SOURCE: JLL

JLL

February 03, 2015 07:30 ET

JLL Reports Record Full-Year 2014 Adjusted Earnings Per Share of $8.69, Up 38 Percent Over Last Year

Full-year fee revenue of $4.7 billion, up 18 percent

CHICAGO, IL--(Marketwired - Feb 3, 2015) -  Jones Lang LaSalle Incorporated (NYSE: JLL) today reported 2014 adjusted earnings per share of $8.69, up from $6.32 in the prior year. Full-year fee revenue of $4.7 billion was up 18 percent. All percentage variances are calculated on a local currency basis.

  • Strong fourth quarter and full-year fee revenue growth across all service lines and geographic segments

  • Margins expanded in all segments for the quarter and the year

  • Investments for future profitable revenue growth continue

  • LaSalle Investment Management raised nearly $9 billion of equity commitments for the year and continued outstanding investment performance

  • Standard & Poor's raised JLL's investment grade credit rating to BBB
                 
Summary Financial Results   Three Months Ended   Twelve Months Ended
($ in millions, except per share data) December 31,   December 31,
    2014   2013   2014   2013
                         
Revenue   $ 1,749   $ 1,509   $ 5,430   $ 4,462
Fee Revenue1   $ 1,557   $ 1,349   $ 4,702   $ 4,027
Adjusted Net Income2   $ 195   $ 150   $ 393   $ 285
U.S. GAAP Net Income2   $ 194   $ 147   $ 386   $ 269
Adjusted Earnings per Share2   $ 4.30   $ 3.33   $ 8.69   $ 6.32
Earnings per Share   $ 4.28   $ 3.26   $ 8.52   $ 5.98
Adjusted EBITDA3   $ 297   $ 230   $ 651   $ 498
  Adjusted EBITDA, Real Estate Services   $ 271   $ 211   $ 517   $ 428
  Adjusted EBITDA, LaSalle Investment Management   $ 26   $ 19   $ 134   $ 70
                         
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
 

CEO Comment:

"We completed an excellent fourth quarter and full-year 2014, with strong revenue growth across all service lines and geographies, record profit, and record levels of new capital raised by LaSalle," said Colin Dyer, President and CEO of JLL. "In 2015, we will continue our consistent policy of investing in our platform to continuously improve the quality and scope of our services, and build the long-term value of our company," Dyer added.

             
Consolidated Revenue
($ in millions, "LC" = local currency) 
  Three Months Ended
December 31,
% Change in LC    Twelve Months Ended
December 31,
% Change in LC 
    2014   2013     2014   2013  
                             
Real Estate Services ("RES")                            
Leasing   $ 538.1   $ 465.1 19%   $ 1,540.0   $ 1,321.7 17%
Capital Markets & Hotels     328.1     270.3 27%     820.3     716.1 15%
Property & Facility Management Fee Revenue1     305.8     290.7 9%     1,070.6     947.7 15%
  Property & Facility Management     428.6     386.2 16%     1,523.7     1,199.5 30%
Project & Development Services Fee Revenue1     131.6     114.2 19%     434.5     372.4 18%
  Project & Development Services     200.4     178.6 18%     709.3     555.4 29%
Advisory, Consulting and Other     161.8     142.9 17%     468.2     414.2 13%
  Total RES Fee Revenue1   $ 1,465.4   $ 1,283.2 18%   $ 4,333.6   $ 3,772.1 16%
    Total RES Revenue   $ 1,657.0   $ 1,443.1 19%   $ 5,061.5   $ 4,206.9 22%
                             
LaSalle Investment Management                            
Advisory Fees   $ 58.8   $ 56.0 9%   $ 235.6   $ 223.0 5%
Transaction Fees & Other     7.3     7.2 8%     27.2     18.1 53%
Incentive Fees     25.9     3.1 n.m.     105.3     13.6 n.m.
    Total LaSalle Investment Management Revenue   $ 92.0   $ 66.3 44%   $ 368.1   $ 254.7 45%
                             
Total Firm Fee Revenue1   $ 1,557.4   $ 1,349.5 19%   $ 4,701.7   $ 4,026.8 18%
    Total Firm Revenue   $ 1,749.0   $ 1,509.4 20%   $ 5,429.6   $ 4,461.6 23%
                             
n.m. - not meaningful                            
                             
                             

Consolidated Performance Highlights:

  • Consolidated fee revenue for the year was $4.7 billion, up 18 percent from 2013. Consolidated fee revenue for the fourth quarter was $1.6 billion, up 19 percent from 2013.
  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $4.2 billion for the year, compared with $3.6 billion last year, an increase of 16 percent. Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.3 billion for the fourth quarter, compared with $1.2 billion last year, an increase of 16 percent.
  • LaSalle Investment Management continued to successfully raise and deploy capital with a record $8.9 billion in equity raised in the year.
  • Adjusted EBITDA margin calculated on a fee revenue basis was 13.8 percent for the year, compared with 12.4 percent last year. Adjusted EBITDA margin calculated on a fee revenue basis was 19.1 percent for the fourth quarter, compared with 17.1 percent last year.

Balance Sheet and Net Interest Expense:

  • In December 2014, Standard & Poor's raised the firm's investment-grade rating to BBB, which aligns with the firm's investment-grade rating from Moody's of Baa2.
  • The firm reduced total net debt to $163 million from $437 million last year as the firm's strong cash generation continues.
  • Net interest expense for 2014 was $28.3 million, down from $34.7 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
December 31,
  % Change in LC   Twelve Months Ended
December 31,
  % Change in LC
    2014   2013       2014   2013    
                         
Leasing   $ 345.3   $ 295.1   18%   $ 1,039.5   $ 877.7   19%
Capital Markets & Hotels     94.1     80.2   18%     266.6     218.9   22%
Property & Facility Management Fee Revenue1     139.0     133.5   6%     454.3     407.5   13%
  Property & Facility Management     195.3     169.8   18%     661.9     518.4   31%
Project & Development Services Fee Revenue1     69.5     59.3   19%     222.7     187.7   20%
  Project & Development Services     70.7     59.6   20%     225.5     188.9   21%
Advisory, Consulting and Other     40.2     36.3   11%     125.6     114.2   10%
  Operating Revenue   $ 688.1   $ 604.4   15%   $ 2,108.7   $ 1,806.0   18%
                                 
Equity Earnings     0.3     0.3   19%     0.8     0.5   41%
Total Segment Fee Revenue1   $ 688.4   $ 604.7   15%   $ 2,109.5   $ 1,806.5   18%
    Total Segment Revenue   $ 745.9   $ 641.3   18%   $ 2,319.9   $ 1,918.6   22%
                                 
                                 

Americas Performance Highlights:

  • Fee revenue for the year was $2.1 billion, an increase of 18 percent from 2013. Revenue growth was broad-based, with Leasing up 19 percent, Capital Markets & Hotels up 22 percent, Property & Facility Management up 13 percent, and Project & Development Services up 20 percent, compared with last year. Fee revenue for the fourth quarter was $688 million, an increase of 15 percent from 2013.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $1.9 billion for the year, compared with $1.6 billion last year, an increase of 17 percent. Fee-based operating expenses, excluding restructuring and acquisition charges, were $581 million for the fourth quarter, compared with $516 million last year, an increase of 14 percent.
  • Operating income was $219 million for the year, compared with $184 million in 2013. Operating income was $108 million for the fourth quarter, compared with $89 million in 2013.
  • Adjusted EBITDA was $275 million for the year, compared with $229 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 13.0 percent for the year, compared with 12.7 percent in 2013. Adjusted EBITDA was $124 million for the fourth quarter, compared with $101 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 18.1 percent for the fourth quarter, compared with 16.7 percent in 2013.
 
EMEA Real Estate Services
               
EMEA Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
December 31,
  % Change in LC Twelve Months Ended
December 31,
  % Change in LC
    2014   2013     2014   2013    
                               
Leasing   $ 106.9   $ 103.6   11% $ 295.2   $ 271.5   9%
Capital Markets & Hotels     173.2     129.1   42%   411.8     333.3   23%
Property & Facility Management Fee Revenue1     65.7     61.1   14%   236.9     192.6   21%
  Property & Facility Management     91.6     87.9   10%   338.2     240.4   38%
Project & Development Services Fee Revenue1     41.2     36.3   21%   139.6     117.4   18%
  Project & Development Services     96.8     93.7   11%   354.7     274.2   28%
Advisory, Consulting and Other     88.1     77.5   21%   232.7     203.7   13%
  Operating Revenue   $ 475.1   $ 407.6   24% $ 1,316.2   $ 1,118.5   17%
                               
Equity Losses     --     --   n.m.   --     (0.5 ) n.m.
Total Segment Fee Revenue1   $ 475.1   $ 407.6   24% $ 1,316.2   $ 1,118.0   17%
    Total Segment Revenue   $ 556.6   $ 491.8   20% $ 1,632.6   $ 1,322.6   23%
                               
n.m. - not meaningful                              
                               

EMEA Performance Highlights:

  • Fee revenue for the year was $1.3 billion, an increase of 17 percent from 2013. Revenue growth was driven by Capital Markets & Hotels, up 23 percent, and Property & Facility Management, up 21 percent, compared with last year. Growth in the region for the year was broad-based, led by the UK, Germany, France, Spain, MENA, Ireland and Belgium. Fee revenue for the fourth quarter was $475 million, an increase of 24 percent from 2013.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $1.2 billion for the year, compared with $1.0 billion last year, an increase of 15 percent. Fee-based operating expenses, excluding restructuring and acquisition charges, were $390 million for the fourth quarter, compared with $348 million last year, an increase of 18 percent.

  • Adjusted operating income, which excludes King Sturge amortization, was $123 million for the year, compared with $92 million in 2013. Adjusted operating income was $85 million for the fourth quarter, compared with $60 million in 2013.

  • Adjusted EBITDA was $145 million for the year, compared with $110 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 11.0 percent for the year, compared with 9.8 percent in 2013. Adjusted EBITDA was $91 million for the fourth quarter, compared with $65 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 19.2 percent for the quarter, compared with 16.0 percent in 2013.
 
Asia Pacific Real Estate Services
               
Asia Pacific Revenue
($ in millions, "LC" = local currency)
Three Months Ended
December 31,
  % Change in LC   Twelve Months Ended
December 31,
  % Change in LC
  2014   2013       2014   2013    
                               
Leasing $ 85.9   $ 66.4   34%   $ 205.3   $ 172.5   23%
Capital Markets & Hotels   60.8     61.0   5%     141.9     163.9   (10)%
Property & Facility Management Fee Revenue1   101.1     96.1   10%     379.4     347.6   14%
  Property & Facility Management   141.7     128.5   16%     523.6     440.7   24%
Project & Development Services Fee Revenue1   20.9     18.6   18%     72.2     67.3   11%
  Project & Development Services   32.9     25.3   37%     129.1     92.3   45%
Advisory, Consulting and Other   33.5     29.1   16%     109.9     96.3   16%
  Operating Revenue $ 302.2   $ 271.2   16%   $ 908.7   $ 847.6   11%
                               
Equity Earnings   0.3     0.1   n.m.     0.4     0.1   n.m.
Total Segment Fee Revenue1 $ 302.5   $ 271.3   16%   $ 909.1   $ 847.7   11%
    Total Segment Revenue $ 355.1   $ 310.4   20%   $ 1,110.2   $ 965.8   19%
                               
n.m. - not meaningful                              
                               

Asia Pacific Performance Highlights:

  • Fee revenue for the year was $909 million, an increase of 11 percent from 2013. Revenue growth was driven by Leasing, up 23 percent, and Property & Facility Management, up 14 percent, compared with last year. Capital Markets & Hotels revenue for the year was down 10 percent, but up 5 percent for the quarter. Growth was led by Greater China and India geographically, but also was broad-based across the region's Property & Facility Management business. Fee revenue for the fourth quarter was $303 million, an increase of 16 percent from 2013.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $825 million for the year, compared with $770 million last year, an increase of 11 percent. Fee-based operating expenses, excluding restructuring and acquisition charges, were $250 million for the fourth quarter, compared with $229 million last year, an increase of 14 percent.
  • Operating income was $84 million for the year, compared with $77 million in 2013. Operating income was $52 million for the fourth quarter, compared with $43 million in 2013.
  • Adjusted EBITDA was $98 million for the year, compared with $90 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 10.7 percent for the year, compared with 10.6 percent in 2013. Adjusted EBITDA was $56 million for the fourth quarter, compared with $46 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 18.4 percent for the fourth quarter, compared with 16.8 percent in 2013.
 
LaSalle Investment Management
 
LaSalle Investment
Management Revenue
($ in millions, "LC" = local currency)
Three Months Ended
December 31,
  % Change in LC   Twelve Months Ended
December 31,
  % Change in LC
  2014   2013       2014   2013    
                               
Advisory Fees $ 58.8   $ 56.0   9%   $ 235.6   $ 223.0   5%
Transaction Fees & Other   7.3     7.2   8%     27.2     18.1   53%
Incentive Fees   25.9     3.1   n.m.     105.3     13.6   n.m.
  Operating Revenue $ 92.0   $ 66.3   44%   $ 368.1   $ 254.7   45%
                               
Equity Earnings   6.7     9.8   (31)%     47.0     31.2   51%
Total Segment Revenue $ 98.7   $ 76.1   34%   $ 415.1   $ 285.9   46%
                               
n.m. - not meaningful                              
                               

LaSalle Investment Management Performance Highlights:

  • Advisory fees were $236 million for the year, up 5 percent from last year, and up 9 percent in the quarter. Total segment revenue, including $27 million of transaction fees, $105 million of incentive fees and $47 million of equity earnings, was $415 million for the year, compared with $286 million last year.
  • Operating expenses were $283 million for the year, compared with $218 million last year.
  • Operating income was $132 million for the year, compared with $68 million last year. Adjusted EBITDA was $134 million for the year, compared with $70 million last year. Adjusted EBITDA margin was 32.3 percent, compared with 24.4 percent in 2013.
  • Capital raise was a record $8.9 billion for the year.
  • Assets under management were $53.6 billion as of December 31, 2014, up from $47.6 billion at December 31, 2013. The net increase in assets under management resulted from $11.0 billion of acquisitions and takeovers, $8.6 billion of dispositions and withdrawals, $4.3 billion of net valuation increases and $0.7 billion of net foreign currency decreases. Assets under management increased $0.6 billion during the fourth quarter as a result of $4.4 billion of acquisitions and takeovers, $2.8 billion of dispositions and withdrawals, $0.5 billion of net valuation increases and $1.5 billion of foreign currency decreases.

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 $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $53.6 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, 2013, in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014, June 30, 2014, and September 30, 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

Management will conduct a conference call with shareholders, analysts and investment professionals on Tuesday, February 3, 2015 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:  +1 877 800 0896
  • International callers:  +1 706 679 7364
  • Passcode:  61822408

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=101317
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 (101317).

Supplemental Information

Supplemental information regarding the fourth-quarter 2014 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 Tuesday, February 3, 2015 through 11:59 p.m. EST Tuesday, March 3, 2015 at the following numbers:

  • U.S. callers:  +1 855 859 2056  or + 1 800 585 8367
  • International callers:  +1 404 537 3406   
  • Passcode:  61822408   

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, 2014 and 2013  
(in thousands, except share data)  
(Unaudited)  
   
  Three Months Ended     Twelve Months Ended  
   December 31, December 31, 
  2014     2013     2014     2013  
                               
Revenue $ 1,748,981     $ 1,509,418     $ 5,429,603     $ 4,461,591  
                               
  Operating expenses:                              
  Compensation and benefits   1,031,869       919,709       3,258,673       2,817,059  
  Operating, administrative and other   427,048       369,427       1,568,424       1,177,545  
  Depreciation and amortization   27,123       20,857       94,337       79,853  
  Restructuring and acquisition charges 4   1,126       3,626       42,505       18,315  
    Total operating expenses   1,487,166       1,313,619       4,963,939       4,092,772  
                                 
    Operating income 1   261,815       195,799       465,664       368,819  
                               
Interest expense, net of interest income   (6,660 )     (8,115 )     (28,321 )     (34,718 )
Equity earnings from real estate ventures   7,320       10,211       48,265       31,343  
                               
Income before income taxes and noncontrolling interest 4   262,475       197,895       485,608       365,444  
Provision for income taxes 4   67,699       50,372       97,588       92,092  
Net income 4   194,776       147,523       388,020       273,352  
                               
Net income attributable to noncontrolling interest   841       201       1,957       3,487  
Net income attributable to the Company $ 193,935     $ 147,322     $ 386,063     $ 269,865  
                               
Dividends on unvested common stock, net of tax benefit   138       168       314       409  
Net income attributable to common shareholders $ 193,797     $ 147,154     $ 385,749     $ 269,456  
                               
Basic earnings per common share $ 4.32     $ 3.31     $ 8.63     $ 6.09  
                               
Basic weighted average shares outstanding   44,824,108       44,440,684       44,684,482       44,258,878  
                               
Diluted earnings per common share 2 $ 4.28     $ 3.26     $ 8.52     $ 5.98  
                               
Diluted weighted average shares outstanding   45,331,703       45,146,449       45,260,563       45,072,120  
                               
EBITDA 3 $ 296,258     $ 226,867     $ 608,266     $ 480,015  
                               
Please reference attached financial statement notes.  
                           
                           
                           
JONES LANG LASALLE INCORPORATED  
Segment Operating Results  
For the Three and Twelve Months Ended December 31, 2014 and 2013  
(in thousands)  
(Unaudited)  
   
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014     2013     2014     2013  
REAL ESTATE SERVICES                              
                               
AMERICAS                              
  Revenue:                              
  Operating revenue $ 745,584     $ 641,079     $ 2,319,136     $ 1,918,092  
  Equity earnings   329       276       775       549  
  Total segment revenue   745,913       641,355       2,319,911       1,918,641  
  Gross contract costs1   (57,517 )     (36,672 )     (210,380 )     (112,097 )
    Total segment fee revenue   688,396       604,683       2,109,531       1,806,544  
                               
  Operating expenses:                              
    Compensation, operating and administrative expenses   621,582       540,330       2,045,330       1,689,365  
    Depreciation and amortization   16,716       12,006       55,215       45,285  
    Total segment operating expenses   638,298       552,336       2,100,545       1,734,650  
    Gross contract costs1   (57,517 )     (36,672 )     (210,380 )     (112,097 )
    Total fee-based segment operating expenses   580,781       515,664       1,890,165       1,622,553  
                                 
  Operating income $ 107,615     $ 89,019     $ 219,366     $ 183,991  
                                 
  Adjusted EBITDA $ 124,331     $ 101,025     $ 274,581     $ 229,276  
                               
EMEA                              
  Revenue:                              
    Operating revenue $ 556,568     $ 491,779     $ 1,632,657     $ 1,323,201  
    Equity earnings (losses)   4       1       17       (535 )
    Total segment revenue   556,572       491,780       1,632,674       1,322,666  
    Gross contract costs1   (81,511 )     (84,211 )     (316,440 )     (204,596 )
    Total segment fee revenue   475,061       407,569       1,316,234       1,118,070  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   465,434       426,426       1,488,033       1,212,797  
    Depreciation and amortization   6,460       5,435       23,763       20,547  
    Total segment operating expenses   471,894       431,861       1,511,796       1,233,344  
    Gross contract costs1   (81,511 )     (84,211 )     (316,440 )     (204,596 )
    Total fee-based segment operating expenses   390,383       347,650       1,195,356       1,028,748  
                                 
  Operating income $ 84,678     $ 59,919     $ 120,878     $ 89,322  
                                 
  Adjusted EBITDA $ 91,138     $ 65,354     $ 144,641     $ 109,869  
                               
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014     2013     2014     2013  
ASIA PACIFIC                              
  Revenue:                              
    Operating revenue $ 354,812     $ 310,256     $ 1,109,701     $ 965,626  
    Equity earnings   327       127       447       129  
    Total segment revenue   355,139       310,383       1,110,148       965,755  
    Gross contract costs1   (52,590 )     (39,051 )     (201,073 )     (118,089 )
    Total segment fee revenue   302,549       271,332       909,075       847,666  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   299,530       264,804       1,012,639       876,239  
    Depreciation and amortization   3,430       2,996       13,301       12,216  
    Total segment operating expenses   302,960       267,800       1,025,940       888,455  
    Gross contract costs1   (52,590 )     (39,051 )     (201,073 )     (118,089 )
    Total fee-based segment operating expenses   250,370       228,749       824,867       770,366  
                                 
  Operating income $ 52,179     $ 42,583     $ 84,208     $ 77,300  
                                 
  Adjusted EBITDA $ 55,609     $ 45,579     $ 97,509     $ 89,516  
                               
LASALLE INVESTMENT MANAGEMENT                              
  Revenue:                              
    Operating revenue $ 92,017     $ 66,304     $ 368,109     $ 254,672  
    Equity earnings   6,660       9,808       47,026       31,200  
    Total segment revenue   98,677       76,112       415,135       285,872  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   72,371       57,577       281,094       216,203  
    Depreciation and amortization   517       419       2,059       1,805  
    Total segment operating expenses   72,888       57,996       283,153       218,008  
                                 
  Operating income $ 25,789     $ 18,116     $ 131,982     $ 67,864  
                                 
  Adjusted EBITDA $ 26,306     $ 18,535     $ 134,041     $ 69,669  
                               
                               
                               
SEGMENT RECONCILING ITEMS                              
  Total segment revenue $ 1,756,301     $ 1,519,630     $ 5,477,868     $ 4,492,934  
  Reclassification of equity earnings   7,320       10,212       48,265       31,343  
  Total revenue $ 1,748,981     $ 1,509,418     $ 5,429,603     $ 4,461,591  
                                 
  Total operating expenses before restructuring and acquisition charges   1,486,040       1,309,993       4,921,434       4,074,457  
  Operating income before restructuring and acquisition charges $ 262,941     $ 199,425     $ 508,169     $ 387,134  
                                 
  Restructuring and acquisition charges   1,126       3,626       42,505       18,315  
  Operating income after restructuring and acquisition charges $ 261,815     $ 195,799     $ 465,664     $ 368,819  
                                 
  Total adjusted EBITDA $ 297,384     $ 230,493     $ 650,771     $ 498,330  
  Restructuring and acquisition charges   1,126       3,626       42,505       18,315  
  Total EBITDA $ 296,258     $ 226,867     $ 608,266     $ 480,015  
                           
Please reference attached financial statement notes.  
   
   
   
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
December 31, 2014 and December 31, 2013
(in thousands)
         
    December 31,   December 31,
    2014   2013
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 250,413   $ 152,726
  Trade receivables, net of allowances     1,375,035     1,237,514
  Notes and other receivables     181,377     94,519
  Warehouse receivables     83,312     --
  Prepaid expenses     64,963     56,491
  Deferred tax assets, net     135,251     130,822
  Other     27,825     52,156
    Total current assets     2,118,176     1,724,228
             
Property and equipment, net of accumulated depreciation     368,361     295,547
Goodwill, with indefinite useful lives     1,907,924     1,900,080
Identified intangibles, net of accumulated amortization     38,841     45,579
Investments in real estate ventures     297,142     287,200
Long-term receivables     85,749     65,353
Deferred tax assets, net     90,897     104,654
Deferred compensation plans     111,234     85,049
Other     57,012     89,663
    Total assets   $ 5,075,336   $ 4,597,353
             
LIABILITIES AND EQUITY            
Current liabilities:            
  Accounts payable and accrued liabilities   $ 630,037   $ 528,505
  Accrued compensation     990,678     810,425
  Short-term borrowings     19,623     24,522
  Deferred tax liabilities, net     16,554     11,274
  Deferred income     104,565     104,410
  Deferred business acquisition obligations     49,259     36,040
  Warehouse facility     83,312     --
  Minority shareholder redemption liability     11,158     --
  Other     141,825     143,248
    Total current liabilities     2,047,011     1,658,424
             
Noncurrent liabilities:            
  Credit facility     --     155,000
  Long-term senior notes     275,000     275,000
  Deferred tax liabilities, net     17,082     18,029
  Deferred compensation     125,857     103,199
  Deferred business acquisition obligations     68,848     99,196
  Minority shareholder redemption liability     --     20,667
  Other     118,969     77,029
    Total liabilities     2,652,767     2,406,544
                 
                 
    December 31,     December 31,  
    2014     2013  
Redeemable noncontrolling interest     13,449       --  
                 
  Company shareholders' equity:                
  Common stock, $.01 par value per share, 100,000,000 shares authorized; 44,828,779 and 44,447,958 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively     448       444  
  Additional paid-in capital     961,850       945,512  
  Retained earnings     1,631,145       1,266,967  
  Shares held in trust     (6,407 )     (8,052 )
  Accumulated other comprehensive loss     (200,239 )     (25,202 )
    Total Company shareholders' equity     2,386,797       2,179,669  
                   
  Noncontrolling interest     22,323       11,140  
    Total equity     2,409,120       2,190,809  
                   
    Total liabilities and equity   $ 5,075,336     $ 4,597,353  
                 
Please reference attached financial statement notes.         
                 
                 
                 
JONES LANG LASALLE INCORPORATED  
Summarized Consolidated Statements of Cash Flows  
For the Twelve Months Ended December 31, 2014 and 2013  
(in thousands)  
   
    Twelve Months Ended  
    December 31,  
    2014     2013  
                 
Cash provided by operating activities   $ 498,861     $ 295,235  
                 
Cash used in investing activities     (187,938 )     (164,212 )
                 
Cash used in financing activities     (203,029 )     (128,388 )
                 
Effect of currency exchange rate changes on cash and cash equivalents     (10,207 )     (2,068 )
                 
  Net increase in cash and cash equivalents   $ 97,687     $ 567  
                 
Cash and cash equivalents, beginning of period     152,726       152,159  
                 
Cash and cash equivalents, end of period   $ 250,413     $ 152,726  
                 
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 twelve months ended December 31, 2014 and 2013.

           
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
($ in millions) 2014     2013     2014     2013  
                               
Revenue $ 1,749.0     $ 1,509.4     $ 5,429.6     $ 4,461.6  
Gross contract costs   (191.6 )     (159.9 )     (727.9 )     (434.8 )
Fee revenue $ 1,557.4     $ 1,349.5     $ 4,701.7     $ 4,026.8  
                               
Operating expenses $ 1,487.2     $ 1,313.6     $ 4,963.9     $ 4,092.8  
Gross contract costs   (191.6 )     (159.9 )     (727.9 )     (434.8 )
Fee-based operating expenses $ 1,295.6     $ 1,153.7     $ 4,236.0     $ 3,658.0  
                               
Operating income $ 261.8     $ 195.8     $ 465.7     $ 368.8  
                               
Add:                              
Restructuring and acquisition charges*   1.1       3.6       42.5       18.3  
King Sturge intangible amortization   0.4       0.6       2.0       2.2  
Adjusted operating income $ 263.3     $ 200.0     $ 510.2     $ 389.3  
                               
Adjusted operating income margin   16.9 %     14.8 %     10.9 %     9.7 %
                               

*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 twelve months ended December 31, 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   Twelve Months Ended
  December 31,   December 31,
($ in millions, except per share data) 2014   2013   2014   2013
                       
GAAP net income attributable to common shareholders $ 193.8   $ 147.2   $ 385.7   $ 269.5
Shares (in 000s)   45,332     45,146     45,261     45,072
GAAP diluted earnings per share $ 4.28   $ 3.26   $ 8.52   $ 5.98
                       
GAAP net income attributable to common shareholders $ 193.8   $ 147.2   $ 385.7   $ 269.5
Restructuring and acquisition charges, net*   0.8     2.6     6.0     13.7
King Sturge intangible amortization, net   0.3     0.4     1.5     1.6
Adjusted net income $ 194.9   $ 150.2   $ 393.2   $ 284.8
                       
Shares (in 000s)   45,332     45,146     45,261     45,072
                       
Adjusted diluted earnings per share $ 4.30   $ 3.33   $ 8.69   $ 6.32
                       

*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) 2014   2013   2014   2013
                       
GAAP net income $ 194.8   $ 147.5   $ 388.0   $ 273.4
Add:                      
Interest expense, net of interest income   6.7     8.1     28.3     34.7
Provision for income taxes   67.7     50.4     97.6     92.1
Depreciation and amortization   27.1     20.9     94.4     79.8
EBITDA $ 296.3   $ 226.9   $ 608.3   $ 480.0
Add:                      
Restructuring and acquisition charges   1.1     3.6     42.5     18.3
Adjusted EBITDA $ 297.4   $ 230.5   $ 650.8   $ 498.3
                       

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 of $43 million for the twelve months ended December 31, 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 had no impact on net income.

  Three Months Ended   Twelve Months Ended
  December 31, 2014   December 31, 2014
($in millions) GAAP   Adjusting Item   Adjusted   GAAP   Adjusting Item   Adjusted
                                   
Income before income taxes and noncontrolling interest $ 262.5   $ --   $ 262.5   $ 485.6   $ 34.5   $ 520.1
Provision for income taxes   67.7     --     67.7     97.6     34.5     132.1
Net income $ 194.8         $ 194.8   $ 388.0         $ 388.0

Excluding the impact of this item, the adjusted provision for income taxes of $132.1 million for the twelve months ended December 31, 2014, reflects a 25.4 percent effective tax rate on adjusted income before income taxes of $520.1 million for the twelve months ended December 31, 2014. The effective tax rate on income before income taxes for the three months ended December 31, 2014 is 25.8 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. LaSalle Investment Management 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-K for the quarter ended December 31, 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 Information

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