Jones Lang LaSalle Reports Full-Year Adjusted Earnings per Share of $5.48; Revenue of $3.9 billion
Jones Lang LaSalle Reports Full-Year Adjusted Earnings per Share of $5.48;
Revenue of $3.9 billion
Record full-year revenue increased 12 percent; fee revenue grew 10 percent
PR Newswire
CHICAGO, Jan. 29, 2013
CHICAGO, Jan. 29, 2013 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE:
JLL) today reported adjusted EPS for 2012 of $5.48, up from $4.83 last year.
Record full-year revenue of $3.9 billion was up 12 percent in local currency.
Fee revenue was $3.6 billion, an increase of 10 percent.
o Adjusted EPS growth of 13 percent driven by broad-based revenue
performance
o Significant full-year margin improvement in EMEA from management actions
despite challenging market conditions
o Strong Q4 finish in Asia Pacific with 20 percent revenue growth driven by
Capital Markets and continued success in corporate outsourcing
o Continued healthy, above-market leasing performance in the Americas
o $275 million, 10-year bond issuance strengthened investment-grade balance
sheet
Summary Financial Results Three Months Ended Twelve Months Ended
($ in millions, except per December 31, December 31,
share data)
2012 2011 2012 2011
Revenue $ 1,249 $ 1,148 $ 3,933 $ 3,585
Fee Revenue^1 $ 1,165 $ 1,081 $ 3,640 $ 3,374
Adjusted Net Income^2 $ 117 $ 114 $ 245 $ 215
U.S. GAAP Net Income $ 107 $ 85 $ 208 $ 164
Adjusted Earnings per Share^2 $ 2.60 $ 2.56 $ 5.48 $ 4.83
Earnings per Share $ 2.38 $ 1.91 $ 4.63 $ 3.70
Adjusted EBITDA^3 $ 185 $ 179 $ 436 $ 395
Adjusted Operating Income 14.1% 14.6% 9.3% 9.4%
Margin^1
Adjusted EBITDA Margin^1 15.9% 16.6% 12.0% 11.7%
^See Financial Statement Notes (1), (2) and (3) following the Financial
Statements in this News Release.
"Our 2012 performance met our expectations, with a strong finish to the year
in challenging global markets," said Colin Dyer, Chief Executive Officer of
Jones Lang LaSalle. "Again, we continue to secure market share growth,
productivity improvements and expanded client relationships. Our quarterly
and full-year performance leaves us confident that we will continue to
progress in 2013," Dyer added.
Consolidated Revenue
Three Months Ended % Change Twelve Months Ended %
($ in millions, Change
"LC" = local December 31, in LC December 31,
currency) in LC
2012 2011 2012 2011
Real Estate Services
("RES")
Leasing $ $ 8% $ 1,277.8 $ 9%
439.2 408.7 1,189.1
Capital Markets & 194.4 173.2 12% 512.9 459.6 13%
Hotels
Property & Facility 283.9 261.5 9% 1,012.3 864.4 19%
Management
Property & Facility
Management Fee 242.4 222.7 9% 850.1 761.7 13%
Revenue^1
Project & 143.2 126.7 15% 486.2 441.5 14%
Development Services
Project &
Development Services 101.4 98.6 4% 355.8 333.7 9%
Fee Revenue^1
Advisory, Consulting 124.8 115.6 8% 382.2 358.3 9%
and Other
Total RES $ $ 9% $ $ 13%
Revenue 1,185.5 1,085.7 3,671.4 3,312.9
Total RES Fee $ $ 8% $ $ 10%
Revenue^1 1,102.2 1,018.8 3,378.8 3,102.4
LaSalle Investment
Management
Advisory Fees $ $ (7%) $ $ (6%)
56.2 60.1 228.1 245.0
Transaction Fees & 4.6 2.3 104% 10.5 7.3 47%
Other
Incentive Fees 2.4 0.1 n/m 22.8 19.3 18%
Total LaSalle $ $ $ $
Investment 63.2 62.5 0% 261.4 271.6 (3%)
Management Revenue
Total Firm Revenue $ $ 9% $ $ 12%
1,248.7 1,148.2 3,932.8 3,584.5
Total Firm Fee $ $ 8% $ $ 10%
Revenue^1 1,165.4 1,081.3 3,640.2 3,374.0
n/m – not meaningful
Consolidated fee revenue growth for the full year was driven by solid Leasing
performance and continued growth in Property & Facility Management. Leasing
revenue grew 9 percent in local currency for the year, with the largest growth
in the Americas. Property & Facility Management fee revenue rose 13 percent
in local currency, also led by the Americas region, which increased 15 percent
in local currency, followed by Asia Pacific, up 13 percent. LaSalle
Investment Management's advisory fees decreased from 2011 due to significant
asset and portfolio sales, but have remained consistent throughout each
quarter of 2012. LaSalle generated $23 million of incentive fees and $24
million of equity earnings during the year.
Consolidated quarter-to-date revenue rose to $1.2 billion, 9 percent higher in
local currency than the fourth quarter of 2011, and was up 8 percent on a fee
revenue basis.
Operating expenses, excluding restructuring and acquisition charges, were $3.6
billion for the year, an increase of 10 percent, 12 percent in local currency,
compared with $3.3 billion in 2011. The increase was driven by higher
variable compensation resulting from improved Leasing revenue, as well as
higher compensation resulting from increased headcount primarily to service
new and expanded Property & Facility Management contracts. Compensation
expense was further impacted by the firm's previously disclosed decision to
eliminate its Stock Ownership Program ("SOP"), which resulted in approximately
$11 million of accelerated compensation expense in the current year, a timing
difference rather than a permanent increase in compensation, as well as a
timing difference of $5 million related to the acceleration of the final
deferred payment for the Staubach acquisition and extension of employment
agreements with the majority of the Staubach shareholders who are working in
the firm. Fee-based operating expenses^1, excluding restructuring and
acquisition charges, were $3.3 billion, an increase of 9 percent in local
currency, also mostly attributable to higher compensation expense.
Full-year results included $45 million of restructuring and acquisition
charges, principally related to integration and retention costs for the
second-quarter 2011 acquisition of King Sturge, but also including severance
and lease exit costs in targeted areas of the business that are anticipated to
remain economically challenged for an extended period of time. The firm's
results also included $5 million of intangibles amortization related to the
King Sturge acquisition.
Fourth-quarter fee-based operating expenses excluding restructuring and
acquisition charges were $1.0 billion, up 8 percent from $928 million last
year. The majority of the increase was due to increases in variable
compensation, notably bonus and commission expense, as several of the firm's
businesses reached higher bonus and commission hurdles in the fourth quarter,
particularly in the United States.
Balance Sheet
During the fourth quarter, the firm issued $275 million of 4.4% Senior Notes
due November 2022. The investment-grade notes were sold to a diverse group of
investors and further strengthen the firm's liquidity and balance sheet
position. The proceeds from the issuance were used to reduce borrowings on
the firm's long-term revolving credit facility. Outstanding debt on this
facility was $169 million as of December 31, 2012, compared with $463 million
last year.
Also in the quarter, the firm made a payment of $115 million to certain former
Staubach shareholders. This represents an acceleration of the majority of a
$156 million deferred acquisition payment previously recorded and scheduled to
be paid in August 2013. In addition, the Americas' Leasing performance since
the 2008 merger produced an earn-out of $36 million, of which $5 million was
paid in the second quarter of 2012. The remaining $31 million has been
recorded as a deferred acquisition obligation as of December 31, 2012, and
will be paid in the first half of 2013. Total net debt, which includes
deferred acquisition obligations, decreased $105 million during 2012 to $538
million as of December 31, 2012.
Business Segment Performance Highlights
Americas Real Estate Services
Full-year revenue in the Americas region was $1.7 billion, an increase of 15
percent from 2011. On a fee revenue basis, revenue increased 11 percent. The
largest growth was in Capital Markets & Hotels, which increased 25 percent,
and Property & Facility Management, which increased 15 percent. Leasing
revenue increased 9 percent despite overall office leasing volumes dropping 20
percent in the United States.
Americas Revenue Three Months
Ended Twelve Months Ended
($ in millions, % Change December 31, % Change
"LC" = local December 31, in LC in LC
currency)
2012 2011 2012 2011
Leasing $ $ 8% $ $ 9%
278.9 258.6 829.6 760.7
Capital Markets & 59.4 48.1 24% 168.5 135.6 25%
Hotels
Property & Facility 133.2 117.8 13% 458.7 349.7 32%
Management
Property & Facility
Management Fee 111.1 101.2 10% 375.0 329.3 15%
Revenue^1
Project & 51.9 54.3 (4%) 182.9 178.4 4%
Development Services
Project &
Development Services 51.7 53.9 (3%) 182.1 177.9 4%
Fee Revenue^1
Advisory, Consulting 31.5 30.7 3% 107.0 98.2 9%
and Other
Operating $ $ 9% $ 1,746.7 $ 1,522.6 15%
Revenue 554.9 509.5
Equity Earnings 0.1 - n/m - 2.7 n/m
Total Segment $ $ 9% $ $ 1,525.3 15%
Revenue 555.0 509.5 1,746.7
Total Segment Fee $ $ 9% $ 1,662.2 $ 1,504.4 11%
Revenue^1 532.7 492.5
n/m – not meaningful
Operating expenses were $1.6 billion for the year, a 16 percent increase from
2011. Fee-based operating expenses increased 12 percent from last year. The
year-over-year increase was due to higher fixed compensation costs associated
with a larger employee base, as well as higher commission expenses related to
improved Leasing and Capital Markets & Hotels revenue. The SOP elimination
earlier this year has added approximately $5 million to compensation expense
compared with 2011. Also impacting Americas full-year and fourth-quarter
operating expenses was $5 million of compensation expense related to
acceleration of the deferred acquisition payment.
Operating income was $168 million for the year, up from $163 million in 2011.
EBITDA for the year was $210 million, compared with $201 million in 2011.
EBITDA margin calculated on a fee revenue basis was 12.7 percent compared
with 13.4 percent last year. Adjusting for the impact of the SOP elimination
and acceleration of deferred acquisition payments, 2012 EBITDA margin would
have been equal to a similarly adjusted 2011.
Fourth-quarter fee-based operating expenses were $457 million, compared with
$408 million in 2011, a 12 percent increase, and included the $5 million of
compensation expense related to the accelerated deferred acquisition payment
and $2 million from the elimination of the SOP.
EMEA Real Estate Services
EMEA's full-year revenue was $1.0 billion, a 12 percent increase in local
currency. Revenue increased on a fee revenue basis by 9 percent, broad-based
but driven by Project & Development Services, which includes the Tetris
fit-out business, and Leasing. Fourth-quarter fee revenue was $318 million,
consistent with 2011 levels.
EMEA Revenue
Three Months Ended % Change Twelve Months Ended % Change
($ in
millions, "LC" = December 31, in LC December 31, in LC
local currency)
2012 2011 2012 2011
Leasing $ 83.7 $ 4% $ 250.0 $ 236.1 11%
81.0
Capital Markets & 94.9 103.1 (9%) 235.1 229.1 5%
Hotels
Property &
Facility 42.4 42.5 (1%) 155.2 147.9 9%
Management
Property &
Facility 42.4 42.5 (1%) 155.2 147.9 9%
Management Fee
Revenue^1
Project &
Development 64.5 51.4 28% 219.8 182.0 28%
Services
Project &
Development 30.5 28.8 7% 106.5 96.3 16%
Services Fee
Revenue^1
Advisory,
Consulting and 66.8 62.3 7% 189.1 178.9 10%
Other
Operating $ 352.3 $ 4% $ 1,049.2 $ 974.0 12%
Revenue 340.3
Equity Losses (0.1) - n/m (0.3) (0.3) n/m
Total Segment $ 352.2 $ 4% $ 1,048.9 $ 973.7 12%
Revenue 340.3
Total Segment Fee $ 318.2 $ 0% $ 935.6 $ 9%
Revenue^1 317.7 888.0
n/m – not meaningful
Operating expenses, which include $5 million of King Sturge intangibles
amortization, were $1.0 billion for the year, an increase of 10 percent in
local currency from 2011. Operating expenses also include $28 million of
additional gross contract costs related to the Project & Development Services
business line compared with last year. Fee-based operating expenses increased
7 percent from 2011. The year-over-year increase was primarily due to higher
fixed compensation from the addition of King Sturge for a full year in 2012,
compared with just over seven months in 2011.
Full-year EBITDA was $75 million, compared with $57 million in 2011. EBITDA
margin calculated on a fee revenue basis was 8.0 percent compared with 6.5
percent last year reflecting the benefits of cost actions taken across the
region during the year.
Fourth-quarter fee-based operating expenses were $272 million, compared with
$284 million in 2011, a reduction of 4 percent in local currency. Included in
operating expenses was $1 million of intangibles amortization compared with $5
million last year.
Asia Pacific Real Estate Services
Asia Pacific's revenue for the year increased 9 percent in local currency, to
$876 million. Fee revenue was $781 million, an increase of 11 percent, led by
15 percent growth in Capital Markets & Hotels and 13 percent annuity growth in
Property & Facility Management.
Asia Pacific
Revenue Three Months Ended
% Change Twelve Months Ended % Change
($ in December 31, December 31,
millions, "LC" = in LC in LC
local currency)
2012 2011 2012 2011
Leasing $ $ 10% $ 198.2 $ 4%
76.6 69.1 192.3
Capital Markets & 40.1 22.0 79% 109.3 94.9 15%
Hotels
Property &
Facility 108.3 101.2 7% 398.4 366.8 10%
Management
Property &
Facility 88.9 79.0 12% 319.9 284.5 13%
Management Fee
Revenue^1
Project &
Development 26.8 21.0 28% 83.5 81.1 6%
Services
Project &
Development 19.2 15.9 21% 67.2 59.5 16%
Services Fee
Revenue^1
Advisory,
Consulting and 26.5 22.6 16% 86.1 81.2 6%
Other
Operating $ $ 18% $ 875.5 $ 9%
Revenue 278.3 235.9 816.3
Equity Earnings - 0.1 n/m 0.1 0.2 n/m
Total Segment $ $ 18% $ 875.6 $ 9%
Revenue 278.3 236.0 816.5
Total Segment Fee $ $ 20% $ 780.8 $ 11%
Revenue^1 251.3 208.7 712.6
n/m – not meaningful
Operating expenses were $810 million for the year, an increase of 9 percent in
local currency. Operating expenses included $95 million of gross contract
costs, down from $104 million last year. Fee-based operating expenses rose 12
percent, to $716 million, due to a larger employee base servicing new and
expanded Property & Facility Management contracts and inflationary
compensation pressure across the region.
The region's EBITDA for the year was $78 million, consistent with 2011.
EBITDA margin calculated on a fee revenue basis improved significantly in the
fourth quarter; however, full-year EBITDA margin was 10.0 percent, down from
11.0 percent last year due to the slower growth challenges of the previous
quarters.
Fee-based operating expenses for the quarter were $218 million, compared with
$184 million in 2011.
LaSalle Investment Management
LaSalle Investment Management's advisory fees were $228 million for the year,
down 6 percent in local currency. Advisory fees in the fourth quarter
remained flat compared with the first three quarters of 2012. During the
year, the business recognized $23 million of incentive fees as a result of
positive performance for clients, and $24 million of equity earnings,
primarily from asset sales.
LaSalle
Investment Three Months Ended Twelve Months Ended
% Change % Change
Management December 31, December 31,
Revenue in LC in LC
($ in
millions, "LC" = 2012 2011 2012 2011
local currency)
Advisory Fees $ 56.2 $ (7%) $ 228.1 $ (6%)
60.1 245.0
Transaction Fees 4.6 2.3 104% 10.5 7.3 47%
& Other
Incentive Fees 2.4 0.1 n/m 22.8 19.3 18%
Operating $ 63.2 $ 0% $ 261.4 $ (3%)
Revenue 62.5 271.6
Equity Earnings 1.4 3.7 (62%) 24.0 3.8 n/m
Total Segment $ 64.6 $ (3%) $ 285.4 $ 5%
Revenue 66.2 275.4
n/m – not meaningful
Assets under management remained at $47 billion as of December 31, 2012.
EBITDA was $74 million for the year, compared with $60 million in 2011.
EBITDA margin was 25.9 percent in 2012 compared with 21.7 percent last year.
Summary
The firm finished the year with a strong fourth-quarter performance and
delivered record revenue in 2012. Notable market share gains continued as the
firm won new mandates and expanded existing client relationships. Healthy new
business pipelines and moderately improving global market dynamics, combined
with an ongoing focus on productivity and cost discipline, provide confidence
for the firm's performance in 2013.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a professional services and investment
management firm offering specialized real estate services to clients seeking
increased value by owning, occupying and investing in real estate. With annual
revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more
than 1,000 locations worldwide. On behalf of its clients, the firm provides
management and real estate outsourcing services to a property portfolio of 2.6
billion square feet. Its investment management business, LaSalle Investment
Management, has $47.0 billion of real estate assets under management. For
further information, visit www.jll.com.
200 East Randolph Drive Chicago Illinois 60601 │ 22 Hanover Square London W1A
2BN │ 9 Raffles Place #39-00 Republic Plaza Singapore 048619
Statements in this press release regarding, among other things, future
financial results and performance, achievements, plans and objectives may be
considered forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors which may cause actual results,
performance, achievements, plans and objectives of Jones Lang LaSalle to be
materially different from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
include those discussed under "Business," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Quantitative and
Qualitative Disclosures about Market Risk," and elsewhere in Jones Lang
LaSalle's Annual Report on Form 10-K for the year ended December 31, 2011, and
in the Quarterly Report on Form 10-Q for the quarters ended March 31,
2012, June 30, 2012, and September 30, 2012, and in other reports filed with
the Securities and Exchange Commission. Statements speak only as of the date
of this release. Jones Lang LaSalle expressly disclaims any obligation or
undertaking to update or revise any forward-looking statements contained
herein to reflect any change in Jones Lang LaSalle's expectations or results,
or any change in events.
Conference Call
The firm will conduct a conference call for shareholders, analysts and
investment professionals on Tuesday, January 29 at 6:00 p.m. EST.
To participate in the teleconference, please dial into one of the following
phone numbers five to ten minutes before the start time:
o U.S. callers: +1 877 356 3887
o International callers: +1 706 679 7364
o Pass code: 87480384
Webcast
Follow these steps to listen to the webcast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to http://www.videonewswire.com/event.asp?id=91555 and follow
instructions
3. Download free Windows Media Player software: (link located under
registration form)
4. If you experience problems listening, send an email to
prnwebcast@multivu.com
Supplemental Information
Supplemental information regarding the fourth-quarter 2012 earnings call has
been posted to the Investor Relations section of the company's website:
www.jll.com.
Conference Call Replay
Available: 7:00 a.m. EST Wednesday, January 30 through 11:59 p.m. EST
Wednesday, February 6 at the following numbers:
o U.S. callers: +1 855 859 2056
o International callers: +1 404 537 3406
o Pass code: 87480384
Web Audio Replay
Audio replay will be available for download or stream. This information and
link is also available on the company's website: www.jll.com.
If you have any questions, email Jones Lang LaSalle's Investor Relations
department at JLLInvestorRelations@am.jll.com.
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Operations
For the Three and Twelve Months Ended December 31, 2012 and 2011
(in thousands, except share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
$ $ $ $
Revenue 3,932,830 3,584,544
1,248,704 1,148,175
Operating expenses:
Compensation and 794,160 722,469 2,546,965 2,330,520
benefits
Operating,
administrative and 270,501 250,173 972,231 863,860
other
Depreciation and 20,100 22,333 78,810 82,832
amortization
Restructuring and 13,045 33,983 45,421 56,127
acquisition charges
Total
operating 1,097,806 1,028,958 3,643,427 3,333,339
expenses
Operating 150,898 119,217 289,403 251,205
income
Interest expense, net of (10,337) (8,372) (35,173) (35,591)
interest income
Equity earnings from 1,358 3,703 23,857 6,385
unconsolidated ventures
Income before income
taxes and noncontrolling 141,919 114,548 278,087 221,999
interest
Provision for income 34,657 29,525 69,244 56,387
taxes
Net income 107,262 85,023 208,843 165,612
Net income attributable
to noncontrolling 190 107 793 1,228
interest
Net income attributable $ $ $ $
to the Company
107,072 84,916 208,050 164,384
Net income attributable $ $ $ $
to common shareholders
106,831 84,765 207,556 163,997
Basic earnings per $ $ $ $
common share
2.43 1.95 4.73 3.80
Basic weighted average 44,051,014 43,469,543 43,848,737 43,170,383
shares outstanding
Diluted earnings per $ $ $ $
common share
2.38 1.91 4.63 3.70
Diluted weighted average 44,953,524 44,402,412 44,799,437 44,367,359
shares outstanding
$ $ $ $
EBITDA
171,925 144,995 390,783 338,807
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Twelve Months Ended December 31, 2012 and 2011
(in thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
REAL ESTATE SERVICES
AMERICAS
Revenue:
Operating $ $ $ $
revenue
554,867 509,478 1,746,708 1,522,607
Equity earnings 74 16 (3) 2,682
(losses)
Total segment 554,941 509,494 1,746,705 1,525,289
revenue
Gross contract (22,246) (16,992) (84,425) (20,882)
costs^1
Total segment 532,695 492,502 1,662,280 1,504,407
fee revenue
Operating expenses:
Compensation,
operating and 468,441 415,377 1,536,211 1,324,115
administrative
expenses
Depreciation and 11,205 9,710 42,333 38,502
amortization
Total segment
operating 479,646 425,087 1,578,544 1,362,617
expenses
Gross contract (22,246) (16,992) (84,425) (20,882)
costs^1
Total fee-based
segment operating 457,400 408,095 1,494,119 1,341,735
expenses
$ $ $ $
Operating
income 168,161 162,672
75,295 84,407
$ $ $ $
EBITDA
210,494 201,174
86,500 94,117
EMEA
Revenue:
Operating $ $ $ $
revenue
352,321 340,294 1,049,226 974,014
Equity (losses) (82) 2 (310) (304)
/ earnings
Total segment 352,239 340,296 1,048,916 973,710
revenue
Gross contract (34,027) (22,555) (113,321) (85,692)
costs^1
Total segment 318,212 317,741 935,595 888,018
fee revenue
Operating expenses:
Compensation,
operating and 300,805 297,278 974,022 916,412
administrative
expenses
Depreciation and 5,001 9,051 21,644 29,378
amortization
Total segment
operating 305,806 306,329 995,666 945,790
expenses
Gross contract (34,027) (22,555) (113,321) (85,692)
costs^1
Total fee-based
segment operating 271,779 283,774 882,345 860,098
expenses
$ $ $ $
Operating
income
46,433 33,967 53,250 27,920
$ $ $ $
EBITDA
51,434 43,018 74,894 57,298
ASIA PACIFIC
Revenue:
Operating $ $ $ $
revenue
278,329 235,938 875,476 816,301
Equity (losses) (11) 28 150 178
/ earnings
Total segment 278,318 235,966 875,626 816,479
revenue
Gross contract (27,044) (27,329) (94,816) (103,892)
costs^1
Total segment 251,274 208,637 780,810 712,587
fee revenue
Operating expenses:
Compensation,
operating and 241,952 207,797 797,396 738,107
administrative
expenses
Depreciation and 3,329 3,001 12,886 12,203
amortization
Total segment
operating 245,281 210,798 810,282 750,310
expenses
Gross contract (27,044) (27,329) (94,816) (103,892)
costs^1
Total fee-based
segment operating 218,237 183,469 715,466 646,418
expenses
$ $ $ $
Operating
income
33,037 25,168 65,344 66,169
$ $ $ $
EBITDA
36,366 28,169 78,230 78,372
LASALLE INVESTMENT
MANAGEMENT
Revenue:
$ $ $ $
Operating
revenue 261,420 271,622
63,187 62,465
Equity earnings 1,377 3,657 24,020 3,829
Total segment 64,564 66,122 285,440 275,451
revenue
Operating expenses:
Compensation,
operating and 53,463 52,191 211,567 215,745
administrative
expenses
Depreciation and 565 570 1,947 2,750
amortization
Total segment
operating 54,028 52,761 213,514 218,495
expenses
$ $ $ $
Operating
income
10,536 13,361 71,926 56,956
$ $ $ $
EBITDA
11,101 13,931 73,873 59,706
Total segment 1,250,062 1,151,878 3,956,687 3,590,929
revenue
Reclassification
of equity 1,358 3,703 23,857 6,385
earnings
Total $ $ $ $
revenue
1,248,704 1,148,175 3,932,830 3,584,544
Total
operating
expenses before 1,084,761 994,975 3,598,006 3,277,212
restructuring
charges
Operating $ $ $ $
income before
restructuring 163,943 153,200 334,824 307,332
charges
Please reference attached financial statement
notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
December 31, 2012 and December 31, 2011
(in thousands)
December 31, December 31,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ $
152,159 184,454
Trade receivables, net of allowances 996,681 907,772
Notes and other receivables 101,952 97,315
Warehouse receivables 144,257 -
Prepaid expenses 53,165 45,274
Deferred tax assets 50,831 53,553
Other 16,484 12,516
Total current assets 1,515,529 1,300,884
Property and equipment, net of accumulated 269,338 241,415
depreciation
Goodwill, with indefinite useful lives 1,853,761 1,751,207
Identified intangibles, with finite useful 45,932 52,590
lives, net of accumulated amortization
Investments in real estate ventures 268,107 224,854
Long-term receivables 58,881 54,840
Deferred tax assets 197,892 186,605
Other 142,059 120,241
Total assets $ $
4,351,499 3,932,636
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ $
497,817 436,045
Accrued compensation 685,718 655,658
Short-term borrowings 32,233 65,091
Deferred tax liabilities 10,113 6,044
Deferred income 76,152 58,974
Deferred business acquisition obligations 105,772 31,164
Warehouse facility 144,257 -
Other 109,909 95,641
Total current liabilities 1,661,971 1,348,617
Noncurrent liabilities:
Credit facilities 169,000 463,000
Long-term senior notes 275,000 -
Deferred tax liabilities 3,106 7,646
Deferred compensation 75,320 57,118
Pension liabilities 5,281 17,233
Deferred business acquisition obligations 107,661 267,896
Minority shareholder redemption liability 19,489 18,402
Other 75,415 58,344
Total liabilities 2,392,243 2,238,256
Company shareholders' equity:
Common stock, $.01 par value per share,
100,000,000 shares authorized;
44,054,042 and 43,470,271 shares issued and
outstanding as of
December 31, 2012 and December 31, 2011, 441 435
respectively
Additional paid-in capital 932,255 904,968
Retained earnings 1,017,128 827,297
Shares held in trust (7,587) (7,814)
Accumulated other comprehensive income 8,946 (33,757)
(loss)
Total Company shareholders' 1,951,183 1,691,129
equity
Noncontrolling interest 8,073 3,251
Total equity 1,959,256 1,694,380
Total liabilities and equity $ $
4,351,499 3,932,636
Please reference attached financial statement
notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Twelve Months Ended December 31, 2012 and 2011
(in thousands)
(Unaudited)
Twelve Months Ended December 31,
2012 2011
Cash provided by operating $ 327,698 $ 211,338
activities
Cash used in investing activities (151,252) (389,316)
Cash (used in) provided by (208,741) 110,535
financing activities
Net decrease in cash and $ (32,295) $
cash equivalents (67,443)
Cash and cash equivalents, 184,454 251,897
beginning of period
Cash and cash equivalents, end of $ 152,159 $ 184,454
period
Please reference attached financial
statement notes.
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
1. Consistent with U.S. GAAP ("GAAP"), gross contract vendor and subcontractor
costs ("gross contract costs") which are managed on certain client assignments
in the Property & Facility Management and Project & Development Services
business lines are presented on a gross basis in both revenue and operating
expenses. Gross contract costs are excluded from revenue and operating
expenses in determining "fee revenue" and "fee-based operating expenses",
respectively. Excluding these costs from revenue and operating expenses more
accurately reflects how the firm manages its expense base and its operating
margins. Adjusted operating income excludes the impact of restructuring and
acquisition charges and intangible amortization related to the King Sturge
acquisition. "Adjusted operating income margin" is calculated by dividing
adjusted operating income by fee revenue. Below are reconciliations of
revenue and operating expenses to fee revenue and fee-based operating
expenses, as well as adjusted operating income margin calculations, for the
three and twelve months ended December 31, 2012, and 2011.
Three Months Ended Twelve Months Ended
December 31, December 31,
($ in millions) 2012 2011 2012 2011
Revenue $ 1,248.7 $ 1,148.2 $ 3,932.8 $ 3,584.5
Gross contract costs (83.3) (66.9) (292.6) (210.5)
Fee revenue $ 1,165.4 $ 1,081.3 $ 3,640.2 $ 3,374.0
Operating expenses $ 1,097.8 $ 1,029.0 $ 3,643.4 $ 3,333.3
Gross contract costs (83.3) (66.9) (292.6) (210.5)
Fee-based operating $ 1,014.5 $ 962.1 $ 3,350.8 $ 3,122.8
expenses
Operating income $ 150.9 $ 119.2 $ 289.4 $ 251.2
Add:
Restructuring and 13.0 34.0 45.4 56.1
acquisition charges
King Sturge intangible 0.6 4.8 4.9 11.5
amortization
Adjusted operating income $ 164.5 $ 158.0 $ 339.7 $ 318.8
Adjusted operating income 14.1% 14.6% 9.3% 9.4%
margin
2. Charges excluded from GAAP net income attributable to common shareholders
to arrive at adjusted net income for the three and twelve months ended
December 31, 2012, and December 31, 2011, are restructuring and acquisition
charges and intangible amortization related to the recent King Sturge
acquisition. Below are reconciliations of GAAP net income attributable to
common shareholders to adjusted net income and calculations of earnings per
share ("EPS") for each net income total:
Three Months Ended Twelve Months Ended
December 31, December 31,
($ in millions, except per share data) 2012 2011 2012 2011
GAAP net income attributable to common $106.8 $84.8 $207.6 $164.0
shareholders
Shares (in 000s) 44,954 44,402 44,799 44,367
GAAP earnings per share $2.38 $1.91 $4.63 $3.70
GAAP net income attributable to common $106.8 $84.8 $207.6 $164.0
shareholders
Restructuring and acquisition charges, 9.8 25.2 34.1 41.9
net
Intangible amortization, net 0.5 3.6 3.7 8.6
Adjusted net income 117.1 113.6 245.4 214.5
Shares (in 000s) 44,954 44,402 44,799 44,367
Adjusted earnings per share $ 2.60 $ 2.56 $ 5.48 $ 4.83
3. Adjusted EBITDA represents earnings before interest expense, net of
interest income, income taxes, depreciation and amortization, adjusted for
restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are
non-GAAP financial measures, they are used extensively by management and are
useful to investors and lenders as metrics for evaluating operating
performance and liquidity. EBITDA is used in the calculations of certain
covenants related to the firm's revolving credit facility. However, adjusted
EBITDA and EBITDA should not be considered as an alternative to net income
determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not
calculated under GAAP, the firm's adjusted EBITDA and EBITDA may not be
comparable to similarly titled measures used by other companies.
Below is a reconciliation of net income to EBITDA and adjusted EBITDA (in
thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Net income attributable to common $106,831 $84,765 $207,556 $163,997
shareholders
Add:
Interest expense, net of interest 10,337 8,372 35,173 35,591
income
Provision for income taxes 34,657 29,525 69,244 56,387
Depreciation and amortization 20,100 22,333 78,810 82,832
EBITDA $171,925 $144,995 $390,783 $338,807
Add:
Restructuring and acquisition charges 13,045 33,983 45,421 56,127
Adjusted EBITDA $184,970 $178,978 $436,204 $394,934
4. Restructuring and acquisition charges are excluded from segment operating
results, although they are included for consolidated reporting. For purposes
of segment operating results, the allocation of restructuring charges to the
segments has been determined not to be meaningful to investors, so the
performance of segment results has been evaluated without allocation of these
charges.
5. Intangible amortization from the second-quarter 2011 King Sturge
acquisition is included in depreciation and amortization in the firm's
consolidated results, as well as in EMEA's segment results, but has been
excluded from adjusted operating income and adjusted net income.
6. Each geographic region offers the firm's full range of Real Estate Services
businesses consisting primarily of tenant representation and agency leasing;
capital markets; property management and facilities management; project and
development services; and advisory, consulting and valuations services. The
Investment Management segment provides investment management services to
institutional investors and high-net-worth individuals.
7. The consolidated statements of cash flows are presented in summarized form.
For complete consolidated statements of cash flows, please refer to the firm's
Annual Report on Form 10-K for the year ended December 31, 2012, to be filed
with the Securities and Exchange Commission shortly.
8. EMEA refers to Europe, Middle East and Africa. MENA refers to Middle East
and North Africa. Greater China includes China, Hong Kong, Macau and Taiwan.
9. Certain prior year amounts have been reclassified to conform to the current
presentation.
SOURCE Jones Lang LaSalle
Website: http://www.joneslanglasalle.com
Contact: Lauralee Martin, Chief Operating and Financial Officer.
+1-312-228-2073
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