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
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:
- You must have a minimum 14.4 Kbps Internet connection
- Log on to http://www.videonewswire.com/event.asp?id=94966 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 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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