Jones Lang LaSalle Reports 15 Percent Fee Revenue Growth and 21 Percent EPS Growth for Third Quarter 2013
Adjusted EPS of $1.49, fee revenue of $989 million and margin improvement year over year
CHICAGO, Oct. 28, 2013 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share ("EPS") of $1.49 for the third quarter of 2013, up from $1.23 in the prior year. Third-quarter revenue was $1.1 billion, an increase of 19 percent. Fee revenue was $989 million, an increase of 15 percent. All percentage variances are calculated on a local currency basis.
- Strong fee revenue growth, led by Capital Markets & Hotels and Property & Facility Management; solid performance in Leasing
- Double-digit revenue increases in all geographic segments demonstrating global share growth
- Improved profitability, adjusted EPS up 21 percent, adjusted operating margins up more than 1 percentage point
- Healthy capital raise by LaSalle Investment Management; $3.3 billion committed year to date
- Increased strength of investment grade balance sheet; $1.2 billion credit facility renewed and extended at lower cost
- Semi-annual dividend of $0.22 per share declared by the Board of Directors
| Summary Financial Results ($ in millions, except per share data) |
Three Months Ended |
Nine Months Ended |
||||
| September 30, |
September 30, |
|||||
| 2013 |
2012 |
2013 |
2012 |
|||
| Revenue |
$ 1,107 |
$ 949 |
$ 2,952 |
$ 2,684 |
||
| Fee Revenue1 |
$ 989 |
$ 878 |
$ 2,677 |
$ 2,475 |
||
| Adjusted Net Income2 |
$ 67 |
$ 55 |
$ 135 |
$ 128 |
||
| U.S. GAAP Net Income |
$ 63 |
$ 50 |
$ 122 |
$ 101 |
||
| Adjusted Earnings per Share2 |
$ 1.49 |
$ 1.23 |
$ 2.99 |
$ 2.86 |
||
| Earnings per Share |
$ 1.39 |
$ 1.10 |
$ 2.71 |
$ 2.25 |
||
| Adjusted EBITDA3 |
$ 118 |
$ 102 |
$ 268 |
$ 252 |
||
| Adjusted EBITDA, Real Estate Services |
$ 101 |
$ 77 |
$ 217 |
$ 189 |
||
| Adjusted EBITDA, LaSalle Investment Management |
$ 17 |
$ 25 |
$ 51 |
$ 63 |
||
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
"Our solid third-quarter results show significant revenue growth and increasing profitability across our operations," said Colin Dyer, President and Chief Executive Officer of Jones Lang LaSalle. "In the fourth quarter, traditionally the most profitable of the year, we will continue to improve margins, take market share and invest in the long-term strength of the business," Dyer added.
| Consolidated Revenue ($ in millions, "LC" = local currency) |
Three Months Ended September 30, |
% Change in LC |
Nine Months Ended September 30, |
% Change in LC |
|||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| Real Estate Services ("RES") |
|||||||||
| Leasing |
$ 333.2 |
$ 309.5 |
8% |
$ 860.9 |
$ 838.7 |
3% |
|||
| Capital Markets & Hotels |
163.5 |
114.1 |
46% |
441.6 |
318.6 |
40% |
|||
| Property & Facility Management |
304.3 |
249.9 |
26% |
813.1 |
728.4 |
14% |
|||
| Property & Facility Management Fee Revenue1 |
233.7 |
207.9 |
17% |
656.8 |
607.7 |
11% |
|||
| Project & Development Services |
142.8 |
118.8 |
21% |
376.8 |
343.1 |
10% |
|||
| Project & Development Services Fee Revenue1 |
95.1 |
89.2 |
8% |
258.2 |
254.5 |
3% |
|||
| Advisory, Consulting and Other |
95.7 |
85.6 |
13% |
271.4 |
257.0 |
6% |
|||
| Total RES Revenue |
$ 1,039.5 |
$ 877.9 |
20% |
$ 2,763.8 |
$ 2,485.8 |
12% |
|||
| Total RES Fee Revenue1 |
$ 921.2 |
$ 806.3 |
14% |
$ 2,488.9 |
$ 2,276.5 |
10% |
|||
| LaSalle Investment Management |
|||||||||
| Advisory Fees |
$ 55.4 |
$ 57.4 |
(2%) |
$ 167.0 |
$ 172.0 |
(1%) |
|||
| Transaction Fees & Other |
2.6 |
2.5 |
12% |
10.9 |
5.9 |
88% |
|||
| Incentive Fees |
9.3 |
11.7 |
(20%) |
10.5 |
20.4 |
(48%) |
|||
| Total LaSalle Investment Management Revenue |
$ 67.3 |
$ 71.6 |
(4%) |
$ 188.4 |
$ 198.3 |
(4%) |
|||
| Total Firm Revenue |
$ 1,106.8 |
$ 949.5 |
19% |
$ 2,952.2 |
$ 2,684.1 |
11% |
|||
| Total Firm Fee Revenue1 |
$ 988.5 |
$ 877.9 |
15% |
$ 2,677.3 |
$ 2,474.8 |
9% |
|||
Consolidated Performance Highlights:
- Consolidated fee revenue growth of 15 percent for the third quarter and 9 percent year to date was driven by a 46 percent increase in Capital Markets & Hotels and a 17 percent fee revenue increase in Property & Facility Management.
- In BRIC countries, China, India and Russia operations are stabilizing or improving while Brazil continues to be challenging.
- Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $897 million in the third quarter, up 13 percent, and $2.5 billion year to date, up 9 percent.
- Adjusted operating income margin calculated on a fee revenue basis was 9.4 percent for the quarter compared with 8.3 percent last year.
Balance Sheet, Net Interest Expense and Dividend:
- The firm reduced total net debt by $68 million during the quarter to $765 million, consistent with historical seasonal borrowing and repayment patterns.
- Net interest expense for the third quarter was $9.6 million compared with $10.0 million a year ago.
- In October, the firm announced that it renewed its long-term credit facility, increasing capacity to $1.2 billion from $1.1 billion. The outstanding balance on the credit facility at September 30, 2013, was $445 million. Among other items, the renewed agreement reset pricing with initial pricing of LIBOR + 1.25 percent, down from LIBOR + 1.625 percent, extended the maturity to October 2018 and provided for increased add-backs to EBITDA for restructuring and acquisition-related expenses.
- The firm's Board of Directors declared a semi-annual dividend of $0.22 per share. The dividend payment will be made on December 13, 2013, to investors of record at the close of business on November 15, 2013.
Business Segment Performance Highlights
Americas Real Estate Services
| Americas Revenue ($ in millions, "LC" = local currency) |
Three Months Ended September 30, |
% Change in LC |
Nine Months Ended September 30, |
% Change in LC |
|||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| Leasing |
$ 232.6 |
$ 214.1 |
9% |
$ 582.6 |
$ 550.8 |
6% |
|||
| Capital Markets & Hotels |
46.7 |
39.1 |
19% |
138.7 |
109.1 |
27% |
|||
| Property & Facility Management |
129.8 |
104.1 |
26% |
348.5 |
307.4 |
14% |
|||
| Property & Facility Management Fee Revenue1 |
98.0 |
83.7 |
18% |
273.9 |
251.4 |
10% |
|||
| Project & Development Services |
48.6 |
46.3 |
6% |
129.3 |
131.1 |
(1%) |
|||
| Project & Development Services Fee Revenue1 |
48.4 |
46.1 |
6% |
128.4 |
130.5 |
(1%) |
|||
| Advisory, Consulting and Other |
26.4 |
25.6 |
2% |
77.9 |
75.4 |
3% |
|||
| Operating Revenue |
$ 484.1 |
$ 429.2 |
13% |
$ 1,277.0 |
$ 1,173.8 |
9% |
|||
| Equity Earnings |
0.0 |
0.1 |
n/m |
0.2 |
(0.1) |
n/m |
|||
| Total Segment Revenue |
$ 484.1 |
$ 429.3 |
13% |
$ 1,277.2 |
$ 1,173.7 |
9% |
|||
| Total Segment Fee Revenue1 |
$ 452.1 |
$ 408.7 |
11% |
$ 1,201.7 |
$ 1,117.1 |
8% |
|||
| n/m – not meaningful |
|||||||||
Americas Performance Highlights:
- Robust revenue growth was driven by higher Capital Markets & Hotels revenue, up 19 percent, and Property & Facility Management fee revenue growth of 18 percent, despite a continued slowdown in Brazil.
- Fee-based operating expenses, excluding restructuring and acquisition charges, were $407 million for the quarter, up 12 percent, reflecting continued strategic investments to grow market share.
- Operating income was $45 million for the quarter, compared with $42 million in 2012. Operating income margin calculated on a fee revenue basis was 9.9 percent, compared with 10.4 percent last year. Excluding the impact of Latin America, primarily driven by Brazil, operating income increased 0.2 percent compared with last year.
EMEA Real Estate Services
| EMEA Revenue ($ in millions, "LC" = local currency) |
Three Months Ended September 30, |
% Change in LC |
Nine Months Ended September 30, |
% Change in LC |
|||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| Leasing |
$ 58.8 |
$ 52.7 |
10% |
$ 167.9 |
$ 166.3 |
0% |
|||
| Capital Markets & Hotels |
82.8 |
51.1 |
61% |
204.2 |
140.2 |
46% |
|||
| Property & Facility Management |
62.8 |
45.1 |
39% |
152.4 |
130.9 |
17% |
|||
| Property & Facility Management Fee Revenue1 |
48.9 |
42.3 |
15% |
131.4 |
125.3 |
5% |
|||
| Project & Development Services |
68.4 |
52.4 |
26% |
180.5 |
155.3 |
14% |
|||
| Project & Development Services Fee Revenue1 |
29.6 |
26.1 |
11% |
81.1 |
76.0 |
6% |
|||
| Advisory, Consulting and Other |
45.6 |
41.1 |
11% |
126.4 |
122.2 |
4% |
|||
| Operating Revenue |
$ 318.4 |
$ 242.4 |
30% |
$ 831.4 |
$ 714.9 |
16% |
|||
| Equity Earnings |
0.0 |
(0.1) |
n/m |
(0.5) |
(0.2) |
n/m |
|||
| Total Segment Revenue |
$ 318.4 |
$ 242.3 |
30% |
$ 830.9 |
$ 714.7 |
16% |
|||
| Total Segment Fee Revenue1 |
$ 265.7 |
$ 213.2 |
24% |
$ 710.5 |
$ 629.8 |
13% |
|||
| n/m – not meaningful |
|||||||||
EMEA Performance Highlights:
- Strong revenue growth was broad-based, with double-digit increases in each service line, and particularly strong in Capital Markets & Hotels, which grew 61 percent. Leasing also gained share against declining market absorption. Strong performance in the UK, France, the Netherlands and Southern Europe all contributed to growth.
- Fee-based operating expenses, excluding restructuring and acquisition charges, were $248 million for the quarter, up 18 percent, driven by higher compensation costs as a result of increased revenue.
- Adjusted operating income, which excludes King Sturge amortization, was $18 million for the quarter, compared with $5 million in 2012. Adjusted operating income margin calculated on a fee revenue basis was 7.0 percent compared with 2.4 percent last year, representing positive operating leverage from EMEA's substantial revenue increase.
Asia Pacific Real Estate Services
| Asia Pacific Revenue ($ in millions, "LC" = local currency) |
Three Months Ended September 30, |
% Change in LC |
Nine Months Ended September 30, |
% Change in LC |
||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||
| Leasing |
$ 41.8 |
$ 42.7 |
4% |
$ 110.4 |
$ 121.6 |
(7%) |
||||
| Capital Markets & Hotels |
34.0 |
23.9 |
56% |
98.7 |
69.3 |
48% |
||||
| Property & Facility Management |
111.7 |
100.7 |
21% |
312.2 |
290.1 |
14% |
||||
| Property & Facility Management Fee Revenue1 |
86.8 |
81.9 |
16% |
251.5 |
231.0 |
15% |
||||
| Project & Development Services |
25.8 |
20.1 |
43% |
67.0 |
56.7 |
26% |
||||
| Project & Development Services Fee Revenue1 |
17.1 |
17.0 |
10% |
48.7 |
48.0 |
7% |
||||
| Advisory, Consulting and Other |
23.7 |
18.9 |
30% |
67.1 |
59.4 |
15% |
||||
| Operating Revenue |
$ 237.0 |
$ 206.3 |
24% |
$ 655.4 |
$ 597.1 |
15% |
||||
| Equity Earnings |
0.0 |
0.0 |
n/m |
0.0 |
0.2 |
n/m |
||||
| Total Segment Revenue |
$ 237.0 |
$ 206.3 |
24% |
$ 655.4 |
$ 597.3 |
15% |
||||
| Total Segment Fee Revenue1 |
$ 203.4 |
$ 184.4 |
19% |
$ 576.4 |
$ 529.5 |
14% |
||||
| n/m – not meaningful |
||||||||||
Asia Pacific Performance Highlights:
- Healthy growth across all business lines, most notably a 56 percent increase in Capital Markets & Hotels driven by Australia, Japan and Hong Kong, as well as a 16 percent fee revenue increase in Property & Facility Management.
- Fee-based operating expenses were $184 million for the quarter, up 15 percent, partially due to commissions earned on Capital Markets revenue.
- Operating income was $19 million for the quarter, compared with $12 million in 2012. Operating income margin calculated on a fee revenue basis was 9.3 percent, compared with 6.6 percent last year. The increase was driven by substantial revenue growth and overall cost discipline while the firm continued to invest strategically for profitable growth.
LaSalle Investment Management
| LaSalle Investment Management Revenue ($ in millions, "LC" = local currency) |
Three Months Ended September 30, |
% Change |
Nine Months Ended September 30, |
% Change in LC |
||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||
| Advisory Fees |
$ 55.4 |
$ 57.4 |
(2%) |
$ 167.0 |
$ 172.0 |
(1%) |
||||
| Transaction Fees & Other |
2.6 |
2.5 |
12% |
10.9 |
5.9 |
88% |
||||
| Incentive Fees |
9.3 |
11.7 |
(20%) |
10.5 |
20.4 |
(48%) |
||||
| Operating Revenue |
$ 67.3 |
$ 71.6 |
(4%) |
$ 188.4 |
$ 198.3 |
(4%) |
||||
| Equity Earnings |
6.6 |
10.7 |
(38%) |
21.4 |
22.6 |
(5%) |
||||
| Total Segment Revenue |
$ 73.9 |
$ 82.3 |
(9%) |
$ 209.8 |
$ 220.9 |
(4%) |
||||
LaSalle Investment Management Performance Highlights:
- Capital raise momentum continued with nearly $1 billion of capital raised during the quarter, $3.3 billion year to date.
- Advisory fees were $55 million for the quarter, consistent with the second quarter of 2013 and a 2 percent decrease from last year as new fund initiatives continued with capital accumulation and initial investments, and legacy funds continued with liquidations.
- Operating expenses were $57 million for the quarter, compared with $58 million last year. Compensation and benefits costs decreased in line with the decrease in advisory fees.
- Operating income was $17 million for the quarter, a margin of 22.7 percent, compared with $24 million in 2012, a margin of 29.4 percent. Margin was impacted by incentive fees and equity earnings, both of which were healthy in the current quarter but lower than the robust amounts last year.
- Assets under management were $46.7 billion as of September 30, 2013, compared with $46.3 billion at June 30, 2013, with $2.1 billion of acquisitions and valuation increases partially offset by $1.7 billion of dispositions and foreign currency movements.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.
200 East Randolph Drive Chicago Illinois 60601 │ 22 Hanover Square London W1A 2BN │ 9 Raffles Place #39-00 Republic Plaza Singapore 048619
Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives and dividend payments may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements, plans and objectives and dividend payments of Jones Lang LaSalle to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's Annual Report on Form 10-K for the year ended December 31, 2012, and in the Quarterly Report on Form 10-Q for the quarters ended March 31, 2013, and June 30, 2013, and in other reports filed with the Securities and Exchange Commission. There can be no assurance that future dividends will be declared since the actual declaration of future dividends, and the establishment of record and payment dates, remains subject to final determination by the Company's Board of Directors. Statements speak only as of the date of this release. Jones Lang LaSalle expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in Jones Lang LaSalle's expectations or results, or any change in events.
Conference Call
The firm will conduct a conference call for shareholders, analysts and investment professionals on Monday, October 28 at 6:00 p.m. EDT.
To participate in the conference call, please dial into one of the following phone numbers five to ten minutes before the start time:
- U.S. callers: +1 877 800 0896
- International callers: +1 706 679 7364
- Pass code: 80557958
Webcast
Follow these steps to listen to the webcast:
- You must have a minimum 14.4 Kbps Internet connection
- Log on to http://www.videonewswire.com/event.asp?id=96428 and follow instructions
- Download free Windows Media Player software: (link located under registration form)
- If you experience problems listening, send an email to [email protected]
Supplemental Information
Supplemental information regarding the third-quarter 2013 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.
Conference Call Replay
Available: 11:00 p.m. EDT Monday, October 28 through 11:59 p.m. EST Wednesday, November 6 at the following numbers:
- U.S. callers: + 1 855 859 2056
- International callers: + 1 404 537 3406
- Pass code: 80557958
Web Audio Replay
Audio replay will be available for download or stream. This information and link is also available on the company's website: www.jll.com.
If you have any questions, email Jones Lang LaSalle's Investor Relations department at [email protected].
| JONES LANG LASALLE INCORPORATED |
|||||||||
| Consolidated Statements of Operations |
|||||||||
| For the Three and Nine Months Ended September 30, 2013 and 2012 |
|||||||||
| (in thousands, except share data) |
|||||||||
| (Unaudited) |
|||||||||
| Three Months Ended |
Nine Months Ended |
||||||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| Revenue |
$ 1,106,802 |
$ 949,491 |
$ 2,952,173 |
$ 2,684,126 |
|||||
| Operating expenses: |
|||||||||
| Compensation and benefits |
699,031 |
622,360 |
1,897,351 |
1,752,804 |
|||||
| Operating, administrative and other |
296,012 |
235,370 |
808,118 |
701,731 |
|||||
| Depreciation and amortization |
19,742 |
19,089 |
58,996 |
58,710 |
|||||
| Restructuring and acquisition charges |
4,919 |
6,820 |
14,689 |
32,376 |
|||||
| Total operating expenses |
1,019,704 |
883,639 |
2,779,154 |
2,545,621 |
|||||
| Operating income |
87,098 |
65,852 |
173,019 |
138,505 |
|||||
| Interest expense, net of interest income |
(9,631) |
(9,952) |
(26,603) |
(24,837) |
|||||
| Equity earnings from real estate ventures |
6,574 |
10,698 |
21,132 |
22,500 |
|||||
| Income before income taxes and noncontrolling interest |
84,041 |
66,598 |
167,548 |
136,168 |
|||||
| Provision for income taxes |
20,925 |
16,916 |
41,719 |
34,587 |
|||||
| Net income |
63,116 |
49,682 |
125,829 |
101,581 |
|||||
| Net income attributable to noncontrolling interest |
259 |
169 |
3,286 |
603 |
|||||
| Net income attributable to the Company |
$ 62,857 |
$ 49,513 |
$ 122,543 |
$ 100,978 |
|||||
| Dividends on unvested common stock, net of tax benefit |
- |
- |
241 |
253 |
|||||
| Net income attributable to common shareholders |
$ 62,857 |
$ 49,513 |
$ 122,302 |
$ 100,725 |
|||||
| Basic earnings per common share |
$ 1.42 |
$ 1.12 |
$ 2.77 |
$ 2.30 |
|||||
| Basic weighted average shares outstanding |
44,407,468 |
44,015,922 |
44,197,610 |
43,780,819 |
|||||
| Diluted earnings per common share |
$ 1.39 |
$ 1.10 |
$ 2.71 |
$ 2.25 |
|||||
| Diluted weighted average shares outstanding |
45,063,360 |
44,826,502 |
45,070,603 |
44,755,817 |
|||||
| EBITDA |
$ 113,414 |
$ 95,639 |
$ 253,147 |
$ 219,715 |
|||||
| Please reference attached financial statement notes. |
|||||||||
| JONES LANG LASALLE INCORPORATED |
||||||||||
| Segment Operating Results |
||||||||||
| For the Three and Nine Months Ended September 30, 2013 and 2012 |
||||||||||
| (in thousands) |
||||||||||
| (Unaudited) |
||||||||||
| Three Months Ended |
Nine Months Ended |
|||||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||
| REAL ESTATE SERVICES |
||||||||||
| AMERICAS |
||||||||||
| Revenue: |
||||||||||
| Operating revenue |
$ 484,054 |
$429,139 |
$1,277,014 |
$1,173,738 |
||||||
| Equity earnings (losses) |
(17) |
131 |
274 |
(77) |
||||||
| Total segment revenue |
484,037 |
429,270 |
1,277,288 |
1,173,661 |
||||||
| Gross contract costs1 |
(31,957) |
(20,594) |
(75,425) |
(56,615) |
||||||
| Total segment fee revenue |
452,080 |
408,676 |
1,201,863 |
1,117,046 |
||||||
| Operating expenses: |
||||||||||
| Compensation, operating and administrative expenses |
427,817 |
376,111 |
1,149,036 |
1,050,141 |
||||||
| Depreciation and amortization |
11,279 |
10,748 |
33,279 |
31,129 |
||||||
| Total segment operating expenses |
439,096 |
386,859 |
1,182,315 |
1,081,270 |
||||||
| Gross contract costs1 |
(31,957) |
(20,594) |
(75,425) |
(56,615) |
||||||
| Total fee-based segment operating expenses |
407,139 |
366,265 |
1,106,890 |
1,024,655 |
||||||
| Operating income |
$ 44,941 |
$ 42,411 |
$ 94,973 |
$ 92,391 |
||||||
| Adjusted EBITDA |
$ 56,220 |
$ 53,159 |
$ 128,252 |
$ 123,520 |
||||||
| EMEA |
||||||||||
| Revenue: |
||||||||||
| Operating revenue |
$ 318,372 |
$242,492 |
$ 831,422 |
$ 715,009 |
||||||
| Equity losses |
- |
(158) |
(536) |
(228) |
||||||
| Total segment revenue |
318,372 |
242,334 |
830,886 |
714,781 |
||||||
| Gross contract costs1 |
(52,659) |
(29,200) |
(120,385) |
(84,859) |
||||||
| Total segment fee revenue |
265,713 |
213,134 |
710,501 |
629,922 |
||||||
| Operating expenses: |
||||||||||
| Compensation, operating and administrative expenses |
295,350 |
232,977 |
786,372 |
690,844 |
||||||
| Depreciation and amortization |
5,101 |
4,759 |
15,111 |
16,643 |
||||||
| Total segment operating expenses |
300,451 |
237,736 |
801,483 |
707,487 |
||||||
| Gross contract costs1 |
(52,659) |
(29,200) |
(120,385) |
(84,859) |
||||||
| Total fee-based segment operating expenses |
247,792 |
208,536 |
681,098 |
622,628 |
||||||
| Operating income |
$ 17,921 |
$ 4,598 |
$ 29,403 |
$ 7,294 |
||||||
| Adjusted EBITDA |
$ 23,022 |
$ 9,357 |
$ 44,514 |
$ 23,937 |
||||||
| Three Months Ended |
Nine Months Ended |
|||||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||
| ASIA PACIFIC |
||||||||||
| Revenue: |
||||||||||
| Operating revenue |
$ 237,027 |
$206,272 |
$ 655,370 |
$ 597,147 |
||||||
| Equity earnings |
11 |
47 |
2 |
161 |
||||||
| Total segment revenue |
237,038 |
206,319 |
655,372 |
597,308 |
||||||
| Gross contract costs1 |
(33,663) |
(21,893) |
(79,039) |
(67,772) |
||||||
| Total segment fee revenue |
203,375 |
184,426 |
576,333 |
529,536 |
||||||
| Operating expenses: |
||||||||||
| Compensation, operating and administrative expenses |
215,138 |
191,026 |
611,435 |
555,446 |
||||||
| Depreciation and amortization |
2,968 |
3,143 |
9,220 |
9,556 |
||||||
| Total segment operating expenses |
218,106 |
194,169 |
620,655 |
565,002 |
||||||
| Gross contract costs1 |
(33,663) |
(21,893) |
(79,039) |
(67,772) |
||||||
| Total fee-based segment operating expenses |
184,443 |
172,276 |
541,616 |
497,230 |
||||||
| Operating income |
$ 18,932 |
$ 12,150 |
$ 34,717 |
$ 32,306 |
||||||
| Adjusted EBITDA |
$ 21,900 |
$ 15,293 |
$ 43,937 |
$ 41,862 |
||||||
| LASALLE INVESTMENT MANAGEMENT |
||||||||||
| Revenue: |
||||||||||
| Operating revenue |
$ 67,349 |
$ 71,588 |
$ 188,367 |
$ 198,232 |
||||||
| Equity earnings |
6,580 |
10,678 |
21,392 |
22,644 |
||||||
| Total segment revenue |
73,929 |
82,266 |
209,759 |
220,876 |
||||||
| Operating expenses: |
||||||||||
| Compensation, operating and administrative expenses |
56,738 |
57,616 |
158,626 |
158,104 |
||||||
| Depreciation and amortization |
394 |
439 |
1,386 |
1,382 |
||||||
| Total segment operating expenses |
57,132 |
58,055 |
160,012 |
159,486 |
||||||
| Operating income |
$ 16,797 |
$ 24,211 |
$ 49,747 |
$ 61,390 |
||||||
| Adjusted EBITDA |
$ 17,191 |
$ 24,650 |
$ 51,133 |
$ 62,772 |
||||||
| SEGMENT RECONCILING ITEMS: |
||||||||||
| Total segment revenue |
$1,113,376 |
$960,189 |
$2,973,305 |
$2,706,626 |
||||||
| Reclassification of equity earnings |
6,574 |
10,698 |
21,132 |
22,500 |
||||||
| Total revenue |
$1,106,802 |
$949,491 |
$2,952,173 |
$2,684,126 |
||||||
| Total operating expenses before restructuring and acquisition charges |
1,014,785 |
876,819 |
2,764,465 |
2,513,245 |
||||||
| Operating income before restructuring and acquisition charges |
$ 92,017 |
$ 72,672 |
$ 187,708 |
$ 170,881 |
||||||
| Restructuring and acquisition charges |
4,919 |
6,820 |
14,689 |
32,376 |
||||||
| Operating income after restructuring and acquisition charges |
$ 87,098 |
$ 65,852 |
$ 173,019 |
$ 138,505 |
||||||
| Please reference attached financial statement notes. |
||||||||||
| JONES LANG LASALLE INCORPORATED |
|||||||
| Consolidated Balance Sheets |
|||||||
| September 30, 2013, December 31, 2012 and September 30, 2012 |
|||||||
| (in thousands) |
|||||||
| (Unaudited) |
(Unaudited) |
||||||
| September 30, |
December 31, |
September 30, |
|||||
| 2013 |
2012 |
2012 |
|||||
| ASSETS |
|||||||
| Current assets: |
|||||||
| Cash and cash equivalents |
$ 119,704 |
$ 152,159 |
$ 125,730 |
||||
| Trade receivables, net of allowances |
980,955 |
996,681 |
858,594 |
||||
| Notes and other receivables |
117,901 |
101,952 |
99,074 |
||||
| Warehouse receivables |
60,099 |
144,257 |
54,140 |
||||
| Prepaid expenses |
70,448 |
53,165 |
62,513 |
||||
| Deferred tax assets, net |
51,241 |
50,831 |
50,269 |
||||
| Other |
20,626 |
16,484 |
18,770 |
||||
| Total current assets |
1,420,974 |
1,515,529 |
1,269,090 |
||||
| Property and equipment, net of accumulated depreciation |
259,184 |
269,338 |
248,036 |
||||
| Goodwill, with indefinite useful lives |
1,889,848 |
1,853,761 |
1,816,944 |
||||
| Identified intangibles, net of accumulated amortization |
40,649 |
45,932 |
47,745 |
||||
| Investments in real estate ventures |
287,747 |
268,107 |
295,525 |
||||
| Long-term receivables |
85,745 |
58,881 |
56,881 |
||||
| Deferred tax assets, net |
171,713 |
197,892 |
183,809 |
||||
| Other |
170,085 |
142,059 |
135,980 |
||||
| Total assets |
$ 4,325,945 |
$ 4,351,499 |
$ 4,054,010 |
||||
| LIABILITIES AND EQUITY |
|||||||
| Current liabilities: |
|||||||
| Accounts payable and accrued liabilities |
$ 424,282 |
$ 497,817 |
$ 373,811 |
||||
| Accrued compensation |
508,952 |
685,718 |
480,956 |
||||
| Short-term borrowings |
35,478 |
32,233 |
30,775 |
||||
| Deferred tax liabilities, net |
10,113 |
10,113 |
6,095 |
||||
| Deferred income |
108,817 |
76,152 |
86,296 |
||||
| Deferred business acquisition obligations |
34,275 |
105,772 |
184,006 |
||||
| Warehouse facility |
60,099 |
144,257 |
54,140 |
||||
| Other |
105,309 |
109,909 |
97,301 |
||||
| Total current liabilities |
1,287,325 |
1,661,971 |
1,313,380 |
||||
| Noncurrent liabilities: |
|||||||
| Credit facility |
445,000 |
169,000 |
572,000 |
||||
| Long-term senior notes |
275,000 |
275,000 |
- |
||||
| Deferred tax liabilities, net |
3,106 |
3,106 |
7,646 |
||||
| Deferred compensation |
93,540 |
75,320 |
73,914 |
||||
| Deferred business acquisition obligations |
96,023 |
107,661 |
106,185 |
||||
| Minority shareholder redemption liability |
19,733 |
19,489 |
18,585 |
||||
| Other |
72,788 |
80,696 |
103,449 |
||||
| Total liabilities |
2,292,515 |
2,392,243 |
2,195,159 |
||||
| (Unaudited) |
(Unaudited) |
||||||
| September 30, |
December 31, |
September 30, |
|||||
| 2013 |
2012 |
2012 |
|||||
| Company shareholders' equity: |
|||||||
| Common stock, $.01 par value per share, 100,000,000 shares |
|||||||
| authorized; 44,434,717, 44,054,042 and 44,043,059 shares issued |
|||||||
| and outstanding as of September 30, 2013, December 31, 2012 |
|||||||
| and September 30, 2012, respectively |
444 |
441 |
440 |
||||
| Additional paid-in capital |
940,803 |
932,255 |
926,114 |
||||
| Retained earnings |
1,129,648 |
1,017,128 |
919,184 |
||||
| Shares held in trust |
(8,052) |
(7,587) |
(7,599) |
||||
| Accumulated other comprehensive (loss) income |
(36,411) |
8,946 |
14,834 |
||||
| Total Company shareholders' equity |
2,026,432 |
1,951,183 |
1,852,973 |
||||
| Noncontrolling interest |
6,998 |
8,073 |
5,878 |
||||
| Total equity |
2,033,430 |
1,959,256 |
1,858,851 |
||||
| Total liabilities and equity |
$ 4,325,945 |
$ 4,351,499 |
$ 4,054,010 |
||||
| Please reference attached financial statement notes. |
|||||||
| JONES LANG LASALLE INCORPORATED Summarized Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2013 and 2012 (in thousands) (Unaudited) |
|||
| Nine Months Ended September 30, |
|||
| 2013 |
2012 |
||
| Cash (used in) provided by operating activities |
$ (99,873) |
$ 34,288 |
|
| Cash used in investing activities |
(112,159) |
(135,557) |
|
| Cash provided by financing activities |
179,577 |
42,545 |
|
| Net decrease in cash and cash equivalents |
$ (32,455) |
(58,724) |
|
| Cash and cash equivalents, beginning of period |
152,159 |
184,454 |
|
| Cash and cash equivalents, end of period |
$ 119,704 |
$ 125,730 |
|
| Please reference attached financial statement notes. |
|||
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
1. Consistent with U.S. GAAP ("GAAP"), gross contract vendor and subcontractor costs ("gross contract costs") which are managed on certain client assignments in the Property & Facility Management and Project & Development Services business lines are presented on a gross basis in both revenue and operating expenses. Gross contract costs are excluded from revenue and operating expenses in determining "fee revenue" and "fee-based operating expenses", respectively. Excluding these costs from revenue and operating expenses more accurately reflects how the firm manages its expense base and its operating margins. Adjusted operating income excludes the impact of restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition. "Adjusted operating income margin" is calculated by dividing adjusted operating income by fee revenue. Below are reconciliations of revenue and operating expenses to fee revenue and fee-based operating expenses, as well as adjusted operating income margin calculations, for the three and nine months ended September 30, 2013, and 2012.
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, |
September 30, |
|||||||
| ($ in millions) |
2013 |
2012 |
2013 |
2012 |
||||
| Revenue |
$ 1,106.8 |
$ 949.5 |
$ 2,952.2 |
$ 2,684.1 |
||||
| Gross contract costs |
(118.3) |
(71.6) |
(274.9) |
(209.3) |
||||
| Fee revenue |
$ 988.5 |
$ 877.9 |
$ 2,677.3 |
$ 2,474.8 |
||||
| Operating expenses |
$ 1,019.7 |
$ 883.6 |
$ 2,779.2 |
$ 2,545.6 |
||||
| Gross contract costs |
(118.3) |
(71.6) |
(274.9) |
(209.3) |
||||
| Fee-based operating expenses |
$ 901.4 |
$ 812.0 |
$ 2,504.3 |
$ 2,336.3 |
||||
| Operating income |
$ 87.1 |
$ 65.9 |
$ 173.0 |
$ 138.5 |
||||
| Add: |
||||||||
| Restructuring and acquisition charges |
4.9 |
6.8 |
14.7 |
32.4 |
||||
| King Sturge intangible amortization |
0.6 |
0.6 |
1.7 |
4.3 |
||||
| Adjusted operating income |
$ 92.6 |
$ 73.3 |
$ 189.4 |
$ 175.2 |
||||
| Adjusted operating income margin |
9.4% |
8.3% |
7.1% |
7.1% |
||||
2. Charges excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and nine months ended September 30, 2013, and 2012, are (a) restructuring and acquisition charges and (b) intangible amortization related to the 2011 King Sturge acquisition. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share ("EPS") for each net income total:
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, |
September 30, |
|||||||
| ($ in millions, except per share data) |
2013 |
2012 |
2013 |
2012 |
||||
| GAAP net income attributable to common shareholders |
$ 62.9 |
$ 49.5 |
$ 122.3 |
$ 100.7 |
||||
| Shares (in 000s) |
45,063 |
44,827 |
45,071 |
44,756 |
||||
| GAAP diluted earnings per share |
$ 1.39 |
$ 1.10 |
$ 2.71 |
$ 2.25 |
||||
| GAAP net income attributable to common shareholders |
$ 62.9 |
$ 49.5 |
$ 122.3 |
$ 100.7 |
||||
| Restructuring and acquisition charges, net |
3.6 |
5.1 |
11.0 |
24.2 |
||||
| King Sturge intangible amortization, net |
0.5 |
0.4 |
1.3 |
3.2 |
||||
| Adjusted net income |
$ 67.0 |
$ 55.0 |
$ 134.6 |
$ 128.1 |
||||
| Shares (in 000s) |
45,063 |
44,827 |
45,071 |
44,756 |
||||
| Adjusted diluted earnings per share |
$ 1.49 |
$ 1.23 |
$ 2.99 |
$ 2.86 |
||||
3. Adjusted EBITDA represents earnings before interest expense net of interest income, income taxes, depreciation and amortization, adjusted for restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are non-GAAP financial measures, they are used extensively by management and are useful to investors and lenders as metrics for evaluating operating performance and liquidity. EBITDA is used in the calculations of certain covenants related to the firm's revolving credit facility. However, adjusted EBITDA and EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not calculated under GAAP, the firm's adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies.
Below is a reconciliation of net income to EBITDA and adjusted EBITDA:
| Three Months Ended |
Nine Months Ended |
||||||
| September 30, |
September 30, |
||||||
| ($ in millions) |
2013 |
2012 |
2013 |
2012 |
|||
| GAAP net income |
$ 63.1 |
$ 49.7 |
$ 125.8 |
$ 101.6 |
|||
| Add: |
|||||||
| Interest expense, net of interest income |
9.6 |
10.0 |
26.6 |
24.8 |
|||
| Provision for income taxes |
20.9 |
16.9 |
41.7 |
34.6 |
|||
| Depreciation and amortization |
19.8 |
19.0 |
59.0 |
58.7 |
|||
| EBITDA |
$ 113.4 |
$ 95.6 |
$ 253.1 |
$ 219.7 |
|||
| Add: |
|||||||
| Restructuring and acquisition charges |
4.9 |
6.8 |
14.7 |
32.4 |
|||
| Adjusted EBITDA |
$ 118.3 |
$ 102.4 |
$ 267.8 |
$ 252.1 |
|||
4. Restructuring and acquisition charges are excluded from segment operating results, although they are included for consolidated reporting. For purposes of segment operating results, the allocation of restructuring charges to the segments has been determined not to be meaningful to investors, so the performance of segment results has been evaluated without allocation of these charges.
5. Intangible amortization from the second-quarter 2011 King Sturge acquisition is included in depreciation and amortization in the firm's consolidated results, as well as in EMEA's segment results, but has been excluded from adjusted operating income and adjusted net income.
6. Each geographic region offers the firm's full range of Real Estate Services businesses consisting primarily of tenant representation and agency leasing; capital markets; property management and facilities management; project and development services; and advisory, consulting and valuations services. The Investment Management segment provides investment management services to institutional investors and high-net-worth individuals.
7. The consolidated statements of cash flows are presented in summarized form. For complete consolidated statements of cash flows, please refer to the firm's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, to be filed with the Securities and Exchange Commission shortly.
8. EMEA refers to Europe, Middle East and Africa. MENA refers to Middle East and North Africa. Greater China includes China, Hong Kong, Macau and Taiwan. Southeast Asia refers to Singapore, Indonesia, Philippines, Thailand and Vietnam. The BRIC countries include Brazil, Russia, India and China.
9. Certain prior year amounts have been reclassified to conform to the current presentation.
SOURCE Jones Lang LaSalle Incorporated
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