SOURCE: JLL

JLL

October 28, 2015 07:30 ET

JLL Reports Record Third-Quarter Performance for 2015

Adjusted EPS Up 11 Percent to $2.52; Fee Revenue Grows to $1.3 Billion

CHICAGO, IL--(Marketwired - Oct 28, 2015) - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $2.52, up from $2.27 in the prior year. Third-quarter fee revenue totaled $1.3 billion, up 17 percent in local currency from the third quarter of 2014. All percentage variances are calculated on a local currency basis.

  • Ongoing investment fuels broad-based fee revenue growth and margin expansion

  • Acquisition pace accelerates; 15 acquisitions year to date

  • LaSalle Investment Management continues strong performance and capital raise momentum

  • Robust pipelines in place for seasonally strong fourth quarter

  • Semi-annual dividend increases 7 percent to $0.29 per share

                 
Summary Financial Results
($ in millions, except per share data)
  Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
    2015   2014   2015   2014
                 
Revenue   $ 1,501   $ 1,366   $ 4,078   $ 3,681
Fee Revenue1   $ 1,287   $ 1,181   $ 3,498   $ 3,144
Adjusted Net Income2   $ 114   $ 103   $ 249   $ 196
U.S. GAAP Net Income2   $ 110   $ 104   $ 243   $ 192
Adjusted Earnings per Share2   $ 2.52   $ 2.27   $ 5.47   $ 4.32
Earnings per Share   $ 2.43   $ 2.30   $ 5.34   $ 4.24
Adjusted EBITDA3   $ 190   $ 167   $ 438   $ 351
  Adjusted EBITDA, Real Estate Services   $ 127   $ 99   $ 308   $ 243
  Adjusted EBITDA, LaSalle Investment Management   $ 63   $ 68   $ 130   $ 108
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release

CEO Comment:
"We completed another record quarter at JLL, with double-digit fee revenue growth across all service lines and geographic segments, healthy margin expansion and continued outstanding performance by LaSalle Investment Management," said Colin Dyer, President and CEO. "We continue to invest strategically in the long-term growth of our company, and have excellent momentum as we move into 2016," Dyer added.

             
Consolidated Revenue
($ in millions, "LC" = local currency)
  Three Months Ended September 30,   % Change
 in USD
  % Change
in LC
2015   2014  
                     
Real Estate Services ("RES")                    
Leasing   $ 417.8   $ 368.1   14%   19%
Capital Markets & Hotels     223.7     192.9   16%   26%
Property & Facility Management Fee Revenue1     270.7     259.6   4%   14%
  Property & Facility Management     378.3     376.3   1%   10%
Project & Development Services Fee Revenue1     125.9     112.6   12%   21%
  Project & Development Services     232.3     181.3   28%   43%
Advisory, Consulting and Other     115.0     105.1   9%   19%
  Total RES Fee Revenue1   $ 1,153.1   $ 1,038.3   11%   17%
    Total RES Revenue   $ 1,367.1   $ 1,223.7   12%   19%
                     
LaSalle Investment Management ("LaSalle")                    
Advisory Fees   $ 60.7   $ 60.9   --%   7%
Transaction Fees & Other     5.0     10.8   (54)%   (50)%
Incentive Fees     68.5     70.6   (3)%   8%
    Total LaSalle Revenue   $ 134.2   $ 142.3   (6)%   3%
                     
Total Firm Fee Revenue1   $ 1,287.3   $ 1,180.6   9%   17%
    Total Firm Revenue   $ 1,501.3   $ 1,366.0   10%   19%
                     
n.m. - not meaningful                    
                     
             
Consolidated Revenue
($ in millions, "LC" = local currency)
  Nine Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Real Estate Services ("RES")                    
Leasing   $ 1,103.8   $ 1,004.1   10%   14%
Capital Markets & Hotels     623.9     492.3   27%   38%
Property & Facility Management Fee Revenue1     790.8     762.8   4%   12%
  Property & Facility Management     1,115.8     1,093.2   2%   10%
Project & Development Services Fee Revenue1     348.5     302.9   15%   25%
  Project & Development Services     603.5     508.8   19%   33%
Advisory, Consulting and Other     331.1     306.1   8%   18%
  Total RES Fee Revenue1   $ 3,198.1   $ 2,868.2   12%   19%
    Total RES Revenue   $ 3,778.1   $ 3,404.5   11%   20%
                     
LaSalle Investment Management ("LaSalle")                    
Advisory Fees   $ 181.3   $ 176.8   3%   11%
Transaction Fees & Other     19.5     19.8   (2)%   7%
Incentive Fees     99.3     79.5   25%   38%
    Total LaSalle Revenue   $ 300.1   $ 276.1   9%   18%
                     
Total Firm Fee Revenue1   $ 3,498.2   $ 3,144.3   11%   20%
    Total Firm Revenue   $ 4,078.2   $ 3,680.6   11%   20%
                     
n.m. - not meaningful                    

Consolidated Performance Highlights:

  • Consolidated fee revenue for the third quarter was $1.3 billion, up 17 percent from 2014. Growth was broad-based, led by Leasing, up $50 million or 19 percent, Capital Markets & Hotels, up $31 million or 26 percent, and Project & Development Services, up $13 million or 21 percent.

  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.2 billion for the third quarter, compared with $1.1 billion last year. The firm continued to invest in technology and people for its clients in support of the growing business.

  • LaSalle Investment Management's advisory fees grew 7 percent; total revenue increased 3 percent driven by substantial incentive fees as certain funds near the end of their stated investment periods. LaSalle also recognized significant equity earnings from net valuation increases and investment dispositions.

  • Adjusted EBITDA margin calculated on a fee revenue basis was 14.8 percent for the third quarter, compared with 14.1 percent last year.

  • Adjusted earnings per share reached $2.52 for the third quarter, up 11 percent from last year despite a negative foreign exchange impact of approximately $0.23, or 10 percent compared with a year ago.

Balance Sheet and Net Interest Expense:

  • The firm's total net debt was $435 million at quarter end, a decrease of $87 million from the second quarter of 2015. 

  • Net interest expense for the third quarter was $6.8 million, down from $7.4 million in the third quarter of 2014 primarily due to lower average borrowings compared with last year.

  • Reflecting confidence in the firm's cash generation, the Board of Directors declared a semi-annual dividend of $0.29 per share, a 7 percent increase from the $0.27 per share payment made in June 2015. The dividend payment will be made on December 15, 2015, to shareholders of record at the close of business on November 13, 2015.

Business Segment Performance Highlights

Americas Real Estate Services

             
Americas Revenue
($ in millions, "LC" = local currency)
  Three Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Leasing   $ 296.9   $ 256.2     16%   17%
Capital Markets & Hotels     74.9     72.2     4%   5%
Property & Facility Management Fee Revenue1     117.5     106.1     11%   16%
  Property & Facility Management     168.0     166.7     1%   8%
Project & Development Services Fee Revenue1     63.4     57.2     11%   15%
  Project & Development Services     65.1     57.2     14%   18%
Advisory, Consulting and Other     34.5     30.1     15%   17%
  Operating Revenue   $ 587.2   $ 521.8     13%   16%
                     
Equity Earnings     4.5     (0.8 )   n.m.   n.m.
Total Segment Fee Revenue1   $ 591.7   $ 521.0     14%   16%
    Total Segment Revenue   $ 643.9   $ 581.6     11%   14%
                     
n.m. - not meaningful                    
                     
             
Americas Revenue
($ in millions, "LC" = local currency)
  Nine Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Leasing   $ 790.7   $ 694.4   14%   15%
Capital Markets & Hotels     226.2     172.5   31%   32%
Property & Facility Management Fee Revenue1     345.2     315.4   9%   13%
  Property & Facility Management     499.3     466.8   7%   13%
Project & Development Services Fee Revenue1     176.5     153.2   15%   19%
  Project & Development Services     180.4     154.7   17%   20%
Advisory, Consulting and Other     94.4     85.1   11%   13%
  Operating Revenue   $ 1,633.0   $ 1,420.6   15%   17%
                     
Equity Earnings     5.4     0.4   n.m.   n.m.
Total Segment Fee Revenue1   $ 1,638.4   $ 1,421.0   15%   17%
    Total Segment Revenue   $ 1,796.4   $ 1,573.9   14%   17%
                     
n.m. - not meaningful                    

Americas Performance Highlights:

  • Fee revenue for the quarter was $592 million, an increase of 16 percent from 2014. Revenue growth compared with last year was broad-based with Leasing up 17 percent; Advisory, Consulting and Other up 17 percent; Property & Facility Management up 16 percent; and Project & Development Services up 15 percent. Growth in the region was primarily led by U.S. markets including New York, Los Angeles and Atlanta.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $530 million for the quarter, compared with $473 million last year.

  • Operating income was $62 million for the quarter, compared with $48 million in 2014. Year-to-date operating income was $143 million, up from $112 million in 2014.

  • Adjusted EBITDA was $77 million for the quarter, compared with $60 million last year. Adjusted EBITDA margin for the quarter, calculated on a fee revenue basis, was 13.0 percent, compared with 11.4 percent in 2014. Year-to-date Adjusted EBITDA was $190 million, up from $150 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 11.6 percent, compared with 10.6 percent in 2014.

EMEA Real Estate Services

EMEA Revenue
($ in millions, "LC" = local currency)
  Three Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Leasing   $ 72.4   $ 66.6   9%   23%
Capital Markets & Hotels     110.3     90.8   21%   35%
Property & Facility Management Fee Revenue1     53.8     58.8   (9)%   3%
  Property & Facility Management     75.0     81.6   (8)%   3%
Project & Development Services Fee Revenue1     40.7     35.8   14%   27%
  Project & Development Services     133.6     83.4   60%   83%
Advisory, Consulting and Other     55.7     46.2   21%   35%
  Operating Revenue   $ 332.9   $ 298.2   12%   25%
                     
Equity Earnings     --     --   n.m.   --%
Total Segment Fee Revenue1   $ 332.9   $ 298.2   12%   25%
    Total Segment Revenue   $ 447.0   $ 368.6   21%   37%
                     
n.m. - not meaningful                    
                     
             
EMEA Revenue
($ in millions, "LC" = local currency)
  Nine Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                 
Leasing   $ 185.9   $ 188.3   (1)%   14%
Capital Markets & Hotels     298.7     238.6   25%   42%
Property & Facility Management Fee Revenue1     156.4     171.2   (9)%   4%
  Property & Facility Management     219.6     246.6   (11)%   1%
Project & Development Services Fee Revenue1     111.3     98.5   13%   30%
  Project & Development Services     324.1     258.0   26%   48%
Advisory, Consulting and Other     160.8     144.6   11%   26%
  Operating Revenue   $ 913.1   $ 841.2   9%   24%
                     
Equity Earnings     0.7     --   n.m.   n.m
Total Segment Fee Revenue1   $ 913.8   $ 841.2   9%   24%
    Total Segment Revenue   $ 1,189.8   $ 1,076.1   11%   27%
                     
n.m. - not meaningful                    
                     

EMEA Performance Highlights:

  • EMEA's performance during the third quarter was significantly higher in local currencies than in U.S. dollars due to the continued strength of the U.S. dollar against European currencies.

  • Fee revenue for the quarter was $333 million, an increase of 25 percent from 2014. Revenue growth was driven by Capital Markets & Hotels up 35 percent; Advisory, Consulting and Other up 35 percent; Project & Development Services up 27 percent; and Leasing up 23 percent compared with last year. Growth in the region was led by the U.K., Germany and France.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $307 million for the quarter, compared with $282 million last year.

  • Operating income was $26 million for the quarter, compared with $16 million in 2014. Year-to-date operating income was $56 million, up from $36 million in 2014.

  • Adjusted EBITDA was $33 million for the quarter, compared with $23 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 10.0 percent for the quarter, compared with 7.6 percent in 2014. Year-to-date Adjusted EBITDA was $74 million, up from $54 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 8.1 percent, compared with 6.4 percent in 2014.

Asia Pacific Real Estate Services

             
Asia Pacific Revenue
($ in millions, "LC" = local currency)
  Three Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Leasing   $ 48.5   $ 45.3   7%   19%
Capital Markets & Hotels     38.5     29.9   29%   48%
Property & Facility Management Fee Revenue1     99.4     94.7   5%   18%
  Property & Facility Management     135.3     128.0   6%   18%
Project & Development Services Fee Revenue1     21.8     19.6   11%   26%
  Project & Development Services     33.6     40.7   (17)%   (6)%
Advisory, Consulting and Other     24.8     28.8   (14)%   (3)%
  Operating Revenue   $ 233.0   $ 218.3   7%   20%
                     
Equity Earnings     0.2     0.2   --%   8%
Total Segment Fee Revenue1   $ 233.2   $ 218.5   7%   20%
    Total Segment Revenue   $ 280.9   $ 272.9   3%   15%
                     
n.m. - not meaningful                    
                     
             
Asia Pacific Revenue
($ in millions, "LC" = local currency)
  Nine Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Leasing   $ 127.2   $ 121.4   5%   14%
Capital Markets & Hotels     99.0     81.2   22%   37%
Property & Facility Management Fee Revenue1     289.2     276.2   5%   15%
  Property & Facility Management     396.9     379.8   5%   13%
Project & Development Services Fee Revenue1     60.7     51.2   19%   31%
  Project & Development Services     99.0     96.1   3%   14%
Advisory, Consulting and Other     75.9     76.4   (1)%   9%
  Operating Revenue   $ 652.0   $ 606.4   8%   18%
                     
Equity Losses     0.2     0.1   n.m.   92%
Total Segment Fee Revenue1   $ 652.2   $ 606.5   8%   18%
    Total Segment Revenue   $ 798.2   $ 755.0   6%   16%
                     
n.m. - not meaningful                    
                     

Asia Pacific Performance Highlights:

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

  • Fee revenue for the quarter was $233 million, an increase of 20 percent from 2014. Revenue growth was driven by Capital Markets & Hotels up 48 percent, Leasing up 19 percent, and Property & Facility Management up 18 percent, compared with last year. Growth in the region was led by Australia, India and China's tier one cities, including Beijing and Shanghai.

  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $220 million for the quarter, compared with $203 million last year.

  • Operating income was $13 million for the quarter, compared with $15 million in 2014. Year-to-date operating income was $34 million, up from $32 million in 2014.

  • Adjusted EBITDA was $17 million for the quarter, compared with $16 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 7.1 percent for the quarter, compared with 7.5 percent in 2014. Year-to-date Adjusted EBITDA was $44 million, up from $40 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 6.8 percent, compared with 6.5 percent in 2014.

LaSalle Investment Management

             
LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
  Three Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Advisory Fees   $ 60.7   $ 60.9   --%   7%
Transaction Fees & Other     5.0     10.8   (54)%   (50)%
Incentive Fees     68.5     70.6   (3)%   8%
  Operating Revenue   $ 134.2   $ 142.3   (6)%   3%
                     
Equity Earnings     20.7     20.1   3%   4%
Total Segment Revenue   $ 154.9   $ 162.4   (5)%   3%
                     
n.m. - not meaningful                    
                     
             
LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
  Nine Months Ended September 30,   % Change
in USD
  % Change
in LC
2015   2014  
                     
Advisory Fees   $ 181.3   $ 176.8   3%   11%
Transaction Fees & Other     19.5     19.8   (2)%   7%
Incentive Fees     99.3     79.5   25%   38%
  Operating Revenue   $ 300.1   $ 276.1   9%   18%
                     
Equity Earnings     57.6     40.4   43%   44%
Total Segment Revenue   $ 357.7   $ 316.5   13%   21%
                     
n.m. - not meaningful                    
                     

LaSalle Investment Management Performance Highlights:

  • Total segment revenue was $155 million for the quarter, compared with $162 million last year. This included advisory fee growth of 7 percent, $69 million of incentive fees and $21 million of equity earnings.

  • Incentive fees and equity earnings were notable for the quarter, despite a tough 2014 comparable. Incentive fees were driven by the sale of assets as LaSalle realized gains from legacy investments, whereas equity earnings were primarily valuation driven.

  • Operating expenses were $92 million for the quarter, compared with $95 million last year. Operating income was $63 million for the quarter, compared with $68 million last year. 

  • Adjusted EBITDA was $63 million for the quarter, compared with $68 million last year. Adjusted EBITDA margin was 40.9 percent, compared with 42.0 percent in 2014. Year-to-date Adjusted EBITDA was $130 million, up from $108 million in 2014. Year-to-date Adjusted EBITDA margin was 36.3 percent, compared to 34.0 percent in 2014.

  • Capital raise was $838 million for the quarter and $3.8 billion year-to-date.

  • Assets under management were $57.2 billion as of September 30, 2015, up from $56.0 billion as of June 30, 2015. The net increase in assets under management resulted from $2.5 billion of acquisitions and takeovers, $1.7 billion of dispositions and withdrawals, $0.7 billion of net valuation decreases and $1.1 billion of net 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. A Fortune 500 company 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 $57.2 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 quarters ended March 31, 2015 and June 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, October 28, 2015 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: +1 844 231 9804
International callers: +1 402 858 7998
Passcode: 49805888

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=102889
3. Download free Windows Media Player software: (link located under registration form)
4. If you experience problems listening, please call the Webcast Hotline +1 800 744 9473 and provide your Event ID (102889).

Supplemental Information
Supplemental information regarding the third-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. EDT Wednesday, October 28, 2015 through 11:59 p.m. EST Saturday, November 28, 2015 at the following numbers:

U.S. callers: +1 855 859 2056 or + 1 800 585 8367
International callers: +1 404 537 3406
Passcode: 49805888

Web Audio Replay
An audio replay will be available. 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, 2015 and 2014
(in thousands, except share data)
(Unaudited)
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2015   2014   2015   2014
                         
Revenue   $ 1,501,267     $ 1,365,975     $ 4,078,254     $ 3,680,622  
                         
  Operating expenses:                        
  Compensation and benefits     896,080       828,241       2,459,056       2,226,804  
  Operating, administrative and other     440,119       388,290       1,245,443       1,141,376  
  Depreciation and amortization     26,643       22,023       77,060       67,214  
  Restructuring and acquisition charges 4     18,108       (37 )     20,757       41,379  
    Total operating expenses     1,380,950       1,238,517       3,802,316       3,476,773  
                           
    Operating income 1     120,317       127,458       275,938       203,849  
                         
Interest expense, net of interest income     (6,774 )     (7,361 )     (20,369 )     (21,661 )
Equity earnings from real estate ventures     25,362       19,552       63,873       40,945  
                         
Income before income taxes and noncontrolling interest 4     138,905       139,649       319,442       223,133  
Provision for income taxes 4     25,720       34,912       71,576       29,889  
Net income 4     113,185       104,737       247,866       193,244  
                         
Net income attributable to noncontrolling interest     2,776       453       5,252       1,116  
Net income attributable to the Company   $ 110,409     $ 104,284     $ 242,614     $ 192,128  
                         
Dividends on unvested common stock, net of tax benefit     --       --       163       176  
Net income attributable to common shareholders   $ 110,409     $ 104,284     $ 242,451     $ 191,952  
                         
Basic earnings per common share   $ 2.45     $ 2.33     $ 5.40     $ 4.30  
                         
Basic weighted average shares outstanding     45,001,309       44,809,133       44,905,217       44,637,429  
                         
Diluted earnings per common share 2   $ 2.43     $ 2.30     $ 5.34     $ 4.24  
                         
Diluted weighted average shares outstanding     45,452,959       45,290,595       45,394,517       45,241,766  
                         
EBITDA 3   $ 172,322     $ 169,033     $ 416,871     $ 312,008  
                         
Please reference attached financial statement notes.             
                           
 
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Nine Months Ended September 30, 2015 and 2014
(in thousands)
(Unaudited)
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2015   2014   2015   2014
REAL ESTATE SERVICES                        
                         
AMERICAS                        
  Revenue:                        
    Operating revenue   $ 639,405     $ 582,387     $ 1,791,071     $ 1,573,552  
    Equity earnings (losses)     4,450       (756 )     5,366       446  
    Total segment revenue     643,855       581,631       1,796,437       1,573,998  
    Gross contract costs 1     (52,150 )     (60,601 )     (158,047 )     (152,863 )
    Total segment fee revenue     591,705       521,030       1,638,390       1,421,135  
                             
  Operating expenses:                        
    Compensation, operating and administrative expenses     566,668       521,987       1,606,929       1,423,746  
    Depreciation and amortization     15,638       11,658       46,511       38,500  
    Total segment operating expenses     582,306       533,645       1,653,440       1,462,246  
    Gross contract costs 1     (52,150 )     (60,601 )     (158,047 )     (152,863 )
    Total fee-based segment operating expenses     530,156       473,044       1,495,393       1,309,383  
                           
  Operating income   $ 61,549     $ 47,986     $ 142,997     $ 111,752  
                           
  Adjusted EBITDA   $ 77,187     $ 59,644     $ 189,508     $ 150,252  
                         
EMEA                        
  Revenue:                        
    Operating revenue   $ 447,037     $ 368,564     $ 1,189,070     $ 1,076,088  
    Equity earnings     8       13       752       14  
    Total segment revenue     447,045       368,577       1,189,822       1,076,102  
    Gross contract costs 1     (114,125 )     (70,403 )     (276,047 )     (234,929 )
    Total segment fee revenue     332,920       298,174       913,775       841,173  
                             
  Operating expenses:                        
    Compensation, operating and administrative expenses     413,838       345,893       1,116,030       1,022,599  
    Depreciation and amortization     6,800       6,355       18,099       17,303  
    Total segment operating expenses     420,638       352,248       1,134,129       1,039,902  
    Gross contract costs 1     (114,125 )     (70,403 )     (276,047 )     (234,929 )
    Total fee-based segment operating expenses     306,513       281,845       858,082       804,973  
                           
  Operating income   $ 26,407     $ 16,329     $ 55,693     $ 36,200  
                           
  Adjusted EBITDA   $ 33,207     $ 22,684     $ 73,792     $ 53,503  
                                 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2015   2014   2015   2014
ASIA PACIFIC                        
  Revenue:                        
    Operating revenue   $ 280,651     $ 272,708     $ 797,974     $ 754,890  
    Equity earnings     193       198       215       119  
    Total segment revenue     280,844       272,906       798,189       755,009  
    Gross contract costs 1     (47,697 )     (54,419 )     (145,955 )     (148,483 )
    Total segment fee revenue     233,147       218,487       652,234       606,526  
                             
   Operating expenses:                        
    Compensation, operating and administrative expenses     264,261       254,352       753,763       713,111  
    Depreciation and amortization     3,657       3,444       10,878       9,869  
    Total segment operating expenses     267,918       257,796       764,641       722,980  
    Gross contract costs 1     (47,697 )     (54,419 )     (145,955 )     (148,483 )
    Total fee-based segment operating expenses     220,221       203,377       618,686       574,497  
                           
  Operating income   $ 12,926     $ 15,110     $ 33,548     $ 32,029  
                           
  Adjusted EBITDA   $ 16,583     $ 16,338     $ 44,426     $ 39,682  
                         
LASALLE INVESTMENT MANAGEMENT                        
  Revenue:                        
    Operating revenue   $ 134,174     $ 142,316     $ 300,139     $ 276,092  
    Equity earnings     20,711       20,097       57,540       40,366  
    Total segment revenue     154,885       162,413       357,679       316,458  
                             
   Operating expenses:                        
    Compensation, operating and administrative expenses     91,432       94,299       227,777       208,724  
    Depreciation and amortization     548       566       1,572       1,542  
    Total segment operating expenses     91,980       94,865       229,349       210,266  
                           
  Operating income   $ 62,905     $ 67,548     $ 128,330     $ 106,192  
                           
  Adjusted EBITDA   $ 63,453     $ 68,114     $ 129,902     $ 107,734  
                         
                         
SEGMENT RECONCILING ITEMS                        
  Total segment revenue   $ 1,526,629     $ 1,385,527     $ 4,142,127     $ 3,721,567  
  Reclassification of equity earnings     25,362       19,552       63,873       40,945  
  Total revenue   $ 1,501,267     $ 1,365,975     $ 4,078,254     $ 3,680,622  
                           
  Total operating expenses before restructuring and acquisition charges     1,362,842       1,238,554       3,781,559       3,435,394  
  Operating income before restructuring and acquisition charges   $ 138,425     $ 127,421     $ 296,695     $ 245,228  
                           
  Restructuring and acquisition charges 4     18,108       (37 )     20,757       41,379  
  Operating income after restructuring and acquisition charges   $ 120,317     $ 127,458     $ 275,938     $ 203,849  
                           
  Total adjusted EBITDA   $ 190,430     $ 166,780     $ 437,628     $ 351,171  
  Restructuring and acquisition charges 4     18,108       (2,253 )     20,757       39,163  
  Total EBITDA   $ 172,322     $ 169,033     $ 416,871     $ 312,008  
                           
  Please reference attached financial statement notes.         
                           
     
JONES LANG LASALLE INCORPORATED    
Consolidated Balance Sheets    
September 30, 2015, December 31, 2014 and September 30, 2014    
(in thousands)    
     
    (Unaudited)       (Unaudited)
    September 30,   December 31,   September 30,
    2015   2014   2014
ASSETS                  
Current assets:                  
  Cash and cash equivalents   $ 193,499   $ 250,413   $ 162,568
  Trade receivables, net of allowances     1,407,440     1,375,035     1,216,322
  Notes and other receivables     222,270     181,377     193,324
  Warehouse receivables     41,274     83,312     185,797
  Prepaid expenses     90,065     64,963     84,484
  Deferred tax assets, net     129,869     135,251     122,353
  Other     9,980     27,825     29,399
    Total current assets     2,094,397     2,118,176     1,994,247
                   
Property and equipment, net of accumulated depreciation     377,832     368,361     344,765
Goodwill, with indefinite useful lives     1,999,623     1,907,924     1,910,990
Identified intangibles, net of accumulated amortization     43,384     38,841     40,443
Investments in real estate ventures     311,814     297,142     290,674
Long-term receivables     110,044     85,749     94,170
Deferred tax assets, net     104,670     90,897     64,832
Deferred compensation plans     128,910     111,234     108,484
Other     64,352     57,012     86,181
    Total assets   $ 5,235,026   $ 5,075,336   $ 4,934,786
                   
LIABILITIES AND EQUITY                  
Current liabilities:                  
  Accounts payable and accrued liabilities   $ 636,824   $ 630,037   $ 518,704
  Accrued compensation     790,977     990,678     665,556
  Short-term borrowings     30,504     19,623     43,292
  Deferred tax liabilities, net     16,554     16,554     11,606
  Deferred income     143,913     104,565     119,963
  Deferred business acquisition obligations     48,616     49,259     46,462
  Warehouse facility     41,274     83,312     185,797
  Minority shareholder redemption liability     --     11,158     10,909
  Other     153,109     141,825     157,987
    Total current liabilities     1,861,771     2,047,011     1,760,276
                     
Noncurrent liabilities:                  
  Credit facility     235,005     --     250,000
  Long-term senior notes     275,000     275,000     275,000
  Deferred tax liabilities, net     17,723     17,082     18,029
  Deferred compensation     142,551     125,857     114,576
  Deferred business acquisition obligations     37,975     68,848     65,937
  Minority shareholder redemption liability     --     --     --
  Other     130,301     118,969     94,111
    Total liabilities     2,700,326     2,652,767     2,577,929
                   
    (Unaudited)       (Unaudited)
    September 30,   December 31,   September 30,
    2015   2014   2014
Redeemable noncontrolling interest     8,917       13,449       13,638  
                   
Company shareholders' equity:                  
  Common stock, $.01 par value per share,100,000,000 shares authorized; 45,033,713, 44,828,779, and 44,817,758 shares issued and outstanding as of September 30, 2015, December 31, 2014 and September 30, 2014, respectively     450       448       448  
  Additional paid-in capital     980,698       961,850       957,374  
  Retained earnings     1,861,427       1,631,145       1,448,602  
  Shares held in trust     (6,328 )     (6,407 )     (6,407 )
  Accumulated other comprehensive income (loss)     (329,747 )     (200,239 )     (76,839 )
    Total Company shareholders' equity     2,506,500       2,386,797       2,323,178  
                   
Noncontrolling interest     19,283       22,323       20,041  
    Total equity     2,525,783       2,409,120       2,343,219  
                   
    Total liabilities and equity   $ 5,235,026     $ 5,075,336     $ 4,934,786  
                   
Please reference attached financial statement notes.         
                         
 
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2015 and 2014
(in thousands)
 
    Nine Months Ended
    September 30,
    2015   2014
             
Cash (used in) provided by operating activities   $ (18,245 )   $ 42,356  
             
Cash used in investing activities     (184,464 )     (111,503 )
             
Cash provided by financing activities     160,243       82,769  
             
Effect of currency exchange rate changes on cash and cash equivalents     (14,448 )     (3,780 )
             
  Net (decrease) increase in cash and cash equivalents   $ (56,914 )   $ 9,842  
             
Cash and cash equivalents, beginning of period     250,413       152,726  
             
Cash and cash equivalents, end of period   $ 193,499     $ 162,568  
             
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 nine months ended September 30, 2015 and 2014.

         
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
($ in millions)   2015   2014   2015   2014
                         
Revenue   $ 1,501.3     $ 1,366.0     $ 4,078.2     $ 3,680.6  
Gross contract costs     (214.0 )     (185.4 )     (580.0 )     (536.3 )
Fee revenue   $ 1,287.3     $ 1,180.6     $ 3,498.2     $ 3,144.3  
                         
Operating expenses   $ 1,381.0     $ 1,238.5     $ 3,802.3     $ 3,476.8  
Gross contract costs     (214.0 )     (185.4 )     (580.0 )     (536.3 )
Fee-based operating expenses   $ 1,167.0     $ 1,053.1     $ 3,222.3     $ 2,940.5  
                         
Operating income   $ 120.3     $ 127.5     $ 275.9     $ 203.8  
                         
Add:                        
Restructuring and acquisition charges*     18.1       (2.2 )     20.8       39.2  
Adjusted operating income   $ 138.4     $ 125.3     $ 296.7     $ 243.0  
                         
Adjusted operating income margin     10.8 %     10.6 %     8.5 %     7.7 %

*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 nine months ended September 30, 2015 and 2014. Adjusted net income in the table below for the three and nine months ended September 30, 2014 no longer incorporates an adjustment to exclude the net intangible amortization related to the 2011 King Sturge acquisition; such amounts were $0.5 million and $1.6 million of amortization expense for the three and nine months ended September 30, 2014, respectively. There was no comparable activity during the three and nine months ended September 30, 2015.

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)   2015   2014   2015   2014
                         
GAAP net income attributable to common shareholders   $ 110.4   $ 104.3     $ 242.5   $ 192.0
Shares (in 000s)     45,453     45,291       45,395     45,242
GAAP diluted earnings per share   $ 2.43   $ 2.30     $ 5.34   $ 4.24
                         
GAAP net income attributable to common shareholders   $ 110.4   $ 104.3     $ 242.5   $ 192.0
Restructuring and acquisition charges, net*     4.0     (1.6 )     6.0     3.5
Adjusted net income   $ 114.4   $ 102.7     $ 248.5   $ 195.5
                         
Shares (in 000s)     45,453     45,291       45,395     45,242
                         
Adjusted diluted earnings per share   $ 2.52   $ 2.27     $ 5.47   $ 4.32

*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   Nine Months Ended
    September 30,   September 30,
($ in millions)   2015   2014   2015   2014
                         
GAAP net income   $ 113.2   $ 104.7     $ 247.9   $ 193.2
Add:                        
Interest expense, net of interest income     6.8     7.4       20.4     21.7
Provision for (benefit from) income taxes     25.7     34.9       71.5     29.9
Depreciation and amortization     26.6     22.0       77.1     67.2
                         
EBITDA   $ 172.3   $ 169.0     $ 416.9   $ 312.0
Add:                        
Restructuring and acquisition charges     18.1     (2.2 )     20.8     39.2
Adjusted EBITDA   $ 190.4   $ 166.8     $ 437.7   $ 351.2
                           

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 and nine months ended September 30, 2014 includes a pre-tax benefit 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 for full-year 2014 reporting comparability.

Restructuring and acquisition charges of $18 million in the quarter ended September 30, 2015 include $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   Nine Months Ended
    September 30,   September 30,
($ in millions)   GAAP   Adjusting Item   Adjusted   GAAP   Adjusting Item   Adjusted
                                     
Income before income taxes and noncontrolling interest   $ 138.9   $ 12.8   $ 151.7   $ 319.4   $ 12.8   $ 332.2
Provision for income taxes     25.7     12.8     38.5     71.5     12.8     84.3
Net Income   $ 113.2         $ 113.2   $ 247.9         $ 247.9
                                     

Excluding the impact of this item, the adjusted provision for income taxes for the three months ended September 30, 2015 of $38.5 reflects a 25.4 percent effective tax rate on adjusted income before taxes of $151.7 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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