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

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.

Contact:

Christie B. Kelly
Title: Global Chief Financial Officer
Phone: +1 312 228 2316
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