SOURCE: JLL

JLL

February 03, 2016 07:30 ET

JLL Reports Record Fourth Quarter and Full-Year 2015 Results

Full-year gross revenue up 18% to $6.0 billion; fee revenue up 17% to $5.2 billion; Adjusted Earnings Per Share of $10.01 up 26% reflecting $0.87 currency headwind

CHICAGO, IL--(Marketwired - Feb 3, 2016) - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported strong, diversified revenue increases for the full year and fourth quarter of 2015. Adjusted earnings per share were $4.53 for the fourth quarter, up 14 percent reflecting a $0.42 currency headwind. Fourth quarter gross revenue was up 15 percent to $1.9 billion; fee revenue of $1.7 billion was up 14 percent. All percentage variances are calculated on a local currency basis.

  • Broad-based revenue and margin expansion across all geographic segments and LaSalle

  • Acquisitions and investments continue to fuel profitable growth

  • Corporate Solutions posts record year of business wins globally 

  • LaSalle Investment Management continues to deliver strong performance and capital raise momentum

  • Moody's raises outlook on JLL's Baa2 investment grade balance sheet to Positive

CEO Comment:
"An excellent fourth quarter completed another year of record revenue and profit," said Colin Dyer, President and CEO of JLL. "Growth will continue in 2016, driven by the caliber of our people, targeted investments and strategic acquisitions, all combining to expand our services and build the long-term value of our company," Dyer added.

                 
Summary Financial Results
($ in millions, except per share data)
  Three Months Ended   Twelve Months Ended
December 31,   December 31,
    2015   2014   2015   2014
                         
Revenue   $ 1,887   $ 1,749   $ 5,966   $ 5,430
Fee Revenue1   $ 1,666   $ 1,557   $ 5,164   $ 4,702
Adjusted Net Income2   $ 206   $ 196   $ 455   $ 392
U.S. GAAP Net Income2   $ 196   $ 194   $ 438   $ 386
Adjusted Earnings per Share2   $ 4.53   $ 4.33   $ 10.01   $ 8.65
Earnings per Share   $ 4.31   $ 4.28   $ 9.65   $ 8.52
Adjusted EBITDA3   $ 312   $ 300   $ 749   $ 651
  Adjusted EBITDA, Real Estate Services   $ 282   $ 274   $ 589   $ 517
  Adjusted EBITDA, LaSalle Investment Management   $ 30   $ 26   $ 160   $ 134
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
 
             
Consolidated Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in USD   % Change in LC
    2015   2014  
                     
Real Estate Services ("RES")                    
Leasing   $ 566.0   $ 536.8   5%   12%
Capital Markets & Hotels     331.9     330.1   1%   7%
Property & Facility Management Fee Revenue1     337.5     305.8   10%   17%
    Property & Facility Management     441.6     428.6   3%   10%
Project & Development Services Fee Revenue1     161.4     131.6   23%   31%
    Project & Development Services     278.7     200.4   39%   50%
Advisory, Consulting and Other     172.2     161.1   7%   14%
  Total RES Fee Revenue1   $ 1,569.0   $ 1,465.4   7%   14%
    Total RES Revenue   $ 1,790.4   $ 1,657.0   8%   15%
                     
LaSalle Investment Management ("LaSalle")                    
Advisory Fees   $ 61.6   $ 58.8   5%   9%
Transaction Fees & Other     11.2     7.3   53%   61%
Incentive Fees     24.2     25.9   (7)%   (5)%
    Total LaSalle Revenue   $ 97.0   $ 92.0   5%   10%
                     
Total Firm Fee Revenue1   $ 1,666.0   $ 1,557.4   7%   14%
    Total Firm Revenue   $ 1,887.4   $ 1,749.0   8%   15%
                     
n.m. - not meaningful                    
                     
             
Consolidated Revenue
($ in millions, "LC" = local currency)
  Twelve Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Real Estate Services ("RES")                    
Leasing   $ 1,669.5   $ 1,540.0   8%   13%
Capital Markets & Hotels     955.8     822.9   16%   25%
Property & Facility Management Fee Revenue1     1,128.2     1,070.6   5%   13%
    Property & Facility Management     1,557.4     1,523.7   2%   10%
Project & Development Services Fee Revenue1     510.0     434.5   17%   26%
    Project & Development Services     882.1     709.3   24%   38%
Advisory, Consulting and Other     503.9     465.6   8%   18%
  Total RES Fee Revenue1   $ 4,767.4   $ 4,333.6   10%   17%
    Total RES Revenue   $ 5,568.7   $ 5,061.5   10%   18%
                     
LaSalle Investment Management ("LaSalle")                    
Advisory Fees   $ 242.9   $ 235.6   3%   10%
Transaction Fees & Other     30.6     27.2   13%   22%
Incentive Fees     123.5     105.3   17%   27%
    Total LaSalle Revenue   $ 397.0   $ 368.1   8%   16%
                     
Total Firm Fee Revenue1   $ 5,164.4   $ 4,701.7   10%   17%
    Total Firm Revenue   $ 5,965.7   $ 5,429.6   10%   18%
                     
n.m. - not meaningful                    
                     

Consolidated Performance Highlights:

  • Consolidated fee revenue for the year was $5.2 billion, up 17 percent from 2014. Consolidated fee revenue for the fourth quarter was $1.7 billion, up 14 percent from 2014. Growth for the year was broad-based, with double-digit increases across all service lines, geographic segments and LaSalle.

  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $4.6 billion for the year, compared with $4.2 billion last year, an increase of 17 percent. Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.4 billion for the fourth quarter, compared with $1.3 billion last year, an increase of 15 percent.

  • LaSalle Investment Management generated annual double-digit growth across all three of its major fee categories, with total revenue increasing 16 percent. LaSalle also recognized significant equity earnings from net valuation increases and investment dispositions.

  • Adjusted EBITDA margin calculated on a fee revenue basis was 14.6 percent in local currency for the year, compared with 13.8 percent last year. Adjusted EBITDA margin calculated on a fee revenue basis was 19.2 percent in local currency for the fourth quarter, in-line with last year.

  • Adjusted earnings per share reached $10.01 for the year, up 26 percent from last year. Foreign exchange reduced adjusted earnings per share for the year by approximately $0.87. Adjusted earnings per share reached $4.53 for the quarter, up 14 percent from the same period last year. Foreign exchange reduced adjusted earnings per share in the quarter by approximately $0.42.

Balance Sheet and Net Interest Expense:

  • In December 2015 Moody's revised its outlook on the firm to Positive, reflecting the firm's strong cash generation. The firm's investment grade balance sheet is positioned for growth.

  • The firm's total net debt was $461 million at year end, an increase of $298 million from last year, reflecting the pace of the firm's continued investments and acquisitions. 

  • Net interest expense for the year was $28.1 million, down from $28.3 million in 2014, due to slightly lower average borrowings compared with last year.

Business Segment Performance Highlights

Americas Real Estate Services

             
Americas Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 374.9   $ 345.3   9%   13%
Capital Markets & Hotels     105.4     94.1   12%   13%
Property & Facility Management Fee Revenue1     154.1     139.0   11%   15%
    Property & Facility Management     206.7     195.3   6%   12%
Project & Development Services Fee Revenue1     81.5     69.5   17%   21%
    Project & Development Services     83.0     70.7   17%   21%
Advisory, Consulting and Other     44.5     40.2   11%   13%
  Operating Revenue   $ 760.4   $ 688.1   11%   14%
                     
Equity Earnings     0.5     0.3   67%   63%
Total Segment Fee Revenue1   $ 760.9   $ 688.4   11%   14%
      Total Segment Revenue   $ 815.0   $ 745.9   9%   14%
                     
n.m. - not meaningful                    
                     
                     
Americas Revenue
($ in millions, "LC" = local currency)
  Twelve Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 1,165.6   $ 1,039.5   12%   14%
Capital Markets & Hotels     331.6     266.6   24%   25%
Property & Facility Management Fee Revenue1     499.3     454.3   10%   14%
    Property & Facility Management     706.1     661.9   7%   12%
Project & Development Services Fee Revenue1     258.0     222.7   16%   20%
    Project & Development Services     263.3     225.5   17%   21%
Advisory, Consulting and Other     138.9     125.6   11%   13%
  Operating Revenue   $ 2,393.4   $ 2,108.7   14%   16%
                     
Equity Earnings     5.9     0.8   n.m.   n.m.
Total Segment Fee Revenue1   $ 2,399.3   $ 2,109.5   14%   16%
      Total Segment Revenue   $ 2,611.4   $ 2,319.9   13%   16%
                     
n.m. - not meaningful                    
                     

Americas Performance Highlights:

  • Fee revenue for the year was $2.4 billion, an increase of 16 percent from last year. Revenue growth compared with last year was strong across the platform, with double-digit growth across all service lines led by Leasing, Capital Markets & Hotels, Property & Facility Management and Project & Development Services. Fee revenue for the fourth quarter was $761 million, an increase of 14 percent from 2014.

  • Fee-based operating expenses for the year, excluding restructuring and acquisition charges, were $2.1 billion, up from $1.9 billion 2014. Fee-based operating expenses, excluding restructuring and acquisition charges, were $653 million for the quarter, up from $581 million last year.

  • Operating income was $251 million for the year, compared with $219 million in 2014. Fourth quarter operating income was $108 million, in-line with 2014.

  • Adjusted EBITDA was $314 million for the year, up from $275 million in 2014. Adjusted EBITDA margin, calculated on a fee revenue basis, was 13.3 percent in local currency for 2015, compared with 13.0 percent in 2014. Adjusted EBITDA was $125 million for the fourth quarter, compared with $124 million last year. Adjusted EBITDA margin, for the fourth quarter, calculated on a fee revenue basis, was 17.3 percent in local currency, compared with 18.1 percent in 2014. 

EMEA Real Estate Services

             
EMEA Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 103.4   $ 106.9   (3)%   7%
Capital Markets & Hotels     176.1     173.2   2%   11%
Property & Facility Management Fee Revenue1     68.1     65.7   4%   13%
    Property & Facility Management     85.2     91.6   (7)%   1%
Project & Development Services Fee Revenue1     58.7     41.2   42%   57%
    Project & Development Services     163.0     96.8   68%   85%
Advisory, Consulting and Other     86.2     88.1   (2)%   6%
  Operating Revenue   $ 492.5   $ 475.1   4%   13%
                     
Equity Earnings     --     --   n.m.   n.m.
Total Segment Fee Revenue1   $ 492.5   $ 475.1   4%   13%
      Total Segment Revenue   $ 613.9   $ 556.6   10%   21%
                     
n.m. - not meaningful                    
                     
                     
EMEA Revenue
($ in millions, "LC" = local currency)
  Twelve Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 289.4   $ 295.2   (2)%   11%
Capital Markets & Hotels     474.8     411.8   15%   29%
Property & Facility Management Fee Revenue1     224.4     236.9   (5)%   6%
    Property & Facility Management     304.8     338.2   (10)%   1%
Project & Development Services Fee Revenue1     170.1     139.6   22%   38%
    Project & Development Services     487.1     354.7   37%   58%
Advisory, Consulting and Other     247.0     232.7   6%   18%
  Operating Revenue   $ 1,405.7   $ 1,316.2   7%   20%
                     
Equity Earnings     0.8     --   n.m.   n.m
Total Segment Fee Revenue1   $ 1,406.5   $ 1,316.2   7%   20%
      Total Segment Revenue   $ 1,803.9   $ 1,632.6   10%   25%
                     
n.m. - not meaningful                    
                     

EMEA Performance Highlights:

  • EMEA's performance during the year was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar against European currencies, particularly the Euro.

  • Fee revenue for the year was $1.4 billion, an increase of 20 percent from last year. Revenue growth from last year was driven by Project & Development Services and Capital Markets & Hotels. Growth in the region was led by Germany, France and the UK. Fee revenue for the quarter was $493 million, an increase of 13 percent from 2014.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $1.3 billion, compared with $1.2 billion last year. Fee-based operating expenses, excluding restructuring and acquisition charges, were $403 million for the fourth quarter, compared with $390 million last year.

  • Operating income was $146 million for the year, up from $121 million in 2014. Operating income was $90 million for the fourth quarter, compared with $85 million last year.

  • Adjusted EBITDA was $173 million for the year, up from $145 million in 2014. Adjusted EBITDA margin calculated on a fee revenue basis was 12.4 percent in local currency for the year, compared with 11.0 percent in 2014. Adjusted EBITDA was $99 million for the fourth quarter, compared with $91 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 20.4 percent in local currency for the fourth quarter, compared with 19.2 percent in 2014.

Asia Pacific Real Estate Services

             
Asia Pacific Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 87.7   $ 84.6   4%   11%
Capital Markets & Hotels     50.4     62.8   (20)%   (12)%
Property & Facility Management Fee Revenue1     115.3     101.1   14%   23%
    Property & Facility Management     149.7     141.7   6%   14%
Project & Development Services Fee Revenue1     21.2     20.9   1%   11%
    Project & Development Services     32.7     32.9   (1)%   8%
Advisory, Consulting and Other     41.5     32.8   27%   39%
  Operating Revenue   $ 316.1   $ 302.2   5%   14%
                     
Equity Earnings     0.5     0.3   67%   63%
Total Segment Fee Revenue1   $ 316.6   $ 302.5   5%   14%
      Total Segment Revenue   $ 362.5   $ 355.1   2%   11%
                     
n.m. - not meaningful                    
                     
                     
Asia Pacific Revenue
($ in millions, "LC" = local currency)
  Twelve Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Leasing   $ 214.5   $ 205.3   4%   13%
Capital Markets & Hotels     149.4     144.5   3%   15%
Property & Facility Management Fee Revenue1     404.5     379.4   7%   17%
    Property & Facility Management     546.5     523.6   4%   13%
Project & Development Services Fee Revenue1     81.9     72.2   13%   25%
    Project & Development Services     131.7     129.1   2%   13%
Advisory, Consulting and Other     118.0     107.3   10%   21%
  Operating Revenue   $ 968.3   $ 908.7   7%   17%
                     
Equity Earnings     0.7     0.4   75%   70%
Total Segment Fee Revenue1   $ 969.0   $ 909.1   7%   17%
      Total Segment Revenue   $ 1,160.8   $ 1,110.2   5%   14%
                     
n.m. - not meaningful                    
                     

Asia Pacific Performance Highlights:

  • Asia Pacific's performance during the year was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar, particularly against the Australian dollar and Japanese yen.

  • Fee revenue for the year was $969 million, an increase of 17 percent from 2014. Revenue growth compared with last year was strong across the platform, with double-digit increases across all service lines led by Property & Facility Management. Growth in the region was led by India and Japan. Fee revenue for the fourth quarter was $317 million, an increase of 14 percent from last year. Capital Markets & Hotels revenue for the quarter is down from 2014, reflective of the decline in market volumes for the region.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $882 million for the year, compared with $825 million last year. Fee-based operating expenses, excluding restructuring and acquisition charges, were $263 million for the fourth quarter, compared with $250 million last year.

  • Operating income was $87 million for the year, up from $84 million in 2014. Operating income was $54 million for the fourth quarter, up from $52 million last year.

  • Adjusted EBITDA was $103 million for the year, up from $98 million in 2014. Adjusted EBITDA margin calculated on a fee revenue basis was 11.0 percent in local currency for the year, compared with 10.7 percent in 2014. Adjusted EBITDA was $58 million for the fourth quarter, consistent with the same period last year. Adjusted EBITDA margin calculated on a fee revenue basis was 18.4 percent in local currency for the fourth quarter, compared to 19.1 percent in 2014.

LaSalle Investment Management

             
LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Advisory Fees   $ 61.6   $ 58.8   5%   9%
Transaction Fees & Other     11.2     7.3   53%   61%
Incentive Fees     24.2     25.9   (7)%   (5)%
  Operating Revenue   $ 97.0   $ 92.0   5%   10%
                       
Equity Earnings     12.6     6.7   88%   90%
Total Segment Revenue   $ 109.6   $ 98.7   11%   15%
                     
n.m. - not meaningful                    
                     
LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
  Twelve Months Ended
December 31,
  % Change in USD   % Change in LC
2015   2014  
                     
Advisory Fees   $ 242.9   $ 235.6   3%   10%
Transaction Fees & Other     30.6     27.2   13%   22%
Incentive Fees     123.5     105.3   17%   27%
  Operating Revenue   $ 397.0   $ 368.1   8%   16%
                       
Equity Earnings     70.1     47.0   49%   50%
Total Segment Revenue   $ 467.1   $ 415.1   13%   20%
                     
n.m. - not meaningful                    
                     

LaSalle Investment Management Performance Highlights:

  • Advisory fees were $243 million for the year, up 10 percent from last year, and up 9 percent for the quarter. Total segment revenue, including $31 million of transaction fees and other income, $123 million of incentive fees and $70 million of equity earnings, was $467 million for the year compared with $415 million last year.

  • Incentive fees and equity earnings were notable for the year and prior year. Incentive fees were driven by the sale of assets as LaSalle realized gains from legacy investments, whereas equity earnings were driven by valuation increases and investment dispositions.

  • Operating expenses were $310 million for the year, compared with $283 million last year. Operating income was $158 million for the year, compared with $132 million last year. 

  • Adjusted EBITDA was $160 million for the year, compared with $134 million last year. Adjusted EBITDA margin was 34.0 percent in local currency, compared with 32.3 percent in 2014.

  • Capital raise was $5.0 billion for the year, with $1.2 billion raised in the fourth quarter.

  • Assets under management were $56.4 billion as of December 31, 2015, down from $57.2 billion as of September 30, 2015, primarily due to dispositions and foreign currency impact. The net decrease in assets under management resulted from $4.7 billion of dispositions and withdrawals and $0.8 billion of net foreign currency decreases, partially offset by $3.3 billion of acquisitions and takeovers and $1.4 billion of net valuation increases.

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. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 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 news 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, 2014, on Form 10-Q for the quarter ended March 31, 2015, June 30, 2015, and September 30, 2015 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

Management will conduct a conference call with shareholders, analysts and investment professionals on Wednesday, February 3, 2016 at 9:00 a.m. EST.

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

U.S. callers: +1 844 231 9804
International callers: +1 402 858 7998
Passcode: 21562666

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 https://www.webcaster4.com/Webcast/Page/609/12740
3. Download free Windows Media Player software: (link located under registration form)
4. If you experience problems listening, please call the Webcast Hotline +1 800 774 9473 and provide your Event ID (12740).

Supplemental Information

Supplemental information regarding the fourth-quarter 2015 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.

Conference Call Replay

Available: 12:00 p.m. EST Wednesday, February 3, 2016 through 11:59 p.m. EST Thursday, March 3, 2016 at the following numbers:

U.S. callers: +1 855 859 2056 or +1 800 585 8367
International callers: +1 404 537 3406 
Passcode: 21562666 

Web Audio Replay

An audio replay will be available for download or stream. Information and the link can be found on the company's website: www.jll.com.

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

   
JONES LANG LASALLE INCORPORATED  
Consolidated Statements of Operations  
For the Three and Twelve Months Ended December 31, 2015 and 2014  
(in thousands, except share data)  
(Unaudited)  
   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
    2015   2014   2015   2014  
                           
Revenue   $ 1,887,417   $ 1,748,981   $ 5,965,671   $ 5,429,603  
                           
  Operating expenses:                          
  Compensation and benefits     1,105,480     1,031,869     3,564,536     3,258,673  
  Operating, administrative and other     483,636     427,048     1,729,079     1,568,424  
  Depreciation and amortization     31,082     27,123     108,142     94,337  
  Restructuring and acquisition charges 4     13,359     1,126     34,116     42,505  
    Total operating expenses     1,633,557     1,487,166     5,435,873     4,963,939  
                           
      Operating income1     253,860     261,815     529,798     465,664  
                           
Interest expense, net of interest income     (7,758 )   (6,660 )   (28,127 )   (28,321 )
Equity earnings from real estate ventures     13,602     7,320     77,475     48,265  
                           
Income before income taxes and noncontrolling interest 4     259,704     262,475     579,146     485,608  
Provision for income taxes 4     61,229     67,699     132,805     97,588  
Net income 4     198,475     194,776     446,341     388,020  
                           
Net income attributable to noncontrolling interest     2,417     841     7,669     1,957  
Net income attributable to the Company   $ 196,058   $ 193,935   $ 438,672   $ 386,063  
                           
Dividends on unvested common stock, net of tax benefit     151     138     314     314  
Net income attributable to common shareholders   $ 195,907   $ 193,797   $ 438,358   $ 385,749  
                           
Basic earnings per common share   $ 4.35   $ 4.32   $ 9.75   $ 8.63  
                           
Basic weighted average shares outstanding     45,043,383     44,824,108     44,940,042     44,684,482  
                           
Diluted earnings per common share 2   $ 4.31   $ 4.28   $ 9.65   $ 8.52  
                           
Diluted weighted average shares outstanding     45,491,779     45,331,703     45,414,898     45,260,563  
                           
EBITDA 3   $ 298,544   $ 296,258   $ 715,415   $ 608,266  
                           
Please reference attached financial statement notes.  
                     
   
JONES LANG LASALLE INCORPORATED  
Segment Operating Results  
For the Three and Twelve Months Ended December 31, 2015 and 2014  
(in thousands)  
(Unaudited)  
   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
    2015   2014   2015   2014  
REAL ESTATE SERVICES                          
                           
AMERICAS                          
  Revenue:                          
    Operating revenue   $ 814,484   $ 745,584   $ 2,605,556   $ 2,319,136  
    Equity earnings     522     329     5,888     775  
    Total segment revenue     815,006     745,913     2,611,444     2,319,911  
    Gross contract costs1     (54,072 )   (57,517 )   (212,118 )   (210,380 )
    Total segment fee revenue     760,934     688,396     2,399,326     2,109,531  
                           
  Operating expenses:                          
    Compensation, operating and administrative expenses     690,213     621,582     2,297,142     2,045,330  
    Depreciation and amortization     16,728     16,716     63,239     55,215  
    Total segment operating expenses     706,941     638,298     2,360,381     2,100,545  
    Gross contract costs1     (54,072 )   (57,517 )   (212,118 )   (210,380 )
    Total fee-based segment operating expenses     652,869     580,781     2,148,263     1,890,165  
                           
  Operating income   $ 108,065   $ 107,615   $ 251,063   $ 219,366  
                           
  Adjusted EBITDA   $ 124,793   $ 124,331   $ 314,302   $ 274,581  
                           
EMEA                          
  Revenue:                          
    Operating revenue   $ 613,930   $ 556,568   $ 1,803,000   $ 1,632,657  
    Equity earnings     -     4     752     17  
    Total segment revenue     613,930     556,572     1,803,752     1,632,674  
    Gross contract costs1     (121,398 )   (81,511 )   (397,446 )   (316,440 )
    Total segment fee revenue     492,532     475,061     1,406,306     1,316,234  
                           
  Operating expenses:                          
    Compensation, operating and administrative expenses     515,035     465,434     1,631,064     1,488,033  
    Depreciation and amortization     9,080     6,460     27,179     23,763  
    Total segment operating expenses     524,115     471,894     1,658,243     1,511,796  
    Gross contract costs1     (121,398 )   (81,511 )   (397,446 )   (316,440 )
    Total fee-based segment operating expenses     402,717     390,383     1,260,797     1,195,356  
                           
  Operating income   $ 89,815   $ 84,678   $ 145,509   $ 120,878  
                           
  Adjusted EBITDA   $ 98,895   $ 91,138   $ 172,688   $ 144,641  
                           
           
    Three Months Ended December 31,   Twelve Months Ended December 31,  
    2015   2014   2015   2014  
ASIA PACIFIC                          
  Revenue:                          
    Operating revenue   $ 362,006   $ 354,812   $ 1,159,979   $ 1,109,701  
    Equity earnings     498     327     713     447  
    Total segment revenue     362,504     355,139     1,160,692     1,110,148  
    Gross contract costs1     (45,825 )   (52,590 )   (191,780 )   (201,073 )
    Total segment fee revenue     316,679     302,549     968,912     909,075  
                           
  Operating expenses:                          
    Compensation, operating and administrative expenses     304,199     299,530     1,057,962     1,012,639  
    Depreciation and amortization     4,651     3,430     15,529     13,301  
    Total segment operating expenses     308,850     302,960     1,073,491     1,025,940  
    Gross contract costs1     (45,825 )   (52,590 )   (191,780 )   (201,073 )
    Total fee-based segment operating expenses     263,025     250,370     881,711     824,867  
                           
  Operating income   $ 53,654   $ 52,179   $ 87,201   $ 84,208  
                           
  Adjusted EBITDA   $ 58,305   $ 57,825   $ 102,730   $ 97,509  
                           
LASALLE INVESTMENT MANAGEMENT                          
  Revenue:                          
    Operating revenue   $ 96,997   $ 92,017   $ 397,136   $ 368,109  
    Equity earnings     12,582     6,660     70,122     47,026  
    Total segment revenue     109,579     98,677     467,258     415,135  
                           
  Operating expenses:                          
    Compensation, operating and administrative expenses     79,669     72,371     307,447     281,094  
    Depreciation and amortization     623     517     2,195     2,059  
    Total segment operating expenses     80,292     72,888     309,642     283,153  
                           
  Operating income   $ 29,287   $ 25,789   $ 157,616   $ 131,982  
                           
  Adjusted EBITDA   $ 29,910   $ 26,306   $ 159,811   $ 134,041  
   
                           
SEGMENT RECONCILING ITEMS                          
  Total segment revenue   $ 1,901,019   $ 1,756,301   $ 6,043,146   $ 5,477,868  
  Reclassification of equity earnings     13,602     7,320     77,475     48,265  
  Total revenue   $ 1,887,417   $ 1,748,981   $ 5,965,671   $ 5,429,603  
                           
  Total operating expenses before restructuring and acquisition charges     1,620,198     1,486,040     5,401,757     4,921,434  
  Operating income before restructuring and acquisition charges   $ 267,219   $ 262,941   $ 563,914   $ 508,169  
                           
  Restructuring and acquisition charges4     13,359     1,126     34,116     42,505  
  Operating income after restructuring and acquisition charges   $ 253,860   $ 261,815   $ 529,798   $ 465,664  
                           
  Total adjusted EBITDA   $ 311,903   $ 299,600   $ 749,531   $ 650,771  
  Restructuring and acquisition charges4     13,359     3,342     34,116     42,505  
  Total EBITDA   $ 298,544   $ 296,258   $ 715,415   $ 608,266  
                     
Please reference attached financial statement notes.  
                     
 
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
December 31, 2015 and December 31, 2014
(in thousands)
 
    (Unaudited)    
    December 31,   December 31,
    2015   2014
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 216,583   $ 250,413
  Trade receivables, net of allowances     1,591,674     1,375,035
  Notes and other receivables     267,307     181,377
  Warehouse receivables     265,211     83,312
  Prepaid expenses     77,753     64,963
  Deferred tax assets, net     132,868     135,251
  Other     99,411     27,825
    Total current assets     2,650,807     2,118,176
             
Property and equipment, net of accumulated depreciation     423,268     368,361
Goodwill, with indefinite useful lives     2,141,471     1,907,924
Identified intangibles, net of accumulated amortization     227,185     38,841
Investments in real estate ventures     311,487     297,142
Long-term receivables     135,181     85,749
Deferred tax assets, net     87,177     90,897
Deferred compensation plans     134,253     111,234
Other     94,330     57,012
    Total assets   $ 6,205,159   $ 5,075,336
             
LIABILITIES AND EQUITY            
Current liabilities:            
  Accounts payable and accrued liabilities   $ 712,624   $ 630,037
  Accrued compensation     1,088,889     990,678
  Short-term borrowings     49,217     19,623
  Deferred tax liabilities, net     21,112     16,554
  Deferred income     114,770     104,565
  Deferred business acquisition obligations     54,675     49,259
  Warehouse facility     263,102     83,312
  Minority shareholder redemption liability     -     11,158
  Other     200,804     141,825
    Total current liabilities     2,505,193     2,047,011
             
Noncurrent liabilities:            
  Credit facility     254,999     -
  Long-term senior notes     275,000     275,000
  Deferred tax liabilities, net     33,032     17,082
  Deferred compensation     156,197     125,857
  Deferred business acquisition obligations     42,860     68,848
  Other     208,496     118,969
    Total liabilities     3,475,777     2,652,767
             
             
    (Unaudited)        
    December 31,     December 31,  
    2015     2014  
Redeemable noncontrolling interest     11,083       13,449  
                 
Company shareholders' equity:                
  Common stock, $.01 par value per share,100,000,000 shares authorized; 45,049,503 and 44,828,779 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively     450       448  
  Additional paid-in capital     986,633       961,850  
  Retained earnings     2,044,224       1,631,145  
  Shares held in trust     (6,231 )     (6,407 )
  Accumulated other comprehensive income (loss)     (336,313 )     (200,239 )
    Total Company shareholders' equity     2,688,763       2,386,797  
                 
  Noncontrolling interest     29,536       22,323  
    Total equity     2,718,299       2,409,120  
                 
    Total liabilities and equity   $ 6,205,159     $ 5,075,336  
                 
Please reference attached financial statement notes.  
                 
   
JONES LANG LASALLE INCORPORATED  
Summarized Consolidated Statements of Cash Flows  
For the Twelve Months Ended December 31, 2015 and 2014  
(in thousands)  
   
    Twelve Months Ended  
    December 31,  
    2015     2014  
                 
Cash used in operating activities   $ 375,769     $ 498,861  
                 
Cash used in investing activities     (584,615 )     (187,938 )
                 
Cash provided by financing activities     191,567       (203,029 )
                 
Effect of currency exchange rate changes on cash and cash equivalents     (16,551 )     (10,207 )
                 
  Net decrease in cash and cash equivalents   $ (33,830 )   $ 97,687  
                 
Cash and cash equivalents, beginning of period     250,413       152,726  
                 
Cash and cash equivalents, end of period   $ 216,583     $ 250,413  
                 
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. "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 twelve months ended December 31, 2015 and 2014.

             
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
($ in millions)   2015     2014     2015     2014  
                                 
Revenue   $ 1,887.4     $ 1,749.0     $ 5,965.7     $ 5,429.6  
Gross contract costs     (221.3 )     (191.6 )     (801.3 )     (727.9 )
Fee revenue   $ 1,666.1     $ 1,557.4     $ 5,164.4     $ 4,701.7  
                                 
Operating expenses   $ 1,633.6     $ 1,487.2     $ 5,435.9     $ 4,963.9  
Gross contract costs     (221.3 )     (191.6 )     (801.3 )     (727.9 )
Fee-based operating expenses   $ 1,412.3     $ 1,295.6     $ 4,634.6     $ 4,236.0  
                                 
Operating income   $ 253.8     $ 261.8     $ 529.8     $ 465.7  
                                 
Add:                                
Restructuring and acquisition charges*     13.4       3.3       34.1       42.5  
Adjusted operating income   $ 267.2     $ 265.1     $ 563.9     $ 508.2  
                                 
Adjusted operating income margin     16.0 %     17.0 %     10.9 %     10.8 %
*See note 4 for more information on restructuring and acquisition charges  
                                 

2. Net restructuring and acquisition charges are excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and twelve months ended December 31, 2015 and 2014. Adjusted net income in the table below for the three and twelve months ended December 31, 2014 no longer incorporates an adjustment to exclude the net intangible amortization related to the 2011 King Sturge acquisition; such amounts were $0.4 million and $2.0 million of amortization expense for the three and twelve months ended December 31, 2014, respectively. There was no comparable activity during the three and twelve months ended December 31, 2015.

Amounts, including adjusted diluted earnings per share - local currency, and percentage variances presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the periods against which our current period results are being compared. Management believes this methodology provides a framework for assessing our performance and operations excluding the effect of foreign currency exchange rate fluctuations. Adjusted diluted earnings per share - local currency, calculated pursuant to this methodology is a non-GAAP financial measure, which should not be considered as an alternative to basic or diluted earnings per share determined in accordance with GAAP. Because amounts and percentage variances presented on a local currency basis are not calculated under GAAP, they may not be comparable to similarly titled measures used by other companies.

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   Twelve Months Ended
    December 31,   December 31,
($ in millions, except per share data)   2015   2014   2015   2014
                         
GAAP net income attributable to common shareholders   $ 195.9   $ 193.8   $ 438.4   $ 385.7
Shares (in 000s)     45,492     45,332     45,415     45,261
GAAP diluted earnings per share   $ 4.31   $ 4.28   $ 9.65   $ 8.52
                         
GAAP net income attributable to common shareholders   $ 195.9   $ 193.8   $ 438.4   $ 385.7
Restructuring and acquisition charges, net*     10.1     2.5     16.1     6.0
Adjusted net income   $ 206.0   $ 196.3   $ 454.5   $ 391.7
                         
Shares (in 000s)     45,492     45,332     45,415     45,261
                         
Adjusted diluted earnings per share   $ 4.53   $ 4.33   $ 10.01   $ 8.65
Currency impact on adjusted diluted earnings per share     0.42           0.87      
Adjusted diluted earnings per share - local currency   $ 4.95         $ 10.88      
*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   Twelve Months Ended
    December 31,   December 31,
($ in millions)   2015   2014   2015   2014
                         
GAAP net income   $ 198.5   $ 194.8   $ 446.3   $ 388.0
Add:                        
Interest expense, net of interest income     7.8     6.7     28.1     28.3
Provision for income taxes     61.2     67.7     132.8     97.6
Depreciation and amortization     31.1     27.1     108.1     94.4
                         
EBITDA   $ 298.6   $ 296.3   $ 715.3   $ 608.3
Add:                        
Restructuring and acquisition charges     13.4     3.3     34.1     42.5
Adjusted EBITDA   $ 312.0   $ 299.6   $ 749.4   $ 650.8
                         

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 and acquisition 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 presented in the Financial Statement Notes for the three months ended December 31, 2014 includes a pre-tax charge of $2.2 million associated with acquisition-related activity that was presented within Operating, administrative and other expenses in the consolidated statements of operations for the quarter and reclassified to Restructuring and acquisition charges for full-year 2014 reporting comparability.

Restructuring and acquisition charges of $34 million for the year ended December 31, 2015 includes $13 million related to the write-off of an indemnification asset which arose from prior period acquisition activity. This write-off is 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   Twelve Months End
    December 31, 2015   December 31, 2015
($ in millions)   GAAP   Adjusting Item   Adjusted   GAAP   Adjusting Item   Adjusted
                                     
Income before income taxes and noncontrolling interest   $ 259.7   $ --   $ 259.7   $ 579.1   $ 12.8   $ 591.9
Provision for income taxes     61.2     --     61.2     132.8     12.8     145.6
Net Income   $ 198.5         $ 198.5   $ 446.3         $ 446.3
                                     

Excluding the impact of this item, the adjusted provision for income taxes for the year ended December 31, 2015 of $145.6 million reflects a 24.6 percent estimated annual effective tax rate on adjusted income before taxes of $592.4 million.

5. 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. LaSalle Investment Management provides investment management services to institutional investors and high-net-worth individuals.

6. 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-K for the year ended December 31, 2015, to be filed with the Securities and Exchange Commission shortly.

7. 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.

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

Contact Information

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