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): July 29, 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) | | | | |
|
| | |
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 July 29, 2015, Jones Lang LaSalle Incorporated issued a press release and supporting supplemental information announcing its financial results for the second quarter ended June 30, 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 July 29, 2015 announcing its financial |
| results for the second quarter ended June 30, 2015. |
| |
99.2. | Supplemental Information to Second Quarter 2015 Earnings Call issued on July 29, 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: July 29, 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 July 29, 2015 announcing its financial |
| results for the second quarter ended June 30, 2015. |
| |
99.2. | Supplemental Information to Second Quarter 2015 Earnings Call issued on July 29, 2015. |
JLL Reports Second-Quarter 2015 Adjusted Earnings Per Share of $2.01, 20 Percent Above Last Year
Record second-quarter fee revenue of $1.2 billion, up 17 percent in local currency and 9 percent in U.S. dollars
CHICAGO, July 29, 2015 -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $2.01, up from $1.68 in the prior year. Second-quarter fee revenue totaled $1.2 billion, up 17 percent from the second quarter of 2014. All percentage variances are calculated on a local currency basis.
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• | Record second-quarter fee revenue with double-digit growth across all four segments |
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• | Year-to-date margin expansion in all segments with ongoing investments for future revenue and profit growth |
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• | Capital Markets & Hotels momentum and market share growth continues; Corporate Solutions secures significant client wins and adds to strong pipeline |
| |
• | LaSalle Investment Management year-to-date capital raise of $3 billion; outstanding performance for clients and shareholders |
| |
• | Acquisitions increasing; 10 transactions announced in 2015 |
| |
• | JLL's credit rating upgraded to BBB+ (Stable) by Standard & Poor’s on July 28, 2015 |
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| | | | | | | | | | | | | | |
| | | | | | |
Summary Financial Results ($ in millions, except per share data) | | Three Months Ended | | Six Months Ended |
June 30, | June 30, |
| | 2015 | 2014 | | 2015 | 2014 |
| | | | | | |
Revenue | | $ | 1,373 |
| $ | 1,277 |
| | $ | 2,577 |
| $ | 2,315 |
|
Fee Revenue1 | | $ | 1,182 |
| $ | 1,086 |
| | $ | 2,211 |
| $ | 1,964 |
|
Adjusted Net Income2 | | $ | 92 |
| $ | 76 |
| | $ | 134 |
| $ | 93 |
|
U.S. GAAP Net Income2 | | $ | 90 |
| $ | 72 |
| | $ | 132 |
| $ | 88 |
|
Adjusted Earnings per Share2 | | $ | 2.01 |
| $ | 1.68 |
| | $ | 2.95 |
| $ | 2.05 |
|
Earnings per Share | | $ | 1.98 |
| $ | 1.58 |
| | $ | 2.91 |
| $ | 1.94 |
|
Adjusted EBITDA3 | | $ | 157 |
| $ | 132 |
| | $ | 247 |
| $ | 184 |
|
Adjusted EBITDA, Real Estate Services | | $ | 119 |
| $ | 109 |
| | $ | 181 |
| $ | 144 |
|
Adjusted EBITDA, LaSalle Investment Management | | $ | 38 |
| $ | 23 |
| | $ | 66 |
| $ | 40 |
|
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release |
CEO Comment:
“We are pleased with another record quarter, with double-digit revenue growth in all business segments, the product of years of consistent, disciplined investment across all areas of our company,” said Colin Dyer, President and CEO of JLL. “We remain positive on our prospects for the second half of 2015, with solid momentum across all service lines and markets,” Dyer added.
JLL Reports Second-Quarter 2015 Results - Page 2
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| | | | | | | | | | |
Consolidated Revenue ($ in millions, “LC” = local currency) | Three Months Ended June 30, | | % Change in USD | | % Change in LC |
| 2015 |
| 2014 | | |
| | | | | | |
Real Estate Services (“RES”) | | | | | | |
Leasing | $ | 379.0 |
| $ | 366.8 |
| | 3% | | 8% |
Capital Markets & Hotels | 222.8 |
| 182.2 |
| | 22% | | 33% |
Property & Facility Management Fee Revenue1 | 258.6 |
| 260.6 |
| | (1)% | | 7% |
Property & Facility Management | 363.1 |
| 376.5 |
| | (4)% | | 4% |
Project & Development Services Fee Revenue1 | 121.4 |
| 102.8 |
| | 18% | | 29% |
Project & Development Services | 208.6 |
| 178.1 |
| | 17% | | 34% |
Advisory, Consulting and Other | 119.9 |
| 103.6 |
| | 16% | | 27% |
Total RES Fee Revenue1 | $ | 1,101.7 |
| $ | 1,016.0 |
| | 8% | | 16% |
Total RES Revenue | $ | 1,293.4 |
| $ | 1,207.2 |
| | 7% | | 16% |
| | | | | | |
LaSalle Investment Management ("LaSalle") | | | | | | |
Advisory Fees | $ | 59.8 |
| $ | 60.0 |
| | —% | | 8% |
Transaction Fees & Other | 8.4 |
| 4.4 |
| | 91% | | 108% |
Incentive Fees | 11.9 |
| 5.6 |
| | 113% | | 133% |
Total LaSalle Revenue | $ | 80.1 |
| $ | 70.0 |
| | 14% | | 24% |
| | | | | | |
Total Firm Fee Revenue1 | $ | 1,181.8 |
| $ | 1,086.0 |
| | 9% | | 17% |
Total Firm Revenue | $ | 1,373.5 |
| $ | 1,277.2 |
| | 8% | | 16% |
| | | | | | |
n.m. - not meaningful | | | | | | |
JLL Reports Second-Quarter 2015 Results - Page 3
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| | | | | | | | | | |
Consolidated Revenue ($ in millions, “LC” = local currency) | Six Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Real Estate Services (“RES”) | | | | | | |
Leasing | $ | 685.1 |
| $ | 636.0 |
| | 8% | | 12% |
Capital Markets & Hotels | 400.1 |
| 299.5 |
| | 34% | | 45% |
Property & Facility Management Fee Revenue1 | 518.4 |
| 507.7 |
| | 2% | | 9% |
Property & Facility Management | 735.9 |
| 721.2 |
| | 2% | | 9% |
Project & Development Services Fee Revenue1 | 222.6 |
| 190.2 |
| | 17% | | 27% |
Project & Development Services | 371.2 |
| 327.6 |
| | 13% | | 28% |
Advisory, Consulting and Other | 218.7 |
| 196.6 |
| | 11% | | 22% |
Total RES Fee Revenue1 | $ | 2,044.9 |
| $ | 1,830.0 |
| | 12% | | 19% |
Total RES Revenue | $ | 2,411.0 |
| $ | 2,180.9 |
| | 11% | | 19% |
| | | | | | |
LaSalle Investment Management ("LaSalle") | | | | | | |
Advisory Fees | $ | 120.6 |
| $ | 115.8 |
| | 4% | | 12% |
Transaction Fees & Other | 14.5 |
| 9.0 |
| | 61% | | 76% |
Incentive Fees | 30.9 |
| 8.9 |
| | n.m. | | n.m. |
Total LaSalle Revenue | $ | 166.0 |
| $ | 133.7 |
| | 24% | | 34% |
| | | | | | |
Total Firm Fee Revenue1 | $ | 2,210.9 |
| $ | 1,963.7 |
| | 13% | | 20% |
Total Firm Revenue | $ | 2,577.0 |
| $ | 2,314.6 |
| | 11% | | 20% |
| | | | | | |
n.m. - not meaningful | | | | | | |
Consolidated Performance Highlights:
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• | Consolidated fee revenue for the second quarter was $1.2 billion, up 17 percent from 2014. Growth was broad-based, led by Capital Markets, up $41 million or 33 percent, and Project & Development Services, up $19 million or 29 percent. |
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• | Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.1 billion for the second quarter, compared with $989 million last year, an increase of 17 percent. |
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• | LaSalle Investment Management's advisory fees grew 8 percent while healthy transaction and incentive fees contributed to a total revenue increase of 24 percent. LaSalle also recognized significant equity earnings from legacy investment dispositions. |
| |
• | Adjusted EBITDA margin calculated on a fee revenue basis was 13.3 percent for the second quarter, compared with 12.2 percent last year. |
| |
• | Adjusted earnings per share reached $2.01 for the second quarter, up 20 percent from last year despite a negative foreign exchange impact of approximately $0.15 compared with a year ago. |
JLL Reports Second-Quarter 2015 Results - Page 4
Balance Sheet and Net Interest Expense:
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• | JLL's credit rating was upgraded to BBB+ (Stable) by Standard & Poor’s on July 28, 2015. This upgrade reflects the second time in eight months that S&P has improved JLL’s debt rating. |
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• | The firm's total net debt was $522 million at quarter end, a decrease of $24 million from the first quarter 2015 and $150 million from the second quarter last year. |
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• | Net interest expense for the second quarter was $7.6 million, down from $7.7 million in the second quarter of 2014. Slightly higher borrowing costs partially offset lower average borrowings compared with last year. |
JLL Reports Second-Quarter 2015 Results - Page 5
Business Segment Performance Highlights
Americas Real Estate Services
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| | | | | | | | | | |
Americas Revenue ($ in millions, “LC” = local currency) | Three Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 263.7 |
| $ | 250.5 |
| | 5% | | 6% |
Capital Markets & Hotels | 76.5 |
| 59.2 |
| | 29% | | 30% |
Property & Facility Management Fee Revenue1 | 111.9 |
| 107.6 |
| | 4% | | 8% |
Property & Facility Management | 163.4 |
| 158.3 |
| | 3% | | 9% |
Project & Development Services Fee Revenue1 | 60.4 |
| 51.3 |
| | 18% | | 22% |
Project & Development Services | 61.8 |
| 52.1 |
| | 19% | | 23% |
Advisory, Consulting and Other | 32.1 |
| 24.0 |
| | 34% | | 36% |
Operating Revenue | $ | 544.6 |
| $ | 492.6 |
| | 11% | | 11% |
| | | | | | |
Equity Earnings | 0.5 |
| 1.0 |
| | (50)% | | (41)% |
Total Segment Fee Revenue1 | $ | 545.1 |
| $ | 493.6 |
| | 10% | | 12% |
Total Segment Revenue | $ | 598.0 |
| $ | 545.1 |
| | 10% | | 12% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
|
| | | | | | | | | | |
Americas Revenue
($ in millions, “LC” = local currency) | Six Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 492.9 |
| $ | 438.2 |
| | 12% | | 13% |
Capital Markets & Hotels | 151.3 |
| 100.3 |
| | 51% | | 52% |
Property & Facility Management Fee Revenue1 | 226.1 |
| 213.7 |
| | 6% | | 9% |
Property & Facility Management | 329.9 |
| 304.4 |
| | 8% | | 13% |
Project & Development Services Fee Revenue1 | 113.1 |
| 96.0 |
| | 18% | | 21% |
Project & Development Services | 115.2 |
| 97.6 |
| | 18% | | 21% |
Advisory, Consulting and Other | 62.4 |
| 50.7 |
| | 23% | | 25% |
Operating Revenue | $ | 1,045.8 |
| $ | 898.9 |
| | 16% | | 17% |
| | | | | | |
Equity Earnings | 0.9 |
| 1.2 |
| | (25)% | | (24)% |
Total Segment Fee Revenue1 | $ | 1,046.7 |
| $ | 900.1 |
| | 16% | | 18% |
Total Segment Revenue | $ | 1,152.6 |
| $ | 992.4 |
| | 16% | | 18% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
Americas Performance Highlights:
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• | Fee revenue for the quarter was $545 million, an increase of 11 percent from 2014. Revenue growth compared with last year was broad-based, with Capital Markets & Hotels up 30 percent, Project & Development Services up 22 percent, and Advisory, Consulting and Other up 36 percent. |
JLL Reports Second-Quarter 2015 Results - Page 6
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• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $499 million for the quarter, up 14 percent from last year. The quarter included investments in technology to support our clients and platform to support the growing business. |
| |
• | Operating income was $46 million for the quarter, compared with $47 million in 2014. Year-to-date operating income was $81 million, up from $64 million in 2014. |
| |
• | Adjusted EBITDA was $61 million for the quarter, compared with $60 million last year. Adjusted EBITDA margin, for the quarter, calculated on a fee revenue basis, was 11.3 percent, compared with 12.2 percent in 2014. Year-to-date Adjusted EBITDA was $112 million, up from $91 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 10.7 percent, compared with 10.1 percent in 2014. |
JLL Reports Second-Quarter 2015 Results - Page 7
EMEA Real Estate Services
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EMEA Revenue ($ in millions, “LC” = local currency) | Three Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 65.1 |
| $ | 67.6 |
| | (4)% | | 12% |
Capital Markets & Hotels | 113.2 |
| 93.4 |
| | 21% | | 38% |
Property & Facility Management Fee Revenue1 | 50.9 |
| 60.3 |
| | (16)% | | (3)% |
Property & Facility Management | 69.7 |
| 88.5 |
| | (21)% | | (10)% |
Project & Development Services Fee Revenue1 | 39.4 |
| 34.1 |
| | 16% | | 36% |
Project & Development Services | 110.7 |
| 92.5 |
| | 20% | | 44% |
Advisory, Consulting and Other | 57.6 |
| 53.6 |
| | 7% | | 24% |
Operating Revenue | $ | 326.2 |
| $ | 309.0 |
| | 6% | | 21% |
| | | | | | |
Equity Earnings | 1.1 |
| — |
| | n.m. | | n.m. |
Total Segment Fee Revenue1 | $ | 327.3 |
| $ | 309.0 |
| | 6% | | 22% |
Total Segment Revenue | $ | 417.4 |
| $ | 395.6 |
| | 6% | | 23% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
|
| | | | | | | | | | |
EMEA Revenue
($ in millions, “LC” = local currency) | Six Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 113.5 |
| $ | 121.7 |
| | (7)% | | 9% |
Capital Markets & Hotels | 188.3 |
| 147.8 |
| | 27% | | 46% |
Property & Facility Management Fee Revenue1 | 102.6 |
| 112.4 |
| | (9)% | | 4% |
Property & Facility Management | 144.5 |
| 165.1 |
| | (12)% | | —% |
Project & Development Services Fee Revenue1 | 70.6 |
| 62.7 |
| | 13% | | 32% |
Project & Development Services | 190.6 |
| 174.6 |
| | 9% | | 32% |
Advisory, Consulting and Other | 105.1 |
| 98.4 |
| | 7% | | 22% |
Operating Revenue | $ | 580.1 |
| $ | 543.0 |
| | 7% | | 23% |
| | | | | | |
Equity Earnings | 0.8 |
| — |
| | n.m. | | n.m. |
Total Segment Fee Revenue1 | $ | 580.9 |
| $ | 543.0 |
| | 7% | | 23% |
Total Segment Revenue | $ | 742.8 |
| $ | 707.6 |
| | 5% | | 22% |
| | | | | | |
n.m. - not meaningful | | | | | | |
EMEA Performance Highlights:
| |
• | EMEA's performance during the second quarter was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar against European currencies. |
JLL Reports Second-Quarter 2015 Results - Page 8
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• | Fee revenue for the quarter was $327 million, an increase of 21 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 38 percent, and Project & Development Services up 36 percent, compared with last year. Growth in the region was broad-based, led by the UK, Germany, Sweden, and Central and Eastern Europe. |
| |
• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $295 million for the quarter, compared with $284 million last year. |
| |
• | Operating income was $32 million for the quarter, compared with $25 million in 2014. Year-to-date operating income was $29 million, up from $20 million in 2014. |
| |
• | Adjusted EBITDA was $38 million for the quarter, compared with $30 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 11.7 percent for the quarter, compared with 9.8 percent in 2014. Year-to-date Adjusted EBITDA was $41 million, up from $31 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 7.0 percent, compared with 5.7 percent in 2014. |
JLL Reports Second-Quarter 2015 Results - Page 9
Asia Pacific Real Estate Services
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Asia Pacific Revenue ($ in millions, “LC” = local currency) | Three Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 50.2 |
| $ | 48.7 |
| | 3% | | 11% |
Capital Markets & Hotels | 33.1 |
| 29.6 |
| | 12% | | 25% |
Property & Facility Management Fee Revenue1 | 95.8 |
| 92.7 |
| | 3% | | 13% |
Property & Facility Management | 130.0 |
| 129.7 |
| | —% | | 9% |
Project & Development Services Fee Revenue1 | 21.6 |
| 17.4 |
| | 24% | | 38% |
Project & Development Services | 36.1 |
| 33.5 |
| | 8% | | 20% |
Advisory, Consulting and Other | 30.2 |
| 26.0 |
| | 16% | | 27% |
Operating Revenue | $ | 230.9 |
| $ | 214.4 |
| | 8% | | 18% |
| | | | | | |
Equity Earnings | 0.1 |
| — |
| | n.m. | | n.m. |
Total Segment Fee Revenue1 | $ | 231.0 |
| $ | 214.4 |
| | 8% | | 18% |
Total Segment Revenue | $ | 279.7 |
| $ | 267.5 |
| | 5% | | 14% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
|
| | | | | | | | | | |
Asia Pacific Revenue ($ in millions, “LC” = local currency) | Six Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 | | |
| | | | | | |
Leasing | $ | 78.7 |
| $ | 76.1 |
| | 3% | | 11% |
Capital Markets & Hotels | 60.5 |
| 51.4 |
| | 18% | | 31% |
Property & Facility Management Fee Revenue1 | 189.7 |
| 181.6 |
| | 4% | | 13% |
Property & Facility Management | 261.5 |
| 251.8 |
| | 4% | | 11% |
Project & Development Services Fee Revenue1 | 38.9 |
| 31.5 |
| | 23% | | 35% |
Project & Development Services | 65.4 |
| 55.4 |
| | 18% | | 29% |
Advisory, Consulting and Other | 51.2 |
| 47.5 |
| | 8% | | 17% |
Operating Revenue | $ | 419.0 |
| $ | 388.1 |
| | 8% | | 17% |
| | | | | | |
Equity Losses | — |
| (0.1 | ) | | n.m. | | n.m. |
Total Segment Fee Revenue1 | $ | 419.0 |
| $ | 388.0 |
| | 8% | | 17% |
Total Segment Revenue | $ | 517.3 |
| $ | 482.1 |
| | 7% | | 16% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
Asia Pacific Performance Highlights:
| |
• | Asia Pacific's performance during the second quarter was significantly higher in local currencies than in U.S. dollars due to the strength of the U.S. dollar, particularly against the Australian dollar and Japanese yen. |
| |
• | Fee revenue for the quarter was $231 million, an increase of 18 percent from 2014. Revenue growth was driven by Capital Markets & Hotels, up 25 percent, and Project & Development Services, up 38 percent, compared with last year. Growth in the region was broad-based, led by Japan, Australia, India and Singapore. |
JLL Reports Second-Quarter 2015 Results - Page 10
| |
• | Fee-based operating expenses, excluding restructuring and acquisition charges, were $215 million for the quarter, compared with $199 million last year, an increase of 13 percent. |
| |
• | Operating income was $16 million for the quarter, in-line with 2014. Year-to-date operating income was $21 million, up from $17 million in 2014. |
| |
• | Adjusted EBITDA was $20 million for the quarter, compared with $19 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 8.6 percent for the quarter, compared with 8.9 percent in 2014. Year-to-date Adjusted EBITDA was $28 million, up from $23 million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue basis was 6.6 percent, compared with 6.0 percent in 2014. |
JLL Reports Second-Quarter 2015 Results - Page 11
LaSalle Investment Management
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| | | | | | | | | | |
LaSalle Investment Management Revenue ($ in millions, “LC” = local currency) | Three Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 |
| | |
| | | | | | |
Advisory Fees | $ | 59.8 |
| $ | 60.0 |
| | —% | | 8% |
Transaction Fees & Other | 8.4 |
| 4.4 |
| | 91% | | 108% |
Incentive Fees | 11.9 |
| 5.6 |
| | 113% | | 133% |
Operating Revenue | $ | 80.1 |
| $ | 70.0 |
| | 14% | | 24% |
| | | | | | |
Equity Earnings | 25.4 |
| 11.5 |
| | 121% | | 121% |
Total Segment Revenue | $ | 105.5 |
| $ | 81.5 |
| | 29% | | 38% |
| | | | | | |
n.m. - not meaningful
| | | | | | |
|
| | | | | | | | | | |
LaSalle Investment Management Revenue ($ in millions, “LC” = local currency) | Six Months Ended June 30, | | % Change in USD | | % Change in LC |
2015 |
| 2014 |
| | |
| | | | | | |
Advisory Fees | $ | 120.6 |
| $ | 115.8 |
| | 4% | | 12% |
Transaction Fees & Other | 14.5 |
| 9.0 |
| | 61% | | 76% |
Incentive Fees | 30.9 |
| 8.9 |
| | n.m. | | n.m. |
Operating Revenue | $ | 166.0 |
| $ | 133.7 |
| | 24% | | 34% |
| | | | | | |
Equity Earnings | 36.8 |
| 20.3 |
| | 81% | | 83% |
Total Segment Revenue | $ | 202.8 |
| $ | 154.0 |
| | 32% | | 41% |
| | | | | | |
n.m. - not meaningful | | | | | | |
LaSalle Investment Management Performance Highlights:
| |
• | Total segment revenue was $106 million for the quarter, compared with $82 million last year. This included $8 million of transaction fees and other income, $12 million of incentive fees and $25 million of equity earnings. |
| |
• | Equity earnings grew significantly for the quarter, driven by the sale of assets as LaSalle realizes gains from legacy investments. |
| |
• | Operating expenses were $68 million for the quarter, compared with $59 million last year. |
| |
• | Operating income was $38 million for the quarter, compared with $22 million last year. |
| |
• | Adjusted EBITDA was $38 million for the quarter, compared with $23 million last year. Adjusted EBITDA margin was 36.0 percent, compared with 27.9 percent in 2014. Year-to-date Adjusted EBITDA was $66 million, up from $40 million in 2014. Year-to-date Adjusted EBITDA margin was 32.8 percent, compared to 25.7 percent in 2014. |
| |
• | Capital raise was $948 million for the quarter and $3.0 billion year-to-date. |
| |
• | Assets under management were $56.0 billion as of June 30, 2015, up from $55.3 billion as of March 31, 2015. The net increase in assets under management resulted from $3.5 billion of acquisitions and takeovers, $2.5 billion of dispositions and withdrawals, $1.3 billion of net valuation increases and $1.6 billion of net foreign currency decreases. |
JLL Reports Second-Quarter 2015 Results - Page 12
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. A Fortune 500 company 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 $56.0 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, on Form 10-Q for the quarter ended March 31, 2015, 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 Second-Quarter 2015 Results - Page 13
Conference Call
Management will conduct a conference call with shareholders, analysts and investment professionals on Wednesday, July 29, 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):
|
| | |
∙ | U.S. callers: | +1 877 800 0896 |
∙ | International callers: | +1 706 679 7364 |
∙ | Passcode: | 78003651 |
Webcast
We are also offering a live webcast. Follow these steps to participate:
| |
1. | You must have a minimum 14.4 Kbps Internet connection |
| |
2. | Log on to http://www.visualwebcaster.com/event.asp?id=102619 |
| |
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 (102619). |
Supplemental Information
Supplemental information regarding the second-quarter 2015 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.
Conference Call Replay
Available: 12:00 p.m. EDT Wednesday, July 29, 2015 through 11:59 p.m. EDT Sunday, August 30, 2015 at the following numbers:
|
| | | |
∙ | U.S. callers: | +1 855 859 2056 | or + 1 800 585 8367 |
∙ | International callers: | +1 404 537 3406 | |
∙ | Passcode: | 78003651 | |
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.
###
|
| | | | | | | | | | | | | | | |
JONES LANG LASALLE INCORPORATED |
Consolidated Statements of Operations |
For the Three and Six Months Ended June 30, 2015 and 2014 |
(in thousands, except share data) |
(Unaudited) |
| Three Months Ended
June 30, | | Six Months Ended June 30, |
| |
| 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | |
Revenue | $ | 1,373,475 |
| | $ | 1,277,204 |
| | $ | 2,576,986 |
| | $ | 2,314,646 |
|
| | | | | | | |
Operating expenses: | | | | | | | |
Compensation and benefits | 825,058 |
| | 761,224 |
| | 1,562,975 |
| | 1,398,563 |
|
Operating, administrative and other | 418,127 |
| | 396,086 |
| | 805,324 |
| | 753,086 |
|
Depreciation and amortization | 25,495 |
| | 22,780 |
| | 50,418 |
| | 45,191 |
|
Restructuring and acquisition charges 4 | 1,832 |
| | 5,458 |
| | 2,648 |
| | 41,416 |
|
Total operating expenses | 1,270,512 |
| | 1,185,548 |
| | 2,421,365 |
| | 2,238,256 |
|
| | | | | | | |
Operating income1 | 102,963 |
| | 91,656 |
| | 155,621 |
| | 76,390 |
|
| | | | | | | |
Interest expense, net of interest income | (7,558 | ) | | (7,664 | ) | | (13,596 | ) | | (14,300 | ) |
Equity earnings from real estate ventures | 27,128 |
| | 12,491 |
| | 38,511 |
| | 21,393 |
|
| | | | | | | |
Income before income taxes and noncontrolling interest 4 | 122,533 |
| | 96,483 |
| | 180,536 |
| | 83,483 |
|
Provision for (benefit from) income taxes 4 | 31,123 |
| | 24,121 |
| | 45,856 |
| | (5,024 | ) |
Net income 4 | 91,410 |
| | 72,362 |
| | 134,680 |
| | 88,507 |
|
| | | | | | | |
Net income attributable to noncontrolling interest | 1,099 |
| | 420 |
| | 2,475 |
| | 663 |
|
Net income attributable to the Company | $ | 90,311 |
| | $ | 71,942 |
| | $ | 132,205 |
| | $ | 87,844 |
|
| | | | | | | |
Dividends on unvested common stock, net of tax benefit | 163 |
| | 176 |
| | 163 |
| | 176 |
|
Net income attributable to common shareholders | $ | 90,148 |
| | $ | 71,766 |
| | $ | 132,042 |
| | $ | 87,668 |
|
| | | | | | | |
Basic earnings per common share | $ | 2.01 |
| | $ | 1.61 |
| | $ | 2.94 |
| | $ | 1.97 |
|
| | | | | | | |
Basic weighted average shares outstanding | 44,868,979 |
| | 44,586,095 |
| | 44,856,374 |
| | 44,550,154 |
|
| | | | | | | |
Diluted earnings per common share 2 | $ | 1.98 |
| | $ | 1.58 |
| | $ | 2.91 |
| | $ | 1.94 |
|
| | | | | | | |
Diluted weighted average shares outstanding | 45,434,585 |
| | 45,278,494 |
| | 45,393,438 |
| | 45,220,082 |
|
| | | | | | | |
EBITDA 3 | $ | 155,586 |
| | $ | 126,927 |
| | $ | 244,550 |
| | $ | 142,974 |
|
| | | | | | | |
Please reference attached financial statement notes. | | | | | | |
|
| | | | | | | | | | | | | | | |
JONES LANG LASALLE INCORPORATED |
Segment Operating Results |
For the Three and Six Months Ended June 30, 2015 and 2014 |
(in thousands) |
(Unaudited) |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
|
| 2015 | | 2014 | | 2015 | | 2014 |
REAL ESTATE SERVICES | | | | | | | |
| | | | | | | |
AMERICAS | | | | | | | |
Revenue: | | | | | | | |
Operating revenue | $ | 597,470 |
| | $ | 544,082 |
| | $ | 1,151,666 |
| | $ | 991,164 |
|
Equity earnings | 570 |
| | 967 |
| | 916 |
| | 1,202 |
|
Total segment revenue | 598,040 |
| | 545,049 |
| | 1,152,582 |
| | 992,366 |
|
Gross contract costs1 | (52,937 | ) | | (51,479 | ) | | (105,896 | ) | | (92,262 | ) |
Total segment fee revenue | 545,103 |
| | 493,570 |
| | 1,046,686 |
| | 900,104 |
|
| | | | | | | |
Operating expenses: | | | | | | | |
Compensation, operating and administrative expenses | 536,685 |
| | 484,750 |
| | 1,040,261 |
| | 901,759 |
|
Depreciation and amortization | 15,322 |
| | 13,531 |
| | 30,873 |
| | 26,842 |
|
Total segment operating expenses | 552,007 |
| | 498,281 |
| | 1,071,134 |
| | 928,601 |
|
Gross contract costs1 | (52,937 | ) | | (51,479 | ) | | (105,896 | ) | | (92,262 | ) |
Total fee-based segment operating expenses | 499,070 |
| | 446,802 |
| | 965,238 |
| | 836,339 |
|
| | | | | | | |
Operating income | $ | 46,033 |
| | $ | 46,768 |
| | $ | 81,448 |
| | $ | 63,765 |
|
| | | | | | | |
Adjusted EBITDA | $ | 61,355 |
| | $ | 60,299 |
| | $ | 112,321 |
| | $ | 90,607 |
|
| | | | | | | |
EMEA | | | | | | | |
Revenue: | | | | | | | |
Operating revenue | $ | 416,259 |
| | $ | 395,643 |
| | $ | 742,033 |
| | $ | 707,525 |
|
Equity earnings | 1,112 |
| | — |
| | 744 |
| | — |
|
Total segment revenue | 417,371 |
| | 395,643 |
| | 742,777 |
| | 707,525 |
|
Gross contract costs1 | (90,060 | ) | | (86,673 | ) | | (161,922 | ) | | (164,525 | ) |
Total segment fee revenue | 327,311 |
| | 308,970 |
| | 580,855 |
| | 543,000 |
|
| | | | | | | |
Operating expenses: | | | | | | | |
Compensation, operating and administrative expenses | 379,106 |
| | 365,360 |
| | 702,192 |
| | 676,706 |
|
Depreciation and amortization | 6,073 |
| | 5,504 |
| | 11,299 |
| | 10,948 |
|
Total segment operating expenses | 385,179 |
| | 370,864 |
| | 713,491 |
| | 687,654 |
|
Gross contract costs1 | (90,060 | ) | | (86,673 | ) | | (161,922 | ) | | (164,525 | ) |
Total fee-based segment operating expenses | 295,119 |
| | 284,191 |
| | 551,569 |
| | 523,129 |
|
| | | | | | | |
Operating income | $ | 32,192 |
| | $ | 24,779 |
| | $ | 29,286 |
| | $ | 19,871 |
|
| | | | | | | |
Adjusted EBITDA | $ | 38,265 |
| | $ | 30,283 |
| | $ | 40,585 |
| | $ | 30,819 |
|
|
| | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| |
| 2015 | | 2014 | | 2015 | | 2014 |
ASIA PACIFIC | | | | | | | |
Revenue: | | | | | | | |
Operating revenue | $ | 279,573 |
| | $ | 267,477 |
| | $ | 517,322 |
| | $ | 482,182 |
|
Equity earnings (losses) | 74 |
| | 4 |
| | 22 |
| | (79 | ) |
Total segment revenue | 279,647 |
| | 267,481 |
| | 517,344 |
| | 482,103 |
|
Gross contract costs1 | (48,669 | ) | | (53,096 | ) | | (98,257 | ) | | (94,063 | ) |
Total segment fee revenue | 230,978 |
| | 214,385 |
| | 419,087 |
| | 388,040 |
|
| | | | | | | |
Operating expenses: | | | | | | | |
Compensation, operating and administrative expenses | 259,878 |
| | 248,454 |
| | 489,500 |
| | 458,759 |
|
Depreciation and amortization | 3,583 |
| | 3,257 |
| | 7,222 |
| | 6,425 |
|
Total segment operating expenses | 263,461 |
| | 251,711 |
| | 496,722 |
| | 465,184 |
|
Gross contract costs1 | (48,669 | ) | | (53,096 | ) | | (98,257 | ) | | (94,063 | ) |
Total fee-based segment operating expenses | 214,792 |
| | 198,615 |
| | 398,465 |
| | 371,121 |
|
| | | | | | | |
Operating income | $ | 16,186 |
| | $ | 15,770 |
| | $ | 20,622 |
| | $ | 16,919 |
|
| | | | | | | |
Adjusted EBITDA | $ | 19,769 |
| | $ | 19,027 |
| | $ | 27,844 |
| | $ | 23,344 |
|
| | | | | | | |
LASALLE INVESTMENT MANAGEMENT | | | | | | | |
Revenue: | | | | | | | |
Operating revenue | $ | 80,173 |
| | $ | 70,002 |
| | $ | 165,965 |
| | $ | 133,775 |
|
Equity earnings | 25,372 |
| | 11,520 |
| | 36,829 |
| | 20,270 |
|
Total segment revenue | 105,545 |
| | 81,522 |
| | 202,794 |
| | 154,045 |
|
| | | | | | | |
Operating expenses: | | | | | | | |
Compensation, operating and administrative expenses | 67,516 |
| | 58,746 |
| | 136,346 |
| | 114,425 |
|
Depreciation and amortization | 517 |
| | 488 |
| | 1,024 |
| | 976 |
|
Total segment operating expenses | 68,033 |
| | 59,234 |
| | 137,370 |
| | 115,401 |
|
| | | | | | | |
Operating income | $ | 37,512 |
| | $ | 22,288 |
| | $ | 65,424 |
| | $ | 38,644 |
|
| | | | | | | |
Adjusted EBITDA | $ | 38,029 |
| | $ | 22,776 |
| | $ | 66,448 |
| | $ | 39,620 |
|
| | | | | | | |
| | | | | | | |
SEGMENT RECONCILING ITEMS | | | | | | | |
Total segment revenue | $ | 1,400,603 |
| | $ | 1,289,695 |
| | $ | 2,615,497 |
| | $ | 2,336,039 |
|
Reclassification of equity earnings | 27,128 |
| | 12,491 |
| | 38,511 |
| | 21,393 |
|
Total revenue | $ | 1,373,475 |
| | $ | 1,277,204 |
| | $ | 2,576,986 |
| | $ | 2,314,646 |
|
| | | | | | | |
Total operating expenses before restructuring and acquisition charges | 1,268,680 |
| | 1,180,090 |
| | 2,418,717 |
| | 2,196,840 |
|
Operating income before restructuring and acquisition charges | $ | 104,795 |
| | $ | 97,114 |
| | $ | 158,269 |
| | $ | 117,806 |
|
| | | | | | | |
Restructuring and acquisition charges | 1,832 |
| | 5,458 |
| | 2,648 |
| | 41,416 |
|
Operating income after restructuring and acquisition charges | $ | 102,963 |
| | $ | 91,656 |
| | $ | 155,621 |
| | $ | 76,390 |
|
| | | | | | | |
Total adjusted EBITDA | $ | 157,418 |
| | $ | 132,385 |
| | $ | 247,198 |
| | $ | 184,390 |
|
Restructuring and acquisition charges | 1,832 |
| | 5,458 |
| | 2,648 |
| | 41,416 |
|
Total EBITDA | $ | 155,586 |
| | $ | 126,927 |
| | $ | 244,550 |
| | $ | 142,974 |
|
| | | | | |
Please reference attached financial statement notes. | | | | | |
|
| | | | | | | | | | | | | | |
JONES LANG LASALLE INCORPORATED | | |
Consolidated Balance Sheets | | |
June 30, 2015, December 31, 2014 and June 30, 2014 | | |
(in thousands) | | |
| | | | (Unaudited) | | | | (Unaudited) |
| | | | June 30, | | December 31, | | June 30, |
| | | | 2015 | | 2014 | | 2014 |
ASSETS | | | | | | |
Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 191,034 |
| | $ | 250,413 |
| | $ | 150,708 |
|
| Trade receivables, net of allowances | | 1,305,467 |
| | 1,375,035 |
| | 1,195,172 |
|
| Notes and other receivables | | 218,003 |
| | 181,377 |
| | 172,700 |
|
| Warehouse receivables | | 32,200 |
| | 83,312 |
| | 100,922 |
|
| Prepaid expenses | | 71,730 |
| | 64,963 |
| | 75,859 |
|
| Deferred tax assets, net | | 131,881 |
| | 135,251 |
| | 128,901 |
|
| Other | | 34,633 |
| | 27,825 |
| | 9,676 |
|
| | Total current assets | | 1,984,948 |
| | 2,118,176 |
| | 1,833,938 |
|
| | | | | | | | |
Property and equipment, net of accumulated depreciation | | 362,988 |
| | 368,361 |
| | 331,850 |
|
Goodwill, with indefinite useful lives | | 1,933,280 |
| | 1,907,924 |
| | 1,946,414 |
|
Identified intangibles, net of accumulated amortization | | 38,367 |
| | 38,841 |
| | 44,146 |
|
Investments in real estate ventures | | 333,016 |
| | 297,142 |
| | 295,618 |
|
Long-term receivables | | 99,396 |
| | 85,749 |
| | 62,412 |
|
Deferred tax assets, net | | 102,718 |
| | 90,897 |
| | 69,148 |
|
Deferred compensation plans | | 126,627 |
| | 111,234 |
| | 96,729 |
|
Other | | 61,961 |
| | 57,012 |
| | 96,001 |
|
| | Total assets | | $ | 5,043,301 |
| | $ | 5,075,336 |
| | $ | 4,776,256 |
|
| | | | | | | | |
LIABILITIES AND EQUITY | | | | |
Current liabilities: | | | | |
| Accounts payable and accrued liabilities | | $ | 575,807 |
| | $ | 630,037 |
| | $ | 491,598 |
|
| Accrued compensation | | 662,865 |
| | 990,678 |
| | 549,234 |
|
| Short-term borrowings | | 22,150 |
| | 19,623 |
| | 24,738 |
|
| Deferred tax liabilities, net | | 16,554 |
| | 16,554 |
| | 11,631 |
|
| Deferred income | | 127,332 |
| | 104,565 |
| | 111,187 |
|
| Deferred business acquisition obligations | | 39,463 |
| | 49,259 |
| | 43,595 |
|
| Warehouse facility | | 32,200 |
| | 83,312 |
| | 100,922 |
|
| Minority shareholder redemption liability | | — |
| | 11,158 |
| | — |
|
| Other | | 146,689 |
| | 141,825 |
| | 116,610 |
|
| | Total current liabilities | | 1,623,060 |
| | 2,047,011 |
| | 1,449,515 |
|
| | | | | | | | |
Noncurrent liabilities: | | | | | | |
| Credit facility | | 329,998 |
| | — |
| | 410,000 |
|
| Long-term senior notes | | 275,000 |
| | 275,000 |
| | 275,000 |
|
| Deferred tax liabilities, net | | 17,712 |
| | 17,082 |
| | 18,029 |
|
| Deferred compensation | | 141,799 |
| | 125,857 |
| | 105,743 |
|
| Deferred business acquisition obligations | | 46,360 |
| | 68,848 |
| | 69,161 |
|
| Minority shareholder redemption liability | | — |
| | — |
| | 10,657 |
|
| Other | | 114,512 |
| | 118,969 |
| | 97,474 |
|
| | Total liabilities | | 2,548,441 |
| | 2,652,767 |
| | 2,435,579 |
|
|
| | | | | | | | | | | | | | |
| | | | (Unaudited) | | | | (Unaudited) |
| | | | June 30, | | December 31, | | June 30, |
| | | | 2015 | | 2014 | | 2014 |
Redeemable noncontrolling interest | | 9,905 |
| | 13,449 |
| | 13,725 |
|
| | | | | | | | |
Company shareholders' equity: | | | | | | |
| Common stock, $.01 par value per share,100,000,000 shares authorized; 44,880,457, 44,828,779, and 44,621,117 shares issued and outstanding as of June 30, 2015, December 31, 2014 and June 30, 2014, respectively | | 449 |
| | 448 |
| | 446 |
|
| Additional paid-in capital | | 974,174 |
| | 961,850 |
| | 957,763 |
|
| Retained earnings | | 1,751,018 |
| | 1,631,145 |
| | 1,344,318 |
|
| Shares held in trust | | (6,329 | ) | | (6,407 | ) | | (6,250 | ) |
| Accumulated other comprehensive income (loss) | | (254,772 | ) | | (200,239 | ) | | 13,750 |
|
| | Total Company shareholders' equity | | 2,464,540 |
| | 2,386,797 |
| | 2,310,027 |
|
| | | | | | | | |
| Noncontrolling interest | | 20,415 |
| | 22,323 |
| | 16,925 |
|
| | Total equity | | 2,484,955 |
| | 2,409,120 |
| | 2,326,952 |
|
| | | | | | | | |
| | Total liabilities and equity | | $ | 5,043,301 |
| | $ | 5,075,336 |
| | $ | 4,776,256 |
|
| | | | | | | | |
Please reference attached financial statement notes. | | | | | | |
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2015 and 2014
(in thousands)
|
| | | | | | | |
| Six Months Ended |
| June 30, |
| 2015 | | 2014 |
| | | |
Cash used in operating activities | $ | (214,851 | ) | | $ | (147,008 | ) |
| | | |
Cash used in investing activities | (92,307 | ) | | (83,865 | ) |
| | | |
Cash provided by financing activities | 255,620 |
| | 228,252 |
|
| | | |
Effect of currency exchange rate changes on cash and cash equivalents | (7,841 | ) | | 603 |
|
| | | |
Net decrease in cash and cash equivalents | $ | (59,379 | ) | | $ | (2,018 | ) |
| | | |
Cash and cash equivalents, beginning of period | 250,413 |
| | 152,726 |
|
| | | |
Cash and cash equivalents, end of period | $ | 191,034 |
| | $ | 150,708 |
|
| | | |
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 and six months ended June 30, 2015 and 2014.
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
($ in millions) | | 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | | |
Revenue | | $ | 1,373.5 |
| | $ | 1,277.2 |
| | $ | 2,577.0 |
| | $ | 2,314.6 |
|
Gross contract costs | | (191.7 | ) | | (191.2 | ) | | (366.1 | ) | | (350.9 | ) |
Fee revenue | | $ | 1,181.8 |
| | $ | 1,086.0 |
| | $ | 2,210.9 |
| | $ | 1,963.7 |
|
| | | | | | | | |
Operating expenses | | $ | 1,270.5 |
| | $ | 1,185.5 |
| | $ | 2,421.4 |
| | $ | 2,238.2 |
|
Gross contract costs | | (191.7 | ) | | (191.2 | ) | | (366.1 | ) | | (350.9 | ) |
Fee-based operating expenses | | $ | 1,078.8 |
| | $ | 994.3 |
| | $ | 2,055.3 |
| | $ | 1,887.3 |
|
| | | | | | | | |
Operating income | | $ | 103.0 |
| | $ | 91.7 |
| | $ | 155.6 |
| | $ | 76.4 |
|
| | | | | | | | |
Add: | | | | | | | | |
Restructuring and acquisition charges* | | 1.8 |
| | 5.5 |
| | 2.6 |
| | 41.4 |
|
Adjusted operating income | | $ | 104.8 |
| | $ | 97.2 |
| | $ | 158.2 |
| | $ | 117.8 |
|
| | | | | | | | |
Adjusted operating income margin | | 8.9 | % | | 9.0 | % | | 7.2 | % | | 6.0 | % |
*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 and six months ended June 30, 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 | | Six Months Ended |
| | June 30, | | June 30, |
($ in millions, except per share data) | | 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | | |
GAAP net income attributable to common shareholders | | $ | 90.1 |
| | $ | 71.8 |
| | $ | 132.0 |
| | $ | 87.7 |
|
Shares (in 000s) | | 45,435 |
| | 45,278 |
| | 45,393 |
| | 45,220 |
|
GAAP diluted earnings per share | | $ | 1.98 |
| | $ | 1.58 |
| | $ | 2.91 |
| | $ | 1.94 |
|
| | | | | | | | |
GAAP net income attributable to common shareholders | | $ | 90.1 |
| | $ | 71.8 |
| | $ | 132.0 |
| | $ | 87.7 |
|
Restructuring and acquisition charges, net* | | 1.4 |
| | 4.1 |
| | 2.0 |
| | 5.2 |
|
Adjusted net income | | $ | 91.5 |
| | $ | 75.9 |
| | $ | 134.0 |
| | $ | 92.9 |
|
| | | | | | | | |
Shares (in 000s) | | 45,435 |
| | 45,278 |
| | 45,393 |
| | 45,220 |
|
| | | | | | | | |
Adjusted diluted earnings per share | | $ | 2.01 |
| | $ | 1.68 |
| | $ | 2.95 |
| | $ | 2.05 |
|
*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 | | Six Months Ended |
| | June 30, | | June 30, |
($ in millions) | | 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | | |
GAAP net income | | $ | 91.4 |
| | $ | 72.4 |
| | $ | 134.7 |
| | $ | 88.5 |
|
Add: | | | | | | | | |
Interest expense, net of interest income | | 7.6 |
| | 7.6 |
| | 13.6 |
| | 14.3 |
|
Provision for (benefit from) income taxes | | 31.1 |
| | 24.1 |
| | 45.9 |
| | (5.0 | ) |
Depreciation and amortization | | 25.5 |
| | 22.8 |
| | 50.4 |
| | 45.2 |
|
| | |
| | |
| | |
| | |
|
EBITDA | | $ | 155.6 |
| | $ | 126.9 |
| | $ | 244.6 |
| | $ | 143.0 |
|
Add: | | | | | | | | |
Restructuring and acquisition charges | | 1.8 |
| | 5.5 |
| | 2.6 |
| | 41.4 |
|
Adjusted EBITDA | | $ | 157.4 |
| | $ | 132.4 |
| | $ | 247.2 |
| | $ | 184.4 |
|
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 June 30, 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 Second-Quarter 2015
Capital Markets(1) (in USD) Americas 20% 19% 20% EMEA(2) 3% 3% -10-15% Asia Pacific -2% 2% 5-10% Total 9% 9% 5% Leasing (in square meters) Americas (U.S. only) 4% -1% 0-5% EMEA (Europe only) 5% 2% Flat Asia Pacific (select markets) 41% 25% 15-20% Total 8% 3% 0-5% Investment Volumes Vary by Region; Outlook Consistent in Local Currency Q2 2015 Market Volume & Outlook Actual Forecast Q2 2015 v. Q2 2014 Q2 YTD 2015 v. Q2 YTD 2014 FY 2015 v. FY 2014 Leasing Volumes Improving; Outlook Steady (1) Market volume data presented in U.S. dollar and excludes multi-family assets. (2) Q2 2015 actual volumes are up 28% compared to Q2 2014 in euro terms, up 3% in US Dollars. JLL Research volume projections for full year 2015 are up 5% in euro terms compared to 2014 and a decrease of 10-15% in US Dollars. Source: JLL Research, July 2015 JLL Research 2 Market Volumes Actual Forecast Q2 2015 v. Q2 2014 Q2 YTD 2015 v. Q2 YTD 2014 FY 2015 v. FY 2014 Gross Absorption
Multi-Regional Arris Group 2.8M sf Nokia Americas Bristol-Meyers Squibb 9.1M sf Waldorf Astoria Chicago $112M Kimberly-Clark 2.2M sf Amazon.com, New Jersey 1.1M sf Aon Center, Chicago $712M Foot Locker, New York 145K sf United Plaza/1650 Arch, Philadelphia $200M GlaxoSmithKline, New Jersey 144K sf EMEA Nido Student Accomodation, London £600M AXA, Belgium, Brussels 106K sf AMF/Ilmarien/Kesko JV, Finland & Sweden €652M NLMK, Moscow 66K sf InterContinental Paris LeGrand $396M Baker & McKenzie, Johannesburg 57K sf Deka Madrid Portfolio €55M Confidential Technology Company, Warsaw 237K sf Baker & McKenzie, Johannesburg 57K sf Asia Pacific University of Hong Kong 3.5M sf Equity Commonwealth Portfolio, Australia AUD 303M Cathay Pacific Airways 2.0M sf Telstra, Australia 15,000 Properties Myer Centre Adelaide AUD 288M Waterfront Place/Eagle Street Pier, Brisbane AUD 635M WPP, Shanghai 441K sf Challenger Portfolio, Australia 4.9M sf Selected Business Wins and Expansions 3
Rental Values Capital Values + 20-30% Tokyo, Madrid + 10-20% Hong Kong, Tokyo London*, Sydney, Boston, Chicago, Los Angeles,New York*, San Francisco, Frankfurt, Shanghai + 5-10% Sydney, London*, Shanghai, Boston, Chicago, Toronto, Washington DC, Paris*, BeijingLos Angeles, New York*, San Francisco, Madrid, Beijing + 0-5% Toronto, Dubai, Washington DC, Seoul, Hong Kong, Dubai, Mexico City,Mexico City, Stockholm, Seoul, Brussels, Frankfurt Brussels, Stockholm, - 0-5% Paris*, Sao Paulo, Mumbai Mumbai, Singapore - 5-10% Sao Paulo - 10-20% Singapore, Moscow - 20-30% Moscow Prime Offices – Projected Changes in Values, 2015 4 NOTES: *New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency. Source: JLL Research, July 2015
Note: Equity earnings of $27.1M and $38.5M in Q2 2015 and YTD 2015, respectively, 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 costs. Consolidated Fee - $1,182 Gross - $1,374 LaSalle $105 EMEA Fee - $327 Gross - $418 Q2 2015 Revenue Q2 2015 performance ($ in millions) Americas Fee - $545 Gross - $598 Asia Pac Fee - $231 Gross - $280 5 Consolidated Fee - $2,211 Gross - $2,577 LaSalle $203 EMEA Fee - $581 Gross - $743 YTD 2015 Americas Fee - $1,047 Gross - $1,153 Asia Pac Fee - $419 Gross - $517 Q2 2015 YTD 2015 YOY % Growth, Fee Revenue Basis LC USD Segment LC USD 12% 10% Americas 18% 16% 22% 6% EMEA 23% 7% 18% 8% Asia Pacific 17% 8% 38% 29% LaSalle 41% 32% 17% 9% Consolidated 20% 13% 16% 8% Consolidated Gross Revenue 20% 11%
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. Q2 2015 Real Estate Services revenue ($ in millions; % change in local currency over Q2 2014) Americas EMEA Asia Pacific Total RES Leasing $263.7 6% $65.1 12% $50.2 11% $379.0 8% Capital Markets & Hotels $76.5 30% $113.2 38% $33.1 25% $222.8 33% Property & Facility Management Fee $111.9 8% $50.9 (3%) $95.8 13% $258.6 7% Gross Revenue $163.4 9% $69.7 (10%) $130.0 9% $363.1 4% Project & Development Services - Fee $60.4 22% $39.4 36% $21.6 38% $121.4 29% Gross Revenue $61.8 23% $110.7 44% $36.1 20% $208.6 34% Advisory, Consulting & Other $32.1 36% $57.6 24% $30.2 27% $119.9 27% Total RES Operating Fee Revenue $544.6 11% $326.2 21% $230.9 18% $1,101.7 16% Total Gross Revenue $597.5 12% $416.3 23% $279.6 14% $1,293.4 16% 6
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. YTD 2015 Real Estate Services revenue ($ in millions; % change in local currency over YTD 2014) Americas EMEA Asia Pacific Total RES Leasing $492.9 13% $113.5 9% $78.7 11% $685.1 12% Capital Markets & Hotels $151.3 52% $188.3 46% $60.5 31% $400.1 45% Property & Facility Management Fee $226.1 9% $102.6 4% $189.7 13% $518.4 9% Gross Revenue $329.9 13% $144.5 —% $261.5 11% $735.9 9% Project & Development Services - Fee $113.1 21% $70.6 32% $38.9 35% $222.6 27% Gross Revenue $115.2 21% $190.6 32% $65.4 29% $371.2 28% Advisory, Consulting & Other $62.4 25% $105.1 22% $51.2 17% $218.7 22% Total RES Operating Fee Revenue $1,045.8 17% $580.1 23% $419.0 17% $2,044.9 19% Total Gross Revenue $1,151.7 18% $742.0 22% $517.3 16% $2,411.0 19% 7
U.K. $18.0 North America $13.4 Asia Pacific $7.0 • Successful capital raising with $948 million for the quarter, $3.0 billion raised year-to-date • Assets Under Management reach $56 billion, up from $50 billion a year ago • Equity earnings from sale of legacy investments • Significant incentive fee potential if markets remain stable; timing to be driven by asset sales Separate Accounts $30.7 Commingled Funds $11.4 Public Securities $13.9 Q2 & Year-to-date 2015 Highlights Q2 2015 AUM = $56 Billion ($ in billions) Note: AUM data reported on a one-quarter lag. Public Securities $13.9 Continental Europe $3.7 8
Investment grade ratings; Baa2 (Stable) / BBB+ (Stable) ◦ JLL's credit rating upgraded to BBB+ (Stable) by Standard & Poor's on July 28, 2015 ◦ Low debt cost: year-to-date net interest expense of $13.6 million versus $14.3 million in 2014 • M&A Activity ◦ 10 acquisitions executed or announced in 2015, 20 acquisitions since the beginning of 2014 ◦ Ample capacity on $2 billion bank credit facility ◦ Disciplined underwriting remains a focus ▪ Strategic fit, culture alignment and financially accretive • Q2 YTD Capital Spending ◦ Capital Expenditures (1) $ 44 million ◦ M&A (2) $ 42 million ◦ Co-Investment (3) $ 12 million Balance Sheet $ millions Q2 2015 Q4 2014 Q2 2014 Cash and Cash Equivalents $ 191 $ 250 $ 151 Short Term Borrowings 22 20 25 Credit Facility 330 — 410 Net Bank Debt $ 161 $ (230) $ 284 Long Term Senior Notes 275 275 275 Deferred Business Acquisition Obligations 86 118 113 Total Net Debt $ 522 $ 163 $ 672 Balance Sheet Highlights Strong balance sheet 9 (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 upfront payments made at close plus deferred acquisition payments and earn outs paid during the period for transactions closed in prior periods (3) Includes capital contributions of $32M partially offset by distributions of $20M
Appendix 10
Prime Offices – Capital Value Clock, Q2 2014 v Q2 2015 Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, July 2015 Americas EMEA Asia Pacific The Jones Lang LaSalle Property Clocks SM 11
Prime Offices – Rental Clock, Q2 2014 v Q2 2015 Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, July 2015 Americas EMEA Asia Pacific The Jones Lang LaSalle Property Clocks SM 12
Refer to page 16 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the three and six months ended June 30, 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 $157 Q2 2015 Adjusted EBITDA Q2 2015 performance ($ in millions) Asia Pac $20 EMEA $38 LaSalle $38 13 Consolidated $247 YTD 2015 Asia Pac $28 EMEA $41 LaSalle $66 Q2 Adj. EBITDA Margin, Fee Revenue YTD 2015 2014 Segment 2015 2014 11.3% 12.2% Americas 10.7% 10.1% 11.7% 9.8% EMEA 7.0% 5.7% 8.6% 8.9% Asia Pacific 6.6% 6.0% 36.0% 28.0% LaSalle 32.7% 25.7% 13.3% 12.2% Consolidated 11.2% 9.4% Americas $61 Americas $112
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. Q2 2015 Real Estate Services revenue ($ in millions; % change in USD over Q2 2014) Americas EMEA Asia Pacific Total RES Leasing $263.7 5% $65.1 -4% $50.2 3% $379.0 3% Capital Markets & Hotels $76.5 29% $113.2 21% $33.1 12% $222.8 22% Property & Facility Management Fee $111.9 4% $50.9 -16% $95.8 3% $258.6 -1% Gross Revenue $163.4 3% $69.7 -21% $130.0 —% $363.1 -4% Project & Development Services - Fee $60.4 18% $39.4 16% $21.6 24% $121.4 18% Gross Revenue $61.8 19% $110.7 20% $36.1 8% $208.6 17% Advisory, Consulting & Other $32.1 34% $57.6 7% $30.2 16% $119.9 16% Total RES Operating Fee Revenue $544.6 11% $326.2 6% $230.9 8% $1,101.7 8% Total Gross Revenue $597.5 10% $416.3 6% $279.6 5% $1,293.4 7% 14
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. YTD 2015 Real Estate Services revenue ($ in millions; % change in USD over YTD 2014) Americas EMEA Asia Pacific Total RES Leasing $492.9 12% $113.5 -7% $78.7 3% $685.1 8% Capital Markets & Hotels $151.3 51% $188.3 27% $60.5 18% $400.1 34% Property & Facility Management Fee $226.1 6% $102.6 -9% $189.7 4% $518.4 2% Gross Revenue $329.9 8% $144.5 -12% $261.5 4% $735.9 2% Project & Development Services - Fee $113.1 18% $70.6 13% $38.9 23% $222.6 17% Gross Revenue $115.2 18% $190.6 9% $65.4 18% $371.2 13% Advisory, Consulting & Other $62.4 23% $105.1 7% $51.2 8% $218.7 11% Total RES Operating Fee Revenue $1,045.8 16% $580.1 7% $419.0 8% $2,044.9 12% Total Gross Revenue $1,151.7 16% $742.0 5% $517.3 7% $2,411.0 11% 15
• Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily • Gross accounting requirements increase revenue and costs without corresponding profit • Business managed on a fee revenue basis to focus on margin expansion in the base business Revenue Gross contract costs Fee revenue Operating expenses Gross contract costs Fee-based operating expenses Operating income Restructuring and acquisition charges Adjusted operating income Adjusted operating income margin Fee Revenue / Expense Reconciliation ($ in millions) Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges are excluded from adjusted operating income margin. 2015 2014 2015 2014 Three Months Ended June 30 Six Months Ended June 30 $ 1,373.5 $ 1,277.2 $ 2,577.0 $ 2,314.6 191.7 191.2 366.1 350.9 $ 1,181.8 $ 1,086.0 $ 2,210.9 $ 1,963.7 $ 1,270.5 $ 1,185.5 $ 2,421.4 $ 2,238.2 191.7 191.2 366.1 350.9 $ 1,078.8 $ 994.3 $ 2,055.3 $ 1,887.3 $ 103.0 $ 91.7 $ 155.6 $ 76.4 1.8 5.5 2.6 41.4 $ 104.8 $ 97.2 $ 158.2 $ 117.8 8.9% 9.0% 7.2% 6.0% 16
Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings per Share ($ in millions) 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 2015 2014 2015 2014 Three Months Ended June 30 Six Months Ended June 30 $ 90.1 $ 71.8 $ 132.0 $ 87.7 45,435 45,278 45,393 45,220 $ 1.98 $ 1.58 $ 2.91 $ 1.94 $ 90.1 $ 71.8 $ 132.0 $ 87.7 1.4 4.1 2.0 5.2 $ 91.5 $ 75.9 $ 134.0 $ 92.9 45,435 45,278 45,393 45,220 $ 2.01 $ 1.68 $ 2.95 $ 2.05 17
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. 2015 2014 2015 2014 Three Months Ended June 30 Six Months Ended June 30 $ 91.4 $ 72.4 $ 134.7 $ 88.5 7.6 7.6 13.6 14.3 31.1 24.1 45.9 (5.0) 25.5 22.8 50.4 45.2 $ 155.6 $ 126.9 $ 244.6 $ 143.0 1.8 5.5 2.6 41.4 $ 157.4 $ 132.4 $ 247.2 $ 184.4 18
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