JLL Reports Strong Fourth-Quarter and Full-Year 2016 Revenue Growth
CHICAGO, IL -- (Marketwired) -- 02/06/17 -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported diversified revenue increases for the full year and fourth quarter of 2016. For the full year, diluted earnings per share were $6.98 and adjusted diluted earnings per share were $8.13. Fourth quarter diluted earnings per share were $3.62; adjusted diluted earnings per share were $3.95. Fourth quarter revenue was up 14 percent to $2.2 billion; fee revenue of $1.8 billion was up 11 percent.
- Fourth-quarter and full-year revenue growth led by Property & Facility Management and Project & Development Services
- Margin declines reflect increased investments in technology and data, shift toward annuity businesses and decline in LaSalle equity earnings
- Robust full-year leasing and capital markets performance despite market volume declines
- Strong performance in Continental Europe overshadowed by post-Brexit market volume and margin declines in the UK
- LaSalle continues solid performance and annuity-based advisory fee expansion
- Net debt reduced by $171 million during the quarter, reducing leverage to 1.7x
CEO Comment:
"We recorded double-digit revenue growth for both the fourth quarter and full year of 2016, driven by recent acquisitions and organic growth," said Christian Ulbrich, JLL CEO. "Going forward, we are focused on translating our increases in revenue and strategic investments into accelerated profit growth," Ulbrich added. "Our businesses continue to perform well, and we expect economic and real estate markets to remain positive in most markets globally this year."
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Summary Financial Results Three Months Ended Twelve Months Ended
December 31, December 31,
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($ in millions, except per share
data) 2016 2015 2016 2015
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Revenue $ 2,158 $ 1,887 $ 6,804 $ 5,966
Fee Revenue(1) 1,849 1,667 5,757 5,165
Net Income 165 196 318 438
Adjusted Net Income(2) 180 210 370 463
Diluted Earnings per Share $ 3.62 $ 4.31 $ 6.98 $ 9.65
Adjusted Diluted Earnings per
Share(2) $ 3.95 $ 4.61 $ 8.13 $ 10.20
Adjusted EBITDA(3) $ 286 $ 310 $ 658 $ 742
Adjusted EBITDA, Real Estate
Services 265 280 542 582
Adjusted EBITDA, LaSalle 21 30 116 160
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See Financial Statement Notes (1), (2) and (3) following the Financial
Statements in this news release.
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Consolidated Revenue
($ in millions, "LC" = local Three Months Ended % Change % Change
currency) December 31, in USD in LC
--------------------
2016 2015
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Real Estate Services ("RES")
Leasing $ 575.3 $ 565.9 2% 3%
Capital Markets & Hotels 341.5 332.2 3 7
Capital Markets & Hotels Fee
Revenue(1) 320.3 333.0 (4) --
Property & Facility Management 603.3 439.6 37 46
Property & Facility Management Fee
Revenue(1) 469.2 335.5 40 49
Project & Development Services 351.8 278.6 26 31
Project & Development Services Fee
Revenue(1) 197.9 161.4 23 26
Advisory, Consulting and Other 186.3 174.1 7 12
--------------------
Total RES Revenue $ 2,058.2 $ 1,790.4 15% 20%
--------------------
Total RES Fee Revenue(1) $ 1,749.0 $ 1,569.9 11% 16%
--------------------
LaSalle Investment Management
("LaSalle")
Advisory Fees $ 65.8 $ 61.6 7% 11%
Transaction Fees & Other 10.3 11.2 (8) (7)
Incentive Fees 23.9 24.2 (1) (4)
--------------------
Total LaSalle Revenue $ 100.0 $ 97.0 3% 5%
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Total Firm Revenue $ 2,158.2 $ 1,887.4 14% 19%
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Total Fee Revenue(1) $ 1,849.0 $ 1,666.9 11% 15%
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Capital Markets & Hotels revenue includes both "gross" and "fee"
presentation, effective this quarter, with the difference between the two
amounts representing net non-cash activity associated with mortgage
servicing rights and mortgage banking derivatives, which is also excluded
from our non-GAAP performance measures.
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Consolidated Revenue
($ in millions, "LC" = local Twelve Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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RES
Leasing $ 1,759.2 $ 1,669.2 5% 7%
Capital Markets & Hotels 972.1 956.9 2 4
Capital Markets & Hotels Fee
Revenue(1) 948.6 957.7 (1) 2
Property & Facility Management 1,902.5 1,550.6 23 29
Property & Facility Management
Fee Revenue(1) 1,434.0 1,121.4 28 33
Project & Development Services 1,195.2 882.1 35 40
Project & Development Services
Fee Revenue(1) 640.2 510.0 26 28
Advisory, Consulting and Other 567.0 509.9 11 15
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Total RES Revenue $ 6,396.0 $ 5,568.7 15% 18%
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Total RES Fee Revenue(1) $ 5,349.0 $ 4,768.2 12% 15%
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LaSalle
Advisory Fees $ 260.8 $ 242.9 7% 10%
Transaction Fees & Other 51.1 30.6 67 65
Incentive Fees 95.9 123.5 (22) (25)
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Total LaSalle Revenue $ 407.8 $ 397.0 3% 3%
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Total Revenue $ 6,803.8 $ 5,965.7 14% 17%
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Total Fee Revenue(1) $ 5,756.8 $ 5,165.2 11% 14%
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Capital Markets & Hotels revenue includes both "gross" and "fee"
presentation, effective this quarter, with the difference between the two
amounts representing net non-cash activity associated with mortgage
servicing rights and mortgage banking derivatives, which is also excluded
from our non-GAAP performance measures.
Percentage variances in the Consolidated Performance Highlights below are
calculated and presented on a local currency basis, unless otherwise
noted.
Consolidated Performance Highlights:
- Record consolidated revenue performance of $6.8 billion and consolidated fee revenue of $5.8 billion for the year represented double-digit percentage increases over a robust 2015. For the fourth quarter, consolidated revenue was $2.2 billion and consolidated fee revenue was $1.8 billion, which represented increases of 19 percent and 15 percent, respectively, against the same period in 2015. Revenue growth occurred across all geographic segments and LaSalle, fueled by recent acquisitions that contributed over $470 million of incremental fee revenue in 2016. Annuity businesses led revenue growth while transactional businesses also grew against a global decline in market volumes, which was notably impactful in the UK.
- Consolidated operating expenses for the year were $6.4 billion, compared with $5.4 billion for the same period in 2015, an increase of 21 percent. Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $5.3 billion for the year, compared with $4.6 billion last year, an increase of 18 percent. For the fourth quarter, consolidated operating expenses were $1.9 billion, and consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.6 billion, up 24 percent and 20 percent, respectively, against 2015. The annual expense growth reflected expansion of annuity businesses and included over $420 million of fee-based operating expenses from recent acquisitions and nearly $60 million of technology and data expenditures, excluding depreciation and amortization, incremental to 2016.
- LaSalle generated solid performance for the year, driven by continued growth of annuity-based advisory fees together with strong incentive and transaction fee performance.
- Net income attributable to common shareholders was $317.8 million for the year, compared to $438.4 million last year. Adjusted EBITDA was $657.9 million for the year, compared with $742.3 million last year. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 11.4 percent in USD (11.1 percent in local currency) for the year, compared with 14.4 percent last year.
The results for the year reflect strong revenue growth which was more than offset, notably by the following year-over-year changes:
- $66.2 million decline in LaSalle incentive fee revenue and equity earnings;
- $45.6 million EBITDA decline from a change in EMEA service mix, led by slower UK capital markets and leasing volumes and a decline in capital markets performance fees, combined with additional contract expenses incurred during the wind-down of operations in a non-core UK market; and
- Aforementioned increase in technology and data expenditures.
- The acquisition of Integral UK Ltd. ("Integral") also contributed to the results, and particularly margin performance, by adding $175.6 million of fee revenue and $167.5 million of fee-based operating expenses, excluding depreciation and amortization, during 2016. For the fourth quarter, net income attributable to common shareholders was $165.3 million, compared with $195.9 million last year. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 15.5 percent in USD (15.1 percent in local currency) for the quarter, compared with 18.6 percent last year.
- Diluted earnings per share for the year were $6.98, compared with $9.65 last year. Adjusted diluted earnings per share were $8.13, compared with $10.20 last year. Diluted earnings per share for the fourth quarter were $3.62, compared with $4.31 last year. Adjusted diluted earnings per share were $3.95 for the fourth quarter, compared with $4.61 last year.
Balance Sheet and Net Interest Expense:
- Total net debt was $1.1 billion as of December 31, 2016, a decrease of $171 million from the third quarter, but an increase of $673 million from prior year. The year-to-date increase primarily reflected outflows for acquisitions and capital expenditures of $538 million and $216 million, respectively.
- Net interest expense for the year was $45.3 million, up from $28.1 million in 2015, primarily due to an increase in average borrowings from $335.1 million during 2015 to $981.6 million during 2016.
Business Segment Performance Highlights
Americas Real Estate Services
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Americas Revenue
($ in millions, "LC" = local Three Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Leasing $ 390.7 $ 374.6 4% 4%
Capital Markets & Hotels 145.0 105.7 37 38
Capital Markets & Hotels Fee
Revenue(1) 123.8 106.5 16 17
Property & Facility Management 216.9 207.4 5 6
Property & Facility Management
Fee Revenue(1) 170.6 154.7 10 10
Project & Development Services 106.3 82.9 28 29
Project & Development Services
Fee Revenue(1) 105.4 81.5 29 30
Advisory, Consulting and Other 59.5 43.9 36 36
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Total Revenue $ 918.4 $ 814.5 13% 13%
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Total Fee Revenue $ 850.0 $ 761.2 12% 12%
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Capital Markets & Hotels revenue includes both "gross" and "fee"
presentation, effective this quarter, with the difference between the two
amounts representing net non-cash activity associated with mortgage
servicing rights and mortgage banking derivatives, which is also excluded
from our non-GAAP performance measures.
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Americas Revenue
($ in millions, "LC" = local Twelve Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
---------------------------------------------- ----------------------------
Leasing $ 1,275.0 $ 1,165.1 9% 10%
Capital Markets & Hotels 427.3 331.8 29 29
Capital Markets & Hotels Fee
Revenue(1) 403.8 332.6 21 22
Property & Facility Management 745.7 707.2 5 8
Property & Facility Management
Fee Revenue(1) 571.5 500.4 14 15
Project & Development Services 349.3 263.3 33 34
Project & Development Services
Fee Revenue(1) 331.5 258.0 28 30
Advisory, Consulting and Other 168.6 138.1 22 23
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Total Revenue $ 2,965.9 $ 2,605.5 14% 15%
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Total Fee Revenue $ 2,750.4 $ 2,394.2 15% 15%
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Capital Markets & Hotels revenue includes both "gross" and "fee"
presentation, effective this quarter, with the difference between the two
amounts representing net non-cash activity associated with mortgage
servicing rights and mortgage banking derivatives, which is also excluded
from our non-GAAP performance measures.
Percentage variances in the Americas Performance Highlights below are
calculated and presented on a local currency basis, unless otherwise
noted.
Americas Performance Highlights:
- Total revenue for the year was $3.0 billion, a 15 percent increase compared with last year. Fee revenue for the year was $2.8 billion, an increase of 15 percent from 2015. Fee revenue growth compared with last year was broad-based across all business lines, reflecting balanced organic and acquisition-driven expansion. For the fourth quarter, total revenue was $918.4 million and total fee revenue was $850.0 million, representing increases of 13 percent and 12 percent, respectively, over the prior year quarter.
- Operating expenses for the year were $2.7 billion, up 16 percent from $2.4 billion in 2015. Fee-based operating expenses for the year, excluding restructuring and acquisition charges, were $2.5 billion, up 18 percent from $2.1 billion in 2015. Operating expenses for the quarter were $796.1 million, up 13 percent from $706.9 million in 2015. Fee-based operating expenses for the quarter, excluding restructuring and acquisition charges, were $748.9 million, up 15 percent from $652.8 million in the fourth quarter of 2015.
- Operating income for the year was $260.7 million, up 6 percent from $245.2 million in 2015. Adjusted EBITDA was $322.0 million for the year, compared with $309.3 million in 2015. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 11.7 percent in USD and local currency for the year, compared with 12.9 percent in 2015. The decline in Adjusted EBITDA margin was driven by continued spend in data, technology and people, partially offset by the contributions from recent acquisitions. Operating income for the quarter was $122.3 million, up from $107.6 million in 2015. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 14.8 percent in USD (14.9 percent in local currency) for the fourth quarter, compared with 16.5 percent in the prior year quarter.
EMEA Real Estate Services
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EMEA Revenue
($ in millions, "LC" = local Three Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Leasing $ 97.3 $ 103.4 (6)% 1%
Capital Markets & Hotels 141.5 176.0 (20) (12)
Property & Facility Management 203.5 85.2 n.m. n.m.
Property & Facility Management
Fee Revenue(1) 167.1 68.1 n.m. n.m.
Project & Development Services 181.1 163.0 11 19
Project & Development Services
Fee Revenue(1) 61.5 58.7 5 11
Advisory, Consulting and Other 80.7 86.2 (6) 4
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Total Revenue $ 704.1 $ 613.9 15% 28%
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Total Fee Revenue $ 548.1 $ 492.5 11% 24%
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n.m. - not meaningful as represented by a percentage change of greater than
100%, favorably or unfavorably.
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EMEA Revenue
($ in millions, "LC" = local Twelve Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Leasing $ 268.6 $ 289.4 (7)% (3)%
Capital Markets & Hotels 386.9 475.2 (19) (13)
Property & Facility Management 517.5 304.8 70 92
Property & Facility Management
Fee Revenue(1) 405.6 224.4 81 n.m.
Project & Development Services 659.1 487.1 35 42
Project & Development Services
Fee Revenue(1) 207.7 170.1 22 27
Advisory, Consulting and Other 245.4 246.6 -- 7
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Total Revenue $ 2,077.5 $ 1,803.1 15% 24%
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Total Fee Revenue $ 1,514.2 $ 1,405.7 8% 16%
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n.m. - not meaningful as represented by a percentage change of greater
than 100%, favorably or unfavorably.
Percentage variances in the EMEA Performance Highlights below are
calculated and presented on a local currency basis, unless otherwise
noted.
EMEA Performance Highlights:
- Total revenue for the year was $2.1 billion, an increase of 24 percent from last year. Fee revenue for the year was $1.5 billion, an increase of 16 percent from 2015. Revenue expansion compared with 2015 was most notable in Property & Facility Management, driven by approximately $175 million of incremental fee revenue from the August 2016 acquisition of Integral, along with Project & Development Services. Partially offsetting the increase in revenue was the impact of a 39 percent year-over-year decrease (measured in USD) in capital markets investment volumes in the UK. Revenue growth in the region was led by Germany and France combined with the acquisition of Integral in the UK. For the fourth quarter, total revenue was $704.1 million and total fee revenue was $548.1 million, representing increases of 28 percent and 24 percent, respectively, from 2015.
- Operating expenses for the year were $2.0 billion, up 30 percent from $1.7 billion in 2015. Fee-based operating expenses, excluding restructuring and acquisition charges, were $1.4 billion, up 24 percent from $1.3 billion in 2015, primarily reflecting the impact of the Integral acquisition. Operating expenses for the fourth quarter were $636.2 million, up 37 percent from $524.1 million in 2015. Fee-based operating expenses for the quarter, excluding restructuring and acquisition charges, were $480.2 million, up 35 percent from $402.7 million in 2015.
- Operating income for the year was $79.1 million, down from $144.7 million in 2015. Adjusted EBITDA was $115.7 million for the year, compared with $170.9 million in 2015. Adjusted EBITDA margin, calculated on a fee revenue basis, was 7.6 percent in USD (7.0 percent in local currency) for the year, compared with 12.2 percent in 2015. The decline in profitability was primarily UK-focused and driven by the decline in capital markets transaction volumes, nearly $35.0 million of capital markets performance fees earned in 2015 that did not recur in 2016, and approximately $13.0 million of additional contract expenses incurred during the wind down of operations in a non-core market. The decline in adjusted EBITDA margin also reflects the shift in service mix associated with the Integral acquisition. Operating income for the fourth quarter was $67.9 million, down from $89.8 million in 2015. Adjusted EBITDA margin, calculated on a fee revenue basis, was 14.8 percent in USD (13.6 percent in local currency) for the fourth quarter, compared with 19.6 percent in 2015.
Asia Pacific Real Estate Services
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Asia Pacific Revenue
($ in millions, "LC" = local Three Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Leasing $ 87.3 $ 87.8 (1)% 1%
Capital Markets & Hotels 55.0 50.5 9 8
Property & Facility Management 182.9 147.0 24 24
Property & Facility Management
Fee Revenue(1) 131.5 112.7 17 16
Project & Development Services 64.4 32.7 97 98
Project & Development Services
Fee Revenue(1) 31.0 21.2 46 47
Advisory, Consulting and Other 46.1 44.0 5 4
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Total Revenue $ 435.7 $ 362.0 20% 20%
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Total Fee Revenue $ 350.9 $ 316.2 11% 11%
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Asia Pacific Revenue
($ in millions, "LC" = local Twelve Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Leasing $ 215.6 $ 214.7 --% 2%
Capital Markets & Hotels 157.9 149.9 5 5
Property & Facility Management 639.3 538.6 19 20
Property & Facility Management
Fee Revenue(1) 456.9 396.6 15 16
Project & Development Services 186.8 131.7 42 44
Project & Development Services
Fee Revenue(1) 101.0 81.9 23 25
Advisory, Consulting and Other 153.0 125.2 22 23
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Total Revenue $ 1,352.6 $ 1,160.1 17% 18%
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Total Fee Revenue $ 1,084.4 $ 968.3 12% 13%
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Percentage variances in the Asia Pacific Performance Highlights below are
calculated and presented on a local currency basis, unless otherwise
noted.
Asia Pacific Performance Highlights:
- Total revenue for the year was $1.4 billion, an increase of 18 percent from last year. Fee revenue for the year was $1.1 billion, an increase of 13 percent from 2015. Revenue growth compared with last year was driven by Property & Facility Management; Advisory, Consulting & Other; and Project & Development Services. Growth in the region, led by Japan, Australia and Greater China, was balanced between organic expansion and acquisitions of annuity businesses such as property management, facilities management and valuations. For the fourth quarter, total revenue was $435.7 million and total fee revenue was $350.9 million, representing increases of 20 percent and 11 percent, respectively, from 2015.
- Operating expenses for the year were $1.3 billion, up 19 percent from $1.1 billion in 2015. Fee-based operating expenses, excluding restructuring and acquisition charges, were $1.0 billion, up 14 percent from $881.8 million in 2015. Operating expenses for the quarter were $382.2 million, up 23 percent from $308.9 million in 2015. Fee-based operating expenses for the fourth quarter, excluding restructuring and acquisition charges, were $297.4 million, up 12 percent from $263.1 million in 2015.
- Operating income for the year was $86.4 million, consistent with 2015. Adjusted EBITDA was $104.8 million for the year, compared with $102.7 million in 2015. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 9.7 percent in USD (9.6 percent in local currency) for the year, compared with 10.6 percent in 2015, and reflected increases in data and technology investments. Operating income for the fourth quarter was $53.5 million, up 3 percent from $53.1 million in 2015. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 16.8 percent in USD (17.2 percent in local currency) for the fourth quarter, compared with 18.4 percent in 2015.
LaSalle
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LaSalle Revenue
($ in millions, "LC" = local Three Months Ended % Change % Change
currency) December 31, in USD in LC
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2016 2015
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Advisory Fees $ 65.8 $ 61.6 7% 11%
Transaction Fees & Other 10.3 11.2 (8) (7)
Incentive Fees 23.9 24.2 (1) (4)
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Total Revenue $ 100.0 $ 97.0 3% 5%
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Equity Earnings $ 5.0 $ 12.6 (60)% (60)%
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LaSalle Revenue
($ in millions, "LC" = local Twelve Months Ended % Change % Change
currency) December 31, in USD in LC
-------------------
2016 2015
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Advisory Fees $ 260.8 $ 242.9 7% 10%
Transaction Fees & Other 51.1 30.6 67 65
Incentive Fees 95.9 123.5 (22) (25)
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Total Revenue $ 407.8 $ 397.0 3% 3%
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Equity Earnings $ 31.5 $ 70.1 (55)% (55)%
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Percentage variances in the LaSalle Performance Highlights below are
calculated and presented on a local currency basis, unless otherwise
noted.
LaSalle Performance Highlights:
- Total revenue for the year was up 3 percent from last year, and included $260.8 million of advisory fees, $95.9 million of incentive fees and $51.1 million of transaction fees. Total revenue for the quarter was up 5 percent from last year.
- Equity earnings for the year were $31.5 million, as compared with $70.1 million in the prior year. While activity in both periods reflected net valuation increases of assets within the co-investment portfolio, gains recognized in 2015 from the disposition of legacy investments that did not recur in 2016 contributed substantially to the year-over-year decline.
- Operating expenses for the year were $324.9 million, up 7 percent from $309.5 million last year. Operating expenses for the fourth quarter were $84.8 million, up 9 percent from $80.3 million the prior year quarter.
- Operating income for the year was $82.9 million, a decrease from $87.5 million in 2015. Adjusted EBITDA was $115.7 million for the year compared with $159.8 million last year. Adjusted EBITDA margin was 28.4 percent in USD (27.5 percent in local currency) for the year, compared with 40.2 percent last year. The decreases in Adjusted EBITDA and Adjusted EBITDA margin reflected the year-over-year decline in incentive fee revenue and equity earnings along with the impact of deferred compensation expense. Operating income for the fourth quarter was $15.2 million, a decrease from $16.7 million in 2015. Adjusted EBITDA was $20.3 million for the quarter, compared with $29.9 million last year. Adjusted EBITDA margin was 20.3 percent in USD (19.1 percent in local currency) for the quarter, compared with 30.8 percent in 2015.
- Net capital raise was $5.1 billion for the year, with $188 million raised in the fourth quarter.
- Assets under management reached a record high of $60.1 billion as of December 31, 2016, up from $59.7 billion as of September 30, 2016, and $56.4 billion as of December 31, 2015. The net annual increase in assets under management resulted from $10.7 billion of acquisitions and $5.5 billion of net valuation increases, partially offset by $10.6 billion of dispositions and withdrawals and $1.9 billion of foreign currency decreases.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and on behalf of its clients managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
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Cautionary Note Regarding Forward-Looking Statements
Statements in this news release regarding, among other things, future financial results and performance, achievements, plans and objectives 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 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, 2015, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016 and in other reports filed with the Securities and Exchange Commission (the "SEC"). 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.
Live Webcast We are offering a live webcast for shareholders, analysts, and investment professionals on Monday, February 6, 2017 at 5:00 p.m. Eastern. Follow these steps to participate:
1. You must have a minimum 14.4 Kbps Internet connection 2. Go to http://edge.media-server.com/m/p/jwbhpzav 3. Download free Windows Media Player software: (link located under registration form) 4. If you experience problems listening, please call the webcast hotline +1 800 774 9473 and provide your Event ID (ca3h9owp).
Conference Call Management will also conduct a conference call. If you are unable to join the live webcast and 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 be required):
- United States callers: +1 844 231 9804
- International callers: +1 402 858 7998
- Passcode: 51862587
Supplemental Information Supplemental information regarding the fourth quarter 2016 earnings call has been posted to the Investor Relations section of the company's website: ir.jll.com.
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: ir.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
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
(in millions, except share and per
share data) 2016 2015 2016 2015
--------- --------- --------- ---------
Revenue $ 2,158.2 $ 1,887.4 $ 6,803.8 $ 5,965.7
Operating expenses:
Compensation and benefits 1,232.7 1,105.5 3,983.1 3,564.6
Operating, administrative and
other 623.3 483.6 2,169.8 1,729.1
Depreciation and amortization 43.3 31.1 141.8 108.1
Restructuring and acquisition
charges5 32.6 13.4 68.5 34.1
--------- --------- --------- ---------
Total operating expenses 1,931.9 1,633.6 6,363.2 5,435.9
--------- --------- --------- ---------
Operating income 226.3 253.8 440.6 529.8
Interest expense, net of interest
income 13.1 7.7 45.3 28.1
Equity earnings from real estate
ventures 6.1 13.6 33.8 77.4
Other income -- -- 13.3 --
--------- --------- --------- ---------
Income before income taxes and
noncontrolling interest 219.3 259.7 442.4 579.1
Provision for income taxes 52.7 61.2 108.0 132.8
--------- --------- --------- ---------
Net income 166.6 198.5 334.4 446.3
Net income attributable to
noncontrolling interest 1.1 2.4 16.2 7.6
--------- --------- --------- ---------
Net income attributable to the
company $ 165.5 $ 196.1 $ 318.2 $ 438.7
--------- --------- --------- ---------
Dividends on unvested common stock,
net of tax benefit 0.2 0.2 0.4 0.3
--------- --------- --------- ---------
Net income attributable to common
shareholders $ 165.3 $ 195.9 $ 317.8 $ 438.4
========= ========= ========= =========
Basic earnings per common share $ 3.66 $ 4.35 $ 7.04 $ 9.75
--------- --------- --------- ---------
Basic weighted average shares
outstanding (in thousands) 45,210 45,043 45,154 44,940
--------- --------- --------- ---------
Diluted earnings per common share $ 3.62 $ 4.31 $ 6.98 $ 9.65
--------- --------- --------- ---------
Diluted weighted average shares
outstanding (in thousands) 45,642 45,492 45,528 45,415
--------- --------- --------- ---------
EBITDA attributable to common
shareholders3 $ 274.4 $ 295.9 $ 612.9 $ 707.4
--------- --------- --------- ---------
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
(in millions) 2016 2015 2016 2015
--------- --------- --------- ---------
REAL ESTATE SERVICES
AMERICAS
Revenue $ 918.4 $ 814.5 $ 2,965.9 $ 2,605.5
Gross contract costs1 (47.2) (54.1) (192.0) (212.1)
Net non-cash MSR and mortgage
banking derivative activity1 (21.2) 0.8 (23.5) 0.8
--------- --------- --------- ---------
Total fee revenue 850.0 761.2 2,750.4 2,394.2
--------- --------- --------- ---------
Operating expenses:
Compensation, operating and
administrative expenses 771.7 690.2 2,620.6 2,297.1
Depreciation and
amortization 24.4 16.7 84.6 63.2
--------- --------- --------- ---------
Total segment operating
expenses 796.1 706.9 2,705.2 2,360.3
Gross contract costs1 (47.2) (54.1) (192.0) (212.1)
--------- --------- --------- ---------
Total fee-based segment
operating expenses 748.9 652.8 2,513.2 2,148.2
Segment operating income $ 122.3 $ 107.6 $ 260.7 $ 245.2
--------- --------- --------- ---------
Equity earnings 0.4 0.5 1.2 5.9
--------- --------- --------- ---------
Total segment income $ 122.7 $ 108.1 $ 261.9 $ 251.1
========= ========= ========= =========
--------- --------- --------- ---------
Adjusted operating income $ 104.3 $ 110.4 $ 248.1 $ 252.4
--------- --------- --------- ---------
--------- --------- --------- ---------
Adjusted EBITDA $ 125.7 $ 125.3 $ 322.0 $ 309.3
--------- --------- --------- ---------
EMEA
Revenue $ 704.1 $ 613.9 $ 2,077.5 $ 1,803.1
Gross contract costs1 (156.0) (121.4) (563.3) (397.4)
--------- --------- --------- ---------
Total fee revenue 548.1 492.5 1,514.2 1,405.7
--------- --------- --------- ---------
Operating expenses:
Compensation, operating and
administrative expenses 622.9 515.0 1,961.3 1,631.2
Depreciation and
amortization 13.3 9.1 37.1 27.2
--------- --------- --------- ---------
Total segment operating
expenses 636.2 524.1 1,998.4 1,658.4
Gross contract costs1 (156.0) (121.4) (563.3) (397.4)
--------- --------- --------- ---------
Total fee-based segment
operating expenses 480.2 402.7 1,435.1 1,261.0
Segment operating income $ 67.9 $ 89.8 $ 79.1 $ 144.7
--------- --------- --------- ---------
Equity (losses) / earnings -- -- (0.1) 0.8
Total segment income $ 67.9 $ 89.8 $ 79.0 $ 145.5
========= ========= ========= =========
--------- --------- --------- ---------
Adjusted operating income $ 71.9 $ 91.3 $ 90.1 $ 148.6
--------- --------- --------- ---------
--------- --------- --------- ---------
Adjusted EBITDA $ 81.0 $ 96.7 $ 115.7 $ 170.9
--------- --------- --------- ---------
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
(in millions) 2016 2015 2016 2015
--------- --------- --------- ---------
ASIA PACIFIC
Revenue $ 435.7 $ 362.0 $ 1,352.6 $ 1,160.1
Gross contract costs1 (84.8) (45.8) (268.2) (191.8)
--------- --------- --------- ---------
Total fee revenue 350.9 316.2 1,084.4 968.3
--------- --------- --------- ---------
Operating expenses:
Compensation, operating and
administrative expenses 377.3 304.2 1,248.9 1,058.1
Depreciation and
amortization 4.9 4.7 17.3 15.5
--------- --------- --------- ---------
Total segment operating
expenses 382.2 308.9 1,266.2 1,073.6
Gross contract costs1 (84.8) (45.8) (268.2) (191.8)
--------- --------- --------- ---------
Total fee-based segment
operating expenses 297.4 263.1 998.0 881.8
Segment operating income $ 53.5 $ 53.1 $ 86.4 $ 86.5
--------- --------- --------- ---------
Equity earnings 0.6 0.5 1.1 0.7
--------- --------- --------- ---------
Total segment income $ 54.1 $ 53.6 $ 87.5 $ 87.2
========= ========= ========= =========
--------- --------- --------- ---------
Adjusted operating income $ 54.5 $ 53.6 $ 88.7 $ 87.2
--------- --------- --------- ---------
--------- --------- --------- ---------
Adjusted EBITDA $ 59.0 $ 58.3 $ 104.8 $ 102.7
--------- --------- --------- ---------
LASALLE INVESTMENT MANAGEMENT
Revenue $ 100.0 $ 97.0 $ 407.8 $ 397.0
Operating expenses:
Compensation, operating and
administrative expenses 84.1 79.7 322.1 307.3
Depreciation and
amortization 0.7 0.6 2.8 2.2
--------- --------- --------- ---------
Total segment operating
expenses 84.8 80.3 324.9 309.5
Segment operating income $ 15.2 $ 16.7 $ 82.9 $ 87.5
--------- --------- --------- ---------
Equity earnings 5.0 12.6 31.5 70.1
--------- --------- --------- ---------
Total segment income $ 20.2 $ 29.3 $ 114.4 $ 157.6
========= ========= ========= =========
--------- --------- --------- ---------
Adjusted operating income $ 15.2 $ 16.7 $ 82.9 $ 87.5
--------- --------- --------- ---------
--------- --------- --------- ---------
Adjusted EBITDA $ 20.3 $ 29.9 $ 115.7 $ 159.8
--------- --------- --------- ---------
---------------------------------------------------------------------------
SEGMENT RECONCILING ITEMS
Total revenue $ 2,158.2 $ 1,887.4 $ 6,803.8 $ 5,965.7
Total segment operating
expenses before restructuring
andacquisition charges $ 1,899.3 $ 1,620.2 $ 6,294.7 $ 5,401.8
--------- --------- --------- ---------
Total segment operating income $ 258.9 $ 267.2 $ 509.1 $ 563.9
Restructuring and acquisition
charges5 32.6 13.4 68.5 34.1
Operating income $ 226.3 $ 253.8 $ 440.6 $ 529.8
========= ========= ========= =========
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
(in millions, except share and per share data) 2016 2015
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 258.5 $ 216.6
Trade receivables, net of allowances 1,870.6 1,591.7
Notes and other receivables 326.7 267.3
Warehouse receivables 600.8 265.2
Prepaid expenses 81.7 77.8
Deferred tax assets, net -- 132.9
Other 161.4 99.3
-------------- --------------
Total current assets 3,299.7 2,650.8
Property and equipment, net of accumulated
depreciation 501.0 423.3
Goodwill, with indefinite useful lives 2,579.3 2,141.5
Identified intangibles, net of accumulated
amortization 295.0 227.2
Investments in real estate ventures 355.4 311.5
Long-term receivables 176.4 135.2
Deferred tax assets, net 180.9 87.2
Deferred compensation plans 173.0 134.3
Other 68.7 76.1
-------------- --------------
Total assets $ 7,629.4 $ 6,187.1
============== ==============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 846.2 $ 712.6
Accrued compensation 1,064.7 1,088.9
Short-term borrowings 89.5 49.2
Deferred tax liabilities, net -- 21.1
Deferred income 129.8 114.8
Deferred business acquisition obligations 28.6 54.7
Warehouse facility 580.1 263.1
Other 227.4 200.8
-------------- --------------
Total current liabilities 2,966.3 2,505.2
Noncurrent liabilities:
Credit facility, net of debt issuance costs 905.4 239.6
Long-term senior notes, net of debt issuance
costs 272.7 272.3
Deferred tax liabilities, net 21.5 33.0
Deferred compensation 201.1 156.2
Deferred business acquisition obligations 73.8 42.9
Other 367.1 208.5
-------------- --------------
Total liabilities $ 4,807.9 $ 3,457.7
-------------- --------------
December 31, December 31,
(in millions, except share and per share data) 2016 2015
------------- -------------
Redeemable noncontrolling interest $ 6.8 $ 11.1
Company shareholders' equity:
Common stock, $.01 par value per
share,100,000,000 shares authorized;
45,213,832 and 45,049,503 shares issued and
outstanding as of December 31, 2016 and
2015, respectively 0.5 0.5
Additional paid-in capital 1,013.3 986.6
Retained earnings 2,333.0 2,044.2
Shares held in trust (6.0) (6.2)
Accumulated other comprehensive loss (551.1) (336.3)
------------- -------------
Total company shareholders' equity 2,789.7 2,688.8
Noncontrolling interest 25.0 29.5
------------- -------------
Total equity 2,814.7 2,718.3
------------- -------------
Total liabilities and equity $ 7,629.4 $ 6,187.1
============= =============
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
(Unaudited)
Twelve Months Ended
December 31,
--------------------
(in millions) 2016 2015
--------- ---------
Cash provided by operating activities $ 214.5 $ 375.8
Cash used in investing activities (802.0) (584.6)
Cash provided by financing activities 636.4 191.6
Effect of currency exchange rate changes on cash and
cash equivalents (7.0) (16.6)
--------- ---------
Net change in cash and cash equivalents $ 41.9 $ (33.8)
Cash and cash equivalents, beginning of period 216.6 250.4
--------- ---------
Cash and cash equivalents, end of period $ 258.5 $ 216.6
========= =========
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
1. Consistent with U.S. generally accepted accounting principles ("GAAP"),
certain 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.
Net non-cash mortgage servicing rights ("MSR") and mortgage banking
derivative activity, within our Capital Markets & Hotels business line,
consists of the balances presented within Revenue composed of (a)
derivative gains/losses resulting from mortgage banking loan commitment
activity and (b) the gains recognized by the company in conjunction with
the origination and sale of mortgage loans with retention of servicing
rights, offset by (c) the amortization of the corresponding MSR
intangible assets generated upon the aforementioned gain recognition over
the period that net servicing income is projected to be received. Non-
cash derivative gains/losses resulting from mortgage banking loan
commitment activity are calculated as the change in estimated fair value
of loan commitments, primarily represented by the estimated net cash
flows associated with future servicing rights. MSR gains and the
corresponding MSR intangible assets are calculated as the present value
of estimated cash inflows and outflows over the estimated mortgage
servicing periods. This activity is more notable following the company's
acquisition of Oak Grove Capital during the fourth quarter of 2015 and is
reported entirely within the Americas segment.
Gross contract costs and Net non-cash MSR and mortgage banking derivative
activity are excluded from revenue in determining "fee revenue." Gross
contract costs are excluded from operating expenses in determining "fee-
based operating expenses." Excluding gross contract costs from both
Revenue and Operating expenses more accurately reflects how the company
manages its expense base and its operating margins and, accordingly, is
believed to be useful to investors and other external stakeholders for
evaluating performance. Excluding net non-cash MSR and mortgage banking
derivative activity in determining fee revenue is useful to investors and
other external stakeholders for evaluating performance because the
activity is non-cash in nature and reflects how the company manages and
evaluates performance.
Fee revenue and fee-based operating expenses should not be considered as
alternatives to Revenue and Operating expenses, respectively, determined
in accordance with GAAP. Because fee revenue and fee-based operating
expenses are not calculated under GAAP, the company's fee revenue and
fee-based operating expense measurements may not be comparable to
similarly titled measures used by other companies.
The company defines adjusted operating income as Operating income
excluding the impact of Restructuring and acquisition charges, Net non-
cash MSR and mortgage banking derivative activity, and amortization of
acquisition-related intangibles.
Restructuring and acquisition charges primarily consist of: (1) severance
and employment-related charges, including those related to external
service providers, incurred in conjunction with a structural business
shift, which can be represented by a notable change in headcount or
change in leadership or transformation of business processes; (2)
acquisition and integration-related charges, including non-cash fair
value adjustments to assets and liabilities recorded in purchase
accounting such as earn-out liabilities and intangible assets; and (3)
lease exit charges. As noted within Note 5, Restructuring and acquisition
charges are excluded from segment operating results and therefore not a
line item in the reconciliation from segment operating income to adjusted
operating income and Adjusted EBITDA.
Amortization of acquisition-related intangibles, primarily composed of
the estimated fair value ascribed at closing of an acquisition to
acquired management contracts, customer backlog and trade name, is more
notable following the company's recent increase in acquisition activity.
At the segment reporting level, this is the primary reconciling
difference between segment operating income and adjusted operating
income, except for the Americas segment, where Net non-cash MSR and
mortgage banking derivative activity is also excluded.
Although adjusted operating income is a non-GAAP financial measure, it is
used extensively by management in normal business operations to develop
budgets and forecasts as well as measure and reward performance against
those budgets and forecasts, inclusive of the impact from capital
expenditures reflected through depreciation expense, and is believed to
be useful to investors and other external stakeholders as a supplemental
measure of performance. However, adjusted operating income should not be
considered as an alternative to operating income or net income determined
in accordance with GAAP. Any measure that eliminates components of the
company's costs of operation and investment, such as acquisition and
integration-related charges, has material limitations as a performance
measure. In light of these limitations, management does not rely solely
on adjusted operating income as a performance measure and also considers
GAAP operating income results. Because adjusted operating income is not
calculated in accordance with GAAP, the company's adjusted operating
income may not be comparable to similarly titled measures used by other
companies.
To conform to 2016 presentation, 2015 amounts were recast for adjusted
operating income, adjusted net income, adjusted diluted earnings per
share, and adjusted EBITDA for the fourth quarter and year-to-date
presentations to reflect the adjustments associated with Net non-cash MSR
and mortgage banking derivative activity and amortization of acquisition-
related intangibles. Additionally, adjustments to fee revenue amounts
presented throughout have been made to exclude Net non-cash MSR and
mortgage banking derivative activity.
Below are reconciliations of GAAP revenue to fee revenue, GAAP operating
expenses to fee-based operating expenses and GAAP operating income to
adjusted operating income:
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
($ in millions) 2016 2015 2016 2015
--------- --------- --------- ---------
Revenue $ 2,158.2 $ 1,887.4 $ 6,803.8 $ 5,965.7
Gross contract costs (288.0) (221.3) (1,023.5) (801.3)
Net non-cash MSR and mortgage
banking derivative activity (21.2) 0.8 (23.5) 0.8
--------- --------- --------- ---------
Fee revenue 1,849.0 1,666.9 5,756.8 5,165.2
--------- --------- --------- ---------
Operating expenses 1,931.9 1,633.6 6,363.2 5,435.9
Gross contract costs (288.0) (221.3) (1,023.5) (801.3)
Fee-based operating expenses $ 1,643.9 $ 1,412.3 $ 5,339.7 $ 4,634.6
--------- --------- --------- ---------
Operating income $ 226.3 $ 253.8 $ 440.6 $ 529.8
Restructuring and acquisition
charges5 32.6 13.4 68.5 34.1
Net non-cash MSR and mortgage
banking derivative activity (21.2) 0.8 (23.5) 0.8
Amortization of acquisition-
related intangibles 8.1 4.0 24.1 11.0
--------- --------- --------- ---------
Adjusted operating income $ 245.8 $ 272.0 $ 509.7 $ 575.7
========= ========= ========= =========
2. Net Restructuring and acquisition charges, Net non-cash MSR and mortgage
banking derivative activity, and amortization of acquisition-related
intangibles are excluded from GAAP net income attributable to common
shareholders to arrive at the company's definition of adjusted net income
used in the calculation of adjusted diluted earnings per share.
Although adjusted net income and adjusted diluted earnings per share are
non-GAAP financial measures, they are used extensively by management in
normal business operations to develop budgets and forecasts as well as
measure and reward performance against those budgets and forecasts,
inclusive of the impact from capital expenditures reflected through
depreciation expense, and are believed to be useful to investors and
other external stakeholders as a supplemental measure of performance.
However, adjusted net income and adjusted diluted earnings per share
should not be considered as alternatives to Net income and Diluted
earnings per common share determined in accordance with GAAP. Any measure
that eliminates components of the company's costs of operation and
investment, such as acquisition and integration-related charges, has
material limitations as a performance measure. In light of these
limitations, management does not rely solely on adjusted net income and
adjusted diluted earnings per share as performance measures, but also
considers GAAP results. Because adjusted net income and adjusted diluted
earnings per share are not calculated under GAAP, the company's adjusted
net income and adjusted diluted earnings per share may not be comparable
to similarly titled measures used by other companies.
Below are reconciliations of GAAP net income attributable to common
shareholders to adjusted net income and calculations of diluted earnings
per share for each net income total:
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
(In millions, except share and
per share data) 2016 2015 2016 2015
--------- --------- --------- ---------
GAAP net income attributable to
common shareholders $ 165.3 $ 195.9 $ 317.8 $ 438.4
Diluted shares (in thousands) 45,642 45,492 45,528 45,415
--------- --------- --------- ---------
GAAP diluted earnings per share $ 3.62 $ 4.31 $ 6.98 $ 9.65
========= ========= ========= =========
GAAP net income attributable to
common shareholders $ 165.3 $ 195.9 $ 317.8 $ 438.4
Restructuring and acquisition
charges5 32.6 13.4 68.5 34.1
Net non-cash MSR and mortgage
banking derivative activity (21.2) 0.8 (23.5) 0.8
Acquisition-related intangible
amortization 8.1 4.0 24.1 11.0
Tax impact of adjusted items5 (4.6) (4.5) (16.9) (20.9)
--------- --------- --------- ---------
Adjusted net income $ 180.2 $ 209.6 $ 370.0 $ 463.4
Diluted shares (in thousands) 45,642 45,492 45,528 45,415
--------- --------- --------- ---------
Adjusted diluted earnings per
share $ 3.95 $ 4.61 $ 8.13 $ 10.20
========= ========= ========= =========
Calculated on a local currency basis, the per share results for the three
and twelve months ended 2016 include a $(0.03) per share unfavorable and
$0.13 per share favorable impact, respectively, due to foreign exchange rate
fluctuations.
After analysis of adjusted items by tax jurisdiction, the use of our fourth
quarter and full-year consolidated effective tax rates to calculate the tax
impact of adjusted items was deemed to approximate the tax impact of
adjusted items calculated using applicable statutory tax rates.
3. The company's definition of EBITDA attributable to common shareholders
("EBITDA") represents GAAP net income attributable to common shareholders
before interest expense net of interest income, income taxes and
depreciation and amortization. Adjusted EBITDA attributable to common
shareholders ("Adjusted EBITDA") represents EBITDA further adjusted for
certain items we do not consider directly indicative of our ongoing
performance in the context of certain performance measurements, including
restructuring and acquisition charges and Net non-cash MSR and mortgage
banking derivative activity.
Although Adjusted EBITDA and EBITDA are non-GAAP financial measures, they
are used extensively by management in normal business operations to
develop budgets and forecasts as well as measure and reward performance
against those budgets and forecasts, exclusive of the impact from capital
expenditures reflected through depreciation expense along with other
components of the company's capital structure. Adjusted EBITDA and EBITDA
are believed to be useful to investors and other external stakeholders as
supplemental measures of performance. EBITDA is used in the calculations
of certain covenants related to the company's revolving credit facility.
However, Adjusted EBITDA and EBITDA should not be considered as
alternatives to net income determined in accordance with GAAP. Any
measure that eliminates components of the company's capital and
investment structure and costs associated with operations, has material
limitations as a performance measure. In light of these limitations,
management does not rely solely on Adjusted EBITDA and EBITDA as
performance measures, but also considers GAAP results. Because Adjusted
EBITDA and EBITDA are not calculated under GAAP, the company'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 Twelve Months Ended
December 31, December 31,
-------------------- --------------------
($ in millions) 2016 2015 2016 2015
--------- --------- --------- ---------
GAAP net income attributable to
common shareholders $ 165.3 $ 195.9 $ 317.8 $ 438.4
Add:
Interest expense, net of interest
income 13.1 7.7 45.3 28.1
Provision for income taxes 52.7 61.2 108.0 132.8
Depreciation and amortization 43.3 31.1 141.8 108.1
--------- --------- --------- ---------
EBITDA $ 274.4 $ 295.9 $ 612.9 $ 707.4
Add:
Restructuring and acquisition
charges 32.6 13.4 68.5 34.1
Net non-cash MSR and mortgage
banking derivative activity (21.2) 0.8 (23.5) 0.8
--------- --------- --------- ---------
Adjusted EBITDA $ 285.8 $ 310.1 $ 657.9 $ 742.3
========= ========= ========= =========
4. In discussing our operating results, we refer to percentage changes and
report Adjusted EBITDA margins in local currency, unless otherwise noted.
Such amounts presented on a local currency basis are calculated by
translating the current period results of our foreign operations to U.S.
dollars using the foreign currency exchange rates from the comparative
period. We believe this methodology provides a framework for assessing
our performance and operations excluding the effect of foreign currency
fluctuations. Because amounts presented on a local currency basis are not
calculated under U.S. GAAP, they may not be comparable to similarly
titled measures used by other companies.
The following table reflects the reconciliation to local currency amounts
for consolidated revenue, consolidated fee revenue, consolidated
operating income, and consolidated adjusted operating income:
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
($ in millions) 2016 % Change 2016 % Change
--------- -------- --------- --------
Revenue:
At current period exchange rates $ 2,158.2 14% $ 6,803.8 14%
Impact of change in exchange
rates 87.8 n/a 198.1 n/a
--------- -------- --------- --------
At comparative period exchange
rates $ 2,246.0 19% $ 7,001.9 17%
--------- -------- --------- --------
Fee Revenue:
At current period exchange rates $ 1,849.0 11% $ 5,756.8 11%
Impact of change in exchange
rates 67.8 n/a 143.9 n/a
--------- -------- --------- --------
At comparative period exchange
rates $ 1,916.8 15% $ 5,900.7 14%
--------- -------- --------- --------
Operating Income:
At current period exchange rates $ 226.3 (11)% $ 440.6 (17)%
Impact of change in exchange
rates 1.3 n/a (8.9) n/a
--------- -------- --------- --------
At comparative period exchange
rates $ 227.6 (10)% $ 431.7 (19)%
--------- -------- --------- --------
Adjusted EBITDA:
At current period exchange rates $ 285.8 (8)% $ 657.9 (11)%
Impact of change in exchange
rates 3.3 n/a (5.1) n/a
--------- -------- --------- --------
At comparative period exchange
rates $ 289.1 (7)% $ 652.8 (12)%
--------- -------- --------- --------
The favorable impact of exchange rate fluctuations on Operating Income and
Adjusted EBITDA is primarily driven by EMEA regional British pound-
denominated operating expenses.
5. Restructuring and acquisition charges are excluded from our measure of
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 is not believed to
be meaningful to investors. Accordingly, the performance of segment
results has been evaluated without allocation of these charges.
Restructuring and acquisition charges of $34.1 million in the year ended
December 31, 2015 included $12.8 million related to the write-off of an
indemnification asset which arose from prior period acquisition activity.
This write-off was offset by the recognition of a tax benefit of an equal
amount in the provision for income taxes, and therefore had no impact on
net income.
Three Months Ended Twelve Months Ended
December 31, 2015 December 31, 2015
------------------------- -------------------------
Adjusting Adjusting
($ in millions) GAAP Item Adjusted GAAP Item Adjusted
------ --------- -------- ------ --------- --------
Income before income
taxes and
noncontrolling interest $259.7 $ -- $ 259.7 $579.1 $ 12.8 $ 591.9
Provision for income
taxes 61.2 -- 61.2 132.8 12.8 145.6
------ -------- ------ --------
Net Income $198.5 $ 198.5 $446.3 $ 446.3
====== ======== ====== ========
Excluding the impact of this item, the adjusted provision for income taxes
for the year ended December 31, 2015 of $145.6 million reflects a 24.6
percent effective tax rate on adjusted income before taxes of $591.9
million.
6. Each geographic region offers the company'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 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 company's Annual Report on Form 10-K for the year ended December
31, 2016, to be filed with the Securities and Exchange Commission in the
near future.
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. Benelux refers to Belgium, the Netherlands, and Luxembourg.
9. Certain prior-year amounts have been reclassified to conform to the
current presentation. The company adopted ASU 2015-03, Interest -
Imputation of Interest (ASU 2015-03), and therefore ASU 2015-15,
effective January 1, 2016, as a change in accounting principle. As
retrospective application is required, the comparative balance sheet
information has been adjusted; debt issuance costs of $18.1 million as
of December 31, 2015, have been reclassified from Other assets to Credit
facility ($15.4 million) and Long-term senior notes ($2.7 million). The
adoption of ASU 2015-03 had no impact on our consolidated statements of
comprehensive income or cash flows.
10. As of December 31, 2016, LaSalle had $60.1 billion of real estate assets
under management with approximately $6.5 billion available for
investment ("dry powder") contemplating committed capital and available
borrowing capacity at traditional leverage levels. Assets under
management were composed of $30.5 billion invested in separate accounts,
$14.1 billion invested in fund management vehicles, and $15.5 billion
invested in public securities. The geographic distribution of separate
accounts and fund management investments was $16.8 billion in North
America, $15.7 billion in the UK, $7.8 billion in Asia Pacific, and $4.3
billion in continental Europe. Assets under management data for separate
accounts and fund management amounts are reported on a one-quarter lag.
Contact: Christie B. Kelly Title: Global Chief Financial Officer Phone: +1 312 228 2316
Source: JLL