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JLL Reports Solid Second-Quarter 2018 Results
Second-quarter revenue up 12 percent to $3.9 billion; fee revenue up 13 percent to $1.5 billion

CHICAGO, Aug. 8, 2018 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE: JLL) today reported operating performance for the second quarter of 2018 with diluted earnings per share of $2.35 and adjusted diluted earnings per share1 of $2.26.

  • Organic revenue expansion across all segments
    • Americas-led growth driven by transactional businesses
    • Corporate Solutions continues to build annuity-based revenue
  • Margins reflect:
    • Strong organic expansion driven by Americas
    • Investments supporting digital agenda and technology transformation
  • LaSalle capital raise continues growth in private equity assets under management to record $52.3B
  • Extended credit facility maturity with improved pricing to support growth strategy

CEO Comment:

"Our year-to-date performance was strong, reflecting organic revenue growth across our business segments and progress on our digital agenda and technology transformation initiatives," said Christian Ulbrich, JLL CEO. "Real estate fundamentals remain resilient, and we are optimistic about our full-year performance, despite intensifying global economic uncertainty."

Summary Financial Results

Three Months Ended


Six Months Ended

June 30,

June 30,

   ($ in millions, except per share data)

2018

2017


2018

2017







Revenue

$

3,903.7

$

3,470.3


$

7,458.9

$

6,588.0

Revenue before reimbursements

2,163.3

1,874.5


4,054.4

3,490.8

Fee revenue1

1,493.5

1,324.3


2,775.0

2,448.3










Net income attributable to common shareholders

$

107.8

$

94.3


$

148.1

$

101.5

Adjusted net income attributable to common shareholders1

103.9

99.4


148.2

116.4







Diluted earnings per share

$

2.35

$

2.06


$

3.23

$

2.22

Adjusted diluted earnings per share1

2.26

2.17


3.23

2.55








Adjusted EBITDA1

$

193.6

$

184.6


$

301.3

$

252.6

Adjusted EBITDA, Real Estate Services

169.3

162.0


234.6

210.4

Adjusted EBITDA, LaSalle

24.4

22.6


66.8

42.2



(1)

For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release.



Note: The company adopted ASC 606 and refined its non-GAAP definition "Fee revenue" in the first quarter of 2018. Comparative periods have been recast accordingly. In addition to the footnotes following the Financial Statements, refer to our April 2018 podcast (available on ir.jll.com) for additional information.

 

 

Consolidated
 
   ($ in millions, "LC" = local currency)

Three Months Ended
June 30,


%
Change
in USD


%
Change
in LC

2018


2017



Leasing

$

553.9


$

506.4


9

%


8

%

Capital Markets

258.0


237.4


9



6


Property & Facility Management

2,192.3


1,945.1


13



12


Project & Development Services

609.4


535.2


14



11


Advisory, Consulting and Other

198.4


173.3


14



12


Real Estate Services ("RES") revenue

$

3,812.0


$

3,397.4


12

%


11

%

LaSalle

91.7


72.9


26



23


Total revenue

$

3,903.7


$

3,470.3


12

%


11

%

Reimbursements

(1,740.4)


(1,595.8)


9



8


Revenue before reimbursements

$

2,163.3


$

1,874.5


15

%


13

%

Gross contract costs1

(668.5)


(543.5)


23



19


Net non-cash MSR and mortgage banking derivative activity

(1.3)


(6.7)


(81)



(81)


Total fee revenue1

$

1,493.5


$

1,324.3


13

%


11

%

Leasing

537.8


493.8


9



8


Capital Markets

243.5


225.0


8



5


Property & Facility Management

277.5


247.2


12



8


Project & Development Services

196.7


163.6


20



18


Advisory, Consulting and Other

152.3


127.4


20



19


RES fee revenue

1,407.8


1,257.0


12



10


LaSalle

85.7


67.3


27



24


Operating income

$

149.8


$

130.8


15

%


14

%

Equity earnings

$

10.2


$

14.5


(30)

%


(29)

%

Adjusted EBITDA1

$

193.6


$

184.6


5

%


4

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Consolidated Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

 

Consolidated Second-Quarter 2018 Performance Highlights:

  • Consolidated revenue and consolidated fee revenue both increased 11 percent, compared with the prior year, due to broad-based growth across all four segments. Consolidated fee revenue expansion in the RES service lines was led by Leasing, Project & Development Services, and Property & Facility Management. Geographically across the service lines, Americas was the primary driver of RES fee revenue growth, contributing 67 percent on a local currency basis, followed by APAC (18 percent) and EMEA (15 percent).
  • Consolidated operating expenses excluding reimbursed expenses were $2.0 billion and consolidated fee-based operating expenses1 excluding restructuring and acquisition charges were $1.4 billion, increases of 14 percent and 11 percent, respectively, over the second quarter of 2017.
  • LaSalle revenue growth was primarily due to higher incentive fees earned on the disposition of real estate assets on behalf of clients along with solid advisory fees for the quarter. Overall performance reflected higher incentive fees offset by lower equity earnings.
  • Net income attributable to common shareholders was $107.8 million, compared with $94.3 million in the prior-year quarter, and adjusted EBITDA was $193.6 million, compared with $184.6 million in 2017. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 13.0 percent in USD for the quarter (13.1 percent in local currency), compared with 13.9 percent in 2017.

    The consolidated results reflect:
    • Approximately 20 basis points of net operational reduction as solid organic growth in Americas and Asia Pacific was more than offset by the performance in EMEA together with increased investments, primarily in technology-related initiatives; and
    • Approximately 70 basis points unfavorable year-over-year impact associated with the adoption of ASC 606. Refer to Note 6 following the Financial Statements of this news release for additional information.
  • Diluted earnings per share were $2.35, compared with $2.06 in 2017, and adjusted diluted earnings per share were $2.26, up from $2.17 last year.

Balance Sheet and Net Interest Expense:

  • Total net debt increased $62.5 million from March 31, 2018 to $972.6 million as of June 30, 2018, but decreased $294.3 million from June 30, 2017. The year-over-year decrease reflected the company's trailing 12-month performance and efforts to improve working capital management.
  • Net interest expense was $14.3 million for the second quarter of 2018, a decrease from $14.6 million in the prior-year quarter. The decrease in net interest expense was due to a decline in the outstanding average borrowings, partially offset by a higher effective interest rate on the company's debt.
  • In May 2018, the company amended its $2.75 billion credit facility, extending the maturity from June 2021 to May 2023, with improved pricing and enhanced operating flexibility.
  • In July 2018, Standard & Poor's raised the company's investment-grade rating to BBB+, bringing the credit rating in alignment with Moody's Baa1 rating.

 

Consolidated

 

   ($ in millions, "LC" = local currency)

Six Months Ended 
June 30,


% Change in USD


% Change in LC

2018


2017



Leasing

$

955.1



$

884.8



8

%


6

%

Capital Markets

490.7



426.1



15



11


Property & Facility Management

4,245.9



3,752.2



13



11


Project & Development Services

1,188.6



1,045.1



14



9


Advisory, Consulting and Other

367.6



318.6



15



11


Real Estate Services ("RES") revenue

$

7,247.9



$

6,426.8



13

%


10

%

LaSalle

211.0



161.2



31



25


Total revenue

$

7,458.9



$

6,588.0



13

%


10

%

Reimbursements

(3,404.5)



(3,097.2)



10



9


Revenue before reimbursements

$

4,054.4



$

3,490.8



16

%


12

%

Gross contract costs1

(1,275.4)



(1,038.5)



23



17


Net non-cash MSR and mortgage banking derivative activity

(4.0)



(4.0)






Total fee revenue1

$

2,775.0



$

2,448.3



13

%


10

%

Leasing

922.9



860.8



7



6


Capital Markets

464.7



410.9



13



9


Property & Facility Management

542.7



487.1



11



7


Project & Development Services

370.4



306.1



21



17


Advisory, Consulting and Other

275.4



233.7



18



15


RES fee revenue

2,576.1



2,298.6



12



9


LaSalle

198.9



149.7



33



27


Operating income

$

203.6



$

146.2



39

%


39

%

Equity earnings

$

23.8



$

20.1



18

%


19

%

Adjusted EBITDA1

$

301.3



$

252.6



19

%


18

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Consolidated Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

 

Business Segment Performance Highlights

Americas Real Estate Services


   ($ in millions, "LC" = local currency)

Three Months Ended
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

2,152.5



$

1,932.5



11

%


12

%

Reimbursements

(1,226.4)



(1,110.0)



10



11


Revenue before reimbursements

$

926.1



$

822.5



13

%


13

%

Gross contract costs1

(156.6)



(130.4)



20



21


Net non-cash MSR and mortgage banking derivative activity

(1.3)



(6.7)



(81)



(81)


Fee revenue1

$

768.2



$

685.4



12

%


12

%

Leasing

412.8



378.7



9



9


Capital Markets

116.0



98.0



18



18


Property & Facility Management

108.1



95.7



13



9


Project & Development Services

90.8



82.0



11



11


Advisory, Consulting and Other

40.5



31.0



31



44


Operating income

$

100.9



$

96.4



5

%


3

%

Equity earnings

$

0.4



$

0.2



100

%


125

%

Adjusted EBITDA1

$

128.1



$

113.1



13

%


13

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Americas Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

Americas Second-Quarter 2018 Performance Highlights:

  • Americas revenue and fee revenue both increased 12 percent compared with 2017 with notable growth across all service lines. Overall segment growth was led by U.S. Leasing, specifically strong performance in the Northwest, New York and Mid-Atlantic markets, following double-digit year-over-year service line growth in 2017. Revenue growth highlights also include Capital Markets, driven by notable debt placement and investment sales performance in the U.S., as well as Property & Facility Management, reflecting the ramp-up of recent wins and expansion of existing facilities management relationships.
  • Operating expenses, excluding reimbursed expenses, were $825.2 million, up 14 percent from 2017. Fee-based operating expenses, excluding restructuring and acquisition charges, were $668.6 million, up 12 percent over 2017. These increases correlated with the growth in revenue and reflect increased investments in technology transformation initiatives.
  • Operating income and adjusted EBITDA increased 3 percent and 13 percent, respectively, compared with 2017. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 16.7 percent in USD for the quarter (16.6 percent in local currency), compared with 16.5 percent in 2017. Profitability reflects a shift in service mix toward transactional revenue partially offset by increased investments in technology transformation initiatives. In addition, margin comparability is impacted by the adoption of ASC 606; refer to Footnote 6 following the Financial Statements for additional information.

 

Americas Real Estate Services
 
   ($ in millions, "LC" = local currency)

Six Months Ended 
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

4,093.5



$

3,732.4



10

%


10

%

Reimbursements

(2,408.1)



(2,188.5)



10



10


Revenue before reimbursements

$

1,685.4



$

1,543.9



9

%


9

%

Gross contract costs1

(289.7)



(262.2)



10



11


Net non-cash MSR and mortgage banking derivative activity

(4.0)



(4.0)






Fee revenue1

$

1,391.7



$

1,277.7



9

%


9

%

Leasing

706.1



668.6



6



6


Capital Markets

224.2



199.5



12



12


Property & Facility Management

218.3



191.4



14



12


Project & Development Services

169.7



158.3



7



7


Advisory, Consulting and Other

73.4



59.9



23



30


Operating income

$

147.2



$

128.7



14

%


14

%

Equity earnings

$

0.5



$

0.4



25

%


26

%

Adjusted EBITDA1

$

195.8



$

171.5



14

%


14

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Americas Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

 

 

EMEA Real Estate Services
 
   ($ in millions, "LC" = local currency)

Three Months Ended
June 30,


%
Change
in USD


%
Change
in LC

2018


2017



Revenue

$

846.6



$

721.2



17

%


11

%

Reimbursements

(153.0)



(125.5)



22



16


Revenue before reimbursements

$

693.6



$

595.7



16

%


9

%

Gross contract costs1

(305.3)



(248.9)



23



15


Fee revenue1

$

388.3



$

346.8



12

%


5

%

Leasing

69.7



65.1



7




Capital Markets

84.1



92.5



(9)



(15)


Property & Facility Management

100.4



79.6



26



19


Project & Development Services

68.7



51.8



33



24


Advisory, Consulting and Other

65.4



57.8



13



7


Operating (loss) income

$

(1.4)



$

10.0



n.m.



n.m.


Equity earnings

$



$



%


%

Adjusted EBITDA1

$

11.2



$

21.2



(47)%



(50)

%

n.m. - not meaningful as represented by a percentage change of greater than 100%, favorably or unfavorably.

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the EMEA Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

EMEA Second-Quarter 2018 Performance Highlights:

  • EMEA revenue and fee revenue increased 11 percent and 5 percent, respectively, compared with the prior-year quarter. Fee revenue expansion was most notable in Property & Facility Management, specifically mobile engineering in the UK, and Project & Development Services, driven by the Tetris fit-out business in Continental Europe. Capital Markets partially offset this growth due to lower investment sales in the UK and Germany for the current quarter, reflecting year-over-year volume declines attributable to 2018 transaction timing. On a year-to-date basis, however, Capital Markets fee revenue increased over 2017.
  • Operating expenses, excluding reimbursed expenses, increased 11 percent from 2017 to $695.0 million, and fee-based operating expenses, excluding restructuring and acquisition charges, increased 9 percent to $389.7 million, compared with last year. The expense increase reflected the growth in revenue together with compensation and benefits expense associated with an increase in headcount.
  • Operating results decreased by $11.4 million and adjusted EBITDA decreased by $10.0 million from the prior-year quarter. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 2.9 percent in USD and local currency for the quarter, compared with 6.1 percent last year. The decline in profitability reflects a shift in service mix toward annuity revenue, transaction and compensation timing, and increased investments in the platform and people.

 

EMEA Real Estate Services
 
 
 ($ in millions, "LC" = local currency)

Six Months Ended 
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

1,630.2



$

1,324.4



23

%


12

%

Reimbursements

(309.0)



(227.4)



36



25


Revenue before reimbursements

$

1,321.2



$

1,097.0



20

%


10

%

Gross contract costs1

(582.5)



(480.3)



21



10


Fee revenue1

$

738.7



$

616.7



20

%


9

%

Leasing

126.7



112.7



12



3


Capital Markets

168.1



148.6



13



3


Property & Facility Management

187.6



159.1



18



8


Project & Development Services

133.6



93.4



43



30


Advisory, Consulting and Other

122.7



102.9



19



10


Operating loss

$

(21.4)



$

(22.0)



3

%


8

%

Equity earnings

$



$






Adjusted EBITDA1

$

3.8



$

0.6



n.m.



n.m.


n.m. - not meaningful as represented by a percentage change of greater than 100%, favorably or unfavorably.

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the EMEA Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

 

 

Asia Pacific Real Estate Services
 
   ($ in millions, "LC" = local currency)

Three Months Ended
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

812.9



$

743.7



9

%


8

%

Reimbursements

(356.2)



(355.9)





(1)


Revenue before reimbursements

$

456.7



$

387.8



18

%


16

%

Gross contract costs1

(205.4)



(163.0)



26



25


Fee revenue1

$

251.3



$

224.8



12

%


10

%

Leasing

55.3



50.0



11



9


Capital Markets

43.4



34.5



26



23


Property & Facility Management

69.0



71.9



(4)



(5)


Project & Development Services

37.2



29.8



25



23


Advisory, Consulting and Other

46.4



38.6



20



18


Operating income

$

23.4



$

21.4



9

%


9

%

Equity earnings

$

0.7



$

0.6



17

%


25

%

Adjusted EBITDA1

$

30.0



$

27.7



8

%


7

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Asia Pacific Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

Asia Pacific Second-Quarter 2018 Performance Highlights:

  • Asia Pacific revenue and fee revenue increased 8 percent and 10 percent, respectively, compared with 2017. Fee revenue growth was led by Capital Markets, driven by investment sales performance in Japan and Singapore; Advisory, Consulting and Other, primarily due to valuations business in Greater China; Project & Development Services, mainly in Australia. Geographically across service lines, fee revenue expansion was led by Greater China, Japan and Singapore.
  • Operating expenses, excluding reimbursed expenses, were $433.3 million and fee-based operating expenses, excluding restructuring and acquisition charges, were $227.9 million, increases of 17 percent and 10 percent, respectively, over the prior year. The increase in expenses reflects revenue-related expense growth and higher than anticipated costs on certain client assignments, partially offset by platform productivity gains in the quarter.
  • Operating income was $23.4 million, an increase of 9 percent compared with the prior-year quarter. Adjusted EBITDA increased 7 percent, compared with 2017, to $30.0 million. Adjusted EBITDA margin, calculated on a fee-revenue basis, was 12.0 percent in USD and local currency for the quarter, compared with 12.3 percent in 2017.

 

Asia Pacific Real Estate Services
 
   ($ in millions, "LC" = local currency)

Six Months Ended 
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

1,524.2



$

1,370.0



11

%


9

%

Reimbursements

(677.8)



(672.4)



1



(1)


Revenue before reimbursements

$

846.4



$

697.6



21

%


18

%

Gross contract costs1

(400.7)



(293.4)



37



33


Fee revenue1

$

445.7



$

404.2



10

%


7

%

Leasing

90.1



79.5



13



10


Capital Markets

72.4



62.8



15



13


Property & Facility Management

136.8



136.6





(2)


Project & Development Services

67.1



54.4



23



20


Advisory, Consulting and Other

79.3



70.9



12



9


Operating income

$

22.5



$

26.4



(15)

%


(11)

%

Equity earnings

$

1.0



$

1.4



(29)

%


(18)

%

Adjusted EBITDA1

$

35.0



$

38.3



(9)

%


(7)

%

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the Asia Pacific Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

 

 

LaSalle


   ($ in millions, "LC" = local currency)

Three Months Ended
June 30,


%
Change
in USD


%
Change
in LC

2018


2017



Revenue

$

91.7



$

72.9



26

%


23

%

Reimbursements(a)

(4.8)



(4.4)



9



8


Revenue before reimbursements

$

86.9



$

68.5



27

%


24

%

Gross contract costs(a)

(1.2)



(1.2)





(11)


Fee revenue1

$

85.7



$

67.3



27

%


24

%

Advisory fees(a)

62.3



60.0



4




Transaction fees & other(a)

5.5



3.9



41



41


Incentive fees

17.9



3.4



n.m.



n.m.


Operating income

$

15.8



$

8.4



88

%


83

%

Equity earnings

$

9.1



$

13.7



(34)

%


(34)

%

Adjusted EBITDA1

$

24.4



$

22.6



8

%


6

%

n.m. - not meaningful as represented by a percentage change of greater than 100%, favorably or unfavorably.

(a) Reimbursements are entirely within Advisory fees and Gross contract costs are entirely within Other.

Percentage variances in the LaSalle Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. See Financial Statement Note (4) following the Financial Statements in this news release.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

LaSalle Second-Quarter 2018 Performance Highlights:

  • LaSalle revenue and fee revenue growth was driven by strong incentive fee performance associated with real estate dispositions in Asia Pacific.
  • Equity earnings in both the current and prior years were primarily driven by net valuation increases for investments in Europe and Asia.
  • Operating expenses, excluding reimbursed expenses, were $71.1 million, up 15 percent from 2017. Fee-based operating expenses, excluding restructuring and acquisition charges, were $69.9 million, up 16 percent from 2017. The increases primarily reflect higher variable compensation expense as a result of the increase in incentive fees.
  • Operating income increased 83 percent and adjusted EBITDA increased 6 percent, both compared with last year. Adjusted EBITDA margin was 28.5 percent in USD for the quarter (28.7 percent in local currency), compared with 33.7 percent last year. Margin contraction primarily reflects the decline in equity earnings.
  • Assets under management (AUM) were $59.9 billion as of June 30, 2018, an increase of 2 percent in USD (flat in local currency) from $59.0 billion as of March 31, 2018. The net increase in AUM during the year resulted from $1.6 billion of acquisitions, $1.2 billion of foreign currency increase and $0.4 billion of net valuation increases, partially offset by $2.3 billion of dispositions and withdrawals. Private equity assets represented 87 percent of AUM as of June 30, 2018, compared with 78 percent as of June 30, 2017.

 

LaSalle

 

   ($ in millions, "LC" = local currency)

Six Months Ended 
June 30,


% Change in USD


% Change in LC

2018


2017



Revenue

$

211.0



$

161.2



31

%


25

%

Reimbursements(a)

(9.6)



(8.9)



8



6


Revenue before reimbursements

$

201.4



$

152.3



32

%


26

%

Gross contract costs(a)

(2.5)



(2.6)



(4)



(14)


Fee revenue1

$

198.9



$

149.7



33

%


27

%

Advisory fees(a)

127.4



117.7



8



3


Transaction fees & other(a)

20.9



16.7



25



22


Incentive fees

50.6



15.3



n.m.



n.m.


Operating income

$

44.9



$

23.0



95

%


82

%

Equity earnings

$

22.3



$

18.3



22

%


21

%

Adjusted EBITDA1

$

66.8



$

42.2



58

%


50

%

n.m. - not meaningful as represented by a percentage change of greater than 100%, favorably or unfavorably.

(a) Reimbursements are entirely within Advisory fees and Gross contract costs are entirely within Other.

(1) For discussion of non-GAAP financial measures, see Note 1 following the Financial Statements in this news release. Percentage variances in the LaSalle Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.

Note: The company adopted ASC 606 and revised its non-GAAP definition "Fee revenue" in the first quarter of 2018. Refer to the footnotes following the Financial Statements for additional discussion.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with nearly 300 corporate offices, operations in over 80 countries and a global workforce of 86,000 as of June 30, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit ir.jll.com.

Connect with us
https://www.linkedin.com/company/jll    
https://www.facebook.com/jll   
https://twitter.com/jll      
https://plus.google.com/+joneslanglasalle

Live Webcast


Conference Call


Management will offer a live webcast for shareholders, analysts, and investment professionals on Wednesday, August 8, 2018, at 9:00 a.m. Eastern.

 

Please use the following webcast link:


Management will also conduct a conference call. If you are unable to join the live webcast and 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 be required):


https://engage.vevent.com/rt/joneslanglasalleincorporated~080818


 ■  United States callers:

 ■  International callers:

 ■  Passcode:

+1 844 231 9804

+1 402 858 7998

5988098









Supplemental Information


Audio Replay


Supplemental information regarding the second quarter 2018 earnings call has been posted to the Investor Relations section of JLL's website: ir.jll.com.


An audio replay will be available for download or stream. Information and the link can be found on JLL's website: ir.jll.com.  


If you have any questions, please contact JLL Investor Relations: JLLInvestorRelations@am.jll.com.

Cautionary Note Regarding Forward-Looking Statements

Statements in this news 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 the company's actual results, performance, achievements, plans and objectives 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 the company'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 the company's Annual Report on Form 10-K for the year ended December 31, 2017, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, and in other reports filed with the Securities and Exchange Commission. Any forward-looking statements speak only as of the date of this release, and except to the extent required by applicable securities laws, management expressly disclaims any obligation or undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in expectations or results, or any change in events.


JONES LANG LASALLE INCORPORATED

Consolidated Statements of Operations

(Unaudited)


Three Months Ended June 30,


Six Months Ended June 30,



(in millions, except share and per share data)

2018


2017


2018


2017









Revenue before reimbursements

$

2,163.3



$

1,874.5



$

4,054.4



$

3,490.8


Reimbursements

1,740.4



1,595.8



3,404.5



3,097.2


Total Revenue

$

3,903.7



$

3,470.3



$

7,458.9



$

6,588.0










Operating expenses:








Compensation and benefits

$

1,240.5



$

1,066.4



$

2,337.7



$

2,044.0


Operating, administrative and other

737.8



630.7



1,435.1



1,210.2


Reimbursed expenses

1,740.4



1,595.8



3,404.5



3,097.2


Depreciation and amortization

46.3



41.2



88.4



80.5


Restructuring and acquisition (credits) charges5

(11.1)



5.4



(10.4)



9.9


Total operating expenses

3,753.9



3,339.5



7,255.3



6,441.8










Operating income

149.8



130.8



203.6



146.2










Interest expense, net of interest income

14.3



14.6



28.1



27.6


Equity earnings from real estate ventures

10.2



14.5



23.8



20.1


Other income

1.7





4.2



1.0










Income before income taxes and noncontrolling interest

147.4



130.7



203.5



139.7


Provision for income taxes

37.6



35.8



51.1



37.1


Net income

109.8



94.9



152.4



102.6










Net income attributable to noncontrolling interest

1.8



0.4



4.1



0.9


Net income attributable to the company

$

108.0



$

94.5



$

148.3



$

101.7










Dividends on unvested common stock, net of tax benefit

0.2



0.2



0.2



0.2


Net income attributable to common shareholders

$

107.8



$

94.3



$

148.1



$

101.5










Basic earnings per common share

$

2.37



$

2.08



$

3.26



$

2.24


Basic weighted average shares outstanding (in 000's)

45,493



45,288



45,468



45,273










Diluted earnings per common share

$

2.35



$

2.06



$

3.23



$

2.22


Diluted weighted average shares outstanding (in 000's)

45,951



45,782



45,922



45,728










Please reference attached financial statement notes.

 

 

JONES LANG LASALLE INCORPORATED

 Segment Operating Results

(Unaudited)


Three Months Ended June 30,


Six Months Ended June 30,



(in millions)

2018


2017


2018


2017

AMERICAS - REAL ESTATE SERVICES








Revenue

$

2,152.5



$

1,932.5



$

4,093.5



$

3,732.4


Reimbursements

(1,226.4)



(1,110.0)



(2,408.1)



(2,188.5)


Revenue before reimbursements

926.1



822.5



1,685.4



1,543.9


Gross contract costs1

(156.6)



(130.4)



(289.7)



(262.2)


Net non-cash MSR and mortgage banking derivative activity1

(1.3)



(6.7)



(4.0)



(4.0)


Fee revenue1

768.2



685.4



1,391.7



1,277.7










Compensation, operating and administrative expenses

796.9



702.4



1,485.6



1,368.0


Depreciation and amortization

28.3



23.7



52.6



47.2


Total segment operating expenses, excluding reimbursed

825.2



726.1



1,538.2



1,415.2


Gross contract costs1

(156.6)



(130.4)



(289.7)



(262.2)


Total fee-based segment operating expenses

668.6



595.7



1,248.5



1,153.0










Segment operating income

$

100.9



$

96.4



$

147.2



$

128.7


Equity earnings

0.4



0.2



0.5



0.4


Total segment income

$

101.3



$

96.6



$

147.7



$

129.1










Adjusted operating income1

$

103.0



$

93.1



$

150.0



$

131.5










Adjusted EBITDA1

$

128.1



$

113.1



$

195.8



$

171.5










EMEA - REAL ESTATE SERVICES








Revenue

$

846.6



$

721.2



$

1,630.2



$

1,324.4


Reimbursements

(153.0)



(125.5)



(309.0)



(227.4)


Revenue before reimbursements

693.6



595.7



1,321.2



1,097.0


Gross contract costs1

(305.3)



(248.9)



(582.5)



(480.3)


Fee revenue1

388.3



346.8



738.7



616.7










Compensation, operating and administrative expenses

683.5



574.6



1,319.7



1,097.6


Depreciation and amortization

11.5



11.1



22.9



21.4


Total segment operating expenses, excluding reimbursed

695.0



585.7



1,342.6



1,119.0


Gross contract costs1

(305.3)



(248.9)



(582.5)



(480.3)


Total fee-based segment operating expenses

389.7



336.8



760.1



638.7










Segment operating (loss) income

$

(1.4)



$

10.0



$

(21.4)



$

(22.0)


Equity earnings








Total segment (loss) income

$

(1.4)



$

10.0



$

(21.4)



$

(22.0)










Adjusted operating income (loss)1

$

1.8



$

14.1



$

(14.9)



$

(14.4)










Adjusted EBITDA1

$

11.2



$

21.2



$

3.8



$

0.6


 

 


Three Months Ended June 30,


Six Months Ended June 30,



(in millions)

2018


2017


2018


2017

ASIA PACIFIC - REAL ESTATE SERVICES








Revenue

$

812.9



$

743.7



$

1,524.2



$

1,370.0


Reimbursements

(356.2)



(355.9)



(677.8)



(672.4)


Revenue before reimbursements

456.7



387.8



846.4



697.6


Gross contract costs1

(205.4)



(163.0)



(400.7)



(293.4)


Fee revenue1

251.3



224.8



445.7



404.2










Compensation, operating and administrative expenses

427.5



360.7



812.5



660.7


Depreciation and amortization

5.8



5.7



11.4



10.5


Total segment operating expenses, excluding reimbursed

433.3



366.4



823.9



671.2


Gross contract costs1

(205.4)



(163.0)



(400.7)



(293.4)


Total fee-based segment operating expenses

227.9



203.4



423.2



377.8










Segment operating income

$

23.4



$

21.4



$

22.5



$

26.4


Equity earnings

0.7



0.6



1.0



1.4


Total segment income

$

24.1



$

22.0



$

23.5



$

27.8










Adjusted operating income1

$

24.1



$

22.0



$

23.8



$

27.6










Adjusted EBITDA1

$

30.0



$

27.7



$

35.0



$

38.3










LASALLE








Revenue

$

91.7



$

72.9



$

211.0



$

161.2


Reimbursements

(4.8)



(4.4)



(9.6)



(8.9)


Revenue before reimbursements

86.9



68.5



201.4



152.3


Gross contract costs1

(1.2)



(1.2)



(2.5)



(2.6)


Fee revenue1

85.7



67.3



198.9



149.7










Segment operating expenses, excluding reimbursed expenses

$

71.1



$

60.1



$

156.5



$

129.3


Gross contract costs1

(1.2)



(1.2)



(2.5)



(2.6)


Total fee-based segment operating expenses

69.9



58.9



154.0



126.7










Segment operating income

$

15.8



$

8.4



$

44.9



$

23.0


Equity earnings

9.1



13.7



22.3



18.3


Total segment income

$

24.9



$

22.1



$

67.2



$

41.3










Adjusted operating income1

$

15.8



$

8.4



$

44.9



$

23.0










Adjusted EBITDA1

$

24.4



$

22.6



$

66.8



$

42.2


















SEGMENT RECONCILING ITEMS








Fee revenue

$

1,493.5



$

1,324.3



$

2,775.0



$

2,448.3


Gross contracts costs1

668.5



543.5



1,275.4



1,038.5


Net non-cash MSR and mortgage banking derivative activity1

1.3



6.7



4.0



4.0


Revenue before reimbursements

$

2,163.3



$

1,874.5



$

4,054.4



$

3,490.8


Reimbursements

1,740.4



1,595.8



3,404.5



3,097.2


Revenue

$

3,903.7



$

3,470.3



$

7,458.9



$

6,588.0


Segment operating expenses excluding restructuring and acquisition charges

3,765.0



3,334.1



7,265.7



6,431.9


Segment operating income

$

138.7



$

136.2



$

193.2



$

156.1


Restructuring and acquisition (credits) charges5

(11.1)



5.4



(10.4)



9.9


Operating income

$

149.8



$

130.8



$

203.6



$

146.2



Please reference attached financial statement notes.

 

 

JONES LANG LASALLE INCORPORATED

Consolidated Balance Sheets

(Unaudited)



June 30,


December 31,

(in millions, except share and per share data)


2018


2017

ASSETS





Current assets:






Cash and cash equivalents


$

292.8



$

268.0



Trade receivables, net of allowances


1,508.0



1,739.4



Notes and other receivables


296.1



385.3



Reimbursable receivables


1,301.5