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 | % | Nine Months Ended September 30, | % | ||||||||||||||
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 $11 million of equity earnings, primarily from asset sales.
LaSalle Investment Management Revenue | Three Months Ended September 30, | % | Nine Months Ended September 30, | % | |||||||||||||
($ 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 | |||
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
