Jones Lang LaSalle Reports Full-Year Adjusted Earnings per Share of $5.48; Revenue of $3.9 billion Record full-year revenue increased 12 percent; fee revenue grew 10 percent

CHICAGO, Jan. 29, 2013 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted EPS for 2012 of $5.48, up from $4.83 last year.  Record full-year revenue of $3.9 billion was up 12 percent in local currency.  Fee revenue was $3.6 billion, an increase of 10 percent.

  • Adjusted EPS growth of 13 percent driven by broad-based revenue performance
  • Significant full-year margin improvement in EMEA from management actions despite challenging market conditions
  • Strong Q4 finish in Asia Pacific with 20 percent revenue growth driven by Capital Markets and continued success in corporate outsourcing
  • Continued healthy, above-market leasing performance in the Americas
  • $275 million, 10-year bond issuance strengthened investment-grade balance sheet

 




Summary Financial Results

   ($ in millions, except per share data)

Three Months Ended

December 31,


Twelve Months Ended

December 31,


2012

2011


2012

2011







Revenue

$    1,249

$  1,148


$    3,933

$  3,585

Fee Revenue1

$    1,165

$  1,081


$    3,640

$  3,374

Adjusted Net Income2

$       117

$     114


$       245

$     215

U.S. GAAP Net Income

$       107

$       85


$       208

$     164

Adjusted Earnings per Share2

$      2.60

$    2.56


$      5.48

$    4.83

Earnings per Share

$      2.38

$    1.91


$      4.63

$    3.70

Adjusted EBITDA3

$       185

$     179


$       436

$     395








Adjusted Operating Income Margin1

14.1%

14.6%


9.3%

9.4%

Adjusted EBITDA Margin1

15.9%

16.6%


12.0%

11.7%

See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this News Release.

"Our 2012 performance met our expectations, with a strong finish to the year in challenging global markets," said Colin Dyer, Chief Executive Officer of Jones Lang LaSalle. "Again, we continue to secure market share growth, productivity improvements and expanded client relationships.  Our quarterly and full-year performance leaves us confident that we will continue to progress in 2013," Dyer added.







Consolidated Revenue

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

Three Months Ended

December 31,


% Change

 in LC


Twelve Months Ended

December 31,

% Change

 in LC



2012

2011



2012

2011












Real Estate Services ("RES")










Leasing

$      439.2

$      408.7


8%


$   1,277.8

$   1,189.1

9%


Capital Markets & Hotels

194.4

173.2


12%


512.9

459.6

13%


Property & Facility Management

283.9

261.5


9%


1,012.3

864.4

19%


Property & Facility Management Fee Revenue1

242.4

222.7


9%


850.1

761.7

13%


Project & Development Services

143.2

126.7


15%


486.2

441.5

14%


Project & Development Services Fee Revenue1

101.4

98.6


4%


355.8

333.7

9%


Advisory, Consulting and Other

124.8

115.6


8%


382.2

358.3

9%


     Total RES Revenue

$   1,185.5

$   1,085.7


9%


$     3,671.4

$   3,312.9

13%


Total RES Fee Revenue1

$   1,102.2

$   1,018.8


8%


$     3,378.8

$   3,102.4

10%












LaSalle Investment Management










Advisory Fees

$        56.2

$        60.1


(7%)


$        228.1

$      245.0

(6%)


Transaction Fees & Other

4.6

2.3


104%


10.5

7.3

47%


Incentive Fees

2.4

0.1


n/m


22.8

19.3

18%


     Total LaSalle Investment Management Revenue

$        63.2

$        62.5


0%


$        261.4

$      271.6

(3%)












Total Firm Revenue

$   1,248.7

$   1,148.2


9%


$     3,932.8

$   3,584.5

12%


Total Firm Fee Revenue1

$   1,165.4

$   1,081.3


8%


$     3,640.2

$   3,374.0

10%












n/m – not meaningful

Consolidated fee revenue growth for the full year was driven by solid Leasing performance and continued growth in Property & Facility Management.  Leasing revenue grew 9 percent in local currency for the year, with the largest growth in the Americas.  Property & Facility Management fee revenue rose 13 percent in local currency, also led by the Americas region, which increased 15 percent in local currency, followed by Asia Pacific, up 13 percent.  LaSalle Investment Management's advisory fees decreased from 2011 due to significant asset and portfolio sales, but have remained consistent throughout each quarter of 2012.  LaSalle generated $23 million of incentive fees and $24 million of equity earnings during the year.   

Consolidated quarter-to-date revenue rose to $1.2 billion, 9 percent higher in local currency than the fourth quarter of 2011, and was up 8 percent on a fee revenue basis.   

Operating expenses, excluding restructuring and acquisition charges, were $3.6 billion for the year, an increase of 10 percent, 12 percent in local currency, compared with $3.3 billion in 2011.  The increase was driven by higher variable compensation resulting from improved Leasing revenue, as well as higher compensation resulting from increased headcount primarily to service new and expanded Property & Facility Management contracts.  Compensation expense was further impacted by the firm's previously disclosed decision to eliminate its Stock Ownership Program ("SOP"), which resulted in approximately $11 million of accelerated compensation expense in the current year, a timing difference rather than a permanent increase in compensation, as well as a timing difference of $5 million related to the acceleration of the final deferred payment for the Staubach acquisition and extension of employment agreements with the majority of the Staubach shareholders who are working in the firm.  Fee-based operating expenses1, excluding restructuring and acquisition charges, were $3.3 billion, an increase of 9 percent in local currency, also mostly attributable to higher compensation expense.

Full-year results included $45 million of restructuring and acquisition charges, principally related to integration and retention costs for the second-quarter 2011 acquisition of King Sturge, but also including severance and lease exit costs in targeted areas of the business that are anticipated to remain economically challenged for an extended period of time.  The firm's results also included $5 million of intangibles amortization related to the King Sturge acquisition.  

Fourth-quarter fee-based operating expenses excluding restructuring and acquisition charges were $1.0 billion, up 8 percent from $928 million last year.  The majority of the increase was due to increases in variable compensation, notably bonus and commission expense, as several of the firm's businesses reached higher bonus and commission hurdles in the fourth quarter, particularly in the United States.

Balance Sheet

During the fourth quarter, the firm issued $275 million of 4.4% Senior Notes due November 2022.  The investment-grade notes were sold to a diverse group of investors and further strengthen the firm's liquidity and balance sheet position.  The proceeds from the issuance were used to reduce borrowings on the firm's long-term revolving credit facility.  Outstanding debt on this facility was $169 million as of December 31, 2012, compared with $463 million last year.   

Also in the quarter, the firm made a payment of $115 million to certain former Staubach shareholders.  This represents an acceleration of the majority of a $156 million deferred acquisition payment previously recorded and scheduled to be paid in August 2013.  In addition, the Americas' Leasing performance since the 2008 merger produced an earn-out of $36 million, of which $5 million was paid in the second quarter of 2012.  The remaining $31 million has been recorded as a deferred acquisition obligation as of December 31, 2012, and will be paid in the first half of 2013.  Total net debt, which includes deferred acquisition obligations, decreased $105 million during 2012 to $538 million as of December 31, 2012.

Business Segment Performance Highlights

Americas Real Estate Services

Full-year revenue in the Americas region was $1.7 billion, an increase of 15 percent from 2011.  On a fee revenue basis, revenue increased 11 percent.  The largest growth was in Capital Markets & Hotels, which increased 25 percent, and Property & Facility Management, which increased 15 percent.  Leasing revenue increased 9 percent despite overall office leasing volumes dropping 20 percent in the United States.

 








Americas Revenue

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

Three Months Ended

December 31,


% Change in LC


Twelve Months Ended  December 31,


% Change in LC



2012

2011



2012

2011














Leasing

$      278.9

$     258.6


8%


$       829.6

$    760.7


9%


Capital Markets & Hotels

59.4

48.1


24%


168.5

135.6


25%


Property & Facility Management

133.2

117.8


13%


458.7

349.7


32%


Property & Facility Management Fee Revenue1

111.1

101.2


10%


375.0

329.3


15%


Project & Development Services

51.9

54.3


(4%)


182.9

178.4


4%


Project & Development Services Fee Revenue1

51.7

53.9


(3%)


182.1

177.9


4%


Advisory, Consulting and Other

31.5

30.7


3%


107.0

98.2


9%


     Operating Revenue

$     554.9

$     509.5


9%


$    1,746.7

$ 1,522.6


15%













Equity Earnings

0.1

-


n/m


-

2.7


n/m


Total Segment Revenue

$     555.0

$     509.5


9%


$     1,746.7

$ 1,525.3


15%


Total Segment Fee Revenue1

$     532.7

$     492.5


9%


$    1,662.2

$ 1,504.4


11%













n/m – not meaningful

Operating expenses were $1.6 billion for the year, a 16 percent increase from 2011.  Fee-based operating expenses increased 12 percent from last year.  The year-over-year increase was due to higher fixed compensation costs associated with a larger employee base, as well as higher commission expenses related to improved Leasing and Capital Markets & Hotels revenue.  The SOP elimination earlier this year has added approximately $5 million to compensation expense compared with 2011.  Also impacting Americas full-year and fourth-quarter operating expenses was $5 million of compensation expense related to acceleration of the deferred acquisition payment.

Operating income was $168 million for the year, up from $163 million in 2011.  EBITDA for the year was $210 million, compared with $201 million in 2011.  EBITDA margin calculated on a fee revenue basis was 12.7 percent compared with 13.4 percent last year.  Adjusting for the impact of the SOP elimination and acceleration of deferred acquisition payments, 2012 EBITDA margin would have been equal to a similarly adjusted 2011.

Fourth-quarter fee-based operating expenses were $457 million, compared with $408 million in 2011, a 12 percent increase, and included the $5 million of compensation expense related to the accelerated deferred acquisition payment and $2 million from the elimination of the SOP.

EMEA Real Estate Services

EMEA's full-year revenue was $1.0 billion, a 12 percent increase in local currency.  Revenue increased on a fee revenue basis by 9 percent, broad-based but driven by Project & Development Services, which includes the Tetris fit-out business, and Leasing.  Fourth-quarter fee revenue was $318 million, consistent with 2011 levels.








EMEA Revenue

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

Three Months Ended

December 31,


% Change

in LC


Twelve Months Ended

December 31,


% Change

in LC


2012

2011



2012

2011












Leasing

$    83.7

$     81.0


4%


$    250.0

$   236.1


11%

Capital Markets & Hotels

94.9

103.1


(9%)


235.1

229.1


5%

Property & Facility Management

42.4

42.5


(1%)


155.2

147.9


9%

Property & Facility Management Fee Revenue1

42.4

42.5


(1%)


155.2

147.9


9%

Project & Development Services

64.5

51.4


28%


219.8

182.0


28%

Project & Development Services Fee Revenue1

30.5

28.8


7%


106.5

96.3


16%

Advisory, Consulting and Other

66.8

62.3


7%


189.1

178.9


10%

     Operating Revenue

$   352.3

$   340.3


4%


$ 1,049.2

$   974.0


12%










Equity Losses

(0.1)

-


n/m


(0.3)

(0.3)


n/m

Total Segment Revenue

$   352.2

$   340.3


4%


$ 1,048.9

$   973.7


12%

Total Segment Fee Revenue1

$   318.2

$     317.7


0%


$    935.6

$     888.0


9%











n/m – not meaningful

Operating expenses, which include $5 million of King Sturge intangibles amortization, were $1.0 billion for the year, an increase of 10 percent in local currency from 2011.  Operating expenses also include $28 million of additional gross contract costs related to the Project & Development Services business line compared with last year. Fee-based operating expenses increased 7 percent from 2011.  The year-over-year increase was primarily due to higher fixed compensation from the addition of King Sturge for a full year in 2012, compared with just over seven months in 2011.

Full-year EBITDA was $75 million, compared with $57 million in 2011.  EBITDA margin calculated on a fee revenue basis was 8.0 percent compared with 6.5 percent last year reflecting the benefits of cost actions taken across the region during the year.

Fourth-quarter fee-based operating expenses were $272 million, compared with $284 million in 2011, a reduction of 4 percent in local currency.  Included in operating expenses was $1 million of intangibles amortization compared with $5 million last year.

Asia Pacific Real Estate Services

Asia Pacific's revenue for the year increased 9 percent in local currency, to $876 million.  Fee revenue was $781 million, an increase of 11 percent, led by 15 percent growth in Capital Markets & Hotels and 13 percent annuity growth in Property & Facility Management. 







Asia Pacific Revenue

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

Three Months Ended

December 31,


% Change

in LC


Twelve Months Ended December 31,


% Change

in LC



2012

2011



2012

2011














Leasing

$      76.6

$      69.1


10%


$     198.2

$     192.3


4%


Capital Markets & Hotels

40.1

22.0


79%


109.3

94.9


15%


Property & Facility Management

108.3

101.2


7%


398.4

366.8


10%


Property & Facility Management Fee Revenue1

88.9

79.0


12%


319.9

284.5


13%


Project & Development Services

26.8

21.0


28%


83.5

81.1


6%


Project & Development Services Fee Revenue1

19.2

15.9


21%


67.2

59.5


16%


Advisory, Consulting and Other

26.5

22.6


16%


86.1

81.2


6%


     Operating Revenue

$     278.3

$      235.9


18%


$     875.5

$     816.3


9%













Equity Earnings

-

0.1


n/m


0.1

0.2


n/m


Total Segment Revenue

$     278.3

$      236.0


18%


$     875.6

$     816.5


9%


Total Segment Fee Revenue1

$     251.3

$      208.7


20%


$     780.8

$     712.6


11%













n/m – not meaningful

Operating expenses were $810 million for the year, an increase of 9 percent in local currency.  Operating expenses included $95 million of gross contract costs, down from $104 million last year.  Fee-based operating expenses rose 12 percent, to $716 million, due to a larger employee base servicing new and expanded Property & Facility Management contracts and inflationary compensation pressure across the region.  

The region's EBITDA for the year was $78 million, consistent with 2011.  EBITDA margin calculated on a fee revenue basis improved significantly in the fourth quarter; however, full-year EBITDA margin was 10.0 percent, down from 11.0 percent last year due to the slower growth challenges of the previous quarters.

Fee-based operating expenses for the quarter were $218 million, compared with $184 million in 2011. 

LaSalle Investment Management

LaSalle Investment Management's advisory fees were $228 million for the year, down 6 percent in local currency.  Advisory fees in the fourth quarter remained flat compared with the first three quarters of 2012.  During the year, the business recognized $23 million of incentive fees as a result of positive performance for clients, and $24 million of equity earnings, primarily from asset sales. 








LaSalle Investment

  Management Revenue

Three Months Ended

December 31,


% Change

in LC


Twelve Months Ended

  December 31,


% Change

in LC


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

2012

2011



2012

2011














Advisory Fees

$    56.2

$    60.1


(7%)


$    228.1

$     245.0


(6%)


Transaction Fees & Other

4.6

2.3


104%


10.5

7.3


47%


Incentive Fees

2.4

0.1


n/m


22.8

19.3


18%


     Operating Revenue

$    63.2

$    62.5


0%


$     261.4

$     271.6


(3%)













Equity Earnings

1.4

3.7


(62%)


24.0

3.8


n/m


Total Segment Revenue

$    64.6

$    66.2


(3%)


$     285.4

$     275.4


5%













n/m – not meaningful

Assets under management remained at $47 billion as of December 31, 2012.  EBITDA was $74 million for the year, compared with $60 million in 2011.  EBITDA margin was 25.9 percent in 2012 compared with 21.7 percent last year.

Summary

The firm finished the year with a strong fourth-quarter performance and delivered record revenue in 2012.  Notable market share gains continued as the firm won new mandates and expanded existing client relationships.  Healthy new business pipelines and moderately improving global market dynamics, combined with an ongoing focus on productivity and cost discipline, provide confidence for the firm's performance in 2013.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management. For further information, visit www.jll.com.

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

Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives 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 Jones Lang LaSalle to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's Annual Report on Form 10-K for the year ended December 31, 2011, and in the Quarterly Report on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30, 2012, and in other reports filed with the Securities and Exchange Commission. Statements speak only as of the date of this release. Jones Lang LaSalle expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in Jones Lang LaSalle's expectations or results, or any change in events.

Conference Call

The firm will conduct a conference call for shareholders, analysts and investment professionals on Tuesday, January 29 at 6:00 p.m. EST.

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

  • U.S. callers:  +1 877 356 3887
  • International callers:  +1 706 679 7364
  • Pass code:  87480384

 

Webcast

Follow these steps to listen to the webcast:

1. You must have a minimum 14.4 Kbps Internet connection

2. Log on to http://www.videonewswire.com/event.asp?id=91555 and follow instructions

3. Download free Windows Media Player software: (link located under registration form)

4. If you experience problems listening, send an email to prnwebcast@multivu.com 

Supplemental Information

Supplemental information regarding the fourth-quarter 2012 earnings call has been posted to the Investor Relations section of the company's website:  www.jll.com.

Conference Call Replay

Available: 7:00 a.m. EST Wednesday, January 30 through 11:59 p.m. EST Wednesday, February 6 at the following numbers:

  • U.S. callers:  +1 855 859 2056
  • International callers:  +1 404 537 3406
  • Pass code:  87480384

Web Audio Replay

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

If you have any questions, email Jones Lang LaSalle's Investor Relations department at JLLInvestorRelations@am.jll.com.

 

JONES LANG LASALLE INCORPORATED

Consolidated Statements of Operations

For the Three and Twelve Months Ended December 31, 2012 and 2011

(in thousands, except share data)

(Unaudited)
















































Three Months Ended December 31,



Twelve Months Ended December 31,










2012



2011



2012



2011




















Revenue







$               1,248,704



$               1,148,175



$          3,932,830



$          3,584,544




















Operating expenses:
















Compensation and benefits 




794,160



722,469



2,546,965



2,330,520


Operating, administrative and other




270,501



250,173



972,231



863,860


Depreciation and amortization 




20,100



22,333



78,810



82,832


Restructuring and acquisition charges




13,045



33,983



45,421



56,127























Total operating expenses




1,097,806



1,028,958



3,643,427



3,333,339























Operating income





150,898



119,217



289,403



251,205




















Interest expense, net of interest income




(10,337)



(8,372)



(35,173)



(35,591)

Equity earnings from unconsolidated ventures 




1,358



3,703



23,857



6,385




















Income before income taxes and noncontrolling interest




141,919



114,548



278,087



221,999

Provision for income taxes  





34,657



29,525



69,244



56,387

Net income






107,262



85,023



208,843



165,612




















Net income attributable to noncontrolling interest




190



107



793



1,228

Net income attributable to the Company




$                  107,072



$                   84,916



$             208,050



$             164,384




















Net income attributable to common shareholders




$                  106,831



$                   84,765



$             207,556



$             163,997







































Basic earnings per common share




$                       2.43



$                       1.95



$                  4.73



$                  3.80




















Basic weighted average shares outstanding




44,051,014



43,469,543



43,848,737



43,170,383







































Diluted earnings per common share




$                       2.38



$                       1.91



$                  4.63



$                  3.70




















Diluted weighted average shares outstanding




44,953,524



44,402,412



44,799,437



44,367,359







































EBITDA 







$                  171,925



$                  144,995



$             390,783



$             338,807




















Please reference attached financial statement notes.







 

 


 JONES LANG LASALLE INCORPORATED 


 Segment Operating Results 


 For the Three and Twelve Months Ended December 31, 2012 and 2011 


 (in thousands) 


 (Unaudited) 










































 Three Months Ended December 31, 




 Twelve Months Ended December 31, 









2012


2011




2012


2011




















 REAL ESTATE SERVICES  















       AMERICAS 
















 Revenue: 

















 Operating revenue 




$                      554,867


$                      509,478




$                    1,746,708


$                    1,522,607





 Equity earnings (losses)  




74


16




(3)


2,682





 Total segment revenue 




554,941


509,494




1,746,705


1,525,289





 Gross contract costs1




(22,246)


(16,992)




(84,425)


(20,882)





 Total segment fee revenue 




532,695


492,502




1,662,280


1,504,407





















 Operating expenses: 

















 Compensation, operating and administrative expenses 




468,441


415,377




1,536,211


1,324,115





 Depreciation and amortization 




11,205


9,710




42,333


38,502





 Total segment operating expenses 




479,646


425,087




1,578,544


1,362,617





 Gross contract costs1




(22,246)


(16,992)




(84,425)


(20,882)





 Total fee-based segment operating expenses 




457,400


408,095




1,494,119


1,341,735






















 Operating income 




$                        75,295


$                        84,407




$                      168,161


$                      162,672






















 EBITDA 




$                        86,500


$                        94,117




$                      210,494


$                      201,174




















       EMEA 

















 Revenue: 

















 Operating revenue 




$                      352,321


$                      340,294




$                    1,049,226


$                      974,014





 Equity (losses) / earnings 




(82)


2




(310)


(304)





 Total segment revenue 




352,239


340,296




1,048,916


973,710





 Gross contract costs1




(34,027)


(22,555)




(113,321)


(85,692)





 Total segment fee revenue 




318,212


317,741




935,595


888,018





















 Operating expenses: 

















 Compensation, operating and administrative expenses 




300,805


297,278




974,022


916,412





 Depreciation and amortization 




5,001


9,051




21,644


29,378





 Total segment operating expenses 




305,806


306,329




995,666


945,790





 Gross contract costs1




(34,027)


(22,555)




(113,321)


(85,692)





 Total fee-based segment operating expenses 




271,779


283,774




882,345


860,098






















 Operating income 




$                        46,433


$                        33,967




$                        53,250


$                        27,920






















 EBITDA 




$                        51,434


$                        43,018




$                        74,894


$                        57,298




















       ASIA PACIFIC 
















 Revenue: 

















 Operating revenue 




$                      278,329


$                      235,938




$                      875,476


$                      816,301





 Equity (losses) / earnings 




(11)


28




150


178





 Total segment revenue 




278,318


235,966




875,626


816,479





 Gross contract costs1




(27,044)


(27,329)




(94,816)


(103,892)





 Total segment fee revenue 




251,274


208,637




780,810


712,587





















 Operating expenses: 

















 Compensation, operating and administrative expenses 




241,952


207,797




797,396


738,107





 Depreciation and amortization 




3,329


3,001




12,886


12,203





 Total segment operating expenses 




245,281


210,798




810,282


750,310





 Gross contract costs1




(27,044)


(27,329)




(94,816)


(103,892)





 Total fee-based segment operating expenses 




218,237


183,469




715,466


646,418






















 Operating income 




$                        33,037


$                        25,168




$                        65,344


$                        66,169






















 EBITDA 




$                        36,366


$                        28,169




$                        78,230


$                        78,372




















LASALLE INVESTMENT      

     MANAGEMENT 
















 Revenue: 

















 Operating revenue 




$                        63,187


$                        62,465




$                      261,420


$                      271,622





 Equity earnings 




1,377


3,657




24,020


3,829





 Total segment revenue 




64,564


66,122




285,440


275,451





















 Operating expenses: 

















 Compensation, operating and administrative expenses 




53,463


52,191




211,567


215,745





 Depreciation and amortization 




565


570




1,947


2,750





 Total segment operating expenses 




54,028


52,761




213,514


218,495






















 Operating income 




$                        10,536


$                        13,361




$                        71,926


$                        56,956






















 EBITDA 




$                        11,101


$                        13,931




$                        73,873


$                        59,706






















 Total segment revenue 




1,250,062


1,151,878




3,956,687


3,590,929





 Reclassification of equity earnings 




1,358


3,703




23,857


6,385





      Total revenue 




$                    1,248,704


$                    1,148,175




$                    3,932,830


$                    3,584,544






















      Total operating expenses before restructuring charges 




1,084,761


994,975




3,598,006


3,277,212





      Operating income before restructuring charges 




$                      163,943


$                      153,200




$                      334,824


$                      307,332




















Please reference attached financial statement notes.










JONES LANG LASALLE INCORPORATED


Consolidated Balance Sheets


December 31, 2012 and December 31, 2011


(in thousands)





























December 31,


December 31,








2012


2011













ASSETS







Current assets:








Cash and cash equivalents


$             152,159


$             184,454




Trade receivables, net of allowances


996,681


907,772




Notes and other receivables


101,952


97,315




Warehouse receivables


144,257


-




Prepaid expenses


53,165


45,274




Deferred tax assets


50,831


53,553




Other



16,484


12,516






Total current assets


1,515,529


1,300,884













Property and equipment, net of accumulated depreciation


269,338


241,415



Goodwill, with indefinite useful lives


1,853,761


1,751,207



Identified intangibles, with finite useful lives, net of accumulated amortization


45,932


52,590



Investments in real estate ventures 


268,107


224,854



Long-term receivables


58,881


54,840



Deferred tax assets


197,892


186,605



Other



142,059


120,241






Total assets


$          4,351,499


$          3,932,636













LIABILITIES AND EQUITY 







Current liabilities:








Accounts payable and accrued liabilities


$             497,817


$             436,045




Accrued compensation 


685,718


655,658




Short-term borrowings


32,233


65,091




Deferred tax liabilities


10,113


6,044




Deferred income


76,152


58,974




Deferred business acquisition obligations


105,772


31,164




Warehouse facility


144,257


-




Other



109,909


95,641






Total current liabilities


1,661,971


1,348,617













Noncurrent liabilities:








Credit facilities


169,000


463,000




Long-term senior notes


275,000


-




Deferred tax liabilities


3,106


7,646




Deferred compensation


75,320


57,118




Pension liabilities


5,281


17,233




Deferred business acquisition obligations


107,661


267,896




Minority shareholder redemption liability


19,489


18,402




Other



75,415


58,344






Total liabilities


2,392,243


2,238,256













Company shareholders' equity:








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








44,054,042 and 43,470,271 shares issued and outstanding as of








December 31, 2012 and December 31, 2011, respectively


441


435




Additional paid-in capital


932,255


904,968




Retained earnings 


1,017,128


827,297




Shares held in trust


(7,587)


(7,814)




Accumulated other comprehensive income (loss)


8,946


(33,757)






Total Company shareholders' equity


1,951,183


1,691,129














Noncontrolling interest


8,073


3,251






Total equity


1,959,256


1,694,380
















Total liabilities and equity


$          4,351,499


$          3,932,636













Please reference attached financial statement notes.






 

 

JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Twelve Months Ended December 31, 2012 and 2011

(in thousands)

(Unaudited)

 


Twelve Months Ended December 31,


2012


2011





Cash provided by operating activities

$           327,698


$            211,338





Cash used in investing activities

(151,252)


(389,316)





Cash (used in) provided by financing activities

(208,741)


110,535





        Net decrease in cash and cash equivalents

$           (32,295)


$             (67,443)





Cash and cash equivalents, beginning of period

184,454


251,897





Cash and cash equivalents, end of period

$          152,159


$            184,454





Please reference attached financial statement notes.




 


JONES LANG LASALLE INCORPORATED
Financial Statement Notes

1. Consistent with U.S. GAAP ("GAAP"), gross contract vendor and subcontractor costs ("gross contract costs") which are managed on certain client assignments in the Property & Facility Management and Project & Development Services business lines are presented on a gross basis in both revenue and operating expenses.  Gross contract costs are excluded from revenue and operating expenses in determining "fee revenue" and "fee-based operating expenses", respectively.  Excluding these costs from revenue and operating expenses more accurately reflects how the firm manages its expense base and its operating margins.  Adjusted operating income excludes the impact of restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition.  "Adjusted operating income margin" is calculated by dividing adjusted operating income by fee revenue.  Below are reconciliations of revenue and operating expenses to fee revenue and fee-based operating expenses, as well as adjusted operating income margin calculations, for the three and twelve months ended December 31, 2012, and 2011.

 



Three Months Ended

Twelve Months Ended



December 31,

December 31,

($ in millions)


2012


2011


2012


2011










Revenue


$  1,248.7


$  1,148.2


$ 3,932.8


$  3,584.5

Gross contract costs


(83.3)


(66.9)


(292.6)


(210.5)

Fee revenue


$  1,165.4


$  1,081.3


$ 3,640.2


$  3,374.0










Operating expenses


$  1,097.8


$  1,029.0


$ 3,643.4


$  3,333.3

Gross contract costs


(83.3)


(66.9)


(292.6)


(210.5)

Fee-based operating expenses


$  1,014.5


$     962.1


$ 3,350.8


$  3,122.8










Operating income


$     150.9


$     119.2


$    289.4


$     251.2










Add:









Restructuring and acquisition charges


13.0


34.0


45.4


56.1

King Sturge intangible amortization


0.6


4.8


4.9


11.5

Adjusted operating income


$   164.5


$     158.0


$   339.7


$    318.8










Adjusted operating income margin


14.1%


14.6%


9.3%


9.4%











 

2.  Charges excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and twelve months ended December 31, 2012, and December 31, 2011, are restructuring and acquisition charges and intangible amortization related to the recent King Sturge acquisition. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share ("EPS") for each net income total:


Three Months Ended


Twelve Months Ended


December 31,


December 31,

($ in millions, except per share data)

2012


2011


2012


2011









GAAP net income attributable to common shareholders

$106.8


$84.8


$207.6


$164.0

Shares (in 000s)

44,954


44,402


44,799


44,367

GAAP earnings per share

$2.38


$1.91


$4.63


$3.70









GAAP net income attributable to common shareholders

$106.8


$84.8


$207.6


$164.0

Restructuring and acquisition charges, net 

9.8


25.2


34.1


41.9

Intangible amortization, net 

0.5


3.6


3.7


8.6

Adjusted net income 

117.1


113.6


245.4


214.5









Shares (in 000s)

44,954


44,402


44,799


44,367









Adjusted earnings per share

$  2.60


$  2.56


$  5.48


$  4.83

 

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 (in thousands):

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2012


2011


2012


2011









Net income attributable to common shareholders

$106,831


$84,765


$207,556


$163,997

Add:








Interest expense, net of interest income

10,337


8,372


35,173


35,591

Provision for income taxes

34,657


29,525


69,244


56,387

Depreciation and amortization

20,100


22,333


78,810


82,832









EBITDA

$171,925


$144,995


$390,783


$338,807









Add:








Restructuring and acquisition charges

13,045


33,983


45,421


56,127









Adjusted EBITDA

$184,970


$178,978


$436,204


$394,934

4. Restructuring and acquisition charges are excluded from segment operating results, although they are included for consolidated reporting.  For purposes of segment operating results, the allocation of restructuring charges to the segments has been determined not to be meaningful to investors, so the performance of segment results has been evaluated without allocation of these charges.

5. Intangible amortization from the second-quarter 2011 King Sturge acquisition is included in depreciation and amortization in the firm's consolidated results, as well as in EMEA's segment results, but has been excluded from adjusted operating income and adjusted net income.

6. Each geographic region offers the firm's full range of Real Estate Services businesses consisting primarily of tenant representation and agency leasing; capital markets; property management and facilities management; project and development services; and advisory, consulting and valuations services.  The Investment Management segment provides investment management services to institutional investors and high-net-worth individuals.

7. The consolidated statements of cash flows are presented in summarized form. For complete consolidated statements of cash flows, please refer to the firm's Annual Report on Form 10-K for the year ended December 31, 2012, to be filed with the Securities and Exchange Commission shortly.

8. EMEA refers to Europe, Middle East and Africa.  MENA refers to Middle East and North Africa.  Greater China includes China, Hong Kong, Macau and Taiwan.

9. Certain prior year amounts have been reclassified to conform to the current presentation.

SOURCE Jones Lang LaSalle



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