SOURCE: Jones Lang LaSalle Inc.

Jones Lang LaSalle Inc.

October 29, 2014 07:30 ET

JLL Reports Record Third-Quarter 2014 Adjusted Earnings Per Share of $2.31, Up 55 Percent Over Last Year

Third-quarter fee revenue of $1.2 billion, up 19 percent

CHICAGO, IL--(Marketwired - Oct 29, 2014) - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $2.31 for the third quarter of 2014. Third-quarter fee revenue totaled $1.2 billion, up 19 percent from the third quarter of 2013. All percentage variances are calculated on a local currency basis.

  • Strong fee revenue growth across all service lines and geographic segments
  • Outstanding results for LaSalle Investment Management contributed to significant margin expansion
  • Continued strategic investment in technology
  • Healthy pipelines entering the seasonally strong fourth quarter
  • 9 percent increase to semi-annual dividend, to $0.25 per share
                 
Summary Financial Results
($ in millions, except per share data)
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2014   2013   2014   2013
                         
Revenue   $ 1,366   $ 1,107   $ 3,681   $ 2,952
Fee Revenue1   $ 1,181   $ 989   $ 3,144   $ 2,677
Adjusted Net Income2   $ 105   $ 67   $ 198   $ 135
U.S. GAAP Net Income   $ 104   $ 63   $ 192   $ 122
Adjusted Earnings per Share2   $ 2.31   $ 1.49   $ 4.38   $ 2.99
Earnings per Share   $ 2.30   $ 1.39   $ 4.24   $ 2.71
Adjusted EBITDA3   $ 169   $ 118   $ 353   $ 268
  Adjusted EBITDA, Real Estate Services   $ 101   $ 101   $ 245   $ 217
  Adjusted EBITDA, LaSalle Investment Management   $ 68   $ 17   $ 108   $ 51
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
 

"We completed a record third quarter with broad-based growth in all service lines and superior results from LaSalle Investment Management," said Colin Dyer, President and CEO of JLL. "Market conditions and sentiment remain strong in real estate markets around the world, and the healthy pipelines across our business signal continued growth into 2015," Dyer added.

                 
Consolidated Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
September 30,
  % Change in LC   Nine Months Ended
September 30,
  % Change in LC
    2014   2013   2014   2013  
                                 
Real Estate Services ("RES")                                
Leasing   $ 366.9   $ 331.9   10%   $ 1,001.9   $ 856.5   17%
Capital Markets & Hotels     193.0     164.8   15%     492.3     445.9   8%
Property & Facility Management Fee Revenue1     260.6     233.7   11%     765.0     656.8   17%
  Property & Facility Management     377.2     304.3   24%     1,095.4     813.1   36%
Project & Development Services Fee Revenue1     112.6     95.1   18%     302.9     258.2   17%
  Project & Development Services     181.4     142.8   26%     508.8     376.8   34%
Advisory, Consulting and Other     105.2     95.7   8%     306.1     271.5   11%
  Total RES Fee Revenue1   $ 1,038.3   $ 921.2   12%   $ 2,868.2   $ 2,488.9   15%
  Total RES Revenue   $ 1,223.7   $ 1,039.5   17%   $ 3,404.5   $ 2,763.8   23%
                                 
LaSalle Investment Management                                
Advisory Fees   $ 60.9   $ 55.4   8%   $ 176.8   $ 167.0   4%
Transaction Fees & Other     10.8     2.6   n/m     19.8     10.9   82%
Incentive Fees     70.6     9.3   n/m     79.5     10.5   n/m
  Total LaSalle Investment Management Revenue   $ 142.3   $ 67.3   113%   $ 276.1   $ 188.4   46%
                                 
Total Firm Fee Revenue1   $ 1,180.6   $ 988.5   19%   $ 3,144.3   $ 2,677.3   17%
  Total Firm Revenue   $ 1,366.0   $ 1,106.8   23%   $ 3,680.6   $ 2,952.2   24%
                                 
n/m - not meaningful                                
                                 

Consolidated Performance Highlights:

  • Consolidated fee revenue for the quarter was $1.2 billion, up 19 percent from 2013. Growth was strong in Real Estate Services, up 12 percent, driven by both annuity and transaction revenue growth. LaSalle Investment Management grew advisory fees by 8 percent and earned incentive fees of $71 million. 
  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.1 billion for the quarter, compared with $897 million last year, an increase of 16 percent.
  • LaSalle Investment Management continued to successfully raise and deploy capital with $5 billion in equity raised, a single-quarter record for LaSalle.
  • Adjusted operating income margin calculated on a fee revenue basis was 10.8 percent for the third quarter, compared with 9.4 percent a year ago. Adjusted EBITDA margin calculated on a fee revenue basis was 14.3 percent for the third quarter, compared with 12.0 percent a year ago.

Balance Sheet, Net Interest Expense and Dividend:

  • The firm's total net debt was $517 million at quarter end, a decrease of $248 million from the third quarter last year as the firm's strong cash generation continues.
  • Net interest expense for the quarter was $7.4 million, down from $9.6 million in 2013. On a year-to-date basis, net interest expense was $21.6 million, down from $26.6 million for year-to-date 2013.
  • The firm's Board of Directors declared a semi-annual dividend of $0.25 per share, a nine percent increase from the $0.23 per share payment made in June 2014. The dividend payment will be made on December 15, 2014, to investors of record at the close of business on November 14, 2014.
 
Business Segment Performance Highlights
 
Americas Real Estate Services
 
Americas Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
September 30,
  % Change in LC   Nine Months Ended
September 30,
  % Change in LC
    2014     2013   2014   2013  
                                   
Leasing   $ 255.9     $ 232.6   10%   $ 694.1   $ 582.6   19%
Capital Markets & Hotels     72.3       46.7   55%     172.5     138.7   25%
Property & Facility Management Fee Revenue1     106.2       98.0   9%     315.7     273.9   17%
  Property & Facility Management     166.8       129.8   30%     467.0     348.5   37%
Project & Development Services Fee Revenue1     57.2       48.4   19%     153.2     128.4   20%
  Project & Development Services     57.2       48.6   18%     154.8     129.3   21%
Advisory, Consulting and Other     30.2       26.4   14%     85.1     77.9   10%
  Operating Revenue   $ 521.8     $ 452.1   16%   $ 1,420.6   $ 1,201.5   19%
                                   
Equity (Losses) Earnings     (0.8 )     --   n/m     0.4     0.3   63%
Total Segment Fee Revenue1   $ 521.0     $ 452.1   16%   $ 1,421.0   $ 1,201.8   19%
    Total Segment Revenue   $ 581.6     $ 484.1   21%   $ 1,573.9   $ 1,277.3   24%
                                   
n/m - not meaningful                                  
                                   

Americas Performance Highlights:

  • Fee revenue for the quarter was $521 million, an increase of 16 percent from 2013. Fee revenue growth was driven by Capital Markets & Hotels, up 55 percent, and Leasing, up 10 percent, compared with the third quarter of last year.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $473 million for the quarter, compared with $407 million last year, an increase of 17 percent.
  • Operating income was $48 million for the quarter, compared with $45 million in 2013. Year-to-date operating income was $112 million, up from $95 million in 2013.
  • Adjusted EBITDA was $60 million for the quarter, compared with $56 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 11.4 percent, compared with 12.4 percent in 2013. Year-to-date adjusted EBITDA margin was 10.6 percent, compared with 10.7 percent in 2013.
 
EMEA Real Estate Services
 
EMEA Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
September 30,
  % Change in LC   Nine Months Ended
September 30,
    % Change in LC
    2014   2013   2014   2013    
                                   
Leasing   $ 66.6   $ 58.8   11%   $ 188.3   $ 167.9     8%
Capital Markets & Hotels     90.8     82.8   5%     238.6     204.2     11%
Property & Facility Management Fee Revenue1     58.8     48.9   16%     171.2     131.4     24%
  Property & Facility Management     81.6     62.8   25%     246.7     152.4     54%
Project & Development Services Fee Revenue1     35.8     29.6   18%     98.5     81.1     16%
  Project & Development Services     83.4     68.4   20%     257.9     180.5     37%
Advisory, Consulting and Other     46.2     45.6   (2)%     144.6     126.4     9%
  Operating Revenue   $ 298.2   $ 265.7   9%   $ 841.2   $ 711.0     13%
                                   
Equity Losses     --     --   n/m     --     (0.5 )   n/m
Total Segment Fee Revenue1   $ 298.2   $ 265.7   9%   $ 841.2   $ 710.5     13%
    Total Segment Revenue   $ 368.6   $ 318.4   12%   $ 1,076.1   $ 830.9     24%
                                   
n/m - not meaningful                                  
                                   

EMEA Performance Highlights:

  • Fee revenue for the quarter was $298 million, an increase of 9 percent from 2013. Continued investments in the platform throughout the year contributed to broad-based fee revenue growth across the service lines. The UK, Spain and MENA had strong quarters, with the UK driving the growth in Capital Markets & Hotels against a third quarter 2013 that was up 61 percent from 2012. Project & Development Services had double-digit fee revenue growth compared with 2013, while Leasing revenue was up 11 percent as a result of healthy expansion in leasing markets.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $282 million for the quarter, compared with $248 million last year, an increase of 10 percent.
  • Adjusted operating income, which excludes King Sturge amortization, was $17 million for the quarter, compared with $18 million in 2013. Year-to-date adjusted operating income was $38 million, up from $31 million in 2013.
  • Adjusted EBITDA was $23 million for the quarter, consistent with last year. Adjusted EBITDA margin calculated on a fee revenue basis was 7.6 percent, compared with 8.7 percent in 2013. Year-to-date adjusted EBITDA margin was 6.4 percent, compared with 6.3 percent in 2013.
 
Asia Pacific Real Estate Services
 
Asia Pacific Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
September 30,
  % Change in LC   Nine Months Ended
September 30,
  % Change in LC
    2014   2013   2014   2013  
                                 
Leasing   $ 44.4   $ 40.5   9%   $ 119.5   $ 106.0   15%
Capital Markets & Hotels     29.9     35.3   (16)%     81.2     103.0   (19)%
Property & Facility Management Fee Revenue1     95.6     86.8   10%     278.1     251.5   15%
  Property & Facility Management     128.8     111.7   15%     381.7     312.2   27%
Project & Development Services Fee Revenue1     19.6     17.1   14%     51.2     48.7   9%
  Project & Development Services     40.8     25.8   57%     96.1     67.0   48%
Advisory, Consulting and Other     28.8     23.7   21%     76.4     67.2   16%
  Operating Revenue   $ 218.3   $ 203.4   7%   $ 606.4   $ 576.4   8%
                                 
Equity Earnings     0.2     --   n/m     0.1     --   n/m
Total Segment Fee Revenue1   $ 218.5   $ 203.4   7%   $ 606.5   $ 576.4   8%
    Total Segment Revenue   $ 272.9   $ 237.0   15%   $ 755.0   $ 655.4   19%
                                 
n/m - not meaningful                                
                                 

Asia Pacific Performance Highlights:

  • Fee revenue for the quarter was $218 million, an increase of 7 percent from 2013. Revenue growth was driven by Property & Facility Management, up 10 percent, and Leasing, up 9 percent compared with the third quarter last year. Strong performance in Australia's valuations business contributed to the growth of Advisory, Consulting and Other revenue. Capital Markets & Hotels revenue for the quarter was down 16 percent against a third quarter 2013 that was up 56 percent from 2012.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $203 million for the quarter, compared with $184 million last year, an increase of 10 percent.
  • Operating income was $15 million for the quarter, compared with $19 million in 2013. Year-to-date operating income was $32 million compared with $35 million in 2013.
  • Adjusted EBITDA was $19 million for the quarter, compared with $22 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 8.5 percent, compared with 10.8 percent in 2013. Year-to-date adjusted EBITDA margin was 6.9 percent, compared with 7.6 percent in 2013.
 
LaSalle Investment Management
 
LaSalle Investment
Management Revenue
($ in millions, "LC" = local currency)
  Three Months Ended
September 30,
  % Change in LC   Nine Months Ended
September 30,
  % Change in LC
    2014   2013   2014   2013  
                                 
Advisory Fees   $ 60.9   $ 55.4   8%   $ 176.8   $ 167.0   4%
Transaction Fees & Other     10.8     2.6   n/m     19.8     10.9   82%
Incentive Fees     70.6     9.3   n/m     79.5     10.5   n/m
  Operating Revenue   $ 142.3   $ 67.3   113%   $ 276.1   $ 188.4   46%
                                 
Equity Earnings     20.1     6.6   n/m     40.4     21.4   88%
Total Segment Revenue   $ 162.4   $ 73.9   121%   $ 316.5   $ 209.8   50%
                                 
n/m - not meaningful                                
                                 

LaSalle Investment Management Performance Highlights:

  • Advisory fees were $61 million for the quarter, up 8 percent compared with $55 million for the third quarter of 2013. Total segment revenue, including transaction fees, $71 million of incentive fees and $20 million of equity earnings, was $162 million for the quarter, compared with $74 million last year.
  • Capital raise was a single-quarter record of $5.1 billion, bringing year-to-date capital raise to $7.3 billion.
  • Operating expenses were $95 million for the quarter, compared with $57 million in 2013, driven by increased compensation associated with the increase in revenue, particularly incentive fees.
  • Operating income was $68 million for the quarter, compared with $17 million in 2013. Adjusted EBITDA was $68 million for the quarter, compared with $17 million last year. Adjusted EBITDA margin was 41.9 percent, compared with 23.3 percent in 2013. Year-to-date adjusted EBITDA margin was 34.0 percent compared with 24.4 percent in 2013.
  • Assets under management were $53.0 billion as of September 30, 2014, up from $50.0 billion at June 30, 2014. The net increase in assets under management resulted from $2.9 billion of acquisitions and takeovers, $2.1 billion of dispositions and withdrawals, and $2.2 billion of net valuation and foreign currency 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. 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 $53.0 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 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 and June 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 Wednesday, October 29, 2014 at 9:00 a.m. EDT.

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: 19384622

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=100719
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 (100719).

Supplemental Information
Supplemental information regarding the third-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 Wednesday, October 29, 2014 through 11:59 p.m. EST Sunday, November 30, 2014 at the following numbers:

  • U.S. callers: +1 855 859 2056 or + 1 800 585 8367
  • International callers: +1 404 537 3406
  • Passcode: 19384622

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 Nine Months Ended September 30, 2014 and 2013  
(in thousands, except share data)  
(Unaudited)  
   
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2014     2013     2014     2013  
                                 
Revenue   $ 1,365,975     $ 1,106,802     $ 3,680,622     $ 2,952,173  
                                 
  Operating expenses:                                
  Compensation and benefits     828,241       699,031       2,226,804       1,897,351  
  Operating, administrative and other     388,290       296,012       1,141,376       808,118  
  Depreciation and amortization     22,023       19,742       67,214       58,996  
  Restructuring and acquisition charges 4     (37 )     4,919       41,379       14,689  
    Total operating expenses     1,238,517       1,019,704       3,476,773       2,779,154  
                                     
    Operating income 1     127,458       87,098       203,849       173,019  
                                 
Interest expense, net of interest income     (7,361 )     (9,631 )     (21,661 )     (26,603 )
Equity earnings from real estate ventures     19,552       6,574       40,945       21,132  
                                 
Income before income taxes and noncontrolling interest 4     139,649       84,041       223,133       167,548  
Provision for income taxes 4     34,912       20,925       29,889       41,719  
Net income 4     104,737       63,116       193,244       125,829  
                                 
Net income attributable to noncontrolling interest     453       259       1,116       3,286  
Net income attributable to the Company   $ 104,284     $ 62,857     $ 192,128     $ 122,543  
                                 
Dividends on unvested common stock, net of tax benefit     --       --       176       241  
Net income attributable to common shareholders   $ 104,284     $ 62,857     $ 191,952     $ 122,302  
                                 
Basic earnings per common share   $ 2.33     $ 1.42     $ 4.30     $ 2.77  
                                 
Basic weighted average shares outstanding     44,809,133       44,407,468       44,637,429       44,197,610  
                                 
Diluted earnings per common share 2   $ 2.30     $ 1.39     $ 4.24     $ 2.71  
                                 
Diluted weighted average shares outstanding     45,290,595       45,063,360       45,241,766       45,070,603  
                                 
EBITDA 3   $ 169,033     $ 113,414     $ 312,008     $ 253,147  
                                 
Please reference attached financial statement notes.                 
   
   
   
JONES LANG LASALLE INCORPORATED  
Segment Operating Results  
For the Three and Nine Months Ended September 30, 2014 and 2013  
(in thousands)  
(Unaudited)  
   
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2014     2013     2014     2013  
REAL ESTATE SERVICES                                
                                 
AMERICAS                                
  Revenue:                                
    Operating revenue   $ 582,387     $ 484,054     $ 1,573,552     $ 1,277,014  
    Equity (losses) earnings     (756 )     (17 )     446       274  
    Total segment revenue     581,631       484,037       1,573,998       1,277,288  
    Gross contract costs1     (60,601 )     (31,957 )     (152,863 )     (75,425 )
    Total segment fee revenue     521,030       452,080       1,421,135       1,201,863  
                                   
  Operating expenses:                                
    Compensation, operating and administrative expenses     521,987       427,817       1,423,746       1,149,036  
    Depreciation and amortization     11,658       11,279       38,500       33,279  
    Total segment operating expenses     533,645       439,096       1,462,246       1,182,315  
    Gross contract costs1     (60,601 )     (31,957 )     (152,863 )     (75,425 )
    Total fee-based segment operating expenses     473,044       407,139       1,309,383       1,106,890  
                                   
  Operating income   $ 47,986     $ 44,941     $ 111,752     $ 94,973  
                                   
  Adjusted EBITDA   $ 59,644     $ 56,220     $ 150,252     $ 128,252  
                                 
EMEA                                
  Revenue:                                
    Operating revenue   $ 368,564     $ 318,372     $ 1,076,088     $ 831,422  
    Equity earnings (losses)     13       --       14       (536 )
    Total segment revenue     368,577       318,372       1,076,102       830,886  
    Gross contract costs1     (70,403 )     (52,659 )     (234,929 )     (120,385 )
    Total segment fee revenue     298,174       265,713       841,173       710,501  
                                   
  Operating expenses:                                
    Compensation, operating and administrative expenses     345,893       295,350       1,022,599       786,372  
    Depreciation and amortization     6,355       5,101       17,303       15,111  
    Total segment operating expenses     352,248       300,451       1,039,902       801,483  
    Gross contract costs1     (70,403 )     (52,659 )     (234,929 )     (120,385 )
    Total fee-based segment operating expenses     281,845       247,792       804,973       681,098  
                                   
  Operating income   $ 16,329     $ 17,921     $ 36,200     $ 29,403  
                                   
  Adjusted EBITDA   $ 22,684     $ 23,022     $ 53,503     $ 44,514  
                                   
                                   
                                   
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2014     2013     2014     2013  
ASIA PACIFIC                                
  Revenue:                                
    Operating revenue   $ 272,708     $ 237,027     $ 754,890     $ 655,370  
    Equity earnings     198       11       119       2  
    Total segment revenue     272,906       237,038       755,009       655,372  
    Gross contract costs1     (54,419 )     (33,663 )     (148,483 )     (79,039 )
    Total segment fee revenue     218,487       203,375       606,526       576,333  
                                   
  Operating expenses:                                
    Compensation, operating and administrative expenses     254,352       215,138       713,111       611,435  
    Depreciation and amortization     3,444       2,968       9,869       9,220  
    Total segment operating expenses     257,796       218,106       722,980       620,655  
    Gross contract costs1     (54,419 )     (33,663 )     (148,483 )     (79,039 )
    Total fee-based segment operating expenses     203,377       184,443       574,497       541,616  
                                   
  Operating income   $ 15,110     $ 18,932     $ 32,029     $ 34,717  
                                   
  Adjusted EBITDA   $ 18,554     $ 21,900     $ 41,898     $ 43,937  
                                 
LASALLE INVESTMENT MANAGEMENT                                
  Revenue:                                
    Operating revenue   $ 142,316     $ 67,349     $ 276,092     $ 188,367  
    Equity earnings     20,097       6,580       40,366       21,392  
    Total segment revenue     162,413       73,929       316,458       209,759  
                                   
  Operating expenses:                                
    Compensation, operating and administrative expenses     94,299       56,738       208,724       158,626  
    Depreciation and amortization     566       394       1,542       1,386  
    Total segment operating expenses     94,865       57,132       210,266       160,012  
                                   
  Operating income   $ 67,548     $ 16,797     $ 106,192     $ 49,747  
                                   
  Adjusted EBITDA   $ 68,114     $ 17,191     $ 107,734     $ 51,133  
                                 
                                 
SEGMENT RECONCILING ITEMS                                
  Total segment revenue   $ 1,385,527     $ 1,113,376     $ 3,721,567     $ 2,973,305  
  Reclassification of equity earnings     19,552       6,574       40,945       21,132  
  Total revenue   $ 1,365,975     $ 1,106,802     $ 3,680,622     $ 2,952,173  
                                   
  Total operating expenses before restructuring and acquisition charges     1,238,554       1,014,785       3,435,394       2,764,465  
  Operating income before restructuring and acquisition charges   $ 127,421     $ 92,017     $ 245,228     $ 187,708  
                                   
  Restructuring and acquisition charges     (37 )     4,919       41,379       14,689  
  Operating income after restructuring and acquisition charges   $ 127,458     $ 87,098     $ 203,849     $ 173,019  
                                   
  Total adjusted EBITDA   $ 168,996     $ 118,333     $ 353,387     $ 267,836  
  Restructuring and acquisition charges     (37 )     4,919       41,379       14,689  
  Total EBITDA   $ 169,033     $ 113,414     $ 312,008     $ 253,147  
                                 
Please reference attached financial statement notes.  
   
   
   
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
September 30, 2014, December 31, 2013 and September 30, 2013
(in thousands)
 
    (Unaudited)       (Unaudited)
    September 30,   December 31,   September 30,
    2014   2013   2013
ASSETS                  
Current assets:                  
  Cash and cash equivalents   $ 162,568   $ 152,726   $ 119,704
  Trade receivables, net of allowances     1,216,322     1,237,514     980,955
  Notes and other receivables     193,324     94,519     117,901
  Warehouse receivables     185,797     --     60,099
  Prepaid expenses     84,484     56,491     70,448
  Deferred tax assets, net     122,353     130,822     51,241
  Other     29,399     52,156     20,626
    Total current assets     1,994,247     1,724,228     1,420,974
                   
Property and equipment, net of accumulated depreciation     344,765     295,547     259,184
Goodwill, with indefinite useful lives     1,910,990     1,900,080     1,889,848
Identified intangibles, net of accumulated amortization     40,443     45,579     40,649
Investments in real estate ventures     290,674     287,200     287,747
Long-term receivables     94,170     65,353     85,745
Deferred tax assets, net     64,832     104,654     171,713
Other     194,665     174,712     170,085
    Total assets   $ 4,934,786   $ 4,597,353   $ 4,325,945
                   
LIABILITIES AND EQUITY                  
Current liabilities:                  
  Accounts payable and accrued liabilities   $ 518,704   $ 528,505   $ 424,282
  Accrued compensation     665,556     810,425     508,952
  Short-term borrowings     43,292     24,522     35,478
  Deferred tax liabilities, net     11,606     11,274     10,113
  Deferred income     119,963     104,410     108,817
  Deferred business acquisition obligations     46,462     36,040     34,275
  Warehouse facility     185,797     --     60,099
  Minority shareholder redemption liability     10,909     --     --
  Other     157,987     143,248     105,309
    Total current liabilities     1,760,276     1,658,424     1,287,325
                   
Noncurrent liabilities:                  
  Credit facility     250,000     155,000     445,000
  Long-term senior notes     275,000     275,000     275,000
  Deferred tax liabilities, net     18,029     18,029     3,106
  Deferred compensation     114,576     103,199     93,540
  Deferred business acquisition obligations     65,937     99,196     96,023
  Minority shareholder redemption liability     --     20,667     19,733
  Other     94,111     77,029     72,788
    Total liabilities     2,577,929     2,406,544     2,292,515
                       
                       
                       
    (Unaudited)           (Unaudited)  
    September 30,     December 31,     September 30,  
    2014     2013     2013  
Redeemable noncontrolling interest     13,638       --       --  
                         
Company shareholders' equity:                        
  Common stock, $.01 par value per share, 100,000,000 shares authorized; 44,817,758, 44,447,958,and 44,434,717 shares issued and outstanding as of September 30, 2014, December 31, 2013 and September 30, 2013, respectively     448       444       444  
  Additional paid-in capital     957,374       945,512       940,803  
  Retained earnings     1,448,602       1,266,967       1,129,648  
  Shares held in trust     (6,407 )     (8,052 )     (8,052 )
  Accumulated other comprehensive loss     (76,839 )     (25,202 )     (36,411 )
    Total Company shareholders' equity     2,323,178       2,179,669       2,026,432  
                           
  Noncontrolling interest     20,041       11,140       6,998  
    Total equity     2,343,219       2,190,809       2,033,430  
                           
    Total liabilities and equity   $ 4,934,786     $ 4,597,353     $ 4,325,945  
                         
Please reference attached financial statement notes.          
                         
                         
                         
JONES LANG LASALLE INCORPORATED  
Summarized Consolidated Statements of Cash Flows  
For the Nine Months September 30, 2014 and 2013  
(in thousands)  
   
    Nine Months Ended  
    September 30,  
    2014     2013  
                 
Cash provided by (used in) operating activities   $ 38,576     $ (99,873 )
                 
Cash used in investing activities     (111,503 )     (112,159 )
                 
Cash provided by financing activities     82,769       179,577  
                 
  Net increase (decrease) in cash and cash equivalents   $ 9,842     $ (32,455 )
                 
Cash and cash equivalents, beginning of period     152,726       152,159  
                 
Cash and cash equivalents, end of period   $ 162,568     $ 119,704  
                 
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 nine months ended September 30, 2014 and 2013.

             
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
($ in millions)   2014     2013     2014     2013  
                                 
Revenue   $ 1,366.0     $ 1,106.8     $ 3,680.6     $ 2,952.2  
Gross contract costs     (185.4 )     (118.3 )     (536.3 )     (274.9 )
Fee revenue   $ 1,180.6     $ 988.5     $ 3,144.3     $ 2,677.3  
                                 
Operating expenses   $ 1,238.5     $ 1,019.7     $ 3,476.8     $ 2,779.2  
Gross contract costs     (185.4 )     (118.3 )     (536.3 )     (274.9 )
Fee-based operating expenses   $ 1,053.1     $ 901.4     $ 2,940.5     $ 2,504.3  
                                 
Operating income   $ 127.5     $ 87.1     $ 203.8     $ 173.0  
                                 
Add:                                
Restructuring and acquisition charges*     --       4.9       41.4       14.7  
King Sturge intangible amortization     0.5       0.6       1.6       1.7  
Adjusted operating income   $ 128.0     $ 92.6     $ 246.8     $ 189.4  
                                 
Adjusted operating income margin     10.8 %     9.4 %     7.9 %     7.1 %
                                 

*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 nine months ended September 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   Nine Months Ended
    September 30,   September 30,
($ in millions, except per share data)   2014   2013   2014   2013
                         
GAAP net income attributable to common shareholders   $ 104.3   $ 62.9   $ 192.0   $ 122.3
Shares (in 000s)     45,291     45,063     45,242     45,071
GAAP diluted earnings per share   $ 2.30   $ 1.39   $ 4.24   $ 2.71
                         
GAAP net income attributable to common shareholders   $ 104.3   $ 62.9   $ 192.0   $ 122.3
Restructuring and acquisition charges, net*     --     3.6     5.1     11.0
King Sturge intangible amortization, net     0.3     0.5     1.2     1.3
Adjusted net income   $ 104.6   $ 67.0   $ 198.3   $ 134.6
                         
Shares (in 000s)     45,291     45,063     45,242     45,071
                         
Adjusted diluted earnings per share   $ 2.31   $ 1.49   $ 4.38   $ 2.99
                         

*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   Nine Months Ended
    September 30,   September 30,
($ in millions)   2014   2013   2014   2013
                         
GAAP net income   $ 104.7   $ 63.1   $ 193.2   $ 125.8
Add:                        
Interest expense, net of interest income     7.4     9.6     21.7     26.6
Provision for income taxes     34.9     20.9     29.9     41.7
Depreciation and amortization     22.0     19.8     67.2     59.0
                         
EBITDA   $ 169.0   $ 113.4   $ 312.0   $ 253.1
Add:                        
Restructuring and acquisition charges     --     4.9     41.4     14.7
Adjusted EBITDA   $ 169.0   $ 118.3   $ 353.4   $ 267.8
                         

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 of $41 million for the nine months ended September 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 had no impact on net income.

         
    Three Months Ended   Nine Months Ended
    September 30, 2014   September 30, 2014
($ in millions)   GAAP   Adjusting Item   Adjusted   GAAP   Adjusting Item   Adjusted
                                     
Income before income taxes and noncontrolling interest   $ 139.6   $ --   $ 139.6   $ 223.1   $ 34.5   $ 257.6
Provision for income taxes     34.9     --     34.9     29.9     34.5     64.4
Net income   $ 104.7         $ 104.7   $ 193.2         $ 193.2
                                     

Excluding the impact of this item, the adjusted provision for income taxes of $64.4 million for the nine months ended September 30, 2014, reflects a 25 percent effective tax rate on adjusted income before income taxes of $257.6 million for the nine months ended September 30, 2014. The effective tax rate on income before income taxes for the three months ended September 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. 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 Quarterly Report on Form 10-Q for the quarter ended September 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 Information

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