SOURCE: JLL

JLL

July 29, 2015 07:32 ET

JLL Reports Second-Quarter 2015 Adjusted Earnings per Share of $2.01, 20 Percent Above Last Year

Record Second-Quarter Fee Revenue of $1.2 Billion, up 17 Percent in Local Currency and 9 Percent in U.S. Dollars

CHICAGO, IL--(Marketwired - Jul 29, 2015) - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $2.01, up from $1.68 in the prior year. Second-quarter fee revenue totaled $1.2 billion, up 17 percent from the second quarter of 2014. All percentage variances are calculated on a local currency basis.

  • Record second-quarter fee revenue with double-digit growth across all four segments

  • Year-to-date margin expansion in all segments with ongoing investments for future revenue and profit growth

  • Capital Markets & Hotels momentum and market share growth continues; Corporate Solutions secures significant client wins and adds to strong pipeline

  • LaSalle Investment Management year-to-date capital raise of $3 billion; outstanding performance for clients and shareholders

  • Acquisitions increasing; 10 transactions announced in 2015

  • JLL's credit rating upgraded to BBB+ (Stable) by Standard & Poor's on July 28, 2015
                 
Summary Financial Results   Three Months Ended   Six Months Ended
($ in millions, except per share data)   June 30,   June 30,
    2015   2014   2015   2014
                         
Revenue   $ 1,373   $ 1,277   $ 2,577   $ 2,315
Fee Revenue1   $ 1,182   $ 1,086   $ 2,211   $ 1,964
Adjusted Net Income2   $ 92   $ 76   $ 134   $ 93
U.S. GAAP Net Income2   $ 90   $ 72   $ 132   $ 88
Adjusted Earnings per Share2   $ 2.01   $ 1.68   $ 2.95   $ 2.05
Earnings per Share   $ 1.98   $ 1.58   $ 2.91   $ 1.94
Adjusted EBITDA3   $ 157   $ 132   $ 247   $ 184
  Adjusted EBITDA, Real Estate Services   $ 119   $ 109   $ 181   $ 144
  Adjusted EBITDA, LaSalle Investment Management   $ 38   $ 23   $ 66   $ 40
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
 

CEO Comment:
"We are pleased with another record quarter, with double-digit revenue growth in all business segments, the product of years of consistent, disciplined investment across all areas of our company," said Colin Dyer, President and CEO of JLL. "We remain positive on our prospects for the second half of 2015, with solid momentum across all service lines and markets," Dyer added.

           
Consolidated Revenue
($ in millions, "LC" = local currency)
Three Months Ended
June 30,
  % Change in
USD
  % Change in
LC
  2015   2014        
                       
Real Estate Services ("RES")                      
Leasing $ 379.0   $ 366.8   3 %   8 %
Capital Markets & Hotels   222.8     182.2   22 %   33 %
Property & Facility Management Fee Revenue1   258.6     260.6   (1 )%   7 %
  Property & Facility Management   363.1     376.5   (4 )%   4 %
Project & Development Services Fee Revenue1   121.4     102.8   18 %   29 %
  Project & Development Services   208.6     178.1   17 %   34 %
Advisory, Consulting and Other   119.9     103.6   16 %   27 %
  Total RES Fee Revenue1 $ 1,101.7   $ 1,016.0   8 %   16 %
    Total RES Revenue $ 1,293.4   $ 1,207.2   7 %   16 %
                       
LaSalle Investment Management ("LaSalle")                      
Advisory Fees $ 59.8   $ 60.0   -- %   8 %
Transaction Fees & Other   8.4     4.4   91 %   108 %
Incentive Fees   11.9     5.6   113 %   133 %
    Total LaSalle Revenue $ 80.1   $ 70.0   14 %   24 %
                       
Total Firm Fee Revenue1 $ 1,181.8   $ 1,086.0   9 %   17 %
    Total Firm Revenue $ 1,373.5   $ 1,277.2   8 %   16 %
                       
                       
n.m. - not meaningful  
                       
                       
Consolidated Revenue
($ in millions, "LC" = local currency)
Six Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Real Estate Services ("RES")                      
Leasing $ 685.1   $ 636.0   8 %   12 %
Capital Markets & Hotels   400.1     299.5   34 %   45 %
Property & Facility Management Fee Revenue1   518.4     507.7   2 %   9 %
  Property & Facility Management   735.9     721.2   3 %   9 %
Project & Development Services Fee Revenue1   222.6     190.2   17 %   27 %
  Project & Development Services   371.2     327.6   13 %   28 %
Advisory, Consulting and Other   218.7     196.6   11 %   22 %
  Total RES Fee Revenue1 $ 2,044.9   $ 1,830.0   12 %   19 %
    Total RES Revenue $ 2,411.0   $ 2,180.9   11 %   19 %
                       
LaSalle Investment Management ("LaSalle")                      
Advisory Fees $ 120.6   $ 115.8   4 %   12 %
Transaction Fees & Other   14.5     9.0   61 %   76 %
Incentive Fees   30.9     8.9   n.m.     n.m.  
    Total LaSalle Revenue $ 166.0   $ 133.7   24 %   34 %
                       
Total Firm Fee Revenue1 $ 2,210.9   $ 1,963.7   13 %   20 %
    Total Firm Revenue $ 2,577.0   $ 2,314.6   11 %   20 %
                       
n.m. - not meaningful                      
                       

Consolidated Performance Highlights:

  • Consolidated fee revenue for the second quarter was $1.2 billion, up 17 percent from 2014. Growth was broad-based, led by Capital Markets, up $41 million or 33 percent, and Project & Development Services, up $19 million or 29 percent.
  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.1 billion for the second quarter, compared with $989 million last year, an increase of 17 percent.
  • LaSalle Investment Management's advisory fees grew 8 percent while healthy transaction and incentive fees contributed to a total revenue increase of 24 percent. LaSalle also recognized significant equity earnings from legacy investment dispositions.
  • Adjusted EBITDA margin calculated on a fee revenue basis was 13.3 percent for the second quarter, compared with 12.2 percent last year.
  • Adjusted earnings per share reached $2.01 for the second quarter, up 20 percent from last year despite a negative foreign exchange impact of approximately $0.15 compared with a year ago.

Balance Sheet and Net Interest Expense:

  • JLL's credit rating upgraded to BBB+ (Stable) by Standard & Poor's on July 28, 2015. This upgrade reflects the second time in eight months that S&P has improved JLL's debt rating.
  • The firm's total net debt was $522 million at quarter end, a decrease of $24 million from the first quarter 2015 and $150 million from the second quarter last year. 
  • Net interest expense for the second quarter was $7.6 million, down from $7.7 million in the second quarter of 2014. Slightly higher borrowing costs partially offset lower average borrowings compared with last year.

Business Segment Performance Highlights

Americas Real Estate Services

Americas Revenue
($ in millions, "LC" = local currency)
Three Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Leasing $ 263.7   $ 250.5   5 %   6 %
Capital Markets & Hotels   76.5     59.2   29 %   30 %
Property & Facility Management Fee Revenue1   111.9     107.6   4 %   8 %
  Property & Facility Management   163.4     158.3   3 %   9 %
Project & Development Services Fee Revenue1   60.4     51.3   18 %   22 %
  Project & Development Services   61.8     52.1   19 %   23 %
Advisory, Consulting and Other   32.1     24.0   34 %   36 %
  Operating Revenue $ 544.6   $ 492.6   11 %   11 %
                       
Equity Earnings   0.5     1.0   (50 )%   (41 )%
Total Segment Fee Revenue1 $ 545.1   $ 493.6   10 %   12 %
    Total Segment Revenue $ 598.0   $ 545.1   10 %   12 %
                       
n.m. - not meaningful                      
                       
                       
Americas Revenue
($ in millions, "LC" = local currency)
Six Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Leasing $ 492.9   $ 438.2   12 %   13 %
Capital Markets & Hotels   151.3     100.3   51 %   52 %
Property & Facility Management Fee Revenue1   226.1     213.7   6 %   9 %
  Property & Facility Management   329.9     304.4   8 %   13 %
Project & Development Services Fee Revenue1   113.1     96.0   18 %   21 %
  Project & Development Services   115.2     97.6   18 %   21 %
Advisory, Consulting and Other   62.4     50.7   23 %   25 %
  Operating Revenue $ 1,045.8   $ 898.9   16 %   17 %
                       
Equity Earnings   0.9     1.2   (25 )%   (24 )%
Total Segment Fee Revenue1 $ 1,046.7   $ 900.1   16 %   18 %
    Total Segment Revenue $ 1,152.6   $ 992.4   16 %   18 %
                       
n.m. - not meaningful                      
                       

Americas Performance Highlights:

  • Fee revenue for the quarter was $545 million, an increase of 11 percent from 2014. Revenue growth compared with last year was broad-based, with Capital Markets & Hotels up 30 percent, Project & Development Services up 22 percent, and Advisory, Consulting and Other up 36 percent.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $499 million for the quarter, up 14 percent from last year. The quarter included investments in technology to support our clients and platform to support the growing business.
  • Operating income was $46 million for the quarter, compared with $47 million in 2014. Year-to-date operating income was $81 million, up from $64 million in 2014.
  • Adjusted EBITDA was $61 million for the quarter, compared with $60 million last year. Adjusted EBITDA margin, for the quarter, calculated on a fee revenue basis, was 11.3 percent, compared with 12.2 percent in 2014. Year-to-date Adjusted EBITDA was $112 million, up from $91 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 10.7 percent, compared with 10.1 percent in 2014.

EMEA Real Estate Services

EMEA Revenue
($ in millions, "LC" = local currency)
Three Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Leasing $ 65.1   $ 67.6   (4 )%   12 %
Capital Markets & Hotels   113.2     93.4   21 %   38 %
Property & Facility Management Fee Revenue1   50.9     60.3   (16 )%   (3 )%
  Property & Facility Management   69.7     88.5   (21 )%   (10 )%
Project & Development Services Fee Revenue1   39.4     34.1   16 %   36 %
  Project & Development Services   110.7     92.5   20 %   44 %
Advisory, Consulting and Other   57.6     53.6   7 %   24 %
  Operating Revenue $ 326.2   $ 309.0   6 %   21 %
                       
Equity Earnings   1.1     --   n.m.     n.m.  
Total Segment Fee Revenue1 $ 327.3   $ 309.0   6 %   22 %
    Total Segment Revenue $ 417.4   $ 395.6   6 %   23 %
                       
n.m. - not meaningful                      
                       
                       
EMEA Revenue
($ in millions, "LC" = local currency)
Six Months Ended
June 30,
  % Change in
USD
 
  % Change in
LC
 
2015   2014        
                       
Leasing $ 113.5   $ 121.7   (7 )%   9 %
Capital Markets & Hotels   188.3     147.8   27 %   46 %
Property & Facility Management Fee Revenue1   102.6     112.4   (9 )%   4 %
  Property & Facility Management   144.5     165.1   (12 )%   -- %
Project & Development Services Fee Revenue1   70.6     62.7   13 %   32 %
  Project & Development Services   190.6     174.6   9 %   32 %
Advisory, Consulting and Other   105.1     98.4   7 %   22 %
  Operating Revenue $ 580.1   $ 543.0   7 %   23 %
                       
Equity Earnings   0.8     --   n.m.     n.m.  
Total Segment Fee Revenue1 $ 580.9   $ 543.0   7 %   23 %
    Total Segment Revenue $ 742.8   $ 707.6   5 %   22 %
                       
n.m. - not meaningful                      

EMEA Performance Highlights:

  • EMEA's performance during the second quarter was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar against European currencies.
  • Fee revenue for the quarter was $327 million, an increase of 21 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 38 percent, and Project & Development Services up 36 percent, compared with last year. Growth in the region was broad-based, led by the UK, Germany, Sweden, and Central and Eastern Europe.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $295 million for the quarter, compared with $284 million last year.
  • Operating income was $32 million for the quarter, compared with $25 million in 2014. Year-to-date operating income was $29 million, up from $20 million in 2014.
  • Adjusted EBITDA was $38 million for the quarter, compared with $30 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 11.7 percent for the quarter, compared with 9.8 percent in 2014. Year-to-date Adjusted EBITDA was $41 million, up from $31 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 7.0 percent, compared with 5.7 percent in 2014.

Asia Pacific Real Estate Services

Asia Pacific Revenue
($ in millions, "LC" = local currency)
Three Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Leasing $ 50.2   $ 48.7   3 %   11 %
Capital Markets & Hotels   33.1     29.6   12 %   25 %
Property & Facility Management Fee Revenue1   95.8     92.7   3 %   13 %
  Property & Facility Management   130.0     129.7   -- %   9 %
Project & Development Services Fee Revenue1   21.6     17.4   24 %   38 %
  Project & Development Services   36.1     33.5   8 %   20 %
Advisory, Consulting and Other   30.2     26.0   16 %   27 %
  Operating Revenue $ 230.9   $ 214.4   8 %   18 %
                       
Equity Earnings   0.1     --   n.m.     n.m.  
Total Segment Fee Revenue1 $ 231.0   $ 214.4   8 %   18 %
    Total Segment Revenue $ 279.7   $ 267.5   5 %   14 %
                       
n.m. - not meaningful                      
                       
Asia Pacific Revenue
($ in millions, "LC" = local currency)
Six Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                         
Leasing $ 78.7   $ 76.1     3 %   11 %
Capital Markets & Hotels   60.5     51.4     18 %   31 %
Property & Facility Management Fee Revenue1   189.7     181.6     4 %   13 %
  Property & Facility Management   261.5     251.8     4 %   11 %
Project & Development Services Fee Revenue1   38.9     31.5     23 %   35 %
  Project & Development Services   65.4     55.4     18 %   29 %
Advisory, Consulting and Other   51.2     47.5     8 %   17 %
  Operating Revenue $ 419.0   $ 388.1     8 %   17 %
                         
Equity Losses   --     (0.1 )   n.m.     n.m.  
Total Segment Fee Revenue1 $ 419.0   $ 388.0     8 %   17 %
    Total Segment Revenue $ 517.3   $ 482.1     7 %   16 %
                         
n.m. - not meaningful                        

Asia Pacific Performance Highlights:

  • Asia Pacific's performance during the second quarter was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar, particularly against the Australian dollar and Japanese yen.
  • Fee revenue for the quarter was $231 million, an increase of 18 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 25 percent, and Project & Development Services, up 38 percent, compared with last year. Growth in the region was broad-based, led by Japan, Australia, India and Singapore.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $215 million for the quarter, compared with $199 million last year, an increase of 13 percent.
  • Operating income was $16 million for the quarter, in-line with 2014. Year-to-date operating income was $21 million, up from $17 million in 2014.
  • Adjusted EBITDA was $20 million for the quarter, compared with $19 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 8.6 percent for the quarter, compared with 8.9 percent in 2014. Year-to-date Adjusted EBITDA was $28 million, up from $23 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 6.6 percent, compared with 6.0 percent in 2014.

LaSalle Investment Management

LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
Three Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Advisory Fees $ 59.8   $ 60.0   -- %   8 %
Transaction Fees & Other   8.4     4.4   91 %   108 %
Incentive Fees   11.9     5.6   113 %   133 %
  Operating Revenue $ 80.1   $ 70.0   14 %   24 %
                       
Equity Earnings   25.4     11.5   121 %   121 %
Total Segment Revenue $ 105.5   $ 81.5   29 %   38 %
                       
n.m. - not meaningful                      
           
           
LaSalle Investment Management Revenue
($ in millions, "LC" = local currency)
Six Months Ended
June 30,
  % Change in
USD
  % Change in
LC
2015   2014        
                       
Advisory Fees $ 120.6   $ 115.8   4 %   12 %
Transaction Fees & Other   14.5     9.0   61 %   76 %
Incentive Fees   30.9     8.9   n.m.     n.m.  
  Operating Revenue $ 166.0   $ 133.7   24 %   34 %
                       
Equity Earnings   36.8     20.3   81 %   83 %
Total Segment Revenue $ 202.8   $ 154.0   32 %   41 %
                       
n.m. - not meaningful                      
                       

LaSalle Investment Management Performance Highlights:

  • Total segment revenue was $106 million for the quarter, compared with $82 million last year. This included $8 million of transaction fees and other income, $12 million of incentive fees and $25 million of equity earnings.
  • Equity earnings grew significantly for the quarter, driven by the sale of assets as LaSalle realizes gains from legacy investments.
  • Operating expenses were $68 million for the quarter, compared with $59 million last year.
  • Operating income was $38 million for the quarter, compared with $22 million last year. 
  • Adjusted EBITDA was $38 million for the quarter, compared with $23 million last year. Adjusted EBITDA margin was 36.0 percent, compared with 27.9 percent in 2014. Year-to-date Adjusted EBITDA was $66 million, up from $40 million in 2014. Year-to-date Adjusted EBITDA margin was 32.8 percent, compared to 25.7 percent in 2014.
  • Capital raise was $948 million for the quarter and $3.0 billion year-to-date.
  • Assets under management were $56.0 billion as of June 30, 2015, up from $55.3 billion as of March 31, 2015. The net increase in assets under management resulted from $3.5 billion of acquisitions and takeovers, $2.5 billion of dispositions and withdrawals, $1.3 billion of net valuation increases and $1.6 billion of net 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. 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 $56.0 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, 2014, on Form 10-Q for the quarter ended March 31, 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, July 29, 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:  +1 877 800 0896
International callers:  +1 706 679 7364
Passcode:  78003651

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=102619
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 (102619).

Supplemental Information
Supplemental information regarding the second-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, July 29, 2015 through 11:59 p.m. EDT Sunday, August 30, 2015 at the following numbers:

U.S. callers:  +1 855 859 2056  or + 1 800 585 8367
International callers:  +1 404 537 3406   
Passcode:  78003651   

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 Six Months Ended June 30, 2015 and 2014  
(in thousands, except share data)  
(Unaudited)  
   
  Three Months Ended     Six Months Ended  
  June 30,     June 30,  
  2015     2014     2015     2014  
                               
Revenue $ 1,373,475     $ 1,277,204     $ 2,576,986     $ 2,314,646  
                               
  Operating expenses:                              
  Compensation and benefits   825,058       761,224       1,562,975       1,398,563  
  Operating, administrative and other   418,127       396,086       805,324       753,086  
  Depreciation and amortization   25,495       22,780       50,418       45,191  
  Restructuring and acquisition charges 4   1,832       5,458       2,648       41,416  
    Total operating expenses   1,270,512       1,185,548       2,421,365       2,238,256  
                                 
    Operating income1   102,963       91,656       155,621       76,390  
                               
Interest expense, net of interest income   (7,558 )     (7,664 )     (13,596 )     (14,300 )
Equity earnings from real estate ventures   27,128       12,491       38,511       21,393  
                               
Income before income taxes and noncontrolling interest 4   122,533       96,483       180,536       83,483  
Provision for (benefit from) income taxes 4   31,123       24,121       45,856       (5,024 )
Net income 4   91,410       72,362       134,680       88,507  
                               
Net income attributable to noncontrolling interest   1,099       420       2,475       663  
Net income attributable to the Company $ 90,311     $ 71,942     $ 132,205     $ 87,844  
                               
Dividends on unvested common stock, net of tax benefit   163       176       163       176  
Net income attributable to common shareholders $ 90,148     $ 71,766     $ 132,042     $ 87,668  
                               
Basic earnings per common share $ 2.01     $ 1.61     $ 2.94     $ 1.97  
                               
Basic weighted average shares outstanding   44,868,979       44,586,095       44,856,374       44,550,154  
                               
Diluted earnings per common share 2 $ 1.98     $ 1.58     $ 2.91     $ 1.94  
                               
Diluted weighted average shares outstanding   45,434,585       45,278,494       45,393,438       45,220,082  
                               
EBITDA 3 $ 155,586     $ 126,927     $ 244,550     $ 142,974  
                               
Please reference attached financial statement notes.  
   
   
   
JONES LANG LASALLE INCORPORATED  
Segment Operating Results  
For the Three and Six Months Ended June 30, 2015 and 2014  
(in thousands)  
(Unaudited)  
   
  Three Months Ended     Six Months Ended  
  June 30,     June 30,  
  2015     2014     2015     2014  
REAL ESTATE SERVICES                              
                               
AMERICAS                              
  Revenue:                              
    Operating revenue $ 597,470     $ 544,082     $ 1,151,666     $ 991,164  
    Equity earnings   570       967       916       1,202  
    Total segment revenue   598,040       545,049       1,152,582       992,366  
    Gross contract costs1   (52,937 )     (51,479 )     (105,896 )     (92,262 )
    Total segment fee revenue   545,103       493,570       1,046,686       900,104  
                               
  Operating expenses:                              
    Compensation, operating and administrative expenses   536,685       484,750       1,040,261       901,759  
    Depreciation and amortization   15,322       13,531       30,873       26,842  
    Total segment operating expenses   552,007       498,281       1,071,134       928,601  
    Gross contract costs1   (52,937 )     (51,479 )     (105,896 )     (92,262 )
    Total fee-based segment operating expenses   499,070       446,802       965,238       836,339  
                               
  Operating income $ 46,033     $ 46,768     $ 81,448     $ 63,765  
                                 
  Adjusted EBITDA $ 61,355     $ 60,299     $ 112,321     $ 90,607  
                               
EMEA                              
  Revenue:                              
    Operating revenue $ 416,259     $ 395,643     $ 742,033     $ 707,525  
    Equity earnings   1,112       --       744       --  
    Total segment revenue   417,371       395,643       742,777       707,525  
    Gross contract costs1   (90,060 )     (86,673 )     (161,922 )     (164,525 )
    Total segment fee revenue   327,311       308,970       580,855       543,000  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   379,106       365,360       702,192       676,706  
    Depreciation and amortization   6,073       5,504       11,299       10,948  
    Total segment operating expenses   385,179       370,864       713,491       687,654  
    Gross contract costs1   (90,060 )     (86,673 )     (161,922 )     (164,525 )
    Total fee-based segment operating expenses   295,119       284,191       551,569       523,129  
                                 
  Operating income $ 32,192     $ 24,779     $ 29,286     $ 19,871  
                                 
  Adjusted EBITDA $ 38,265     $ 30,283     $ 40,585     $ 30,819  
                               
                               
                               
  Three Months Ended     Six Months Ended  
  June 30,  June 30, 
  2015     2014     2015     2014  
ASIA PACIFIC                              
  Revenue:                              
    Operating revenue $ 279,573     $ 267,477     $ 517,322     $ 482,182  
    Equity earnings (losses)   74       4       22       (79 )
    Total segment revenue   279,647       267,481       517,344       482,103  
    Gross contract costs1   (48,669 )     (53,096 )     (98,257 )     (94,063 )
    Total segment fee revenue   230,978       214,385       419,087       388,040  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   259,878       248,454       489,500       458,759  
    Depreciation and amortization   3,583       3,257       7,222       6,425  
    Total segment operating expenses   263,461       251,711       496,722       465,184  
    Gross contract costs1   (48,669 )     (53,096 )     (98,257 )     (94,063 )
    Total fee-based segment operating expenses   214,792       198,615       398,465       371,121  
                                 
  Operating income $ 16,186     $ 15,770     $ 20,622     $ 16,919  
                                 
  Adjusted EBITDA $ 19,769     $ 19,027     $ 27,844     $ 23,344  
                               
LASALLE INVESTMENT MANAGEMENT                              
  Revenue:                              
    Operating revenue $ 80,173     $ 70,002     $ 165,965     $ 133,775  
    Equity earnings   25,372       11,520       36,829       20,270  
    Total segment revenue   105,545       81,522       202,794       154,045  
                                 
  Operating expenses:                              
    Compensation, operating and administrative expenses   67,516       58,746       136,346       114,425  
    Depreciation and amortization   517       488       1,024       976  
    Total segment operating expenses   68,033       59,234       137,370       115,401  
                                 
  Operating income $ 37,512     $ 22,288     $ 65,424     $ 38,644  
                                 
  Adjusted EBITDA $ 38,029     $ 22,776     $ 66,448     $ 39,620  
                               
                               
                               
SEGMENT RECONCILING ITEMS                              
  Total segment revenue $ 1,400,603     $ 1,289,695     $ 2,615,497     $ 2,336,039  
  Reclassification of equity earnings   27,128       12,491       38,511       21,393  
  Total revenue $ 1,373,475     $ 1,277,204     $ 2,576,986     $ 2,314,646  
                                 
  Total operating expenses before restructuring and acquisition charges   1,268,680       1,180,090       2,418,717       2,196,840  
  Operating income before restructuring and acquisition charges $ 104,795     $ 97,114     $ 158,269     $ 117,806  
                                 
  Restructuring and acquisition charges   1,832       5,458       2,648       41,416  
  Operating income after restructuring and acquisition charges $ 102,963     $ 91,656     $ 155,621     $ 76,390  
                                 
  Total adjusted EBITDA $ 157,418     $ 132,385     $ 247,198     $ 184,390  
  Restructuring and acquisition charges   1,832       5,458       2,648       41,416  
  Total EBITDA $ 155,586     $ 126,927     $ 244,550     $ 142,974  
                           
Please reference attached financial statement notes.              
                           
                           
                           
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
June 30, 2015, December 31, 2014 and June 30, 2014
(in thousands)
 
  (Unaudited)       (Unaudited)
  June 30,   December 31,   June 30,
  2015   2014   2014
ASSETS                
Current assets:                
  Cash and cash equivalents $ 191,034   $ 250,413   $ 150,708
  Trade receivables, net of allowances   1,305,467     1,375,035     1,195,172
  Notes and other receivables   218,003     181,377     172,700
  Warehouse receivables   32,200     83,312     100,922
  Prepaid expenses   71,730     64,963     75,859
  Deferred tax assets, net   131,881     135,251     128,901
  Other   34,633     27,825     9,676
    Total current assets   1,984,948     2,118,176     1,833,938
                 
Property and equipment, net of accumulated depreciation   362,988     368,361     331,850
Goodwill, with indefinite useful lives   1,933,280     1,907,924     1,946,414
Identified intangibles, net of accumulated amortization   38,367     38,841     44,146
Investments in real estate ventures   333,016     297,142     295,618
Long-term receivables   99,396     85,749     62,412
Deferred tax assets, net   102,718     90,897     69,148
Deferred compensation plans   126,627     111,234     96,729
Other   61,961     57,012     96,001
    Total assets $ 5,043,301   $ 5,075,336   $ 4,776,256
                 
LIABILITIES AND EQUITY                
Current liabilities:                
  Accounts payable and accrued liabilities $ 575,807   $ 630,037   $ 491,598
  Accrued compensation   662,865     990,678     549,234
  Short-term borrowings   22,150     19,623     24,738
  Deferred tax liabilities, net   16,554     16,554     11,631
  Deferred income   127,332     104,565     111,187
  Deferred business acquisition obligations   39,463     49,259     43,595
  Warehouse facility   32,200     83,312     100,922
  Minority shareholder redemption liability   --     11,158     --
  Other   146,689     141,825     116,610
    Total current liabilities   1,623,060     2,047,011     1,449,515
                 
Noncurrent liabilities:                
  Credit facility   329,998     --     410,000
  Long-term senior notes   275,000     275,000     275,000
  Deferred tax liabilities, net   17,712     17,082     18,029
  Deferred compensation   141,799     125,857     105,743
  Deferred business acquisition obligations   46,360     68,848     69,161
  Minority shareholder redemption liability   --     --     10,657
  Other   114,512     118,969     97,474
    Total liabilities   2,548,441     2,652,767     2,435,579
                     
                     
                     
  (Unaudited)           (Unaudited)  
  June 30,     December 31,     June 30,  
  2015     2014     2014  
Redeemable noncontrolling interest   9,905       13,449       13,725  
                       
Company shareholders' equity:                      
  Common stock, $.01 par value per share,100,000,000 shares authorized; 44,880,457, 44,828,779, and 44,621,117 shares issued and outstanding as of June 30, 2015, December 31, 2014 and June 30, 2014, respectively   449       448       446  
  Additional paid-in capital   974,174       961,850       957,763  
  Retained earnings   1,751,018       1,631,145       1,344,318  
  Shares held in trust   (6,329 )     (6,407 )     (6,250 )
  Accumulated other comprehensive income (loss)   (254,772 )     (200,239 )     13,750  
    Total Company shareholders' equity   2,464,540       2,386,797       2,310,027  
                       
  Noncontrolling interest   20,415       22,323       16,925  
    Total equity   2,484,955       2,409,120       2,326,952  
                       
    Total liabilities and equity $ 5,043,301     $ 5,075,336     $ 4,776,256  
                       
Please reference attached financial statement notes.            
                       
                       
                       
JONES LANG LASALLE INCORPORATED  
Summarized Consolidated Statements of Cash Flows  
For the Six Months Ended June 30, 2015 and 2014  
(in thousands)  
   
  Six Months Ended  
  June 30,  
  2015     2014  
               
Cash used in operating activities $ (214,851 )   $ (147,008 )
               
Cash used in investing activities   (92,307 )     (83,865 )
               
Cash provided by financing activities   255,620       228,252  
               
Effect of currency exchange rate changes on cash and cash equivalents   (7,841 )     603  
               
  Net decrease in cash and cash equivalents $ (59,379 )   $ (2,018 )
               
Cash and cash equivalents, beginning of period   250,413       152,726  
               
Cash and cash equivalents, end of period $ 191,034     $ 150,708  
               
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 six months ended June 30, 2015 and 2014.

           
  Three Months Ended     Six Months Ended  
  June 30,     June 30,  
($ in millions) 2015     2014     2015     2014  
                               
Revenue $ 1,373.5     $ 1,277.2     $ 2,577.0     $ 2,314.6  
Gross contract costs   (191.7 )     (191.2 )     (366.1 )     (350.9 )
Fee revenue $ 1,181.8     $ 1,086.0     $ 2,210.9     $ 1,963.7  
                               
Operating expenses $ 1,270.5     $ 1,185.5     $ 2,421.4     $ 2,238.2  
Gross contract costs   (191.7 )     (191.2 )     (366.1 )     (350.9 )
Fee-based operating expenses $ 1,078.8     $ 994.3     $ 2,055.3     $ 1,887.3  
                               
Operating income $ 103.0     $ 91.7     $ 155.6     $ 76.4  
                               
Add:                              
Restructuring and acquisition charges*   1.8       5.5       2.6       41.4  
Adjusted operating income $ 104.8     $ 97.2     $ 158.2     $ 117.8  
                               
Adjusted operating income margin   8.9 %     9.0 %     7.2 %     6.0 %
                               

*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 six months ended June 30, 2015, and 2014. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share for each net income total:

       
  Three Months Ended   Six Months Ended
  June 30,   June 30,
($ in millions, except per share data) 2015   2014   2015   2014
                       
GAAP net income attributable to common shareholders $ 90.1   $ 71.8   $ 132.0   $ 87.7
Shares (in 000s)   45,435     45,278     45,393     45,220
GAAP diluted earnings per share $ 1.98   $ 1.58   $ 2.91   $ 1.94
                       
GAAP net income attributable to common shareholders $ 90.1   $ 71.8   $ 132.0   $ 87.7
Restructuring and acquisition charges, net*   1.4     4.1     2.0     5.2
Adjusted net income $ 91.5   $ 75.9   $ 134.0   $ 92.9
                       
Shares (in 000s)   45,435     45,278     45,393     45,220
Adjusted diluted earnings per share $ 2.01   $ 1.68   $ 2.95   $ 2.05
                       

*See note 4 for more information on restructuring and acquisition charges

3. Adjusted EBITDA represents earnings before interest expense net of interest income, income taxes, depreciation and amortization, adjusted for restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are non-GAAP financial measures, they are used extensively by management and are useful to investors and lenders as metrics for evaluating operating performance and liquidity. EBITDA is used in the calculations of certain covenants related to the firm's revolving credit facility. However, adjusted EBITDA and EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not calculated under GAAP, the firm's adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies.

Below is a reconciliation of net income to EBITDA and adjusted EBITDA:

  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
($ in millions) 2015   2014   2015   2014  
                         
GAAP net income $ 91.4   $ 72.4   $ 134.7   $ 88.5  
Add:                        
Interest expense, net of interest income   7.6     7.6     13.6     14.3  
Provision for (benefit from) income taxes   31.1     24.1     45.9     (5.0 )
Depreciation and amortization   25.5     22.8     50.4     45.2  
EBITDA $ 155.6   $ 126.9   $ 244.6   $ 143.0  
Add:                        
Restructuring and acquisition charges   1.8     5.5     2.6     41.4  
Adjusted EBITDA $ 157.4   $ 132.4   $ 247.2   $ 184.4  

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.

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 June 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