-quarter revenue and by margin expansion in all three geographic regions," said Colin Dyer, JLL President and CEO. "These excellent results confirm the value of our ongoing investment in our operating platform and position us for continued solid growth," Dyer added.

Consolidated Revenue
($ in millions, "LC" = local currency)

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

%
Change
in LC

2014

2013

%
Change
in LC

Real Estate Services ("RES")

Leasing

$

365.2

$

297.2

23%

$

634.9

$

524.7

21%

Capital Markets & Hotels

183.1

159.0

12%

299.4

281.2

4%

Property & Facility Management Fee Revenue1

257.2

210.6

22%

504.7

422.9

21%

Property & Facility Management

373.2

257.5

46%

718.3

508.8

44%

Project & Development Services Fee Revenue1

102.9

86.1

19%

190.2

163.3

16%

Project & Development Services

178.1

120.3

46%

327.5

234.0

38%

Advisory, Consulting and Other

107.6

94.1

12%

200.8

175.7

12%

Total RES Fee Revenue1

$

1,016.0

$

847.0

19%

$

1,830.0

$

1,567.8

16%

Total RES Revenue

$

1,207.2

$

928.1

29%

$

2,180.9

$

1,724.4

26%

LaSalle Investment Management

Advisory Fees

$

60.0

$

55.1

6%

$

115.8

$

111.5

2%

Transaction Fees & Other

4.4

5.2

(15)%

9.0

8.3

11%

Incentive Fees

5.6

1.0

n/m

8.9

1.2

n/m

Total LaSalle Investment Management Revenue

$

70.0

$

61.3

12%

$

133.7

$

121.0

9%

Total Firm Fee Revenue1

$

1,086.0

$

908.3

18%

$

1,963.7

$

1,688.8

16%

Total Firm Revenue

$

1,277.2

$

989.4

28%

$

2,314.6

$

1,845.4

25%

n/m - not meaningful

Consolidated Performance Highlights:

  • Consolidated fee revenue was $1.1 billion for the quarter, up 18 percent from 2013. Growth was broad-based, led by Leasing, up 23 percent, and Property & Facility Management, up 22 percent, compared with the second quarter of last year.

  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $989 million for the quarter, compared with $836 million last year, an increase of 17 percent.

  • LaSalle Investment Management advisory fees grew to $60.0 million in the second quarter, up 6 percent; assets under management reached $50.0 billion.

  • Adjusted operating income margin calculated on a fee revenue basis was 9.0 percent compared with 8.0 percent a year ago. Adjusted EBITDA margin also increased 100 basis points to 12.2 percent in the second quarter. Year-to-date adjusted operating income margin was 6.1 percent compared with 5.7 percent a year ago, and year-to-date adjusted EBITDA margin was 9.4 percent compared with 8.9 percent a year ago.

Balance Sheet:

  • During the quarter, Standard & Poor's improved its outlook of the firm's investment-grade rating to positive from stable. The firm's rating from Standard & Poor's is BBB- (outlook:positive) and its rating from Moody's is Baa2 (outlook:stable).

  • The firm's total net debt was $672 million at quarter end, a decrease of $162 million from the second quarter last year as the firm's strong cash generation continues.

  • Net interest expense for the quarter was $7.7 million, down from $9.0 million in 2013. The firm continues to benefit from both lower cost of debt after renewing its bank credit facility in October 2013 and lower average borrowing.

Business Segment Performance Highlights
Americas Real Estate Services

Americas Revenue
($ in millions, "LC" = local currency)

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

% Change in LC

2014

2013

% Change in LC

Leasing

$

249.6

$

197.8

26%

$

438.2

$

350.1

25%

Capital Markets & Hotels

60.1

53.4

13%

100.3

92.1

9%

Property & Facility Management Fee Revenue1

103.6

86.3

21%

209.6

175.7

21%

Property & Facility Management

154.3

110.1

43%

300.3

218.6

41%

Project & Development Services Fee Revenue1

51.3

42.3

23%

96.0

80.1

21%

Project & Development Services

52.1

42.7

23%

97.6

80.7

23%

Advisory, Consulting and Other

28.0

27.5

3%

54.8

51.5

7%

Operating Revenue

$

492.6

$

407.3

22%

$

898.9

$

749.5

21%

Equity Earnings

1.0

0.1

n/m

1.2

0.3

n/m

Total Segment Fee Revenue1

$

493.6

$

407.4

22%

$

900.1

$

749.8

21%

Total Segment Revenue

$

545.1

$

431.6

27%

$

992.4

$

793.3

26%

n/m - not meaningful

Americas Performance Highlights:

  • Fee revenue for the quarter was $494 million, an increase of 22 percent from 2013. Fee revenue growth was driven by Leasing, up 26 percent, and Property & Facility Management, up 21 percent, compared with the second quarter of last year.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $447 million for the quarter, up 21 percent from last year.

  • Operating income was $47 million for the quarter, compared with $35 million in 2013. Operating income margin calculated on a fee revenue basis was 9.5 percent in the second quarter compared with 8.7 percent a year ago.

  • Adjusted EBITDA was $60 million for the quarter, compared with $47 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 12.2 percent, compared with 11.5 percent in 2013.

EMEA Real Estate Services

EMEA Revenue
($ in millions, "LC" = local currency)

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

% Change in LC

2014

2013

% Change in LC

Leasing

$

67.6

$

60.2

7%

$

121.7

$

109.1

7%

Capital Markets & Hotels

93.4

63.2

38%

147.8

121.5

14%

Property & Facility Management Fee Revenue1

60.3

42.0

35%

112.4

82.5

30%

Property & Facility Management

88.5

46.9

77%

165.1

89.7

75%

Project & Development Services Fee Revenue1

34.1

27.6

16%

62.7

51.6

15%

Project & Development Services

92.5

56.2

56%

174.5

112.1

48%

Advisory, Consulting and Other

53.6

41.6

21%

98.4

80.7

15%

Operating Revenue

$

309.0

$

234.6

24%

$

543.0

$

445.4

16%

Equity Earnings

0.0

(0.5

)

n/m

0.0

(0.5

)

n/m

Total Segment Fee Revenue1

$

309.0

$

234.1

24%

$

543.0

$

444.9

16%

Total Segment Revenue

$

395.6

$

267.6

39%

$

707.5

$

512.6

31%

EMEA Performance Highlights:

  • Fee revenue for the quarter was $309 million, an increase of 24 percent from 2013. Fee revenue growth was driven by Capital Markets, up 38 percent, and Property & Facility Management, up 35 percent, compared with the second quarter of last year. Growth in the region was broad-based, led by the UK, Germany, MENA, France, the Netherlands and Belgium.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $284 million for the quarter, up 21 percent from last year.

  • Adjusted operating income, which excludes King Sturge amortization, was $25 million for the quarter, compared with $14 million in 2013. Adjusted operating income margin calculated on a fee revenue basis was 8.2 percent compared with 5.8 percent a year ago.

  • Adjusted EBITDA was $30 million for the quarter, compared with $18 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 9.8 percent, compared with 7.7 percent in 2013.

Asia Pacific Real Estate Services

Asia Pacific Revenue
($ in millions, "LC" = local currency)

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

% Change in LC

2014

2013

% Change in LC

Leasing

$

48.0

$

39.2

27%

$

75.0

$

65.5

19%

Capital Markets & Hotels

29.6

42.4

(29)%

51.3

67.6

(21)%

Property & Facility Management Fee Revenue1

93.3

82.3

17%

182.7

164.7

17%

Property & Facility Management

130.4

100.5

34%

252.9

200.5

33%

Project & Development Services Fee Revenue1

17.5

16.2

12%

31.5

31.6

6%

Project & Development Services

33.5

21.4

64%

55.4

41.2

43%

Advisory, Consulting and Other

26.0

25.0

6%

47.6

43.5

13%

Operating Revenue

$

214.4

$

205.1

8%

$

388.1

$

372.9

9%

Equity Earnings

0.0

(0.1

)

n/m

(0.1

)

0.0

n/m

Total Segment Fee Revenue1

$

214.4

$

205.0

8%

$

388.0

$

372.9

9%

Total Segment Revenue

$

267.5

$

228.4

21%

$

482.1

$

418.3

21%

n/m - not meaningful

Asia Pacific Performance Highlights:

  • Fee revenue for the quarter was $214 million, an increase of 8 percent from 2013. Revenue growth was driven by Leasing, up 27 percent, and Property & Facility Management, up 17 percent, compared with the second quarter last year. Growth was led by Greater China geographically, but also was broad-based across the region's Property & Facility Management platform. Capital Markets & Hotels revenue for the quarter was down 29 percent in local currency, with Australia in particular lower against a strong second quarter in 2013.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $199 million for the quarter, up 7 percent from last year.

  • Operating income was $16 million for the quarter, compared with $13 million in 2013. Operating income margin calculated on a fee revenue basis was 7.4 percent compared with 6.5 percent a year ago.

  • Adjusted EBITDA was $19 million for the quarter, compared with $16 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 8.9 percent, compared with 8.0 percent in 2013.

LaSalle Investment Management

LaSalle Investment
Management Revenue
($ in millions, "LC" = local currency)

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

% Change in LC

2014

2013

% Change in LC

Advisory Fees

$

60.0

$

55.1

6%

$

115.8

$

111.5

2%

Transaction Fees & Other

4.4

5.2

(15)%

9.0

8.3

11%

Incentive Fees

5.6

1.0

n/m

8.9

1.2

n/m

Operating Revenue

$

70.0

$

61.3

12%

$

133.7

$

121.0

9%

Equity Earnings

11.5

9.7

19%

20.3

14.8

36%

Total Segment Revenue

$

81.5

$

71.0

13%

$

154.0

$

135.8

12%

n/m - not meaningful

LaSalle Investment Management Performance Highlights:

  • Advisory fees were $60 million for the quarter, compared with $55 million for the second quarter of 2013. Total segment revenue, including transaction fees, incentive fees and equity earnings, was $82 million for the quarter, compared with $71 million last year.

  • Operating expenses were $59 million for the quarter, compared with $51 million in 2013.

  • Operating income was $22 million for the quarter, compared with $20 million in 2013. Operating income margin, which includes equity earnings for LaSalle Investment Management, was 27.3 percent compared with 27.8 percent a year ago.

  • Adjusted EBITDA was $23 million for the quarter, compared with $20 million last year. Adjusted EBITDA margin was 27.9 percent, compared with 28.4 percent in 2013.

  • LaSalle Investment Management raised $1.4 billion of equity commitments during the quarter, bringing year-to-date commitments to $2.3 billion.

  • Assets under management were $50.0 billion as of June 30, 2014, compared with $48.0 billion at March 31, 2014. The net increase in assets under management resulted from $1.7 billion of acquisitions and takeovers, $1.1 billion of dispositions and withdrawals, $1.2 billion of net value increase and $0.2 billion of net increase due to foreign currency movements.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

200 East Randolph Drive Chicago Illinois 60601 � 30 Warwick Street London W1B 5NH � 9 Raffles Place #39-00 Republic Plaza Singapore 048619

Cautionary Note Regarding Forward-Looking Statements
Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives and dividend payments 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 and dividend payments of JLL to be materially different from those expressed or implied by such forward-looking statements. For additional information concerning risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated in forward-looking statements, and risks to JLL's business in general, please refer to those factors 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 JLL's Annual Report on Form 10-K for the year ended December 31, 2013, in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 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. Any forward-looking statements speak only as of the date of this release, and except to the extent required by applicable securities laws, JLL expressly disclaims any obligation or undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in JLL's expectations or results, or any change in events.

Conference Call

The firm will conduct a conference call with shareholders, analysts and investment professionals on Thursday, July 31 at 6:00 p.m. EDT.

If you would like to participate in the teleconference, please dial into one of the following phone numbers at least five to ten minutes before the start time (the pass code will also be required):

  • U.S. callers: +1 877 800 0896

  • International callers: +1 706 679 7364

  • Pass code: 72203372

Webcast

We are also offering a live webcast. Follow these steps to participate:

1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to http://www.visualwebcaster.com/event.asp?id=100018
3. Download free Windows Media Player software: (link located under registration form)
4. If you experience problems listening, please call the Webcast Hotline +1 877 863 2113 and provide your Event ID (100018).

Supplemental Information

Supplemental information regarding the second-quarter 2014 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.

Conference Call Replay

Available: 9:00 p.m. EDT Thursday, July 31 through 11:59 p.m. EDT Saturday, August 30 at the following numbers:

  • U.S. callers: +1 855 859 2056 or + 1 800 585 8367

  • International callers: +1 404 537 3406

  • Pass code: 72203372

Web Audio Replay

Audio replay will be available for download or stream. This information and link is also available on the company's website: www.jll.com.

If you have any questions, email JLL's Investor Relations department at JLLInvestorRelations@am.jll.com.

JONES LANG LASALLE INCORPORATED

Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2014 and 2013

(in thousands, except share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

Revenue

$

1,277,204

$

989,383

$

2,314,646

$

1,845,371

Operating expenses:

Compensation and benefits

761,224

634,600

1,398,563

1,198,320

Operating, administrative and other

396,086

262,185

753,086

512,106

Depreciation and amortization

22,780

20,174

45,191

39,254

Restructuring and acquisition charges 4

5,458

6,602

41,416

9,770

Total operating expenses

1,185,548

923,561

2,238,256

1,759,450

Operating income 1

91,656

65,822

76,390

85,921

Interest expense, net of interest income

(7,664

)

(9,049

)

(14,300

)

(16,972)

Equity earnings from real estate ventures

12,491

9,076

21,393

14,558

Income before income taxes and noncontrolling interest 4

96,483

65,849

83,483

83,507

Provision for (benefit from) income taxes 4

24,121

16,397

(5,024

)

20,794

Net income 4

72,362

49,452

88,507

62,713

Net income attributable to noncontrolling interest

420

2,921

663

3,027

Net income attributable to the Company

$

71,942

$

46,531

$

87,844

$

59,686

Dividends on unvested common stock, net of tax benefit

176

241

176

241

Net income attributable to common shareholders

$

71,766

$

46,290

$

87,668

$

59,445

Basic earnings per common share

$

1.61

$

1.05

$

1.97

$

1.35

Basic weighted average shares outstanding

44,586,095

44,101,006

44,550,154

44,090,942

Diluted earnings per common share 2

$

1.58

$

1.03

$

1.94

$

1.32

Diluted weighted average shares outstanding

45,278,494

45,141,341

45,220,082

45,091,245

EBITDA 3

$

126,927

$

95,072

$

142,974

$

139,733

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED

Segment Operating Results

For the Three and Six Months Ended June 30, 2014 and 2013

(in thousands)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

REAL ESTATE SERVICES

AMERICAS

Revenue:

Operating revenue

$

544,082

$

431,492

$

991,164

$

792,959

Equity earnings

967

73

1,202

291

Total segment revenue

545,049

431,565

992,366

793,250

Gross contract costs1

(51,479

)

(24,190

)

(92,262

)

(43,468

)

Total segment fee revenue

493,570

407,375

900,104

749,782

Operating expenses:

Compensation, operating and administrative expenses

484,750

384,659

901,759

721,218

Depreciation and amortization

13,531

11,547

26,842

22,000

Total segment operating expenses

498,281

396,206

928,601

743,218

Gross contract costs1

(51,479

)

(24,190

)

(92,262

)

(43,468

)

Total fee-based segment operating expenses

446,802

372,016

836,339

699,750

Operating income

$

46,768

$

35,359

$

63,765

$

50,032

Adjusted EBITDA

$

60,299

$

46,906

$

90,607

$

72,032

EMEA

Revenue:

Operating revenue

$

395,643

$

268,146

$

707,525

$

513,051

Equity earnings (losses)

--

(536

)

--

(536

)

Total segment revenue

395,643

267,610

707,525

512,515

Gross contract costs1

(86,673

)

(33,519

)

(164,525

)

(67,725

)

Total segment fee revenue

308,970

234,091

543,000

444,790

Operating expenses:

Compensation, operating and administrative expenses

365,360

249,497

676,706

491,022

Depreciation and amortization

5,504

5,027

10,948

10,010

Total segment operating expenses

370,864

254,524

687,654

501,032

Gross contract costs1

(86,673

)

(33,519

)

(164,525

)

(67,725

)

Total fee-based segment operating expenses

284,191

221,005

523,129

433,307

Operating income

$

24,779

$

13,086

$

19,871

$

11,483

Adjusted EBITDA

$

30,283

$

18,113

$

30,819

$

21,493

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

ASIA PACIFIC

Revenue:

Operating revenue

$

267,477

$

228,443

$

482,182

$

418,343

Equity earnings (losses)

4

(124

)

(79

)

(9

)

Total segment revenue

267,481

228,319

482,103

418,334

Gross contract costs1

(53,096

)

(23,378

)

(94,063

)

(45,375

)

Total segment fee revenue

214,385

204,941

388,040

372,959

Operating expenses:

Compensation, operating and administrative expenses

248,454

211,848

458,759

396,297

Depreciation and amortization

3,257

3,124

6,425

6,252

Total segment operating expenses

251,711

214,972

465,184

402,549

Gross contract costs1

(53,096

)

(23,378

)

(94,063

)

(45,375

)

Total fee-based segment operating expenses

198,615

191,594

371,121

357,174

Operating income

$

15,770

$

13,347

$

16,919

$

15,785

Adjusted EBITDA

$

19,027

$

16,471

$

23,344

$

22,037

LASALLE INVESTMENT MANAGEMENT

Revenue:

Operating revenue

$

70,002

$

61,302

$

133,775

$

121,018

Equity earnings

11,520

9,663

20,270

14,812

Total segment revenue

81,522

70,965

154,045

135,830

Operating expenses:

Compensation, operating and administrative expenses

58,746

50,781

114,425

101,889

Depreciation and amortization

488

476

976

992

Total segment operating expenses

59,234

51,257

115,401

102,881

Operating income

$

22,288

$

19,708

$

38,644

$

32,949

Adjusted EBITDA

$

22,776

$

20,184

$

39,620

$

33,941

SEGMENT RECONCILING ITEMS:

Total segment revenue

$

1,289,695

$

998,459

$

2,336,039

$

1,859,929

Reclassification of equity earnings

12,491

9,076

21,393

14,558

Total revenue

$

1,277,204

$

989,383

$

2,314,646

$

1,845,371

Total operating expenses before restructuring and acquisition charges

1,180,090

916,959

2,196,840

1,749,680

Operating income before restructuring and acquisition charges

$

97,114

$

72,424

$

117,806

$

95,691

Restructuring and acquisition charges

5,458

6,602

41,416

9,770

Operating income (loss) after restructuring and acquisition charges

$

91,656

$

65,822

$

76,390

$

85,921

Total adjusted EBITDA

$

132,385

$

101,674

$

184,390

$

149,503

Restructuring and acquisition charges

5,458

6,602

41,416

9,770

Total EBITDA

$

126,927

$

95,072

$

142,974

$

139,733

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED

Consolidated Balance Sheets

June 30, 2014, December 31, 2013 and June 30, 2013

(in thousands)

(Unaudited)

(Unaudited)

June 30,

December 31,

June 30,

2014

2013

2013

ASSETS

Current assets:

Cash and cash equivalents

$

150,708

$

152,726

$

121,851

Trade receivables, net of allowances

1,195,172

1,237,514

911,425

Notes and other receivables

172,700

94,519

95,543

Warehouse receivables

100,922

--

98,213

Prepaid expenses

75,859

56,491

64,463

Deferred tax assets, net

128,901

130,822

53,257

Other

9,676

52,156

11,719

Total current assets

1,833,938

1,724,228

1,356,471

Property and equipment, net of accumulated depreciation

331,850

295,547

252,247

Goodwill, with indefinite useful lives

1,946,414

1,900,080

1,836,981

Identified intangibles, net of accumulated amortization

44,146

45,579

41,342

Investments in real estate ventures

295,618

287,200

265,202

Long-term receivables

62,412

65,353

76,825

Deferred tax assets, net

69,148

104,654

187,811

Other

192,730

174,712

157,824

Total assets

$

4,776,256

$

4,597,353

$

4,174,703

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

491,598

$

528,505

$

401,052

Accrued compensation

549,234

810,425

410,032

Short-term borrowings

24,738

24,522

50,724

Deferred tax liabilities, net

11,631

11,274

10,113

Deferred income

111,187

104,410

79,459

Deferred business acquisition obligations

43,595

36,040

75,054

Warehouse facility

100,922

--

98,213

Other

116,610

143,248

112,553

Total current liabilities

1,449,515

1,658,424

1,237,200

Noncurrent liabilities:

Credit facility

410,000

155,000

479,000

Long-term senior notes

275,000

275,000

275,000

Deferred tax liabilities, net

18,029

18,029

3,106

Deferred compensation

105,743

103,199

89,370

Deferred business acquisition obligations

69,161

99,196

75,550

Minority shareholder redemption liability

10,657

20,667

19,838

Other

97,474

77,029

62,336

Total liabilities

2,435,579

2,406,544

2,241,400

(Unaudited)

(Unaudited)

June 30,

December 31,

June 30,

2014

2013

2013

Redeemable noncontrolling interest

13,725

--

--

Company shareholders' equity:

Common stock, $.01 par value per share,100,000,000 shares authorized; 44,621,117, 44,447,958,and 44,119,690 shares issued and outstanding as of June 30, 2014, December 31, 2013 and June 30, 2013, respectively

446

444

441

Additional paid-in capital

957,763

945,512

945,675

Retained earnings

1,344,318

1,266,967

1,066,794

Shares held in trust

(6,250

)

(8,052

)

(7,558

)

Accumulated other comprehensive income

13,750

(25,202

)

(78,807

)

Total Company shareholders' equity

2,310,027

2,179,669

1,926,545

Noncontrolling interest

16,925

11,140

6,758

Total equity

2,326,952

2,190,809

1,933,303

Total liabilities and equity

$

4,776,256

$

4,597,353

$

4,174,703

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Six Months June 30, 2014 and 2013

(in thousands)

Six Months Ended

June 30,

2014

2013

Cash used in operating activities

$

(146,405

)

$

(244,558

)

Cash used in investing activities

(83,865

)

(62,761

)

Cash provided by financing activities

228,252

277,011

Net decrease in cash and cash equivalents

$

(2,018

)

$

(30,308

)

Cash and cash equivalents, beginning of period

152,726

152,159

Cash and cash equivalents, end of period

$

150,708

$

121,851

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED
Financial Statement Notes

1. Consistent with U.S. GAAP ("GAAP"), gross contract vendor and subcontractor costs ("gross contract costs") which are managed on certain client assignments in the Property & Facility Management and Project & Development Services business lines are presented on a gross basis in both revenue and operating expenses. Gross contract costs are excluded from revenue and operating expenses in determining "fee revenue" and "fee-based operating expenses," respectively. Excluding these costs from revenue and operating expenses more accurately reflects how the firm manages its expense base and its operating margins.

Adjusted operating income excludes the impact of restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition. "Adjusted operating income margin" is calculated by dividing adjusted operating income by fee revenue. Below are reconciliations of revenue and operating expenses to fee revenue and fee-based operating expenses, as well as adjusted operating income margin calculations, for the three and six months ended June 30, 2014, and 2013.

Three Months Ended

Six Months Ended

June 30,

June 30,

($ in millions)

2014

2013

2014

2013

Revenue

$

1,277.2

$

989.4

$

2,314.6

$

1,845.4

Gross contract costs

(191.2

)

(81.1

)

(350.9

)

(156.6

)

Fee revenue

$

1,086.0

$

908.3

$

1,963.7

$

1,688.8

Operating expenses

$

1,185.5

$

923.6

$

2,238.2

$

1,759.5

Gross contract costs

(191.2

)

(81.1

)

(350.9

)

(156.6

)

Fee-based operating expenses

$

994.3

$

842.5

$

1,887.3

$

1,602.9

Operating income

$

91.7

$

65.8

$

76.4

$

85.9

Add:

Restructuring and acquisition charges*

5.5

6.6

41.4

9.8

King Sturge intangible amortization

0.6

0.6

1.1

1.1

Adjusted operating income

$

97.8

$

73.0

$

118.9

$

96.8

Adjusted operating income margin

9.0

%

8.0

%

6.1

%

5.7

%

*See note 4 for more information on restructuring and acquisition charges

2. Charges excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and six months ended June 30, 2014, and 2013 are (a) net restructuring and acquisition charges and (b) net intangible amortization related to the 2011 King Sturge acquisition. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share for each net income total:

Three Months Ended

Six Months Ended

June 30,

June 30,

($ in millions, except per share data)

2014

2013

2014

2013

GAAP net income attributable to common shareholders

$

71.8

$

46.3

$

87.7

$

59.4

Shares (in 000s)

45,278

45,141

45,220

45,091

GAAP diluted earnings per share

$

1.58

$

1.03

$

1.94

$

1.32

GAAP net income attributable to common shareholders

$

71.8

$

46.3

$

87.7

$

59.4

Restructuring and acquisition charges, net*

4.1

5.0

5.2

7.4

King Sturge intangible amortization, net

0.4

0.4

0.9

0.8

Adjusted net income

$

76.3

$

51.7

$

93.8

$

67.6

Shares (in 000s)

45,278

45,141

45,220

45,091

Adjusted diluted earnings per share

$

1.68

$

1.15

$

2.07

$

1.50

*See note 4 for more information on restructuring and acquisition charges

3. Adjusted EBITDA represents earnings before interest expense net of interest income, income taxes, depreciation and amortization, adjusted for restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are non-GAAP financial measures, they are used extensively by management and are useful to investors and lenders as metrics for evaluating operating performance and liquidity. EBITDA is used in the calculations of certain covenants related to the firm's revolving credit facility. However, adjusted EBITDA and EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not calculated under GAAP, the firm's adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies.

Below is a reconciliation of net income to EBITDA and adjusted EBITDA:

Three Months Ended

Six Months Ended

June 30,

June 30,

($ in millions)

2014

2013

2014

2013

GAAP net income

$

72.4

$

49.5

$

88.5

$

62.7

Add:

Interest expense, net of interest income

7.7

9.0

14.3

17.0

Provision for (benefit from) income taxes

24.1

16.4

(5.0

)

20.8

Depreciation and amortization

22.8

20.2

45.2

39.2

EBITDA

$

127.0

$

95.1

$

143.0

$

139.7

Add:

Restructuring and acquisition charges

5.5

6.6

41.4

9.8

Adjusted EBITDA

$

132.5

$

101.7

$

184.4

$

149.5

4. Restructuring and acquisition charges are excluded from segment operating results, although they are included for consolidated reporting. For purposes of segment operating results, the allocation of restructuring charges to the segments has been determined not to be meaningful to investors, so the performance of segment results has been evaluated without allocation of these charges.

Restructuring and acquisition charges of $41 million for the six months ended June 30, 2014 include $35 million related to the first quarter write-off of an indemnification asset which arose from prior period acquisition activity. This write-off was offset by the recognition of a tax benefit of an equal amount in the provision for income taxes, and therefore has no impact on net income.

Three Months Ended

Six Months Ended

June 30, 2014

June 30, 2014

($ in millions)

GAAP

Adjusting Item

Adjusted

GAAP

Adjusting Item

Adjusted

Income before income taxes and noncontrolling interest

$

96.5

$

--

$

96.5

$

83.5

$

34.5

$

118.0

Provision for (benefit from) income taxes

24.1

--

24.1

(5.0

)

34.5

29.5

Net income

$

72.4

$

72.4

$

88.5

$

88.5

Excluding the impact of this item, the adjusted provision for income taxes of $29.5 million for the six months ended June 30, 2014, reflects a 25 percent effective rate on adjusted income before income taxes of $118.0 million for the six months ended June 30, 2014. The effective tax rate on income before income taxes for the three months ended June 30, 2014 is also 25 percent.

5. Intangible amortization from the second-quarter 2011 King Sturge acquisition is included in depreciation and amortization in the firm's consolidated results, as well as in EMEA's segment results, but has been excluded from adjusted operating income and adjusted net income.

6. Each geographic region offers the firm's full range of Real Estate Services businesses consisting primarily of tenant representation and agency leasing; capital markets; property management and facilities management; project and development services; and advisory, consulting and valuations services. The Investment Management segment provides investment management services to institutional investors and high-net-worth individuals.

7. The consolidated statements of cash flows are presented in summarized form. For complete consolidated statements of cash flows, please refer to the firm's Annual Report on Form 10-Q for the quarter ended June 30, 2014, to be filed with the Securities and Exchange Commission shortly.

8. EMEA refers to Europe, Middle East and Africa. MENA refers to Middle East and North Africa. Greater China includes China, Hong Kong, Macau and Taiwan. Southeast Asia refers to Singapore, Indonesia, Philippines, Thailand and Vietnam. The BRIC countries include Brazil, Russia, India and China.

9. Certain prior year amounts have been reclassified to conform to the current presentation.

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