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Jones Lang LaSalle Reports Third-Quarter 2012 Adjusted EPS of $1.23
Revenue increased 5 percent, 8 percent in local currency

CHICAGO, Oct. 29, 2012 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted net income of $55 million, or $1.23 per share, for the third quarter of 2012. Consolidated revenue grew 5 percent to $949 million, 8 percent in local currency, in the quarter.  On a fee revenue basis, consolidated revenue increased 5 percent in local currency to $878 million for the quarter.

  • Market share gains drove 9 percent consolidated Leasing revenue growth
  • Continued annuity base expansion led Asia Pacific Property & Facility Management fee revenue increase of 17 percent in local currency
  • LaSalle Investment Management reported strong incentive fees and equity earnings
  • Board of Directors declared $0.20 per share semi-annual dividend

Summary Financial Results

   ($ in millions, except per share data)

Three Months Ended

September 30,


Nine Months Ended

September 30,


2012

2011


2012

2011







Revenue

$      949

$     903


$    2,684

$  2,436

Fee Revenue1

$      878

$     856


$    2,475

$  2,293

Adjusted Net Income2

$        55

$       50


$       128

$     101

U.S. GAAP Net Income

$        50

$       34


$       101

$       79

Adjusted Earnings per Share2

$     1.23

$    1.12


$      2.86

$    2.27

Earnings per Share

$     1.10

$    0.76


$      2.25

$    1.79

Adjusted EBITDA3

$      102

$       94


$       251

$     216







Adjusted Operating Income Margin1

8.3%

8.8%


7.1%

7.0%

Adjusted EBITDA Margin1

11.7%

10.9%


10.1%

9.4%







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

"We maintained our steady growth in revenue and earnings in the quarter and the year to date," said Colin Dyer, President and Chief Executive Officer. "While we remain appropriately cautious given the ongoing, hesitant recovery in global real estate markets, our healthy pipelines, continued market share gains and committed cost management give us a good base for the fourth quarter and into 2013," Dyer added.

On a fee revenue1 basis, consolidated firm revenue grew 5 percent in local currency, to $878 million, compared with the same period last year.  Consolidated revenue growth was driven by solid Leasing performance and continued growth in Property & Facility Management revenue.  Leasing revenue grew 9 percent in local currency during the quarter, with strong 15 percent growth in the Americas.  Property & Facility Management fee revenue rose 10 percent in local currency, led by the Asia Pacific region, which increased 17 percent in local currency, followed by the Americas, which increased 10 percent. LaSalle Investment Management's advisory fees remained steady in comparison with the prior quarter and were flat in local currency compared with the third quarter of 2011 despite significant asset and portfolio sales over the past 12 months.   LaSalle Investment Management generated $12 million of incentive fees and $11 million of equity earnings during the quarter.    

Consolidated year-to-date revenue rose to $2.7 billion, 10 percent higher than the first nine months of 2011, 13 percent in local currency.  Fee revenue for the first nine months of 2012 was $2.5 billion, an increase of 8 percent, 10 percent in local currency.

Consolidated Revenue

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

Three Months Ended

September 30,


%

Change

in LC


Nine Months Ended

September 30,

%

Change

in LC



2012

2011



2012

2011












Real Estate Services ("RES")










Leasing

$    309.5

$    289.1


9%


$      838.7

$      781.7

10%


Capital Markets & Hotels

114.1

117.0


0%


318.6

286.4

14%


Property & Facility Management

249.9

215.3


19%


728.4

602.7

23%


Property & Facility Management

Fee Revenue1

207.9

193.3


10%


607.7

538.9

15%


Project & Development Services

118.8

114.1


10%


343.1

315.0

14%


Project & Development Services

Fee Revenue1

89.2

89.3


4%


254.5

235.3

12%


Advisory, Consulting and Other

85.6

91.6


(3%)


257.0

241.4

9%


     Total RES Revenue

$    877.9

$    827.1


9%


$   2,485.8

$   2,227.2

15%


Total RES Fee Revenue1

$    806.3

$    780.3


6%


$   2,276.5

$   2,083.7

11%












LaSalle Investment Management










Advisory Fees

$      57.4

$      59.0


0%


$      172.0

$     185.0

(5%)


Transaction Fees & Other

2.5

2.0


30%


5.9

5.0

19%


Incentive Fees

11.7

15.1


(24%)


20.4

19.2

6%


     Total LaSalle Investment 

          Management Revenue

$       71.6

$      76.1


(4%)


$      198.3

$     209.2

(4%)












Total Firm Revenue

$     949.5

$    903.2


8%


$   2,684.1

$   2,436.4

13%


Total Firm Fee Revenue1

$    877.9

$    856.4


5%


$   2,474.8

$   2,292.9

10%




































Operating expenses, excluding restructuring and acquisition charges, were $877 million for the quarter, an increase of 5 percent, 8 percent in local currency, compared with $833 million in 2011.  The increase was driven by higher variable compensation resulting from improved Leasing revenue as well as higher compensation resulting from increased headcount primarily to service new and expanded Property & Facility Management contracts.  Compensation expense was further impacted by the firm's previously disclosed decision to eliminate its Stock Ownership Program ("SOP"), which resulted in approximately $3 million more compensation expense during the quarter.  Fee-based operating expenses1, excluding restructuring and acquisition charges, were $805 million for the quarter, an increase of 2 percent in U.S. dollars and 5 percent in local currency, compared with $786 million in the third quarter of 2011.

Third-quarter results included $7 million of restructuring and acquisition charges, principally related to integration and retention costs for the second-quarter 2011 acquisition of King Sturge, but also including some severance and lease exit costs in targeted areas of the business in EMEA.  Third-quarter results also included $1 million of intangibles amortization related to the King Sturge acquisition.  

For the year to date, fee-based operating expenses excluding restructuring and acquisition charges were $2.3 billion, an increase of 8 percent from last year, or 10 percent in local currency.  Operating income margin year to date calculated on fee revenue was 7.1 percent, compared with 7.0 percent last year.

Balance Sheet and Dividend

The firm's net debt position, which includes deferred acquisition obligations, decreased by $60 million compared with a year ago, to $767 million.  Outstanding debt on the firm's long-term credit facility was $572 million at the end of the quarter.

The firm's Board of Directors declared a semi-annual dividend of $0.20 per share.  The dividend payment will be made on December 14, 2012, to holders of record at the close of business on November 15, 2012.

Business Segment Performance Highlights

Americas Real Estate Services

Third-quarter revenue in the Americas region was $437 million, an increase of 15 percent in U.S. dollars over the prior year.  On a fee revenue basis, revenue increased 9 percent compared with the prior year.  The largest growth in revenue was in Leasing, which increased 14 percent in U.S. dollars despite overall office leasing volumes dropping 14 percent in the United States, and Property & Facility Management, which increased 9 percent in U.S. dollars on a fee revenue basis in the quarter.  Year-to-date fee revenue for the Americas exceeded $1.1 billion, an increase of 12 percent in U.S. dollars from $1.0 billion last year.

Americas Revenue

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

Three Months Ended

September 30,


%

Change

in LC


Nine Months Ended  

September 30,


%

Change

in LC



2012

2011



2012

2011














Leasing

$    214.1

$   187.1


15%


$     550.8

$   503.4


10%


Capital Markets & Hotels

39.1

36.4


8%


109.1

87.6


26%


Property & Facility Management

112.1

82.1


38%


325.5

231.9


42%


Property & Facility Management

Fee Revenue1

88.9

81.6


10%


263.9

228.2


17%


Project & Development Services

46.3

46.1


2%


131.0

124.1


7%


Project & Development Services

Fee Revenue1

46.1

46.0


2%


130.4

124.0


7%


Advisory, Consulting and Other

25.6

27.6


(8%)


75.4

66.1


11%


     Operating Revenue

$   437.2

$   379.3


16%


$  1,191.8

$ 1,013.1


18%













Equity Earnings

0.1

-


n/m


-

2.7


n/m


Total Segment Revenue

$     437.3

$    379.3


16%


$   1,191.8

$ 1,015.8


18%


Total Segment Fee Revenue1

$     413.9

$    378.7


10%


$   1,129.6

$ 1,012.0


12%





















n/m – not meaningful


















Operating expenses were $395 million in the third quarter, a 15 percent increase in U.S. dollars over the prior year.  Fee-based operating expenses increased 9 percent in U.S. dollars over the third quarter of 2011.  The year-over-year increase was due to higher fixed compensation costs associated with a larger employee base, as well as higher commission expenses related to improved Leasing and Capital Markets & Hotels revenue and the impact of the SOP elimination. Americas operating income improved to $43 million for the quarter, up from $37 million in 2011.  Operating income margin, calculated on a fee revenue basis, improved to 10.3 percent in 2012 compared with 9.8 percent in 2011.

EBITDA for the quarter ended September 30, 2012, was $53 million, compared with $46 million in 2011. EBITDA margin calculated on a fee revenue basis was 12.9 percent for the third quarter compared with 12.3 percent for the third quarter last year.

Year-to-date fee-based operating expenses for the first nine months of the year were $1.0 billion, compared with $934 million in 2011, an 11 percent increase in U.S. dollars.  Operating income margin for the first nine months of 2012 calculated on a fee revenue basis was 8.2 percent, compared with 7.7 percent last year.

EBITDA for the first nine months was $124 million, compared with $107 million in 2011. EBITDA margin calculated on a fee revenue basis was 11.0 percent for the first nine months of 2012 compared with 10.6 percent for the first nine months of last year.

EMEA Real Estate Services

EMEA's revenue in the third quarter of 2012 was $234 million, a decrease of 5 percent, but an increase of 1 percent in local currency.  Revenue declined on a fee revenue basis by 3 percent in local currency primarily due to lower Capital Markets & Hotels revenue in the period.  Year-to-date fee revenue was $617 million, an increase of 8 percent, 15 percent in local currency.

EMEA Revenue

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

Three Months Ended

September 30,


%

Change

in LC


Nine Months Ended

September 30,


%

Change

in LC


2012

2011



2012

2011












Leasing

$    52.7

$     57.5


(1%)


$    166.3

$   155.1


15%

Capital Markets & Hotels

51.1

59.3


(9%)


140.2

126.0


17%

Property & Facility Management

37.1

40.2


(3%)


112.8

105.1


13%

Property & Facility

Management Fee Revenue1

37.1

40.2


(3%)


112.8

105.1


13%

Project & Development Services

52.4

46.3


23%


155.4

130.9


28%

Project & Development

Services Fee Revenue1

26.1

26.7


5%


76.1

67.8


 

19%

Advisory, Consulting and Other

41.1

44.0


0%


122.2

116.6


11%

     Operating Revenue

$   234.4

$   247.3


1%


$   696.9

$   633.7


17%











Equity Losses

(0.1)

-


n/m


(0.2)

(0.3)


n/m

Total Segment Revenue

$   234.3

$   247.3


1%


$   696.7

$   633.4


17%

Total Segment Fee Revenue1

$    208.0

$   227.7


(3%)


$    617.4

$   570.3


15%












n/m – not meaningful

Operating expenses, which include $1 million of King Sturge intangibles amortization, were $230 million for the third quarter, a decrease of 7 percent from the prior year, flat in local currency.  Operating expenses also include nearly $7 million of additional gross contract costs related to the Project & Development Services business line compared with the third quarter of 2011. Fee-based operating expenses decreased 10 percent over the third quarter of 2011 in U.S. dollars, 4 percent in local currency.  The year-over-year decrease was due primarily to lower compensation and operating costs from effective cost rationalization efforts driven by the integration of King Sturge.  On a fee revenue basis, EMEA's adjusted operating income margin, which excludes the King Sturge intangibles amortization, was 2.4 percent in the third quarter compared with 2.5 percent in 2011. 

EBITDA was $9 million, compared with $10 million in the third quarter of 2011. EBITDA margin calculated on a fee revenue basis was 4.4 percent for the third quarter compared with 4.6 percent for the third quarter last year.

Year-to-date fee-based operating expenses were $611 million, compared with $576 million in 2011.  Included in operating expenses was $4 million of intangibles amortization compared with $7 million in the first nine months of 2011. Adjusting for the intangibles amortization related to the merger, operating income margin calculated on a fee revenue basis was 1.8 percent, compared with 0.1 percent in 2011.

EBITDA for the first nine months was $23 million, compared with $14 million in 2011.  EBITDA margin for this period calculated on a fee revenue basis was 3.8 percent, compared with 2.5 percent in the first nine months of 2011.

Asia Pacific Real Estate Services

Revenue for the quarter in Asia Pacific increased 3 percent, 6 percent in local currency, to $206 million, while on a fee revenue basis, revenue increased 9 percent in local currency.  Strong annuity revenue growth in Property & Facility Management, up 17 percent in local currency on a fee revenue basis, helped maintain the region's overall performance despite the slowdown in transactional activity.  Capital Markets & Hotels revenue increased from the third quarter of 2011, up 14 percent in local currency, due to market leading positions across the region, particularly in Singapore.  Year-to-date fee revenue for Asia Pacific increased to $530 million, up 5 percent, 7 percent in local currency.

Asia Pacific Revenue

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

Three Months Ended
September 30,


%
Change
in LC


Nine Months Ended

 September 30,


%
Change
in LC


2012

2011



2012

2011












Leasing

$    42.7

$    44.5


(1%)


$   121.6

$   123.2


1%

Capital Markets & Hotels

23.9

21.3


14%


69.3

72.8


(4%)

Property & Facility Management

100.7

93.0


12%


290.1

265.7


11%

Property & Facility Management

Fee Revenue1

81.9

71.5


17%


231.0

205.6


14%

Project & Development Services

20.1

21.7


(2%)


56.7

60.0


(1%)

Project & Development

Services Fee Revenue1

17.0

16.6


7%


48.0

43.5


14%

Advisory, Consulting and Other

18.9

20.0


(4%)


59.4

58.7


3%

     Operating Revenue

$   206.3

$    200.5


6%


$   597.1

$   580.4


5%











Equity Earnings

-

0.1


n/m


0.2

0.1


n/m

Total Segment Revenue

$   206.3

$    200.6


6%


$   597.3

$   580.5


5%

Total Segment Fee Revenue1

$   184.4

$    174.0


9%


$   529.5

$  503.9


7%



















n/m – not meaningful


















Operating expenses were $194 million for the third quarter, an increase of 4 percent in U.S. dollars, 7 percent in local currency.  Operating expenses included $22 million of gross contract costs, down from $27 million in the third quarter last year.  Fee-based operating expenses for the third quarter compared with a year ago rose 8 percent, 10 percent in local currency, due to a larger employee base servicing new and expanded Property & Facility Management contracts and inflationary compensation pressure across the region.  Asia Pacific's fee-based operating income margin for the quarter was 6.6 percent, down from 8.0 percent a year ago. 

The region's EBITDA for the quarter was $15 million, compared with $17 million in 2011.  EBITDA margin calculated on a fee revenue basis was 8.3 percent, compared with 9.8 percent for the third quarter last year.

Fee-based operating expenses on a year-to-date basis were $497 million, compared with $463 million in 2011.  Operating income margin for the first nine months was 6.1 percent, compared with 8.1 percent last year, affected by a reduction in higher-margin transaction activity.

EBITDA for the first nine months was $42 million, compared with $50 million in 2011.  EBITDA margin calculated on a fee revenue basis was 7.9 percent, compared with 10.0 percent in the first nine months of 2011.

LaSalle Investment Management

LaSalle Investment Management's third-quarter advisory fees were $57 million, down 3 percent in U.S. dollars but flat in local currency.  Advisory fees were also flat compared with the first and second quarters of 2012.  The business recognized $12 million of incentive fees during the quarter as a result of positive performance for clients, and $11 million of equity earnings, primarily from asset sales. 

LaSalle Investment

   Management Revenue

Three Months Ended

September 30,


%
Change
in LC


Nine Months Ended  

September 30,


%
Change
in LC

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

2012

2011



2012

2011












Advisory Fees

$    57.4

$    59.0


0%


$    172.0

$     185.0


(5%)

Transaction Fees & Other

2.5

2.0


30%


5.9

5.0


19%

Incentive Fees

11.7

15.1


(24%)


20.4

19.2


6%

     Operating Revenue

$    71.6

$    76.1


(4%)


$     198.3

$     209.2


(4%)











Equity Earnings

10.7

0.4


n/m


22.6

0.2


n/m

Total Segment Revenue

$    82.3

$    76.5


9%


$     220.9

$     209.4


7%



















n/m – not meaningful

















Assets under management remained at $47 billion as of September 30, 2012.  EBITDA was $25 million, compared with $20 million for the third quarter of 2011.  EBITDA margin was 30.0 percent for the third quarter compared with 25.8 percent for the third quarter last year.  Year-to-date EBITDA was $63 million, a margin of 28.4 percent, compared with $46 million, a 21.9 percent margin, in the first nine months of 2011.

Summary

Continued market share gains and annuity revenue growth generated steady performance in the third quarter despite varying market conditions.  The firm's global footprint, leading investment management business and strong balance sheet are proving to be competitive advantages.  The firm remains cautious amid the fragile global economic environment but healthy new business pipelines provide confidence for a solid finish heading into the seasonally strong fourth quarter of the year.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.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, 2011, and in the Quarterly Report on Form 10-Q for the quarters ended March 31, 2012, and June 30, 2012, 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 Tuesday, October 30 at 9:00 a.m. EDT.

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

  • U.S. callers:                      +1 877 800 0896
  • International callers:           +1 706 679 7364
  • Pass code:                        10274088

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=90200 and follow instructions

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

4. If you experience problems listening, send an e-mail to prnwebcast@multivu.com 

Supplemental Information

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

Conference Call Replay

Available: 12:00 p.m. EDT Tuesday, October 30 through 11:59 p.m. EST Tuesday, November 6 at the following numbers:

  • U.S. callers:                      +1 855 859 2056
  • International callers:           +1 404 537 3406
  • Pass code:                        10274088

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.joneslanglasalle.com.

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

JONES LANG LASALLE INCORPORATED

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2012 and 2011

(in thousands, except share data)

(Unaudited)
















































Three Months Ended September 30,



Nine Months Ended September 30,










2012



2011



2012



2011




















Revenue


$                       949,491



$                       903,210



$             2,684,126



$             2,436,368













Operating expenses:













Compensation and benefits 


622,360



602,473



1,752,804



1,608,051


Operating, administrative and other


235,370



207,517



701,731



613,687


Depreciation and amortization 


19,089



22,835



58,710



60,500


Restructuring and acquisition charges


6,820



16,031



32,376



22,144























Total operating expenses


883,639



848,856



2,545,621



2,304,382




















Operating income


65,852



54,354



138,505



131,986




















Interest expense, net of interest income


(9,952)



(9,667)



(24,837)



(27,218)

Equity earnings from unconsolidated ventures 


10,698



514



22,500



2,682




















Income before income taxes and noncontrolling interest


66,598



45,201



136,168



107,450

Provision for income taxes  


16,916



11,300



34,587



26,863

Net income


49,682



33,901



101,581



80,587




















Net income attributable to noncontrolling interest


169



21



603



1,121

Net income attributable to the Company


$                         49,513



$                         33,880



$                 100,978



$                   79,466




















Net income attributable to common shareholders


$                         49,513



$                         33,880



$                 100,725



$                   79,230







































Basic earnings per common share


$                              1.12



$                              0.78



$                        2.30



$                        1.84




















Basic weighted average shares outstanding


44,015,922



43,421,666



43,780,819



43,069,567







































Diluted earnings per common share


$                              1.10



$                              0.76



$                        2.25



$                        1.79




















Diluted weighted average shares outstanding


44,826,502



44,355,453



44,755,817



44,376,796







































EBITDA 



$                         95,470



$                         77,682



$                 218,859



$                 193,811


























































Please reference attached financial statement notes.












 JONES LANG LASALLE INCORPORATED 


 Segment Operating Results 


 For the Three and Nine Months Ended September 30, 2012 and 2011 


 (in thousands) 


 (Unaudited) 










































 Three Months Ended September 30, 




 Nine Months Ended September 30, 









2012


2011




2012


2011




















 REAL ESTATE SERVICES  













       AMERICAS 














 Revenue: 















 Operating revenue 


$                             437,221


$                             379,273




$                         1,191,841


$                         1,013,128





 Equity earnings (losses)  


131


34




(77)


2,666





 Total segment revenue 


437,352


379,307




1,191,764


1,015,794





 Gross contract costs1


(23,464)


(575)




(62,180)


(3,890)





 Total segment fee revenue 


413,888


378,732




1,129,584


1,011,904





















 Operating expenses: 















 Compensation, operating and administrative expenses 


383,964


332,831




1,067,768


908,736





 Depreciation and amortization 


10,748


9,325




31,129


28,793





 Total segment operating expenses 


394,712


342,156




1,098,897


937,529





 Gross contract costs1


(23,464)


(575)




(62,180)


(3,890)





 Total fee-based segment operating expenses 


371,248


341,581




1,036,717


933,639






















 Operating income 


$                               42,640


$                               37,151




$                               92,867


$                               78,265






















 EBITDA 


$                               53,388


$                               46,476




$                             123,996


$                             107,058




















       EMEA 














 Revenue: 















 Operating revenue 


$                             234,410


$                             247,298




$                             696,906


$                             633,720





 Equity (losses) earnings  


(158)


4




(228)


(306)





 Total segment revenue 


234,252


247,302




696,678


633,414





 Gross contract costs1


(26,330)


(19,602)




(79,294)


(63,137)





 Total segment fee revenue 


207,922


227,700




617,384


570,277





















 Operating expenses: 















 Compensation, operating and administrative expenses 


225,124


236,855




673,217


619,136





 Depreciation and amortization 


4,759


9,824




16,643


20,326





 Total segment operating expenses 


229,883


246,679




689,860


639,462





 Gross contract costs1


(26,330)


(19,602)




(79,294)


(63,137)





 Total fee-based segment operating expenses 


203,553


227,077




610,566


576,325






















 Operating income (loss) 


$                                 4,369


$                                     623




$                                 6,818


$                                (6,048)






















 EBITDA 


$                                 9,128


$                               10,447




$                               23,461


$                               14,278




















       ASIA PACIFIC 














 Revenue: 















 Operating revenue 


$                             206,272


$                             200,536




$                             597,147


$                             580,362





 Equity earnings 


47


56




161


151





 Total segment revenue 


206,319


200,592




597,308


580,513





 Gross contract costs1


(21,893)


(26,577)




(67,772)


(76,563)





 Total segment fee revenue 


184,426


174,015




529,536


503,950





















 Operating expenses: 















 Compensation, operating and administrative expenses 


191,026


183,563




555,446


530,311





 Depreciation and amortization 


3,143


3,128




9,556


9,202





 Total segment operating expenses 


194,169


186,691




565,002


539,513





 Gross contract costs1


(21,893)


(26,577)




(67,772)


(76,563)





 Total fee-based segment operating expenses 


172,276


160,114




497,230


462,950






















 Operating income 


$                               12,150


$                               13,901




$                               32,306


$                               41,000






















 EBITDA 


$                               15,293


$                               17,029




$                               41,862


$                               50,202




















 LASALLE INVESTMENT MANAGEMENT 














 Revenue: 















 Operating revenue 


$                               71,588


$                               76,103




$                             198,232


$                             209,158





 Equity earnings 


10,678


420




22,644


171





 Total segment revenue 


82,266


76,523




220,876


209,329





















 Operating expenses: 















 Compensation, operating and administrative expenses 


57,616


56,741




158,104


163,555





 Depreciation and amortization 


439


558




1,382


2,179





 Total segment operating expenses 


58,055


57,299




159,486


165,734






















 Operating income 


$                               24,211


$                               19,224




$                               61,390


$                               43,595






















 EBITDA 


$                               24,650


$                               19,782




$                               62,772


$                               45,774







































 Total segment revenue 


960,189


903,724




2,706,626


2,439,050





 Reclassification of equity earnings 


10,698


514




22,500


2,682





      Total revenue 


$                             949,491


$                             903,210




$                         2,684,126


$                         2,436,368






















      Total operating expenses before restructuring charges 


876,819


832,825




2,513,245


2,282,238





      Operating income before restructuring charges 


$                               72,672


$                               70,385




$                             170,881


$                             154,130




















Please reference attached financial statement notes.












 


JONES LANG LASALLE INCORPORATED


Consolidated Balance Sheets


September 30, 2012, December 31, 2011 and September 30, 2011


(in thousands)





















September 30,




September 30,








2012


December 31,


2011








(Unaudited)


2011


(Unaudited)















ASSETS









Current assets:










Cash and cash equivalents


$                 125,730


$                 184,454


$                   85,671




Trade receivables, net of allowances


858,594


907,772


739,469




Notes and other receivables


99,074


97,315


104,667




Warehouse receivables


54,140


-


119,450




Prepaid expenses


62,513


45,274


56,772




Deferred tax assets


50,269


53,553


74,871




Other



18,770


12,516


11,073






Total current assets


1,269,090


1,300,884


1,191,973















Property and equipment, net of accumulated depreciation


248,036


241,415


225,149



Goodwill, with indefinite useful lives


1,816,944


1,751,207


1,752,094



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


47,745


52,590


58,428



Investments in real estate ventures 


295,525


224,854


222,194



Long-term receivables


56,881


54,840


54,261



Deferred tax assets


183,809


186,605


135,001



Other



135,981


120,241


120,338






Total assets


$             4,054,011


$             3,932,636


$             3,759,438















LIABILITIES AND EQUITY 









Current liabilities:










Accounts payable and accrued liabilities


$                 373,811


$                 436,045


$                 316,972




Accrued compensation 


480,956


655,658


444,846




Short-term borrowings


30,775


65,091


53,853




Deferred tax liabilities


6,095


6,044


4,215




Deferred income


86,296


58,974


58,674




Deferred business acquisition obligations


184,006


31,164


30,562




Warehouse facility


54,140


-


119,450




Other



97,301


95,641


113,619






Total current liabilities


1,313,380


1,348,617


1,142,191















Noncurrent liabilities:










Credit facilities


572,000


463,000


567,000




Deferred tax liabilities


7,646


7,646


22,694




Deferred compensation


16,087


10,420


11,720




Pension liabilities


12,990


17,233


1,217




Deferred business acquisition obligations


106,185


267,896


261,039




Minority shareholder redemption liability


18,585


18,402


17,734




Other



148,287


105,042


94,089






Total liabilities


2,195,160


2,238,256


2,117,684















Company shareholders' equity:










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










44,043,059, 43,470,271 and 43,468,229 shares issued and outstanding as of










September 30, 2012, December 31, 2011 and September 30, 2011, respectively


440


435


435




Additional paid-in capital


926,114


904,968


894,524




Retained earnings 


919,184


827,297


749,110




Shares held in trust


(7,599)


(7,814)


(7,833)




Accumulated other comprehensive income (loss)


14,834


(33,757)


2,116






Total Company shareholders' equity


1,852,973


1,691,129


1,638,352
















Noncontrolling interest


5,878


3,251


3,402






Total equity


1,858,851


1,694,380


1,641,754


















Total liabilities and equity


$             4,054,011


$             3,932,636


$             3,759,438















Please reference attached financial statement notes.









 

 

JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2012 and 2011
(in thousands)
(Unaudited)




Nine Months Ended September 30,


2012


2011





Cash provided by (used in) operating activities

$             34,288


$           (41,175)





Cash used in investing activities

(135,557)


(336,163)





Cash provided by financing activities

42,545


211,112





        Net decrease in cash and cash equivalents

(58,724)


(166,226)





Cash and cash equivalents, beginning of period

184,454


251,897





Cash and cash equivalents, end of period

$           125,730


$               85,671






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, 2012, and 2011.

 



Three Months Ended

Nine Months Ended



September 30,

September 30,

($ in millions)


2012


2011


2012


2011










Revenue


$    949.5


$     903.2


$ 2,684.1


$  2,436.4

Gross contract costs


(71.6)


(46.8)


(209.3)


(143.5)

Fee revenue


877.9


$     856.4


$ 2,474.8


$  2,292.9










Operating expenses


883.6


848.9


2,545.6


2,304.4

Gross contract costs


(71.6)


(46.8)


(209.3)


(143.5)

Fee-based operating expenses


812.0


$     802.1


2,336.3


$  2,160.9










Operating income


$     65.9


$       54.3


$   138.5


$    132.0










Add:









Restructuring and acquisition charges


6.8


16.0


32.4


22.1

King Sturge intangible amortization


0.6


5.0


4.3


6.6

Adjusted operating income


$     73.3


$       75.3


$   175.2


$    160.7










Adjusted operating income margin


8.3%


8.8%


7.1%


7.0%











 

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, 2012, and September 30, 2011, are restructuring and acquisition charges and intangible amortization related to the recent King Sturge acquisition. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share ("EPS") for each net income total:



Three Months Ended


Nine Months Ended


September 30,


September 30,

($ in millions, except per share data)

2012


2011


2012


2011









GAAP net income attributable to common shareholders

$       49.5


$      33.9


$    100.7


$     79.2

Shares (in 000s)

44,827


44,355


44,756


44,377

GAAP earnings per share

$       1.10


$      0.76


$      2.25


$     1.79









GAAP net income attributable to common shareholders

$       49.5


$      33.9


$    100.7


$     79.2

Restructuring and acquisition charges, net 

5.1


11.9


24.2


16.5

Intangible amortization, net 

0.4


3.7


3.2


4.9

Adjusted net income 

55.0


49.5


128.1


100.6









Shares (in 000s)

44,827


44,355


44,756


44,377









Adjusted earnings per share

$      1.23


$     1.12


$      2.86


$     2.27

               

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


Nine Months Ended


September 30,


September 30,


2012


2011


2012


2011









Net income attributable to common shareholders

$    49,513


$    33,880


$  100,725


$    79,230

Add:








Interest expense, net of interest income

9,952


9,667


24,837


27,218

Provision for income taxes

16,916


11,300


34,587


26,863

Depreciation and amortization

19,089


22,835


58,710


60,500









EBITDA

$   95,470


$    77,682


$  218,859


$   193,811









Add:








Restructuring and acquisition charges

6,820


16,031


32,376


22,144









Adjusted EBITDA

$ 102,290


$    93,713


$  251,235


$   215,955

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, 2012, to be filed with the Securities and Exchange Commission shortly.

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

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

 

SOURCE Jones Lang LaSalle Incorporated

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