Jones Lang LaSalle Reports Second Quarter 2013 Revenue Increase to $989 Million

Fee revenue of $908 million, up 7 percent from the second quarter of 2012

News provided by

Jones Lang LaSalle Incorporated

Jul 30, 2013, 04:15 ET

CHICAGO, July 30, 2013 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share ("EPS") of $1.15 for the second quarter of 2013, up from $1.13 in the prior year.  Second-quarter revenue of $989 million was up 8 percent.  Fee revenue was $908 million, an increase of 7 percent.

  • Continued solid fee revenue growth with 7 percent increase for the quarter and year to date
  • Strong capital raise by LaSalle Investment Management; $1.8 billion committed in the quarter
  • Capital Markets & Hotels outperformed markets in all regions
  • Leasing growth in the Americas driven by further market share gains
  • Revenue performance in BRIC countries impacted by strong comparable quarter in 2012
  • Healthy corporate outsourcing pipeline; transitioning new clients from previous wins



Summary Financial Results

   ($ in millions, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,


2013

2012

2013

2012







Revenue

$    989

$    921

$  1,845

$  1,735

Fee Revenue1

$    908

$    852

$  1,689

$  1,597

Adjusted Net Income2

$      52

$      51

$       68

$       73

U.S. GAAP Net Income

$      46

$      37

$       59

$       51

Adjusted Earnings per Share2

$   1.15

$   1.13

$    1.50

$    1.63

Earnings per Share

$   1.03

$   0.83

$    1.32

$    1.14

Adjusted EBITDA3

$    102

$      95

$     150

$     150

     Adjusted EBITDA, Real Estate Services

$      82

$      84

$     116

$     112

     Adjusted EBITDA, LaSalle Investment Management

$      20

$      11

$       34

$       38

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

"We are pleased with our revenue growth and particularly with the performance of our Capital Markets & Hotels business globally," said Colin Dyer, President and Chief Executive Officer of Jones Lang LaSalle. "Leasing results outpaced the overall market despite hesitant corporate occupiers and reduced activity in the BRIC countries. We are moving with confidence into the seasonally strong second half of the year," Dyer continued. 








Consolidated Revenue

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

Three Months Ended June 30,

%

Change

in LC

Six Months Ended June 30,

%

Change

in LC

2013

2012

2013

2012










Real Estate Services ("RES")








Leasing

$   298.6

$ 299.0

0%

$    527.8

$   529.2

0%

Capital Markets & Hotels

157.6

115.7

37%

278.3

204.5

37%

Property & Facility Management

257.5

238.4

10%

508.8

478.6

8%

Property & Facility Management Fee

Revenue1

210.6

199.0

8%

422.9

399.9

7%

Project & Development Services

120.3

116.7

3%

234.0

224.3

5%

Project & Development Services Fee

Revenue1

86.1

87.0

0%

163.3

165.4

0%

Advisory, Consulting and Other

94.1

92.4

2%

175.5

171.4

3%

     Total RES Revenue

$   928.1

$ 862.2

8%

$  1,724.4

$ 1,608.0

8%

Total RES Fee Revenue1

$   847.0

$   793.1

7%

$  1,567.8

$   1,470.4

7%










LaSalle Investment Management








Advisory Fees

$      55.1

$    57.2

(2%)

$     111.5

$    114.6

(1%)

Transaction Fees & Other

5.2

1.6

n/m

8.3

3.4

n/m

Incentive Fees

1.0

0.3

n/m

1.2

8.7

(86%)

     Total LaSalle Investment

       Management Revenue

$      61.3

$    59.1

5%

$     121.0

$    126.7

(3%)










Total Firm Revenue

$    989.4

$ 921.3

8%

$  1,845.4

$ 1,734.7

7%

Total Firm Fee Revenue1

$    908.3

$   852.2

7%

$  1,688.8

$   1,597.1

7%










n/m – not meaningful

Consolidated Performance Highlights:

  • Consolidated fee revenue growth of 7 percent, for the second quarter and year to date, was driven by a 37 percent increase in Capital Markets & Hotels, partially offset by revenue decreases in the BRIC countries. 
  • Property & Facility Management fee revenue growth of 8 percent for the quarter, 7 percent year to date, was led by 14 percent increases from Asia Pacific, adding to the firm's annuity revenue base.
  • Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $836 million in the second quarter, up 8 percent, and $1.6 billion year to date, up 7 percent, driven partially by the up-front costs of transitioning significant new corporate outsourcing clients that will begin generating revenue in the second half of 2013, as well as variable compensation from increases in Capital Markets revenue.

Balance Sheet and Net Interest Expense:

  • The firm reduced total net debt by $37 million during the quarter to $833 million consistent with seasonal borrowing and repayment patterns.
  • Net interest expense for the second quarter was $9.0 million compared with $7.5 million a year ago, reflecting the diversification of our low-cost debt to include $275 million of 10-year Senior Notes fixed at 4.4 percent, which were issued in November 2012.
  • During the quarter, the firm made deferred acquisition and earn-out payments of $72 million primarily related to the Staubach and King Sturge acquisitions.
    • The final scheduled payment related to Staubach of $34 million will be made in the third quarter of 2013.

Business Segment Performance Highlights

Americas Real Estate Services










Americas Revenue

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

Three Months Ended June 30,

%

Change

in LC

Six Months Ended June 30,

%

Change

in LC

2013

2012

2013

2012










Leasing

$   197.8

$  187.0

6%

$   350.1

$  336.6

4%

Capital Markets & Hotels

53.4

42.1

27%

92.1

70.0

31%

Property & Facility Management

110.1

102.2

8%

218.6

203.6

8%

Property & Facility Management Fee

Revenue1

86.3

82.2

5%

175.7

167.9

5%

Project & Development Services

42.7

45.1

(5%)

80.7

84.7

(4%)

Project & Development Services Fee

Revenue1

42.3

44.9

(6%)

80.1

84.4

(5%)

Advisory, Consulting and Other

27.5

26.8

3%

51.5

49.7

4%

     Operating Revenue

$   431.5

$  403.2

7%

$   793.0

$  744.6

7%










Equity Earnings

0.1

(0.3)

n/m

0.3

(0.2)

n/m

Total Segment Revenue

$   431.6

$  402.9

7%

$   793.3

$  744.4

7%

     Total Segment Fee Revenue1

$   407.4

$  382.7

7%

$   749.8

$  708.4

6%










n/m – not meaningful

Americas Performance Highlights:

  • Revenue growth was driven by higher transactional revenue, led by Capital Markets & Hotels, up 27 percent for the quarter and 31 percent year to date, partially offset by lower Latin America revenue against the prior year.
  • Fee-based operating expenses were $372 million for the quarter, up 8 percent, driven by up-front transition costs incurred from a number of large new corporate outsourcing clients that will begin generating revenue during the second half of the year, as well as variable compensation from increases in transactional revenue.
  • Operating income was $35 million for the quarter, compared with $38 million in 2012.  Operating income margin calculated on a fee revenue basis was 8.7 percent, compared with 9.9 percent last year. 
  • Adjusted EBITDA was $47 million for the quarter, compared with $49 million in 2012.  EBITDA margin calculated on a fee revenue basis was 11.5 percent in the quarter, compared with 12.7 percent last year.  

EMEA Real Estate Services










EMEA Revenue

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

Three Months Ended June 30,

%

Change

in LC

Six Months Ended June 30,

%

Change

in LC

2013

2012

2013

2012










Leasing

$   60.2

$  66.4

(10%)

$   109.1

$  113.7

(4%)

Capital Markets & Hotels

63.2

49.8

28%

121.5

89.1

37%

Property & Facility Management

46.9

43.1

10%

89.7

85.6

5%

Property & Facility Management Fee Revenue1

42.0

41.8

1%

82.5

82.9

0%

Project & Development Services

56.2

52.4

6%

112.1

103.0

9%

Project & Development Services Fee Revenue1

27.6

25.8

7%

51.6

50.0

3%

Advisory, Consulting and Other

41.6

42.8

(2%)

80.7

81.1

1%

     Operating Revenue

$   268.1

$  254.5

6%

$   513.1

$  472.5

9%










Equity Earnings

(0.5)

(0.1)

n/m

(0.5)

(0.1)

n/m

Total Segment Revenue

$   267.6

$  254.4

5%

$   512.6

$  472.4

9%

     Total Segment Fee Revenue1

$    234.1

$  226.5

4%

$    444.9

$  416.7

7%










n/m – not meaningful

EMEA Performance Highlights:

  • Revenue growth was driven by Capital Markets & Hotels, up 28 percent for the quarter and 37 percent year to date, led by the UK and France.  Revenue growth was partially offset by lower Leasing revenue, particularly in Russia and Germany when compared to 2012 performance that helped drive a 20 percent increase in Leasing revenue for the region in the prior year second quarter.
  • Fee-based operating expenses were $221 million for the quarter, up 4 percent, primarily due to the net increase in transactional revenue activity and increased variable operating costs associated with building pipelines for the second half of the year.
  • Adjusted operating income, which excludes King Sturge amortization, was $14 million for the quarter, compared with $15 million in 2012.  Adjusted operating income margin calculated on a fee revenue basis was 5.8 percent compared with 6.6 percent last year.
  • Adjusted EBITDA was $18 million for the quarter, compared with $19 million in 2012.  EBITDA margin calculated on a fee revenue basis was 7.7 percent compared with 8.4 percent last year.

Asia Pacific Real Estate Services











Asia Pacific Revenue

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

Three Months Ended June 30,

%

Change

in LC

Six Months Ended June 30,

%

Change

in LC

2013

2012

2013

2012










Leasing

$   40.6

$  45.6

(10%)

$   68.6

$  78.9

(12%)

Capital Markets & Hotels

41.0

23.8

74%

64.7

45.4

44%

Property & Facility Management

100.5

93.1

13%

200.5

189.4

10%

Property & Facility Management Fee Revenue1

82.3

75.0

14%

164.7

149.1

14%

Project & Development Services

21.4

19.2

15%

41.2

36.6

16%

Project & Development Services Fee Revenue1

16.2

16.3

2%

31.6

31.0

5%

Advisory, Consulting and Other

25.0

22.8

9%

43.3

40.6

8%

     Operating Revenue

$   228.5

$  204.5

15%

$   418.3

$  390.9

10%










Equity Earnings

(0.1)

0.1

n/m

0.0

0.1

n/m

Total Segment Revenue

$   228.4

$  204.6

15%

$   418.3

$  391.0

10%

     Total Segment Fee Revenue1

$   205.0

$  183.6

14%

$   372.9

$  345.1

11%










n/m – not meaningful

Asia Pacific Performance Highlights:

  • Revenue growth was led by both transactional growth in Capital Markets & Hotels, up 74 percent for the quarter and 44 percent year to date, led by Australia and Singapore, as well as annuity growth in Property & Facility Management, up 14 percent in fee revenue in both periods.  This growth was partially offset by Leasing revenue declines in China, India and Australia.
  • Fee-based operating expenses were $192 million for the quarter, up 15 percent, partially due to increased compensation costs from a larger employee base serving Property & Facility Management clients, as well as commissions earned on Capital Markets revenue.
  • Operating income was $13 million for the quarter, consistent with 2012.  Operating income margin calculated on a fee revenue basis was 6.5 percent, compared with 7.2 percent last year.
  • Adjusted EBITDA was $16 million for the quarter, compared with $17 million in 2012.  EBITDA margin calculated on a fee revenue basis was 8.0 percent, compared with 9.0 percent last year.

LaSalle Investment Management











LaSalle Investment

   Management Revenue

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

Three Months Ended June 30,

%

Change

in LC

Six Months Ended June 30,

%

Change

in LC

2013

2012

2013

2012










Advisory Fees

$   55.1

$  57.2

(2%)

$   111.5

$  114.6

(1%)

Transaction Fees & Other

5.2

1.6

n/m

8.3

3.4

n/m

Incentive Fees

1.0

0.3

n/m

1.2

8.7

(86%)

     Operating Revenue

$   61.3

$  59.1

5%

$   121.0

$  126.7

(3%)










Equity Earnings

9.7

0.2

n/m

14.8

11.9

24%

Total Segment Revenue

$    71.0

$  59.3

21%

$    135.8

$  138.6

(1%)










n/m – not meaningful

LaSalle Investment Management Performance Highlights:

  • $1.8 billion of capital was raised during the quarter, primarily in private equity commitments, which will generate growth in assets under management and in advisory fees as the capital is invested.
  • Advisory fees were $55 million for the quarter, which is consistent with quarterly averages in local currency for the last 12 to 18 months.
  • Operating expenses were $51 million for the quarter, up 4 percent from last year on the increase in operating revenue of 5 percent.
  • Adjusted EBITDA was $20 million for the quarter, a margin of 28.4 percent, compared with $11 million in 2012, a margin of 17.8 percent.  The year-over-year improvement in total segment revenue and EBITDA was driven by significant equity earnings recognized in the quarter, reflective of positive investment performance for clients.
  • Assets under management were $46.3 billion as of June 30, 2013, compared with $47.7 billion at March 31, 2013, with the decrease driven primarily by 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 $46.3 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, 2012, and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, 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, July 30 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:

+1 877 356 3887

International callers:

+1 706 679 7364

Pass code:

17566956

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=94966 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 [email protected] 

Supplemental Information

Supplemental information regarding the second-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 Tuesday, July 30 through 11:59 p.m. EDT Thursday, August 8 at the following numbers:

U.S. callers:

+ 1 855 859 2056

International callers:

+ 1 404 537 3406

Pass code:

17566956

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 Six Months Ended June 30, 2013 and 2012

(in thousands, except share data)

(Unaudited)















































Three Months Ended June 30,

Six Months Ended June 30,









2013

2012

2013

2012



















Revenue




$             989,383

$             921,341

$     1,845,371

$     1,734,635



















Operating expenses:














Compensation and benefits 


634,600

592,928

1,198,320

1,130,444

Operating, administrative and other


262,185

233,765

512,106

466,361

Depreciation and amortization 


20,174

19,962

39,254

39,621

Restructuring and acquisition charges


6,602

16,604

9,770

25,556






















Total operating expenses


923,561

863,259

1,759,450

1,661,982






















Operating income


65,822

58,082

85,921

72,653



















Interest expense, net of interest income


(9,049)

(7,459)

(16,972)

(14,885)

Equity earnings (losses) from unconsolidated ventures 

9,076

(47)

14,558

11,802



















Income before income taxes and noncontrolling interest

65,849

50,576

83,507

69,570

Provision for income taxes  


16,397

12,846

20,794

17,671

Net income




49,452

37,730

62,713

51,899



















Net income attributable to noncontrolling interest

2,921

289

3,027

435

Net income attributable to the Company


$               46,531

$               37,441

$           59,686

$           51,464



















Net income attributable to common shareholders

$               46,290

$               37,188

$           59,445

$           51,211






































Basic earnings per common share


$                    1.05

$                    0.85

$               1.35

$               1.17



















Basic weighted average shares outstanding


44,101,006

43,718,678

44,090,942

43,661,976






































Diluted earnings per common share


$                    1.03

$                    0.83

$               1.32

$               1.14



















Diluted weighted average shares outstanding

45,141,341

44,847,350

45,091,245

44,725,914






































EBITDA 





$               95,072

$               77,997

$        139,733

$        124,076

























































Please reference attached financial statement notes.





























 JONES LANG LASALLE INCORPORATED 

 Segment Operating Results 

 For the Three and Six Months Ended June 30, 2013 and 2012 

 (in thousands) 

 (Unaudited) 






































 Three Months Ended June 30, 


 Six Months Ended June 30, 






2013

2012


2013

2012
















 REAL ESTATE SERVICES  












       AMERICAS 













 Revenue: 














 Operating revenue 


$                  431,492

$                  403,172


$                  792,959

$                  744,599


 Equity earnings (losses) 


73

(258)


291

(208)


 Total segment revenue 


431,565

402,914


793,250

744,391


 Gross contract costs1


(24,190)

(20,132)


(43,468)

(36,020)


 Total segment fee revenue 


407,375

382,782


749,782

708,371

















 Operating expenses: 














 Compensation, operating and administrative expenses 


384,659

354,356


721,218

674,032


 Depreciation and amortization 


11,547

10,496


22,000

20,380


 Total segment operating expenses 


396,206

364,852


743,218

694,412


 Gross contract costs1


(24,190)

(20,132)


(43,468)

(36,020)


 Total fee-based segment operating expenses 


372,016

344,720


699,750

658,392


















 Operating income 


$                    35,359

$                    38,062


$                    50,032

$                    49,979


















 Adjusted EBITDA 


$                    46,906

$                    48,558


$                    72,032

$                    70,359
















       EMEA 













 Revenue: 














 Operating revenue 


$                  268,146

$                  254,544


$                  513,051

$                  472,516


 Equity losses 


(536)

(85)


(536)

(70)


 Total segment revenue 


267,610

254,459


512,515

472,446


 Gross contract costs1


(33,519)

(27,958)


(67,725)

(55,659)


 Total segment fee revenue 


234,091

226,501


444,790

416,787

















 Operating expenses: 














 Compensation, operating and administrative expenses 


249,497

235,497


491,022

457,866


 Depreciation and amortization 


5,027

5,683


10,010

11,885


 Total segment operating expenses 


254,524

241,180


501,032

469,751


 Gross contract costs1


(33,519)

(27,958)


(67,725)

(55,659)


 Total fee-based segment operating expenses 


221,005

213,222


433,307

414,092


















 Operating income 


$                    13,086

$                    13,279


$                    11,483

$                      2,695


















 Adjusted EBITDA 


$                    18,113

$                    18,962


$                    21,493

$                    14,580
















       ASIA PACIFIC 













 Revenue: 














 Operating revenue 


$                  228,443

$                  204,513


$                  418,343

$                  390,876


 Equity (losses) earnings 


(124)

62


(9)

114


 Total segment revenue 


228,319

204,575


418,334

390,990


 Gross contract costs1


(23,378)

(21,060)


(45,375)

(45,879)


 Total segment fee revenue 


204,941

183,515


372,959

345,111

















 Operating expenses: 














 Compensation, operating and administrative expenses 


211,848

188,058


396,297

364,418


 Depreciation and amortization 


3,124

3,326


6,252

6,414


 Total segment operating expenses 


214,972

191,384


402,549

370,832


 Gross contract costs1


(23,378)

(21,060)


(45,375)

(45,879)


 Total fee-based segment operating expenses 


191,594

170,324


357,174

324,953


















 Operating income 


$                    13,347

$                    13,191


$                    15,785

$                    20,158


















 Adjusted EBITDA 


$                    16,471

$                    16,517


$                    22,037

$                    26,572






































 Three Months Ended June 30, 


 Six Months Ended June 30, 






2013

2012


2013

2012
















 LASALLE INVESTMENT MANAGEMENT 













 Revenue: 














 Operating revenue 


$                    61,302

$                    59,112


$                  121,018

$                  126,644


 Equity earnings 


9,663

234


14,812

11,966


 Total segment revenue 


70,965

59,346


135,830

138,610

















 Operating expenses: 














 Compensation, operating and administrative expenses 


50,781

48,782


101,889

100,488


 Depreciation and amortization 


476

457


992

943


 Total segment operating expenses 


51,257

49,239


102,881

101,431


















 Operating income 


$                    19,708

$                    10,107


$                    32,949

$                    37,179


















 Adjusted EBITDA 


$                    20,184

$                    10,564


$                    33,941

$                    38,122
































































 SEGMENT RECONCILING ITEMS: 














 Total segment revenue 


$                  998,459

$                  921,294


$              1,859,929

$              1,746,437


 Reclassification of equity earnings (losses) 


9,076

(47)


14,558

11,802


      Total revenue 


$                  989,383

$                  921,341


$              1,845,371

$              1,734,635


















      Total operating expenses before restructuring charges 


916,959

846,655


1,749,680

1,636,426


      Operating income before restructuring charges 


$                    72,424

$                    74,686


$                    95,691

$                    98,209
















Please reference attached financial statement notes.












JONES LANG LASALLE INCORPORATED

Consolidated Balance Sheets

June 30, 2013, December 31, 2012 and June 30, 2012

(in thousands)



























June 30,


June 30,





2013

December 31,

2012





(Unaudited)

2012

(Unaudited)











ASSETS






Current assets:







Cash and cash equivalents

$             121,851

$             152,159

$             115,499

Trade receivables, net of allowances

911,425

996,681

819,946

Notes and other receivables

95,543

101,952

92,663

Warehouse receivables

98,213

144,257

-

Prepaid expenses

64,463

53,165

54,752

Deferred tax assets, net

53,257

50,831

48,525

Other

11,719

16,484

24,081



Total current assets

1,356,471

1,515,529

1,155,466











Property and equipment, net of accumulated depreciation

252,247

269,338

239,202

Goodwill, with indefinite useful lives

1,836,981

1,853,761

1,766,978

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

41,342

45,932

45,762

Investments in real estate ventures 

265,202

268,107

210,799

Long-term receivables

76,825

58,881

51,212

Deferred tax assets, net

187,811

197,892

197,718

Other

157,824

142,059

126,934



Total assets

$          4,174,703

$          4,351,499

$          3,794,071











LIABILITIES AND EQUITY 






Current liabilities:







Accounts payable and accrued liabilities

$             401,052

$             497,817

$             365,254

Accrued compensation 

410,032

685,718

393,344

Short-term borrowings

50,724

32,233

19,598

Deferred tax liabilities, net

10,113

10,113

6,095

Deferred income

79,459

76,152

83,132

Deferred business acquisition obligations

75,054

105,772

31,611

Warehouse facility

98,213

144,257

-

Other

112,553

109,909

92,218



Total current liabilities

1,237,200

1,661,971

991,252











Noncurrent liabilities:







Credit facilities

479,000

169,000

619,000

Long-term senior notes

275,000

275,000

-

Deferred tax liabilities, net

3,106

3,106

7,646

Deferred compensation

89,370

75,320

67,929

Pension liabilities

64

5,281

15,348

Deferred business acquisition obligations

75,550

107,661

246,531

Minority shareholder redemption liability

19,838

19,489

18,692

Other

62,272

75,415

72,962



Total liabilities

2,241,400

2,392,243

2,039,360











Company shareholders' equity:







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







44,119,690, 44,054,042 and 43,778,163 shares issued and outstanding as of







June 30, 2013, December 31, 2012 and June 30, 2012, respectively

441

441

438

Additional paid-in capital

945,675

932,255

927,020

Retained earnings 

1,066,794

1,017,128

869,670

Shares held in trust

(7,558)

(7,587)

(7,151)

Accumulated other comprehensive (loss) income

(78,807)

8,946

(40,090)



Total Company shareholders' equity

1,926,545

1,951,183

1,749,887












Noncontrolling interest

6,758

8,073

4,824



Total equity

1,933,303

1,959,256

1,754,711














Total liabilities and equity

$          4,174,703

$          4,351,499

$          3,794,071











Please reference attached financial statement notes.






JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2013 and 2012

(in thousands)

(Unaudited)


Six Months Ended June 30,

2013

2012




Cash used in operating activities

$         (244,558)

$         (122,618)




Cash used in investing activities

(62,761)

(25,898)




Cash provided by financing activities

277,011

79,561




        Net decrease in cash and cash equivalents

$           (30,308)

(68,955)




Cash and cash equivalents, beginning of period

152,159

184,454




Cash and cash equivalents, end of period

$           121,851

$          115,499








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 six months ended June 30, 2013, and 2012.

Three Months Ended

Six Months Ended


June 30,

June 30,

($ in millions)

2013

2012

2013

2012









Revenue

$  989.4

$  921.3

$  1,845.4

$  1,734.7

Gross contract costs

(81.1)

(69.1)

(156.6)

(137.6)

Fee revenue

$  908.3

$  852.2

$  1,688.8

$  1,597.1









Operating expenses

$  923.6

$  863.2

$  1,759.5

$  1,662.0

Gross contract costs

(81.1)

(69.1)

(156.6)

(137.6)

Fee-based operating expenses

$  842.5

$  794.1

$  1,602.9

$  1,524.4









Operating income

$    65.8

$    58.1

$       85.9

$       72.7









Add:







Restructuring and acquisition charges

6.6

16.6

9.8

25.6

King Sturge intangible amortization

0.6

1.6

1.1

3.8

Adjusted operating income

$    73.0

$    76.3

$       96.8

$     102.1









Adjusted operating income margin

8.0%

9.0%

5.7%

6.4%

2.       Charges excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and six months ended June 30, 2013, and June 30, 2012, 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

Six Months Ended


June 30,

June 30,

2013

2012

2013

2012

($ in millions, except per share data)
















GAAP net income attributable to common

  shareholders

$ 46.3

$ 37.2

$ 59.4

$ 51.2

Shares (in 000s)

45,141

44,847

45,091

44,726

GAAP diluted earnings per share

$ 1.03

$ 0.83

$ 1.32

$ 1.14









GAAP net income attributable to common

  shareholders

$ 46.3

$ 37.2

$ 59.4

$ 51.2

Restructuring and acquisition charges, net

5.0

12.4

7.4

19.1

Intangible amortization, net

0.4

1.2

0.8

2.8

Adjusted net income

$ 51.7

$ 50.8

$ 67.6

$ 73.1

Shares (in 000s)

45,141

44,847

45,091

44,726

Adjusted diluted earnings per share

$ 1.15

$ 1.13

$ 1.50

$ 1.63









               

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

Six Months Ended


June 30,

June 30,


2013

2012

2013

2012









Net income


$ 49,452

$ 37,730

$ 62,713

$51,899

Add:







Interest expense, net of interest income

9,049

7,459

16,972

14,885

Provision for income taxes

16,397

12,846

20,794

17,671

Depreciation and amortization

20,174

19,962

39,254

39,621

EBITDA

$ 95,072

$ 77,997

$ 139,733

$ 124,076









Add:







Restructuring and acquisition charges

6,602

16,604

9,770

25,556

Adjusted EBITDA

$101,674

$ 94,601

$ 149,503

$ 149,632

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 June 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.

10.    All percentage variances have been shown as calculated on a local currency basis.

SOURCE Jones Lang LaSalle Incorporated

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