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Jones Lang LaSalle Reports 15 Percent Fee Revenue Growth and 21 Percent EPS Growth for Third Quarter 2013

Monday, October 28, 2013

Jones Lang LaSalle Reports 15 Percent Fee Revenue Growth and 21 Percent EPS Growth for Third Quarter 2013

16:15 EDT Monday, October 28, 2013

Adjusted EPS of $1.49, fee revenue of $989 million and margin improvement year over year

CHICAGO, Oct. 28, 2013 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share ("EPS") of $1.49 for the third quarter of 2013, up from $1.23 in the prior year.  Third-quarter revenue was $1.1 billion, an increase of 19 percent.  Fee revenue was $989 million, an increase of 15 percent. All percentage variances are calculated on a local currency basis.

  • Strong fee revenue growth, led by Capital Markets & Hotels and Property & Facility Management; solid performance in Leasing
  • Double-digit revenue increases in all geographic segments demonstrating global share growth
  • Improved profitability, adjusted EPS up 21 percent, adjusted operating margins up more than 1 percentage point 
  • Healthy capital raise by LaSalle Investment Management; $3.3 billion committed year to date
  • Increased strength of investment grade balance sheet; $1.2 billion credit facility renewed and extended at lower cost
  • Semi-annual dividend of $0.22 per share declared by the Board of Directors

Summary Financial Results

   ($ in millions, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2013

2012

2013

2012

Revenue

$ 1,107

$    949

$  2,952

$  2,684

Fee Revenue1

$    989

$    878

$  2,677

$  2,475

Adjusted Net Income2

$      67

$      55

$     135

$     128

U.S. GAAP Net Income

$      63

$      50

$     122

$     101

Adjusted Earnings per Share2

$   1.49

$   1.23

$    2.99

$    2.86

Earnings per Share

$   1.39

$   1.10

$    2.71

$    2.25

Adjusted EBITDA3

$    118

$    102

$     268

$     252

     Adjusted EBITDA, Real Estate Services

$    101

$      77

$     217

$     189

     Adjusted EBITDA, LaSalle Investment Management

$      17

$      25

$       51

$       63

See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release

"Our solid third-quarter results show significant revenue growth and increasing profitability across our operations," said Colin Dyer, President and Chief Executive Officer of Jones Lang LaSalle. "In the fourth quarter, traditionally the most profitable of the year, we will continue to improve margins, take market share and invest in the long-term strength of the business," 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

2013

2012

2013

2012

Real Estate Services ("RES")

Leasing

$     333.2

$ 309.5

8%

$     860.9

$   838.7

3%

Capital Markets & Hotels

163.5

114.1

46%

441.6

318.6

40%

Property & Facility Management

304.3

249.9

26%

813.1

728.4

14%

Property & Facility Management

Fee Revenue1

233.7

207.9

17%

656.8

607.7

11%

Project & Development Services

142.8

118.8

21%

376.8

343.1

10%

Project & Development Services

Fee Revenue1

95.1

89.2

8%

258.2

254.5

3%

Advisory, Consulting and Other

95.7

85.6

13%

271.4

257.0

6%

     Total RES Revenue

$  1,039.5

$ 877.9

20%

$  2,763.8

$ 2,485.8

12%

Total RES Fee Revenue1

$     921.2

$  806.3

14%

$  2,488.9

$ 2,276.5

10%

LaSalle Investment Management

Advisory Fees

$       55.4

$    57.4

(2%)

$     167.0

$    172.0

(1%)

Transaction Fees & Other

2.6

2.5

12%

10.9

5.9

88%

Incentive Fees

9.3

11.7

(20%)

10.5

20.4

(48%)

     Total LaSalle Investment Management Revenue

$       67.3

$    71.6

(4%)

$     188.4

$    198.3

(4%)

Total Firm Revenue

$   1,106.8

$  949.5

19%

$  2,952.2

$ 2,684.1

11%

Total Firm Fee Revenue1

$      988.5

$  877.9

15%

$  2,677.3

$ 2,474.8

9%

Consolidated Performance Highlights:

  • Consolidated fee revenue growth of 15 percent for the third quarter and 9 percent year to date was driven by a 46 percent increase in Capital Markets & Hotels and a 17 percent fee revenue increase in Property & Facility Management.
  • In BRIC countries, China, India and Russia operations are stabilizing or improving while Brazil continues to be challenging.
  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $897 million in the third quarter, up 13 percent, and $2.5 billion year to date, up 9 percent.
  • Adjusted operating income margin calculated on a fee revenue basis was 9.4 percent for the quarter compared with 8.3 percent last year.

Balance Sheet, Net Interest Expense and Dividend:

  • The firm reduced total net debt by $68 million during the quarter to $765 million, consistent with historical seasonal borrowing and repayment patterns.
  • Net interest expense for the third quarter was $9.6 million compared with $10.0 million a year ago.
  • In October, the firm announced that it renewed its long-term credit facility, increasing capacity to $1.2 billion from $1.1 billion.  The outstanding balance on the credit facility at September 30, 2013, was $445 million.  Among other items, the renewed agreement reset pricing with initial pricing of LIBOR + 1.25 percent, down from LIBOR + 1.625 percent, extended the maturity to October 2018 and provided for increased add-backs to EBITDA for restructuring and acquisition-related expenses.
  • The firm's Board of Directors declared a semi-annual dividend of $0.22 per share. The dividend payment will be made on December 13, 2013, to investors of record at the close of business on November 15, 2013.

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

2013

2012

2013

2012

Leasing

$   232.6

$  214.1

9%

$   582.6

$  550.8

6%

Capital Markets & Hotels

46.7

39.1

19%

138.7

109.1

27%

Property & Facility Management

129.8

104.1

26%

348.5

307.4

14%

Property & Facility Management

Fee Revenue1

98.0

83.7

18%

273.9

251.4

10%

Project & Development Services

48.6

46.3

6%

129.3

131.1

(1%)

Project & Development Services

Fee Revenue1

48.4

46.1

6%

128.4

130.5

(1%)

Advisory, Consulting and Other

26.4

25.6

2%

77.9

75.4

3%

     Operating Revenue

$   484.1

$  429.2

13%

$ 1,277.0

$  1,173.8

9%

Equity Earnings

0.0

0.1

n/m

0.2

(0.1)

n/m

Total Segment Revenue

$   484.1

$  429.3

13%

$ 1,277.2

$  1,173.7

9%

     Total Segment Fee Revenue1

$   452.1

$  408.7

11%

$ 1,201.7

$  1,117.1

8%

n/m ? not meaningful

Americas Performance Highlights:

  • Robust revenue growth was driven by higher Capital Markets & Hotels revenue, up 19 percent, and Property & Facility Management fee revenue growth of 18 percent, despite a continued slowdown in Brazil.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $407 million for the quarter, up 12 percent, reflecting continued strategic investments to grow market share.
  • Operating income was $45 million for the quarter, compared with $42 million in 2012.  Operating income margin calculated on a fee revenue basis was 9.9 percent, compared with 10.4 percent last year. Excluding the impact of Latin America, primarily driven by Brazil, operating income increased 0.2 percent compared with last year.

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

2013

2012

2013

2012

Leasing

$   58.8

$  52.7

10%

$   167.9

$  166.3

0%

Capital Markets & Hotels

82.8

51.1

61%

204.2

140.2

46%

Property & Facility Management

62.8

45.1

39%

152.4

130.9

17%

Property & Facility Management

Fee Revenue1

48.9

42.3

15%

131.4

125.3

5%

Project & Development Services

68.4

52.4

26%

180.5

155.3

14%

Project & Development Services

Fee Revenue1

29.6

26.1

11%

81.1

76.0

6%

Advisory, Consulting and Other

45.6

41.1

11%

126.4

122.2

4%

     Operating Revenue

$   318.4

$  242.4

30%

$   831.4

$  714.9

16%

Equity Earnings

0.0

(0.1)

n/m

(0.5)

(0.2)

n/m

Total Segment Revenue

$   318.4

$  242.3

30%

$   830.9

$  714.7

16%

     Total Segment Fee Revenue1

$   265.7

$  213.2

24%

$   710.5

$  629.8

13%

n/m ? not meaningful

EMEA Performance Highlights:

  • Strong revenue growth was broad-based, with double-digit increases in each service line, and particularly strong in Capital Markets & Hotels, which grew 61 percent.  Leasing also gained share against declining market absorption. Strong performance in the UK, France, the Netherlands and Southern Europe all contributed to growth.
  • Fee-based operating expenses, excluding restructuring and acquisition charges, were $248 million for the quarter, up 18 percent, driven by higher compensation costs as a result of increased revenue.
  • Adjusted operating income, which excludes King Sturge amortization, was $18 million for the quarter, compared with $5 million in 2012.  Adjusted operating income margin calculated on a fee revenue basis was 7.0 percent compared with 2.4 percent last year, representing positive operating leverage from EMEA's substantial revenue increase.

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

2013

2012

2013

2012

Leasing

$   41.8

$  42.7

4%

$   110.4

$  121.6

(7%)

Capital Markets & Hotels

34.0

23.9

56%

98.7

69.3

48%

Property & Facility Management

111.7

100.7

21%

312.2

290.1

14%

Property & Facility Management

Fee Revenue1

86.8

81.9

16%

251.5

231.0

15%

Project & Development Services

25.8

20.1

43%

67.0

56.7

26%

Project & Development Services

 Fee Revenue1

17.1

17.0

10%

48.7

48.0

7%

Advisory, Consulting and Other

23.7

18.9

30%

67.1

59.4

15%

     Operating Revenue

$   237.0

$  206.3

24%

$   655.4

$  597.1

15%

Equity Earnings

0.0

0.0

n/m

0.0

0.2

n/m

Total Segment Revenue

$   237.0

$  206.3

24%

$   655.4

$  597.3

15%

     Total Segment Fee Revenue1

$   203.4

$  184.4

19%

$   576.4

$  529.5

14%

n/m ? not meaningful

Asia Pacific Performance Highlights:

  • Healthy growth across all business lines, most notably a 56 percent increase in Capital Markets & Hotels driven by Australia, Japan and Hong Kong, as well as a 16 percent fee revenue increase in Property & Facility Management.
  • Fee-based operating expenses were $184 million for the quarter, up 15 percent, partially due to commissions earned on Capital Markets revenue.
  • Operating income was $19 million for the quarter, compared with $12 million in 2012.  Operating income margin calculated on a fee revenue basis was 9.3 percent, compared with 6.6 percent last year.  The increase was driven by substantial revenue growth and overall cost discipline while the firm continued to invest strategically for profitable growth.

LaSalle Investment Management

LaSalle Investment

   Management Revenue

   ($ in millions, "LC" = local currency)

Three Months Ended

September 30,

%

 Changein LC

Nine Months Ended

 September 30,

%

 Change

 in LC

2013

2012

2013

2012

Advisory Fees

$   55.4

$  57.4

(2%)

$   167.0

$  172.0

(1%)

Transaction Fees & Other

2.6

2.5

12%

10.9

5.9

88%

Incentive Fees

9.3

11.7

(20%)

10.5

20.4

(48%)

     Operating Revenue

$   67.3

$  71.6

(4%)

$   188.4

$  198.3

(4%)

Equity Earnings

6.6

10.7

(38%)

21.4

22.6

(5%)

Total Segment Revenue

$    73.9

$  82.3

(9%)

$    209.8

$  220.9

(4%)

LaSalle Investment Management Performance Highlights:

  • Capital raise momentum continued with nearly $1 billion of capital raised during the quarter, $3.3 billion year to date.
  • Advisory fees were $55 million for the quarter, consistent with the second quarter of 2013 and a 2 percent decrease from last year as new fund initiatives continued with capital accumulation and initial investments, and legacy funds continued with liquidations.
  • Operating expenses were $57 million for the quarter, compared with $58 million last year. Compensation and benefits costs decreased in line with the decrease in advisory fees.
  • Operating income was $17 million for the quarter, a margin of 22.7 percent, compared with $24 million in 2012, a margin of 29.4 percent.  Margin was impacted by incentive fees and equity earnings, both of which were healthy in the current quarter but lower than the robust amounts last year.
  • Assets under management were $46.7 billion as of September 30, 2013, compared with $46.3 billion at June 30, 2013, with $2.1 billion of acquisitions and valuation increases partially offset by $1.7 billion of dispositions and foreign currency movements.

About Jones Lang LaSalle Jones Lang LaSalle (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 revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.

200 East Randolph Drive Chicago Illinois 60601 ? 22 Hanover Square London W1A 2BN ? 9 Raffles Place #39-00 Republic Plaza Singapore 048619

Statements in this press 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 Jones Lang LaSalle to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those 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 Jones Lang LaSalle's Annual Report on Form 10-K for the year ended December 31, 2012, and in the Quarterly Report on Form 10-Q for the quarters ended March 31, 2013, and June 30, 2013, 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. Statements speak only as of the date of this release. Jones Lang LaSalle expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in Jones Lang LaSalle's expectations or results, or any change in events.

Conference Call

The firm will conduct a conference call for shareholders, analysts and investment professionals on Monday, October 28 at 6:00 p.m. EDT.

To participate in the conference call, please dial into one of the following phone numbers five to ten minutes before the start time:

  • U.S. callers:                      +1 877 800 0896
  • International callers:           +1 706 679 7364
  • Pass code:                        80557958

Webcast

Follow these steps to listen to the webcast:

  1. You must have a minimum 14.4 Kbps Internet connection
  2. Log on to http://www.videonewswire.com/event.asp?id=96428 and follow instructions
  3. Download free Windows Media Player software: (link located under registration form)
  4. If you experience problems listening, send an email to prnwebcast@multivu.com 

Supplemental Information

Supplemental information regarding the third-quarter 2013 earnings call has been posted to the Investor Relations section of the company's website:  www.jll.com.

Conference Call Replay

Available: 11:00 p.m. EDT Monday, October 28 through 11:59 p.m. EST Wednesday, November 6 at the following numbers:

  • U.S. callers:                      + 1 855 859 2056
  • International callers:           + 1 404 537 3406
  • Pass code:                        80557958

Web Audio Replay

Audio replay will be available for download or stream. This information and link is also available on the company's website:  www.jll.com.

If you have any questions, email Jones Lang LaSalle'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, 2013 and 2012

(in thousands, except share data)

(Unaudited)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2013

2012

2013

2012

Revenue

$ 1,106,802

$    949,491

$ 2,952,173

$ 2,684,126

Operating expenses:

Compensation and benefits 

699,031

622,360

1,897,351

1,752,804

Operating, administrative and other

296,012

235,370

808,118

701,731

Depreciation and amortization 

19,742

19,089

58,996

58,710

Restructuring and acquisition charges

4,919

6,820

14,689

32,376

Total operating expenses

1,019,704

883,639

2,779,154

2,545,621

Operating income

87,098

65,852

173,019

138,505

Interest expense, net of interest income

(9,631)

(9,952)

(26,603)

(24,837)

Equity earnings from real estate ventures 

6,574

10,698

21,132

22,500

Income before income taxes and noncontrolling interest

84,041

66,598

167,548

136,168

Provision for income taxes  

20,925

16,916

41,719

34,587

Net income

63,116

49,682

125,829

101,581

Net income attributable to noncontrolling interest

259

169

3,286

603

Net income attributable to the Company

$     62,857

$     49,513

$    122,543

$    100,978

Dividends on unvested common stock, net of tax benefit

-

-

241

253

Net income attributable to common shareholders

$     62,857

$     49,513

$    122,302

$    100,725

Basic earnings per common share

$         1.42

$         1.12

$         2.77

$         2.30

Basic weighted average shares outstanding

44,407,468

44,015,922

44,197,610

43,780,819

Diluted earnings per common share

$         1.39

$         1.10

$         2.71

$         2.25

Diluted weighted average shares outstanding

45,063,360

44,826,502

45,070,603

44,755,817

EBITDA 

$    113,414

$     95,639

$    253,147

$    219,715

Please reference attached financial statement notes.

 

 

 JONES LANG LASALLE INCORPORATED 

 Segment Operating Results 

 For the Three and Nine Months Ended September 30, 2013 and 2012 

 (in thousands) 

 (Unaudited) 

 Three Months EndedSeptember 30, 

 Nine Months EndedSeptember 30, 

2013

2012

2013

2012

REAL ESTATE SERVICES 

AMERICAS

Revenue:

Operating revenue

$   484,054

$429,139

$1,277,014

$1,173,738

Equity earnings (losses)

(17)

131

274

(77)

Total segment revenue

484,037

429,270

1,277,288

1,173,661

 Gross contract costs1

(31,957)

(20,594)

(75,425)

(56,615)

Total segment fee revenue

452,080

408,676

1,201,863

1,117,046

Operating expenses:

Compensation, operating and administrative expenses

427,817

376,111

1,149,036

1,050,141

Depreciation and amortization

11,279

10,748

33,279

31,129

Total segment operating expenses

439,096

386,859

1,182,315

1,081,270

 Gross contract costs1

(31,957)

(20,594)

(75,425)

(56,615)

Total fee-based segment operating expenses

407,139

366,265

1,106,890

1,024,655

Operating income

$     44,941

$  42,411

$     94,973

$     92,391

Adjusted EBITDA

$     56,220

$  53,159

$   128,252

$   123,520

EMEA

Revenue:

Operating revenue

$   318,372

$242,492

$   831,422

$   715,009

Equity losses

-

(158)

(536)

(228)

Total segment revenue

318,372

242,334

830,886

714,781

 Gross contract costs1

(52,659)

(29,200)

(120,385)

(84,859)

Total segment fee revenue

265,713

213,134

710,501

629,922

Operating expenses:

Compensation, operating and administrative expenses

295,350

232,977

786,372

690,844

Depreciation and amortization

5,101

4,759

15,111

16,643

Total segment operating expenses

300,451

237,736

801,483

707,487

 Gross contract costs1

(52,659)

(29,200)

(120,385)

(84,859)

Total fee-based segment operating expenses

247,792

208,536

681,098

622,628

Operating income

$     17,921

$    4,598

$     29,403

$      7,294

Adjusted EBITDA

$     23,022

$    9,357

$     44,514

$     23,937

 Three Months EndedSeptember 30, 

 Nine Months EndedSeptember 30, 

2013

2012

2013

2012

ASIA PACIFIC

Revenue:

Operating revenue

$   237,027

$206,272

$   655,370

$   597,147

Equity earnings

11

47

2

161

Total segment revenue

237,038

206,319

655,372

597,308

 Gross contract costs1

(33,663)

(21,893)

(79,039)

(67,772)

Total segment fee revenue

203,375

184,426

576,333

529,536

Operating expenses:

Compensation, operating and administrative expenses

215,138

191,026

611,435

555,446

Depreciation and amortization

2,968

3,143

9,220

9,556

Total segment operating expenses

218,106

194,169

620,655

565,002

 Gross contract costs1

(33,663)

(21,893)

(79,039)

(67,772)

Total fee-based segment operating expenses

184,443

172,276

541,616

497,230

Operating income

$     18,932

$  12,150

$     34,717

$     32,306

Adjusted EBITDA

$     21,900

$  15,293

$     43,937

$     41,862

LASALLE INVESTMENT MANAGEMENT

Revenue:

Operating revenue

$     67,349

$  71,588

$   188,367

$   198,232

Equity earnings

6,580

10,678

21,392

22,644

Total segment revenue

73,929

82,266

209,759

220,876

Operating expenses:

Compensation, operating and administrative expenses

56,738

57,616

158,626

158,104

Depreciation and amortization

394

439

1,386

1,382

Total segment operating expenses

57,132

58,055

160,012

159,486

Operating income

$     16,797

$  24,211

$     49,747

$     61,390

Adjusted EBITDA

$     17,191

$  24,650

$     51,133

$     62,772

SEGMENT RECONCILING ITEMS:

Total segment revenue

$1,113,376

$960,189

$2,973,305

$2,706,626

Reclassification of equity earnings

6,574

10,698

21,132

22,500

Total revenue

$1,106,802

$949,491

$2,952,173

$2,684,126

Total operating expenses before restructuring and acquisition charges

1,014,785

876,819

2,764,465

2,513,245

Operating income before restructuring and acquisition charges

$     92,017

$  72,672

$   187,708

$   170,881

Restructuring and acquisition charges

4,919

6,820

14,689

32,376

Operating income after restructuring and acquisition charges

$     87,098

$  65,852

$   173,019

$   138,505

Please reference attached financial statement notes.

 

 

JONES LANG LASALLE INCORPORATED

Consolidated Balance Sheets

September 30, 2013, December 31, 2012 and September 30, 2012

(in thousands)

(Unaudited)

(Unaudited)

September 30,

December 31,

September 30,

2013

2012

2012

ASSETS

Current assets:

Cash and cash equivalents

$            119,704

$            152,159

$            125,730

Trade receivables, net of allowances

980,955

996,681

858,594

Notes and other receivables

117,901

101,952

99,074

Warehouse receivables

60,099

144,257

54,140

Prepaid expenses

70,448

53,165

62,513

Deferred tax assets, net

51,241

50,831

50,269

Other

20,626

16,484

18,770

Total current assets

1,420,974

1,515,529

1,269,090

Property and equipment, net of accumulated depreciation

259,184

269,338

248,036

Goodwill, with indefinite useful lives

1,889,848

1,853,761

1,816,944

Identified intangibles, net of accumulated amortization

40,649

45,932

47,745

Investments in real estate ventures 

287,747

268,107

295,525

Long-term receivables

85,745

58,881

56,881

Deferred tax assets, net

171,713

197,892

183,809

Other

170,085

142,059

135,980

Total assets

$         4,325,945

$         4,351,499

$         4,054,010

LIABILITIES AND EQUITY 

Current liabilities:

Accounts payable and accrued liabilities

$            424,282

$            497,817

$            373,811

Accrued compensation 

508,952

685,718

480,956

Short-term borrowings

35,478

32,233

30,775

Deferred tax liabilities, net

10,113

10,113

6,095

Deferred income

108,817

76,152

86,296

Deferred business acquisition obligations

34,275

105,772

184,006

Warehouse facility

60,099

144,257

54,140

Other

105,309

109,909

97,301

Total current liabilities

1,287,325

1,661,971

1,313,380

Noncurrent liabilities:

Credit facility

445,000

169,000

572,000

Long-term senior notes

275,000

275,000

-

Deferred tax liabilities, net

3,106

3,106

7,646

Deferred compensation

93,540

75,320

73,914

Deferred business acquisition obligations

96,023

107,661

106,185

Minority shareholder redemption liability

19,733

19,489

18,585

Other

72,788

80,696

103,449

Total liabilities

2,292,515

2,392,243

2,195,159

(Unaudited)

(Unaudited)

September 30,

December 31,

September 30,

2013

2012

2012

Company shareholders' equity:

Common stock, $.01 par value per share, 100,000,000 shares

authorized; 44,434,717, 44,054,042 and 44,043,059 shares issued

and outstanding as of September 30, 2013, December 31, 2012

and September 30, 2012, respectively

444

441

440

Additional paid-in capital

940,803

932,255

926,114

Retained earnings 

1,129,648

1,017,128

919,184

Shares held in trust

(8,052)

(7,587)

(7,599)

Accumulated other comprehensive (loss) income

(36,411)

8,946

14,834

Total Company shareholders' equity

2,026,432

1,951,183

1,852,973

Noncontrolling interest

6,998

8,073

5,878

Total equity

2,033,430

1,959,256

1,858,851

Total liabilities and equity

$         4,325,945

$         4,351,499

$         4,054,010

Please reference attached financial statement notes.

 

 

JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2013 and 2012

(in thousands)

(Unaudited)

Nine Months Ended September 30,

2013

2012

Cash (used in) provided by operating activities

$             (99,873)

$               34,288

Cash used in investing activities

(112,159)

(135,557)

Cash provided by financing activities

179,577

42,545

        Net decrease in cash and cash equivalents

$             (32,455)

(58,724)

Cash and cash equivalents, beginning of period

152,159

184,454

Cash and cash equivalents, end of period

$             119,704

$             125,730

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, 2013, and 2012.

Three Months Ended

Nine Months Ended

September 30,

September 30,

($ in millions)

2013

2012

2013

2012

Revenue

$   1,106.8

$      949.5

$   2,952.2

$   2,684.1

Gross contract costs

(118.3)

(71.6)

(274.9)

(209.3)

Fee revenue

$      988.5

$      877.9

$   2,677.3

$   2,474.8

Operating expenses

$   1,019.7

$      883.6

$   2,779.2

$   2,545.6

Gross contract costs

(118.3)

(71.6)

(274.9)

(209.3)

Fee-based operating expenses

$      901.4

$      812.0

$   2,504.3

$   2,336.3

Operating income

$        87.1

$        65.9

$      173.0

$      138.5

Add:

Restructuring and acquisition charges

4.9

6.8

14.7

32.4

King Sturge intangible amortization

0.6

0.6

1.7

4.3

Adjusted operating income

$        92.6

$        73.3

$      189.4

$      175.2

Adjusted operating income margin

9.4%

8.3%

7.1%

7.1%

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, 2013, and 2012, are (a) restructuring and acquisition charges and (b) 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 ("EPS") for each net income total:

Three Months Ended

Nine Months Ended

September 30,

September 30,

($ in millions, except per share data)

2013

2012

2013

2012

GAAP net income attributable to common shareholders

$        62.9

$        49.5

$      122.3

$      100.7

Shares (in 000s)

45,063

44,827

45,071

44,756

GAAP diluted earnings per share

$        1.39

$        1.10

$        2.71

$        2.25

GAAP net income attributable to common shareholders

$        62.9

$        49.5

$      122.3

$      100.7

Restructuring and acquisition charges, net

3.6

5.1

11.0

24.2

King Sturge intangible amortization, net

0.5

0.4

1.3

3.2

Adjusted net income

$        67.0

$        55.0

$      134.6

$      128.1

Shares (in 000s)

45,063

44,827

45,071

44,756

Adjusted diluted earnings per share

$        1.49

$        1.23

$        2.99

$        2.86

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)

2013

2012

2013

2012

GAAP net income

$ 63.1

$ 49.7

$ 125.8

$ 101.6

Add:

Interest expense, net of interest income

9.6

10.0

26.6

24.8

Provision for income taxes

20.9

16.9

41.7

34.6

Depreciation and amortization

19.8

19.0

59.0

58.7

EBITDA

$ 113.4

$ 95.6

$ 253.1

$ 219.7

Add:

Restructuring and acquisition charges

4.9

6.8

14.7

32.4

Adjusted EBITDA

$ 118.3

$ 102.4

$ 267.8

$ 252.1

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 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.  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.  The Investment Management segment 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, 2013, 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.

SOURCE Jones Lang LaSalle Incorporated

For further information: Christie B. Kelly, Title: Global Chief Financial Officer, Phone: +1 312 228 2316

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