United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 27, 2015
Jones Lang LaSalle Incorporated
(Exact name of registrant as specified in its charter)
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Maryland | | 001-13145 | | 36-4150422 |
(State or other jurisdiction | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
of incorporation or organization) | | | | |
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| | |
200 East Randolph Drive, Chicago, IL | | 60601 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: 312-782-5800
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
| |
[ ] | Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On April 27, 2015, Jones Lang LaSalle Incorporated issued a press release and supporting supplemental information announcing its financial results for the first quarter ended March 31, 2015. The full text of the press release and supplemental information are attached as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K and are incorporated by reference herein.
The information contained in this Current Report, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are included with this Report:
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| |
99.1. | News release issued by Jones Lang LaSalle Incorporated on April 27, 2015 announcing its financial |
| results for the first quarter ended March 31, 2015. |
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99.2. | Supplemental Information to First Quarter 2015 Earnings Call issued on April 27, 2015. |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | |
| Dated: April 27, 2015 | |
| Jones Lang LaSalle Incorporated | |
| | | |
| By: /s/ Christie B. Kelly | |
| Name: Christie B. Kelly | |
| Title: Executive Vice President and Chief Financial Officer | |
EXHIBIT INDEX
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| |
99.1. | News release issued by Jones Lang LaSalle Incorporated on April 27, 2015 announcing its financial |
| results for the first quarter ended March 31, 2015. |
| |
99.2. | Supplemental Information to First Quarter 2015 Earnings Call issued on April 27, 2015. |
JLL Reports Record First-Quarter 2015 Adjusted Earnings Per Share of $0.94
First-quarter fee revenue of $1.0 billion, up 25 percent in local currency and 17 percent in U.S. dollars
CHICAGO, April 27, 2015 - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $0.94, up from $0.38 in the prior year. First-quarter fee revenue totaled $1.0 billion, up 25 percent from the first quarter of 2014. All percentage variances are calculated on a local currency basis.
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• | Strong first quarter fee revenue growth across all service lines and geographic segments |
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• | Margins expanded in all segments |
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• | New wins and healthy pipelines continue to drive Corporate Solutions momentum |
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• | LaSalle Investment Management raised $2.0 billion of equity commitments for the quarter and continued outstanding investment performance |
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• | Dividend increased 8 percent to $0.27 per share |
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Summary Financial Results ($ in millions, except per share data) | | Three Months Ended |
March 31, |
| | 2015 | 2014 |
| | | |
Revenue | | $ | 1,204 |
| $ | 1,037 |
|
Fee Revenue1 | | $ | 1,029 |
| $ | 878 |
|
Adjusted Net Income2 | | $ | 43 |
| $ | 17 |
|
U.S. GAAP Net Income2 | | $ | 42 |
| $ | 16 |
|
Adjusted Earnings per Share2 | | $ | 0.94 |
| $ | 0.38 |
|
Earnings per Share | | $ | 0.92 |
| $ | 0.35 |
|
Adjusted EBITDA3 | | $ | 90 |
| $ | 52 |
|
Adjusted EBITDA, Real Estate Services | | $ | 62 |
| $ | 35 |
|
Adjusted EBITDA, LaSalle Investment Management | | $ | 28 |
| $ | 17 |
|
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release |
CEO Comment:
"We completed an excellent first quarter, building on last year's momentum with strong revenue growth across all service lines and geographies, and margin expansion in all segments," said Colin Dyer, President and CEO of JLL. "Corporate Solutions continued to win new business and build healthy pipelines, while LaSalle Investment Management started the year with strong capital raising and investment activity," Dyer added.
JLL Reports First-Quarter 2015 Results - Page 2
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Consolidated Revenue ($ in millions, “LC” = local currency) | Three Months Ended March 31, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Real Estate Services (“RES”) | | | | | | |
Leasing | $ | 306.1 |
| $ | 269.2 |
| | 14% | | 17% |
Capital Markets & Hotels | 177.4 |
| 117.4 |
| | 51% | | 64% |
Property & Facility Management Fee Revenue1 | 259.8 |
| 247.2 |
| | 5% | | 12% |
Property & Facility Management | 372.7 |
| 344.8 |
| | 8% | | 15% |
Project & Development Services Fee Revenue1 | 101.2 |
| 87.4 |
| | 16% | | 24% |
Project & Development Services | 162.7 |
| 149.4 |
| | 9% | | 22% |
Advisory, Consulting and Other | 98.9 |
| 92.8 |
| | 7% | | 15% |
Total RES Fee Revenue1 | $ | 943.4 |
| $ | 814.0 |
| | 16% | | 23% |
Total RES Revenue | $ | 1,117.8 |
| $ | 973.6 |
| | 15% | | 23% |
| | | | | | |
LaSalle Investment Management ("LaSalle") | | | | | | |
Advisory Fees | $ | 60.7 |
| $ | 55.9 |
| | 9% | | 17% |
Transaction Fees & Other | 6.1 |
| 4.6 |
| | 33% | | 45% |
Incentive Fees | 18.9 |
| 3.3 |
| | n.m. | | n.m. |
Total LaSalle Revenue | $ | 85.7 |
| $ | 63.8 |
| | 34% | | 45% |
| | | | | | |
Total Firm Fee Revenue1 | $ | 1,029.1 |
| $ | 877.8 |
| | 17% | | 25% |
Total Firm Revenue | $ | 1,203.5 |
| $ | 1,037.4 |
| | 16% | | 24% |
| | | | | | |
n.m. - not meaningful | | | | | | |
Consolidated Performance Highlights:
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• | Consolidated fee revenue for the first quarter was $1.0 billion, up 25 percent from 2014. Growth was broad-based, led by Capital Markets, up $60 million or 64 percent, and Leasing, up $37 million or 17 percent. |
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• | Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $975 million for the first quarter, compared with $857 million last year, an increase of 21 percent. |
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• | LaSalle Investment Management's advisory fees grew 17 percent to $61 million and incentive fees were $19 million, contributing to a total revenue increase of 45 percent. LaSalle continued to successfully raise and deploy capital with $2.0 billion in equity raised in the first quarter. |
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• | Adjusted EBITDA margin calculated on a fee revenue basis was 8.7 percent for the first quarter, compared with 5.9 percent last year. |
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• | Adjusted earnings per share of $0.94 represents record first-quarter earnings, despite a negative foreign exchange impact of approximately $0.07 compared with a year ago. |
JLL Reports First-Quarter 2015 Results - Page 3
Balance Sheet, Net Interest Expense and Dividend:
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• | In February, the firm announced that it had increased and extended its bank credit facility. The capacity of the facility increased to $2.0 billion from $1.2 billion, and the maturity was extended to February 2020. |
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• | The firm's total net debt was $546 million at quarter end, a decrease of $185 million from the first quarter last year as the firm's strong cash generation continued. |
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• | Net interest expense for the first quarter was $6.0 million, down from $6.6 million in the first quarter of 2014. The firm continues to benefit from both lower cost of debt and lower average borrowing. |
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• | Reflecting confidence in the firm's cash generation, the Board of Directors declared a semi-annual dividend of $0.27 per share, an 8 percent increase from the $0.25 per share payment made in December 2014. The dividend payment will be made on June 15, 2015, to shareholders of record at the close of business on May 15, 2015. |
JLL Reports First-Quarter 2015 Results - Page 4
Business Segment Performance Highlights
Americas Real Estate Services
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Americas Revenue ($ in millions, “LC” = local currency) | Three Months Ended March 31, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 229.3 |
| $ | 187.7 |
| | 22% | | 23% |
Capital Markets & Hotels | 74.8 |
| 41.1 |
| | 82% | | 83% |
Property & Facility Management Fee Revenue1 | 114.2 |
| 106.2 |
| | 8% | | 10% |
Property & Facility Management | 166.4 |
| 146.2 |
| | 14% | | 18% |
Project & Development Services Fee Revenue1 | 52.7 |
| 44.6 |
| | 18% | | 21% |
Project & Development Services | 53.4 |
| 45.4 |
| | 18% | | 20% |
Advisory, Consulting and Other | 30.3 |
| 26.7 |
| | 13% | | 14% |
Operating Revenue | $ | 501.3 |
| $ | 406.3 |
| | 23% | | 25% |
| | | | | | |
Equity Earnings | 0.3 |
| 0.2 |
| | 50% | | 48% |
Total Segment Fee Revenue1 | $ | 501.6 |
| $ | 406.5 |
| | 23% | | 25% |
Total Segment Revenue | $ | 554.5 |
| $ | 447.3 |
| | 24% | | 26% |
| | | | | | |
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Americas Performance Highlights:
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• | Fee revenue for the quarter was $502 million, an increase of 25 percent from 2014. Revenue growth was broad-based, with Leasing up 23 percent, Capital Markets & Hotels up 83 percent, Property & Facility Management up 10 percent, and Project & Development Services up 21 percent, compared with last year. |
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• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $466 million for the quarter, up 21 percent from last year. |
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• | Operating income was $35 million for the quarter, compared with $17 million in 2014. |
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• | Adjusted EBITDA was $51 million for the quarter, compared with $30 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 10.2 percent, compared with 7.5 percent in 2014. |
JLL Reports First-Quarter 2015 Results - Page 5
EMEA Real Estate Services
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EMEA Revenue ($ in millions, “LC” = local currency) | Three Months Ended March 31, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 48.4 |
| $ | 54.1 |
| | (11)% | | 4% |
Capital Markets & Hotels | 75.2 |
| 54.5 |
| | 38% | | 59% |
Property & Facility Management Fee Revenue1 | 51.6 |
| 52.1 |
| | (1)% | | 14% |
Property & Facility Management | 74.8 |
| 76.5 |
| | (2)% | | 11% |
Project & Development Services Fee Revenue1 | 31.2 |
| 28.7 |
| | 9% | | 27% |
Project & Development Services | 79.9 |
| 82.1 |
| | (3)% | | 17% |
Advisory, Consulting and Other | 47.5 |
| 44.6 |
| | 7% | | 20% |
Operating Revenue | $ | 253.9 |
| $ | 234.0 |
| | 9% | | 25% |
| | | | | | |
Equity Losses | (0.4 | ) | — |
| | n.m. | | n.m. |
Total Segment Fee Revenue1 | $ | 253.5 |
| $ | 234.0 |
| | 8% | | 25% |
Total Segment Revenue | $ | 325.4 |
| $ | 311.8 |
| | 4% | | 21% |
| | | | | | |
n.m. - not meaningful
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EMEA Performance Highlights:
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• | EMEA's fee revenue performance during the first quarter was significantly higher in local currencies than in U.S. dollars due to the U.S. dollar exhibiting significantly more strength against European currencies in 2015 compared with 2014. Since revenue and expenses are generally incurred in the same currencies, the operating income and EBITDA impacts are modest relative to the revenue impact. |
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• | Fee revenue for the quarter was $254 million, an increase of 25 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 59 percent, and Property & Facility Management up 14 percent, compared with last year. Growth in the region for the year was broad-based, led by the UK, Germany and France. |
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• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $256 million for the quarter, compared with $239 million last year. |
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• | Operating loss was $3 million for the quarter, compared with a loss of $5 million in 2014. |
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• | Adjusted EBITDA was $2 million for the quarter, compared with $1 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 0.9 percent for the quarter, compared with 0.2 percent in 2014. |
JLL Reports First-Quarter 2015 Results - Page 6
Asia Pacific Real Estate Services
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Asia Pacific Revenue ($ in millions, “LC” = local currency) | Three Months Ended March 31, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 28.4 |
| $ | 27.4 |
| | 4% | | 9% |
Capital Markets & Hotels | 27.4 |
| 21.8 |
| | 26% | | 38% |
Property & Facility Management Fee Revenue1 | 94.0 |
| 88.9 |
| | 6% | | 13% |
Property & Facility Management | 131.5 |
| 122.1 |
| | 8% | | 14% |
Project & Development Services Fee Revenue1 | 17.3 |
| 14.1 |
| | 23% | | 31% |
Project & Development Services | 29.4 |
| 21.9 |
| | 34% | | 42% |
Advisory, Consulting and Other | 21.1 |
| 21.5 |
| | (2)% | | 5% |
Operating Revenue | $ | 188.2 |
| $ | 173.7 |
| | 8% | | 16% |
| | | | | | |
Equity Losses | (0.1 | ) | (0.1 | ) | | —% | | (29)% |
Total Segment Fee Revenue1 | $ | 188.1 |
| $ | 173.6 |
| | 8% | | 16% |
Total Segment Revenue | $ | 237.7 |
| $ | 214.6 |
| | 11% | | 18% |
| | | | | | |
| | | | | | |
Asia Pacific Performance Highlights:
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• | Fee revenue for the quarter was $188 million, an increase of 16 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 38 percent, and Property & Facility Management, up 13 percent, compared with last year. Growth was led by Japan, Australia and India geographically, but also was broad-based across the region's Property & Facility Management business. |
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• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $184 million for the quarter, compared with $173 million last year, an increase of 13 percent. |
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• | Operating income was $4 million for the quarter, compared with $1 million in 2014. |
| |
• | Adjusted EBITDA was $8 million for the quarter, compared with $4 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 4.3 percent for the quarter, compared with 2.5 percent in 2014. |
JLL Reports First-Quarter 2015 Results - Page 7
LaSalle Investment Management
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LaSalle Investment Management Revenue ($ in millions, “LC” = local currency) | Three Months Ended March 31, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Advisory Fees | $ | 60.7 |
| $ | 55.9 |
| | 9% | | 17% |
Transaction Fees & Other | 6.1 |
| 4.6 |
| | 33% | | 45% |
Incentive Fees | 18.9 |
| 3.3 |
| | n.m. | | n.m. |
Operating Revenue | $ | 85.7 |
| $ | 63.8 |
| | 34% | | 45% |
| | | | | | |
Equity Earnings | 11.5 |
| 8.8 |
| | 31% | | 34% |
Total Segment Revenue | $ | 97.2 |
| $ | 72.6 |
| | 34% | | 43% |
| | | | | | |
n.m. - not meaningful
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LaSalle Investment Management Performance Highlights:
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• | Advisory fees were $61 million for the quarter, up 17 percent from last year. Total segment revenue was $97 million for the quarter, compared with $73 million last year. This included $6 million of transaction fees and other income, $19 million of incentive fees and $12 million of equity earnings. |
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• | Operating expenses were $69 million for the quarter, compared with $56 million last year. |
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• | Operating income was $28 million for the quarter, compared with $16 million last year. Adjusted EBITDA was $28 million for the quarter, compared with $17 million last year. Adjusted EBITDA margin was 29.2 percent, compared with 23.2 percent in 2014. |
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• | Capital raise was $2.0 billion for the quarter. |
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• | Assets under management were $55.3 billion as of March 31, 2015, up from $53.6 billion at December 31, 2014. The net increase in assets under management resulted from $3.9 billion of acquisitions and takeovers, $2.6 billion of dispositions and withdrawals, $1.6 billion of net valuation increases and $1.2 billion of net foreign currency decreases. |
JLL Reports First-Quarter 2015 Results - Page 8
About JLL
JLL (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 fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $55.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
200 East Randolph Drive Chicago Illinois 60601 │ 30 Warwick Street London W1B 5NH │ 9 Raffles Place #39-00 Republic Plaza Singapore 048619
Cautionary Note Regarding Forward-Looking Statements
Statements in this news 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 JLL to be materially different from those expressed or implied by such forward-looking statements. For additional information concerning risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated in forward-looking statements, and risks to JLL’s business in general, please refer to those factors 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 JLL’s Annual Report on Form 10-K for the year ended December 31, 2014, 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. Any forward-looking statements speak only as of the date of this release, and except to the extent required by applicable securities laws, JLL expressly disclaims any obligation or undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in JLL’s expectations or results, or any change in events.
JLL Reports First-Quarter 2015 Results - Page 9
Conference Call
Management will conduct a conference call with shareholders, analysts and investment professionals on Tuesday, April 28, 2015 at 9:00 a.m. EDT.
If you would like to participate in the teleconference, please dial into one of the following phone numbers five to ten minutes before the start time (the passcode will also be required):
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∙ | U.S. callers: | +1 877 800 0896 |
∙ | International callers: | +1 706 679 7364 |
∙ | Passcode: | 24082845 |
Webcast
We are also offering a live webcast. Follow these steps to participate:
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1. | You must have a minimum 14.4 Kbps Internet connection |
| |
2. | Log on to https://www.webcaster4.com/Webcast/Page/609/8228 |
| |
3. | Download free Windows Media Player software: (link located under registration form) |
| |
4. | If you experience problems listening, please call the Webcast Hotline +1 877 863 2113 and provide your Event ID (102082). |
Supplemental Information
Supplemental information regarding the first-quarter 2015 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.
Conference Call Replay
Available: 10:00 p.m. EDT Tuesday, April 28, 2015 through 11:59 p.m. EDT Friday, May 29, 2015 at the following numbers:
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∙ | U.S. callers: | +1 855 859 2056 | or + 1 800 585 8367 |
∙ | International callers: | +1 404 537 3406 | |
∙ | Passcode: | 24082845 | |
Web Audio Replay
An audio replay will be available for download or stream. Information and the link can be found on the company’s website: www.jll.com.
If you have any questions, please contact JLL’s Investor Relations department at: JLLInvestorRelations@am.jll.com.
###
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JONES LANG LASALLE INCORPORATED |
Consolidated Statements of Operations |
For the Three Months Ended March 31, 2015 and 2014 |
(in thousands, except share data) |
(Unaudited) |
| Three Months Ended March 31, |
|
| 2015 | | 2014 |
| | | |
Revenue | $ | 1,203,511 |
| | $ | 1,037,442 |
|
| | | |
Operating expenses: | | | |
Compensation and benefits | 737,917 |
| | 637,340 |
|
Operating, administrative and other | 387,197 |
| | 356,999 |
|
Depreciation and amortization | 24,923 |
| | 22,411 |
|
Restructuring and acquisition charges 4 | 816 |
| | 35,958 |
|
Total operating expenses | 1,150,853 |
| | 1,052,708 |
|
| | | |
Operating income (loss) 1 | 52,658 |
| | (15,266 | ) |
| | | |
Interest expense, net of interest income | (6,038 | ) | | (6,637 | ) |
Equity earnings from real estate ventures | 11,384 |
| | 8,903 |
|
| | | |
Income (loss) before income taxes and noncontrolling interest 4 | 58,004 |
| | (13,000 | ) |
Provision for (benefit from) income taxes 4 | 14,733 |
| | (29,145 | ) |
Net income 4 | 43,271 |
| | 16,145 |
|
| | | |
Net income attributable to noncontrolling interest | 1,377 |
| | 243 |
|
Net income attributable to the Company | $ | 41,894 |
| | $ | 15,902 |
|
| | | |
Basic earnings per common share | $ | 0.93 |
| | $ | 0.36 |
|
| | | |
Basic weighted average shares outstanding | 44,843,629 |
| | 44,513,813 |
|
| | | |
Diluted earnings per common share 2 | $ | 0.92 |
| | $ | 0.35 |
|
| | | |
Diluted weighted average shares outstanding | 45,373,911 |
| | 45,201,708 |
|
| | | |
EBITDA 3 | $ | 88,965 |
| | $ | 16,048 |
|
| | | |
Please reference attached financial statement notes. | | | |
|
| | | | | | | |
JONES LANG LASALLE INCORPORATED |
Segment Operating Results |
For the Three Months Ended March 31, 2015 and 2014 |
(in thousands) |
(Unaudited) |
| Three Months Ended
March 31, |
|
| 2015 | | 2014 |
REAL ESTATE SERVICES | | | |
| | | |
AMERICAS | | | |
Revenue: | | | |
Operating revenue | $ | 554,196 |
| | $ | 447,082 |
|
Equity earnings | 347 |
| | 235 |
|
Total segment revenue | 554,543 |
| | 447,317 |
|
Gross contract costs1 | (52,959 | ) | | (40,783 | ) |
Total segment fee revenue | 501,584 |
| | 406,534 |
|
| | | |
Operating expenses: | | | |
Compensation, operating and administrative expenses | 503,577 |
| | 417,009 |
|
Depreciation and amortization | 15,551 |
| | 13,311 |
|
Total segment operating expenses | 519,128 |
| | 430,320 |
|
Gross contract costs1 | (52,959 | ) | | (40,783 | ) |
Total fee-based segment operating expenses | 466,169 |
| | 389,537 |
|
| | | |
Operating income | $ | 35,415 |
| | $ | 16,997 |
|
| | | |
Adjusted EBITDA | $ | 50,966 |
| | $ | 30,308 |
|
| | | |
EMEA | | | |
Revenue: | | | |
Operating revenue | $ | 325,774 |
| | $ | 311,882 |
|
Equity losses | (368 | ) | | — |
|
Total segment revenue | 325,406 |
| | 311,882 |
|
Gross contract costs1 | (71,862 | ) | | (77,853 | ) |
Total segment fee revenue | 253,544 |
| | 234,029 |
|
| | | |
Operating expenses: | | | |
Compensation, operating and administrative expenses | 323,086 |
| | 311,346 |
|
Depreciation and amortization | 5,226 |
| | 5,444 |
|
Total segment operating expenses | 328,312 |
| | 316,790 |
|
Gross contract costs1 | (71,862 | ) | | (77,853 | ) |
Total fee-based segment operating expenses | 256,450 |
| | 238,937 |
|
| | | |
Operating loss | $ | (2,906 | ) | | $ | (4,908 | ) |
| | | |
Adjusted EBITDA | $ | 2,320 |
| | $ | 536 |
|
|
| | | | | | | |
| Three Months Ended
March 31, |
|
| 2015 | | 2014 |
ASIA PACIFIC | | | |
Revenue: | | | |
Operating revenue | $ | 237,750 |
| | $ | 214,705 |
|
Equity losses | (53 | ) | | (82 | ) |
Total segment revenue | 237,697 |
| | 214,623 |
|
Gross contract costs1 | (49,588 | ) | | (40,967 | ) |
Total segment fee revenue | 188,109 |
| | 173,656 |
|
| | | |
Operating expenses: | | | |
Compensation, operating and administrative expenses | 229,622 |
| | 210,305 |
|
Depreciation and amortization | 3,639 |
| | 3,168 |
|
Total segment operating expenses | 233,261 |
| | 213,473 |
|
Gross contract costs1 | (49,588 | ) | | (40,967 | ) |
Total fee-based segment operating expenses | 183,673 |
| | 172,506 |
|
| | | |
Operating income | $ | 4,436 |
| | $ | 1,150 |
|
| | | |
Adjusted EBITDA | $ | 8,075 |
| | $ | 4,318 |
|
| | | |
LASALLE INVESTMENT MANAGEMENT | | | |
Revenue: | | | |
Operating revenue | $ | 85,791 |
| | $ | 63,773 |
|
Equity earnings | 11,458 |
| | 8,750 |
|
Total segment revenue | 97,249 |
| | 72,523 |
|
| | | |
Operating expenses: | | | |
Compensation, operating and administrative expenses | 68,829 |
| | 55,679 |
|
Depreciation and amortization | 507 |
| | 488 |
|
Total segment operating expenses | 69,336 |
| | 56,167 |
|
| | | |
Operating income | $ | 27,913 |
| | $ | 16,356 |
|
| | | |
Adjusted EBITDA | $ | 28,420 |
| | $ | 16,844 |
|
| | | |
| | | |
SEGMENT RECONCILING ITEMS | | | |
Total segment revenue | $ | 1,214,895 |
| | $ | 1,046,345 |
|
Reclassification of equity earnings | 11,384 |
| | 8,903 |
|
Total revenue | $ | 1,203,511 |
| | $ | 1,037,442 |
|
| | | |
Total operating expenses before restructuring and acquisition charges | 1,150,037 |
| | 1,016,750 |
|
Operating income before restructuring and acquisition charges | $ | 53,474 |
| | $ | 20,692 |
|
| | | |
Restructuring and acquisition charges | 816 |
| | 35,958 |
|
Operating income (loss) after restructuring and acquisition charges | $ | 52,658 |
| | $ | (15,266 | ) |
| | | |
Total adjusted EBITDA | $ | 89,781 |
| | $ | 52,006 |
|
Restructuring and acquisition charges | 816 |
| | 35,958 |
|
Total EBITDA | $ | 88,965 |
| | $ | 16,048 |
|
| | | |
Please reference attached financial statement notes. | | | |
|
| | | | | | | | | | | | | | |
JONES LANG LASALLE INCORPORATED | | |
Consolidated Balance Sheets | | |
March 31, 2015, December 31, 2014 and March 31, 2014 | | |
(in thousands) | | |
| | | | (Unaudited) | | | | (Unaudited) |
| | | | March 31, | | December 31, | | March 31, |
| | | | 2015 | | 2014 | | 2014 |
ASSETS | | | | | | |
Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 198,491 |
| | $ | 250,413 |
| | $ | 140,148 |
|
| Trade receivables, net of allowances | | 1,229,545 |
| | 1,375,035 |
| | 1,129,020 |
|
| Notes and other receivables | | 201,614 |
| | 181,377 |
| | 175,869 |
|
| Warehouse receivables | | 178,954 |
| | 83,312 |
| | 7,702 |
|
| Prepaid expenses | | 84,227 |
| | 64,963 |
| | 73,082 |
|
| Deferred tax assets, net | | 133,641 |
| | 135,251 |
| | 125,045 |
|
| Other | | 34,665 |
| | 27,825 |
| | 14,211 |
|
| | Total current assets | | 2,061,137 |
| | 2,118,176 |
| | 1,665,077 |
|
| | | | | | | | |
Property and equipment, net of accumulated depreciation | | 353,818 |
| | 368,361 |
| | 316,765 |
|
Goodwill, with indefinite useful lives | | 1,870,534 |
| | 1,907,924 |
| | 1,903,409 |
|
Identified intangibles, net of accumulated amortization | | 36,014 |
| | 38,841 |
| | 43,614 |
|
Investments in real estate ventures | | 304,770 |
| | 297,142 |
| | 291,779 |
|
Long-term receivables | | 83,941 |
| | 85,749 |
| | 60,959 |
|
Deferred tax assets, net | | 98,539 |
| | 90,897 |
| | 88,747 |
|
Deferred compensation plans | | 124,062 |
| | 111,234 |
| | 92,776 |
|
Other | | 63,603 |
| | 57,012 |
| | 92,516 |
|
| | Total assets | | $ | 4,996,418 |
| | $ | 5,075,336 |
| | $ | 4,555,642 |
|
| | | | | | | | |
LIABILITIES AND EQUITY | | | | |
Current liabilities: | | | | |
| Accounts payable and accrued liabilities | | $ | 548,060 |
| | $ | 630,037 |
| | $ | 491,129 |
|
| Accrued compensation | | 628,592 |
| | 990,678 |
| | 504,164 |
|
| Short-term borrowings | | 21,215 |
| | 19,623 |
| | 16,819 |
|
| Deferred tax liabilities, net | | 16,554 |
| | 16,554 |
| | 11,274 |
|
| Deferred income | | 96,915 |
| | 104,565 |
| | 98,324 |
|
| Deferred business acquisition obligations | | 45,802 |
| | 49,259 |
| | 35,649 |
|
| Warehouse facility | | 178,954 |
| | 83,312 |
| | 7,702 |
|
| Minority shareholder redemption liability | | 16,333 |
| | 11,158 |
| | — |
|
| Other | | 143,175 |
| | 141,825 |
| | 116,011 |
|
| | Total current liabilities | | 1,695,600 |
| | 2,047,011 |
| | 1,281,072 |
|
| | | | | | | | |
Noncurrent liabilities: | | | | | | |
| Credit facility | | 335,000 |
| | — |
| | 443,000 |
|
| Long-term senior notes | | 275,000 |
| | 275,000 |
| | 275,000 |
|
| Deferred tax liabilities, net | | 17,232 |
| | 17,082 |
| | 18,029 |
|
| Deferred compensation | | 137,100 |
| | 125,857 |
| | 107,484 |
|
| Deferred business acquisition obligations | | 67,135 |
| | 68,848 |
| | 100,384 |
|
| Minority shareholder redemption liability | | — |
| | — |
| | 10,456 |
|
| Other | | 112,475 |
| | 118,969 |
| | 95,904 |
|
| | Total liabilities | | 2,639,542 |
| | 2,652,767 |
| | 2,331,329 |
|
|
| | | | | | | | | | | | | | |
| | | | (Unaudited) | | | | (Unaudited) |
| | | | March 31, | | December 31, | | March 31, |
| | | | 2015 | | 2014 | | 2014 |
Redeemable noncontrolling interest | | 9,185 |
| | 13,449 |
| | — |
|
| | | | | | | | |
Company shareholders' equity: | | | | | | |
| Common stock, $.01 par value per share,100,000,000 shares authorized; 44,859,342, 44,828,779, and 44,541,623 shares issued and outstanding as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively | | 449 |
| | 448 |
| | 445 |
|
| Additional paid-in capital | | 967,981 |
| | 961,850 |
| | 949,718 |
|
| Retained earnings | | 1,673,039 |
| | 1,631,145 |
| | 1,282,869 |
|
| Shares held in trust | | (6,329 | ) | | (6,407 | ) | | (8,060 | ) |
| Accumulated other comprehensive loss | | (308,460 | ) | | (200,239 | ) | | (11,384 | ) |
| | Total Company shareholders' equity | | 2,326,680 |
| | 2,386,797 |
| | 2,213,588 |
|
| | | | | | | | |
| Noncontrolling interest | | 21,011 |
| | 22,323 |
| | 10,725 |
|
| | Total equity | | 2,347,691 |
| | 2,409,120 |
| | 2,224,313 |
|
| | | | | | | | |
| | Total liabilities and equity | | $ | 4,996,418 |
| | $ | 5,075,336 |
| | $ | 4,555,642 |
|
| | | | | | | | |
Please reference attached financial statement notes. | | | | | | |
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2015 and 2014
(in thousands)
|
| | | | | | | |
| Three Months Ended |
| March 31, |
| 2015 | | 2014 |
| | | |
Cash used in operating activities | $ | (335,770 | ) | | $ | (263,219 | ) |
| | | |
Cash used in investing activities | (21,054 | ) | | (39,297 | ) |
| | | |
Cash provided by financing activities | 313,381 |
| | 290,147 |
|
| | | |
Effect of currency exchange rate changes on cash and cash equivalents | (8,479 | ) | | (209 | ) |
| | | |
Net decrease in cash and cash equivalents | $ | (51,922 | ) | | $ | (12,578 | ) |
| | | |
Cash and cash equivalents, beginning of period | 250,413 |
| | 152,726 |
|
| | | |
Cash and cash equivalents, end of period | $ | 198,491 |
| | $ | 140,148 |
|
| | | |
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. “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 months ended March 31, 2015 and 2014.
|
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
($ in millions) | | 2015 | | 2014 |
| | | | |
Revenue | | $ | 1,203.5 |
| | $ | 1,037.4 |
|
Gross contract costs | | (174.4 | ) | | (159.6 | ) |
Fee revenue | | $ | 1,029.1 |
| | $ | 877.8 |
|
| | | | |
Operating expenses | | $ | 1,150.9 |
| | $ | 1,052.7 |
|
Gross contract costs | | (174.4 | ) | | (159.6 | ) |
Fee-based operating expenses | | $ | 976.5 |
| | $ | 893.1 |
|
| | | | |
Operating income (loss) | | $ | 52.6 |
| | $ | (15.3 | ) |
| | | | |
Add: | | | | |
Restructuring and acquisition charges* | | 0.8 |
| | 36.0 |
|
Adjusted operating income | | $ | 53.4 |
| | $ | 20.7 |
|
| | | | |
Adjusted operating income margin | | 5.2 | % | | 2.4 | % |
*See note 4 for more information on restructuring and acquisition charges
2. Net restructuring and acquisition charges are excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three months ended March 31, 2015, and 2014. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share for each net income total:
|
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
($ in millions, except per share data) | | 2015 | | 2014 |
| | | | |
GAAP net income attributable to common shareholders | | $ | 41.9 |
| | $ | 15.9 |
|
Shares (in 000s) | | 45,374 |
| | 45,202 |
|
GAAP diluted earnings per share | | $ | 0.92 |
| | $ | 0.35 |
|
| | | | |
GAAP net income attributable to common shareholders | | $ | 41.9 |
| | $ | 15.9 |
|
Restructuring and acquisition charges, net* | | 0.6 |
| | 1.1 |
|
Adjusted net income | | $ | 42.5 |
| | $ | 17.0 |
|
| | | | |
Shares (in 000s) | | 45,374 |
| | 45,202 |
|
| | | | |
Adjusted diluted earnings per share | | $ | 0.94 |
| | $ | 0.38 |
|
*See note 4 for more information on restructuring and acquisition charges
3. Adjusted EBITDA represents earnings before interest expense net of interest income, income taxes, depreciation and amortization, adjusted for restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are non-GAAP financial measures, they are used extensively by management and are useful to investors and lenders as metrics for evaluating operating performance and liquidity. EBITDA is used in the calculations of certain covenants related to the firm’s revolving credit facility. However, adjusted EBITDA and EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not calculated under GAAP, the firm’s adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies.
Below is a reconciliation of net income to EBITDA and adjusted EBITDA:
|
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
($ in millions) | | 2015 | | 2014 |
| | | | |
GAAP net income | | $ | 43.3 |
| | $ | 16.1 |
|
Add: | | | | |
Interest expense, net of interest income | | 6.0 |
| | 6.6 |
|
Provision for (benefit from) income taxes | | 14.7 |
| | (29.1 | ) |
Depreciation and amortization | | 24.9 |
| | 22.4 |
|
| | |
| | |
|
EBITDA | | $ | 88.9 |
| | $ | 16.0 |
|
Add: | | | | |
Restructuring and acquisition charges | | 0.8 |
| | 36.0 |
|
Adjusted EBITDA | | $ | 89.7 |
| | $ | 52.0 |
|
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 and acquisition 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. 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. LaSalle Investment Management provides investment management services to institutional investors and high-net-worth individuals.
6. 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 March 31, 2015, to be filed with the Securities and Exchange Commission shortly.
7. 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.
8. Certain prior year amounts have been reclassified to conform to the current presentation.
|
| |
Contact: | Christie B. Kelly |
Title: | Global Chief Financial Officer |
Phone: | +1 312 228 2316 |
Supplemental Information Earnings Call First-Quarter 2015
2 Capital Markets(1) (in USD) Americas 18% 20% EMEA(2) -1% -15% Asia Pacific 7% 5-10% Total 9% 5% Leasing activity remains mixed; outlook steady Leasing (in square meters) Americas (U.S. only) -6% 0-5% EMEA (Europe only) -3% Flat Asia Pacific (select markets) 5% 15% Total -4% 0-5% ForecastActual Gross Absorption Investment volumes remain strong; outlook unchanged in local currency Q1 2015 Market Volume & FY Outlook Q1 2015 v. Q1 2014 FY 2015 v. FY 2014 Market Volumes (1) Market volume data excludes multi-family assets. (2) In Euro terms, Q1 2015 actual volumes are up 21% compared to Q1 2014; JLL Research projections are flat at Euro 210 billion in 2015; decrease of 15% due to Euro depreciation against the US Dollar. Source: JLL Research, April 2015 JLL Research ForecastActual Q1 2015 v. Q1 2014 FY 2015 v. FY 2014
3 Multi-Regional Americas EMEA Asia Pacific Westinghouse Electric, 4M sf Blackstone Hotel Portfolio, U.S. $1B 1801 K Street, Washington D.C. $445M James Royal Palm, Miami $278M InTown Suites Portfolio $500M Rite Aid Corporation, Spartanburg 900K sf REDI Mall, Helsinki €480M Student Housing Portfolio, London £532M Facebook EMEA HQ, Dublin €233M Le Meridien, Munich $190M Schneider Electric, 13 countries 7M sf AMP, New Zealand 34 offices Hotel B Portfolio, Japan $165M Shenzhen Ping An Centre, China 4.9M sf The Capitol Group Companies, Los Angeles 323K sf Stone Brewing Company, East Coast Brewery Daimler Germany 320K sf WeWorld, London 167K sf Macy’s/Bloomingdales, Abu Dhabi 754K sf Marketplace Auburn Shopping Centre, Australia AUD 120M Flipkart, Bangalore 2M sf Alibaba, China 17M sf Transglobe Life Insurance, Taiwan 401K sf Selected Business Wins and Expansions
4 + 10-20% + 5-10% + 0-5% - 0-5% - 5-10% Prime Offices – 2015 Projected Changes in Values NOTES: *New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency. Source: JLL Research, April 2015 Tokyo San Francisco, Boston, Sydney London*, Chicago, Los Angeles New York*, Madrid, Beijing Hong Kong, Shanghai, Dubai, Toronto Washington DC, Mexico City, Stockholm, Seoul, Paris*, Brussels, Frankfurt Singapore, Mumbai, Sao Paulo Moscow Tokyo, Madrid Boston, San Francisco, London* Sydney, Chicago, Los Angeles New York*, Seoul, Beijing Toronto, Paris*, Shanghai, Frankfurt Dubai, Washington DC, Mexico City Stockholm, Brussels, Hong Kong Sao Paulo Rental Values Capital Values Singapore, Mumbai - 10-20% Moscow
5 Note: Equity earnings of $11.4M in Q1 2015, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract vendor and subcontractor costs. YOY % Growth, Fee Revenue Basis Q1 2015 Segment LC USD Americas 25% 23% EMEA 25% 8% Asia Pacific 16% 8% LaSalle 43% 34% Consolidated 25% 17% Consolidated Gross Revenue 24% 16% Consolidated Fee - $1,029 Gross - $1,204 LaSalle $97 Asia Pac Fee - $188 Gross - $238 Americas Fee - $502 Gross - $555 EMEA Fee - $254 Gross - $325 Q1 2015 Revenue Q1 2015 Revenue Performance ($ in millions)
6 Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract vendor and subcontractor costs. Leasing $229.3 n7up 23% $48.4 n7up 4% $28.4 n7up 9% $306.1 n7up 17% Capital Markets & Hotels $74.8 n7up 83% $75.2 n7up 59% $27.4 n7up 38% $177.4 n7up 64% Property & Facility Management - Fee $114.2 n7up 10% $51.6 n7up 14% $94.0 n7up 13% $259.8 n7up 12% Gross Revenue $166.4 n7up 18% $74.8 n7up 11% $131.5 n7up 14% $372.7 n7up 15% Project & Development Services - Fee $52.7 n7up 21% $31.2 n7up 27% $17.3 n7up 31% $101.2 n7up 24% Gross Revenue $53.4 n7up 20% $79.9 n7up 17% $29.4 n7up 42% $162.7 n7up 22% Advisory, Consulting & Other $30.3 n7up 14% $47.5 n7up 20% $21.1 n7up 5% $98.9 n7up 15% Total RES Operating Fee Revenue $501.3 n7up 25% $253.9 n7up 25% $188.2 n7up 16% $943.4 n7up 23% Total Gross Revenue $554.2 n7up 26% $325.8 n7up 21% $237.8 n7up 18% $1,117.8 n7up 23% Americas EMEA Asia Pacific Total RES Q1 2015 Real Estate Services Revenue ($ in millions; % change in local currency over Q1 2014)
7 • Successful capital raising with $2.0 billion raised in Q1 2015; maintaining record pace achieved by LaSalle in 2014 • Assets Under Management reach $55.3 billion, up from $48.0 billion a year ago • Continued incentive fee performance in quarter; good pipeline of incentive fees but not likely to materialize until H2 2015 Separate Accounts $30.3 Commingled Funds $12.1 Public Securities $12.9 Q1 2015 Highlights Q1 2015 AUM = $55.3 Billion ($ in billions) Note: AUM data reported on a one-quarter lag. U.K. $18.3 Continental Europe $4.8 North America $13.5 Asia Pacific$5.8 Public Securities $12.9
8 • Investment grade ratings; Baa2 (Stable) / BBB (Stable) o Increased and extended bank credit facility; capacity increased to $2.0 billion from $1.2 billion and extended maturity to February 2020 o Continued healthy net debt reduction compared with Q1 2014 while continuing to invest in the business • Lower cost debt driving reduced interest expense o Q1 2015 net interest expense of $6 million compared to $7 million in Q1 2014 • Q1 2015 Capital Spending Q1 2015 . o Capital Expenditures (1) $ 19 million o M&A (2) $ 4 million o Co-Investment (3) $ 5 million Balance Sheet $ millions Q1 2015 Q4 2014 Q1 2014 Cash and Cash Equivalents $ 198 $ 250 $ 140 Short Term Borrowings 21 20 17 Credit Facility 335 - 443 Net Bank Debt $ 158 $ (230) $ 320 Long Term Senior Notes 275 275 275 Deferred Business Acquisition Obligations 113 118 136 Total Net Debt $ 546 $ 163 $ 731 Balance Sheet Highlights Strong Balance Sheet (1) Excludes investments in joint venture entities, capitalized leases and tenant improvement allowances that are required to be consolidated under U.S. GAAP (2) Includes deferred acquisition payments and earn outs paid during the period for transactions closed in prior periods (3) Includes capital contributions of $19M partially offset by distributions of $14M
9 Appendix
10 Prime Offices – Capital Value Clock, Q1 2014 v Q1 2015 Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2015 Americas EMEA Asia Pacific The Jones Lang LaSalle Property Clocks SM Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Hong Kong, Houston, Toronto Singapore, Mexico City, Washington DC Shanghai London, Paris Beijing, Seoul Amsterdam Brussels, Milan Madrid Berlin, New York Chicago, Los Angeles Sydney, Dallas Sao Paulo Moscow Mumbai Sao Paulo Stockholm Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Amsterdam, Madrid Brussels London Milan Paris Mexico City, Moscow Stockholm Tokyo Beijing Dallas, Seoul Singapore Washington DC Toronto Hong Kong Mumbai New York, Chicago Boston, Los Angeles Frankfurt, Boston, San Francisco Tokyo Q1 2015Q1 2014 Berlin, Sydney, Shanghai San Francisco Houston, Frankfurt
11 Prime Offices – Rental Clock, Q1 2014 v Q1 2015 Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2015 Americas EMEA Asia Pacific The Jones Lang LaSalle Property Clocks SM Q1 2015 Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Q1 2014 Sao Paulo New York Stockholm Hong Kong, Beijing Berlin Dubai, Milan Chicago Johannesburg Shanghai, Houston San Francisco Dallas London, Los Angeles Tokyo, Boston Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Brussels, Paris, Madrid, Beijing, Hong Kong, Sydney Singapore Seoul Boston, Los Angeles Istanbul Shanghai Amsterdam Johannesburg London Milan Moscow Chicago, Dubai Washington DC Houston Toronto Mexico City Sao Paulo Dallas San Francisco Berlin, Frankfurt New York Stockholm, Tokyo Amsterdam Frankfurt Madrid, Sydney Singapore Toronto Mexico City Mumbai Mumbai Paris, Brussels, Istanbul Washington DC Seoul Moscow
12 Refer to page 16 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the three months ended March 31, 2015, for details relative to these Adjusted EBITDA calculations. Segment Adjusted EBITDA is calculated by adding the segment’s depreciation and amortization to its reported operating income, which excludes restructuring and acquisition charges. Consolidated Adjusted EBITDA is the sum of the Adjusted EBITDA of the four segments. Consolidated $90 Q1 2015 Adjusted EBITDA Q1 2015 Adjusted EBITDA Performance Asia Pac $8 LaSalle $29 Americas $51 EMEA $2 ($ in millions) Adj. EBITDA Margin Fee Q1 2015 Segment LC USD Americas 10.0% 10.2% EMEA 1.8% 0.9% Asia Pacific 4.7% 4.3% LaSalle 29.0% 29.2% Consolidated 8.7% 8.7%
13 Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. Q1 2015 Real Estate Services Revenue ($ in millions; % change in USD over Q1 2014) Leasing $229.3 n7up 22% $48.4 n7down (11%) $28.4 n7up 4% $306.1 n7up 14% Capital Markets & Hotels $74.8 n7up 82% $75.2 n7up 38% $27.4 n7up 26% $177.4 n7up 51% Property & Facility Management - Fee $114.2 n7up 8% $51.6 n7down (1%) $94.0 n7up 6% $259.8 n7up 5% Gross Revenue $166.4 n7up 14% $74.8 n7down (2%) $131.5 n7up 8% $372.7 n7up 8% Project & Development Services - Fee $52.7 n7up 18% $31.2 n7up 9% $17.3 n7up 23% $101.2 n7up 16% Gross Revenue $53.4 n7up 18% $79.9 n7down (3%) $29.4 n7up 34% $162.7 n7up 9% Advisory, Consulting & Other $30.3 n7up 13% $47.5 n7up 7% $21.1 n7down (2%) $98.9 n7up 7% Total RES Operating Fee Revenue $501.3 n7up 23% $253.9 n7up 8% $188.2 n7up 8% $943.4 n7up 16% Total Gross Revenue $554.2 n7up 24% $325.8 n7up 4% $237.8 n7up 11% $1,117.8 n7up 15% Americas EMEA Asia Pacific Total RES
14 • Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily • Gross accounting requirements increase revenue and costs without corresponding profit • Business managed on a fee revenue basis to focus on margin expansion in the base business Revenue Gross contract costs Fee revenue Operating expenses Gross contract costs Fee-based operating expenses Operating income (loss) Restructuring and acquisition charges Adjusted operating income Adjusted operating income margin Fee Revenue / Expense Reconciliation ($ in millions) $1,203.5 (174.4) $1,029.1 $1,150.9 (174.4) $976.5 $52.6 0.8 $53.4 5.2% $1,037.4 (159.6) $877.8 $1,052.7 (159.6) $893.1 ($15.3) 36.0 $20.7 2.4% Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges are excluded from adjusted operating income margin. Three Months Ended March 31 2015 2014
15 Three Months Ended March 31 2015 2014 Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings per Share ($ in millions, except per share data) $41.9 45,374 $0.92 $41.9 0.6 $42.5 45,374 $0.94 $15.9 45,202 $0.35 $15.9 1.1 $17.0 45,202 $0.38 GAAP net income attributable to common shareholders Shares (in 000s) GAAP diluted earnings per share GAAP net income attributable to common shareholders Restructuring and acquisition charges, net Adjusted net income Shares (in 000s) Adjusted diluted earnings per share
16 Three Months Ended March 31 2015 2014 $43.3 6.0 14.7 24.9 $88.9 0.8 $89.7 $16.1 6.6 (29.1) 22.4 $16.0 36.0 $52.0 Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions) GAAP net income Interest expense, net of interest income Provision for (benefit from) income taxes Depreciation and amortization EBITDA Restructuring and acquisition charges Adjusted EBITDA JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
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