JLL Reports Second-Quarter 2015 Adjusted Earnings per Share of $2.01, 20 Percent Above Last Year
CHICAGO, IL -- (Marketwired) -- 07/29/15 -- 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 $3 billion; outstanding performance for clients and shareholders
- Acquisitions increasing; 10 transactions announced in 2015
- JLL's credit rating upgraded to BBB+ (Stable) by Standard & Poor's on July 28, 2015
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Summary Financial Results Three Months Ended Six Months Ended
($ in millions, except per share data) June 30, June 30,
-------------------------------------
2015 2014 2015 2014
----------------------------------------------------------------------------
Revenue $ 1,373 $ 1,277 $ 2,577 $ 2,315
Fee Revenue(1) $ 1,182 $ 1,086 $ 2,211 $ 1,964
Adjusted Net Income(2) $ 92 $ 76 $ 134 $ 93
U.S. GAAP Net Income(2) $ 90 $ 72 $ 132 $ 88
Adjusted Earnings per Share(2) $ 2.01 $ 1.68 $ 2.95 $ 2.05
Earnings per Share $ 1.98 $ 1.58 $ 2.91 $ 1.94
Adjusted EBITDA(3) $ 157 $ 132 $ 247 $ 184
Adjusted EBITDA, Real Estate
Services $ 119 $ 109 $ 181 $ 144
Adjusted EBITDA, LaSalle Investment
Management $ 38 $ 23 $ 66 $ 40
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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.
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Consolidated Revenue
($ in millions, "LC" = local Three Months Ended % Change in % Change in
currency) June 30, USD 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 Revenue(1) 258.6 260.6 (1)% 7%
Property & Facility Management 363.1 376.5 (4)% 4%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 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 Revenue(1) $ 1,181.8 $ 1,086.0 9% 17%
====================
Total Firm Revenue $ 1,373.5 $ 1,277.2 8% 16%
====================
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n.m. - not meaningful
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Consolidated Revenue
($ in millions, "LC" = local Six Months Ended % Change in % Change in
currency) June 30, USD 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 Revenue(1) 518.4 507.7 2% 9%
Property & Facility Management 735.9 721.2 3% 9%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 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 Revenue(1) $ 2,210.9 $ 1,963.7 13% 20%
====================
Total Firm Revenue $ 2,577.0 $ 2,314.6 11% 20%
====================
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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 $7.7 million in the second quarter of 2014. Slightly higher borrowing costs partially offset lower average borrowings compared with last year.
Business Segment Performance Highlights
Americas Real Estate Services
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Americas Revenue
($ in millions, "LC" = local Three Months Ended % Change in % Change in
currency) June 30, USD LC
--------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 263.7 $ 250.5 5% 6%
Capital Markets & Hotels 76.5 59.2 29% 30%
Property & Facility Management
Fee Revenue(1) 111.9 107.6 4% 8%
Property & Facility Management 163.4 158.3 3% 9%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 545.1 $ 493.6 10% 12%
--------------------
Total Segment Revenue $ 598.0 $ 545.1 10% 12%
====================
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n.m. - not meaningful
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Americas Revenue
($ in millions, "LC" = local Six Months Ended % Change in % Change in
currency) June 30, USD LC
--------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 492.9 $ 438.2 12% 13%
Capital Markets & Hotels 151.3 100.3 51% 52%
Property & Facility Management
Fee Revenue(1) 226.1 213.7 6% 9%
Property & Facility Management 329.9 304.4 8% 13%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 1,046.7 $ 900.1 16% 18%
--------------------
Total Segment Revenue $ 1,152.6 $ 992.4 16% 18%
====================
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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 Three Months Ended % Change in % Change in
currency) June 30, USD LC
-------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 65.1 $ 67.6 (4)% 12%
Capital Markets & Hotels 113.2 93.4 21% 38%
Property & Facility Management
Fee Revenue(1) 50.9 60.3 (16)% (3)%
Property & Facility Management 69.7 88.5 (21)% (10)%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 327.3 $ 309.0 6% 22%
-------------------
Total Segment Revenue $ 417.4 $ 395.6 6% 23%
===================
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n.m. - not meaningful
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EMEA Revenue
($ in millions, "LC" = local Six Months Ended % Change in % Change in
currency) June 30, USD LC
-------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 113.5 $ 121.7 (7)% 9%
Capital Markets & Hotels 188.3 147.8 27% 46%
Property & Facility Management
Fee Revenue(1) 102.6 112.4 (9)% 4%
Property & Facility Management 144.5 165.1 (12)% --%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 580.9 $ 543.0 7% 23%
-------------------
Total Segment Revenue $ 742.8 $ 707.6 5% 22%
===================
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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 $31 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 7.0 percent, compared with 5.7 percent in 2014.
Asia Pacific Real Estate Services
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Asia Pacific Revenue
($ in millions, "LC" = local Three Months Ended % Change in % Change in
currency) June 30, USD LC
--------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 50.2 $ 48.7 3% 11%
Capital Markets & Hotels 33.1 29.6 12% 25%
Property & Facility Management
Fee Revenue(1) 95.8 92.7 3% 13%
Property & Facility Management 130.0 129.7 --% 9%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 231.0 $ 214.4 8% 18%
--------------------
Total Segment Revenue $ 279.7 $ 267.5 5% 14%
====================
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n.m. - not meaningful
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Asia Pacific Revenue
($ in millions, "LC" = local Six Months Ended % Change in % Change in
currency) June 30, USD LC
--------------------
2015 2014
----------------------------------------------------------------------------
Leasing $ 78.7 $ 76.1 3% 11%
Capital Markets & Hotels 60.5 51.4 18% 31%
Property & Facility Management
Fee Revenue(1) 189.7 181.6 4% 13%
Property & Facility Management 261.5 251.8 4% 11%
Project & Development Services
Fee Revenue(1) 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 Revenue(1) $ 419.0 $ 388.0 8% 17%
--------------------
Total Segment Revenue $ 517.3 $ 482.1 7% 16%
====================
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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 Three Months Ended % Change in % Change in
currency) June 30, USD 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%
====================
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n.m. - not meaningful
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LaSalle Investment Management
Revenue
($ in millions, "LC" = local Six Months Ended % Change in % Change in
currency) June 30, USD 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%
====================
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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: [email protected].
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 income(1) 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 costs(1) (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 costs(1) (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 costs(1) (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 costs(1) (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 costs(1) (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 costs(1) (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: Christie B. Kelly Title: Global Chief Financial Officer Phone: +1 312 228 2316
Source: JLL