Print Page     Close Window     

SEC Filings

8-K
JONES LANG LASALLE INC filed this Form 8-K on 11/06/2017
Entire Document
 

Restructuring and Acquisition Charges
Restructuring and acquisition charges primarily consist of: (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership or transformation of business processes; (ii) acquisition and integration-related charges, including non-cash fair value adjustments to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) lease exit charges. Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods. As noted within Note 5, Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments’ reconciliation from operating income to adjusted operating income and Adjusted EBITDA.
Amortization of Acquisition-Related Intangibles
Amortization of acquisition-related intangibles, primarily composed of the estimated fair value ascribed at closing of an acquisition to assets such as acquired management contracts, customer backlog and trade name, is more notable following the company's increase in acquisition activity over the past few years. Such activity is excluded as the change in activity period-over-period is generally the result of longer-term strategic decisions and therefore not necessarily indicative of core operating results. At the segment reporting level, this is the only reconciling difference between operating income and adjusted operating income, except for the Americas segment, where Net non-cash MSR and mortgage banking derivative activity is also excluded.
Reconciliation of Non-GAAP Financial Measures
Below are reconciliations of (i) Revenue to Fee revenue, (ii) Operating expenses to Fee-based operating expenses, and (iii) Operating income to Adjusted operating income:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
($ in millions)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Revenue
$
1,947.0

 
$
1,705.2

 
$
5,396.9

 
$
4,645.6

Gross contract costs
(315.3
)
 
(258.0
)
 
(868.6
)
 
(735.5
)
Net non-cash MSR and mortgage banking derivative activity
(7.1
)
 
(2.9
)
 
(11.1
)
 
(2.3
)
Fee revenue
1,624.6

 
1,444.3

 
$
4,517.2

 
$
3,907.8

 
 
 
 
 
 
 
 
Operating expenses
1,828.9

 
1,634.2

 
$
5,152.2

 
$
4,431.3

Gross contract costs
(315.3
)
 
(258.0
)
 
(868.6
)
 
(735.5
)
Fee-based operating expenses
$
1,513.6

 
$
1,376.2

 
$
4,283.6

 
$
3,695.8

 
 
 
 
 
 
 
 
Operating income
$
118.1

 
$
71.0

 
$
244.7

 
$
214.3

Adjustments:
 
 
 
 
 
 
 
Restructuring and acquisition charges5
3.4

 
18.0

 
13.3

 
35.9

Net non-cash MSR and mortgage banking derivative activity
(7.1
)
 
(2.9
)
 
(11.1
)
 
(2.3
)
Amortization of acquisition-related intangibles
7.7

 
7.1

 
23.3

 
16.0

Adjusted operating income
$
122.1

 
$
93.2

 
$
270.2

 
$
263.9

To conform to current presentation, 2016 amounts were recast for fee revenue to reflect the adjustment associated with Net non-cash MSR and mortgage banking derivative activity.

19


© Copyright Jones Lang LaSalle, IP, Inc.