See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release
CEO Comment:
"We completed another record quarter at JLL, with
double-digit fee revenue growth across all service lines and geographic
segments, healthy margin expansion and continued outstanding performance
by LaSalle Investment Management," said Colin Dyer, President and CEO.
"We continue to invest strategically in the long-term growth of our
company, and have excellent momentum as we move into 2016," Dyer added.
| |
|
|
|
|
|
|
Consolidated Revenue
($ in millions, "LC" = local currency) |
|
Three Months Ended September 30, |
|
% Change
in USD |
|
% Change
in LC |
| 2015 |
|
2014 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Real Estate Services ("RES") |
|
|
|
|
|
|
|
|
|
|
| Leasing |
|
$ |
417.8 |
|
$ |
368.1 |
|
14% |
|
19% |
| Capital Markets & Hotels |
|
|
223.7 |
|
|
192.9 |
|
16% |
|
26% |
| Property & Facility Management Fee Revenue1 |
|
| 270.7 |
|
|
259.6 |
|
4% |
|
14% |
| |
Property & Facility Management |
|
|
378.3 |
|
|
376.3 |
|
1% |
|
10% |
| Project & Development Services Fee Revenue1 |
|
|
125.9 |
|
|
112.6 |
|
12% |
|
21% |
| |
Project & Development Services |
|
|
232.3 |
|
|
181.3 |
|
28% |
|
43% |
| Advisory, Consulting and Other |
|
|
115.0 |
|
|
105.1 |
|
9% |
|
19% |
| |
Total RES Fee Revenue1 |
|
$ |
1,153.1 |
|
$ |
1,038.3 |
|
11% |
|
17% |
| |
|
Total RES Revenue |
|
$ |
1,367.1 |
|
$ |
1,223.7 |
|
12% |
|
19% |
| |
|
|
|
|
|
|
|
|
|
|
| LaSalle Investment Management ("LaSalle") |
|
|
|
|
|
|
|
|
|
|
| Advisory Fees |
|
$ |
60.7 |
|
$ |
60.9 |
|
--% |
|
7% |
| Transaction Fees & Other |
|
|
5.0 |
|
|
10.8 |
|
(54)% |
|
(50)% |
| Incentive Fees |
|
|
68.5 |
| |
70.6 |
|
(3)% |
|
8% |
| |
|
Total LaSalle Revenue |
|
$ |
134.2 |
|
$ |
142.3 |
|
(6)% |
|
3% |
| |
|
|
|
|
|
|
|
|
|
|
| Total Firm Fee Revenue1 |
|
$ |
1,287.3 |
|
$ |
1,180.6 |
|
9% |
|
17% |
| |
|
Total Firm Revenue |
|
$ |
1,501.3 |
|
$ |
1,366.0 |
|
10% |
|
19% |
| |
|
|
|
|
|
|
|
|
|
|
n.m. - not meaningful
|
|
|
|
|
|
|
Consolidated Revenue
($ in millions, "LC" = local currency) |
|
Nine Months Ended September 30, |
|
% Change
in USD |
|
% Change
in LC |
| 2015 |
|
2014 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Real Estate Services ("RES") |
|
|
|
|
| |
|
|
|
|
| Leasing |
|
$ |
1,103.8 |
|
$ |
1,004.1 |
|
10% |
|
14% |
| Capital Markets & Hotels |
|
|
623.9 |
|
|
492.3 |
|
27% |
|
38% |
| Property & Facility Management Fee Revenue1 |
|
|
790.8 |
|
|
762.8 |
|
4% |
|
12% |
| |
Property & Facility Management |
|
|
1,115.8 |
|
|
1,093.2 |
|
2% |
|
10% |
| Project & Development Services Fee Revenue1 |
|
|
348.5 |
|
|
302.9 |
|
15% |
|
25% |
| |
Project & Development Services |
|
|
603.5 |
|
|
508.8 |
|
19% |
|
33% |
| Advisory, Consulting and Other |
|
|
331.1 |
|
|
306.1 |
|
8% |
|
18% |
| |
Total RES Fee Revenue1 |
|
$ |
3,198.1 |
|
$ |
2,868.2 |
|
12% |
|
19% |
| |
|
Total RES Revenue |
|
$ |
3,778.1 |
|
$ |
3,404.5 |
|
11% |
|
20% |
| |
|
|
|
|
|
|
|
|
|
|
| LaSalle Investment Management ("LaSalle") |
|
|
|
|
|
|
|
| |
|
| Advisory Fees |
|
$ |
181.3 |
|
$ |
176.8 |
|
3% |
|
11% |
| Transaction Fees & Other |
|
|
19.5 |
|
|
19.8 |
|
(2)% |
|
7% |
| Incentive Fees |
|
|
99.3 |
|
|
79.5 |
|
25% |
|
38% |
| |
|
Total LaSalle Revenue |
|
$ |
300.1 |
|
$ |
276.1 |
|
9% |
|
18% |
| |
|
|
|
|
|
|
|
|
|
|
| Total Firm Fee Revenue1 |
|
$ |
3,498.2 |
|
$ |
3,144.3 |
|
11% |
|
20% |
| |
|
Total Firm Revenue |
|
$ |
4,078.2 |
|
$ |
3,680.6 |
|
11% |
|
20% |
| |
|
|
|
|
|
|
|
|
|
|
n.m. - not meaningful
Consolidated Performance Highlights:
- Consolidated fee revenue for the third quarter was $1.3
billion, up 17 percent from 2014. Growth was broad-based, led by
Leasing, up $50 million or 19 percent, Capital Markets & Hotels, up
$31 million or 26 percent, and Project & Development Services, up
$13 million or 21 percent.
- Consolidated fee-based operating expenses, excluding restructuring
and acquisition charges, were $1.2 billion for the third quarter,
compared with $1.1 billion last year. The firm continued to invest in
technology and people for its clients in support of the growing
business.
- LaSalle Investment Management's advisory fees grew 7 percent; total
revenue increased 3 percent driven by substantial incentive fees as
certain funds near the end of their stated investment periods. LaSalle
also recognized significant equity earnings from net valuation increases
and investment dispositions.
- Adjusted EBITDA margin calculated on a fee revenue basis was 14.8
percent for the third quarter, compared with 14.1 percent last year.
- Adjusted earnings per share reached $2.52 for the third quarter, up
11 percent from last year despite a negative foreign exchange impact of
approximately $0.23, or 10 percent compared with a year ago.
Balance Sheet and Net Interest Expense:
- The firm's total net debt was $435 million at quarter end, a decrease of $87 million from the second quarter of 2015.
- Net interest expense for the third quarter was $6.8 million, down
from $7.4 million in the third quarter of 2014 primarily due to lower
average borrowings compared with last year.
- Reflecting confidence in the firm's cash generation, the Board of
Directors declared a semi-annual dividend of $0.29 per share, a 7
percent increase from the $0.27 per share payment made in June 2015. The
dividend payment will be made on December 15, 2015, to shareholders of
record at the close of business on November 13, 2015.
Business Segment Performance Highlights
Americas Real Estate Services
Americas Performance Highlights:
- Fee revenue for the quarter was $592 million, an
increase of 16 percent from 2014. Revenue growth compared with last year
was broad-based with Leasing up 17 percent; Advisory, Consulting and
Other up 17 percent; Property & Facility Management up 16 percent;
and Project & Development Services up 15 percent. Growth in the
region was primarily led by U.S. markets including New York, Los Angeles
and Atlanta.
- Fee-based operating expenses, excluding restructuring and
acquisition charges, were $530 million for the quarter, compared with
$473 million last year.
- Operating income was $62 million for the quarter, compared with $48
million in 2014. Year-to-date operating income was $143 million, up from
$112 million in 2014.
- Adjusted EBITDA was $77 million for the quarter, compared with $60
million last year. Adjusted EBITDA margin for the quarter, calculated on
a fee revenue basis, was 13.0 percent, compared with 11.4 percent in
2014. Year-to-date Adjusted EBITDA was $190 million, up from $150
million in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee
revenue basis was 11.6 percent, compared with 10.6 percent in 2014.
EMEA Real Estate Services
EMEA Performance Highlights:
- EMEA's performance during the third quarter was
significantly higher in local currencies than in U.S. dollars due to the
continued strength of the U.S. dollar against European currencies.
- Fee revenue for the quarter was $333 million, an increase of 25
percent from 2014. Revenue growth was driven by Capital Markets &
Hotels up 35 percent; Advisory, Consulting and Other up 35
percent; Project & Development Services up 27 percent; and Leasing
up 23 percent compared with last year. Growth in the region was led by
the U.K., Germany and France.
- Fee-based operating expenses, excluding restructuring and
acquisition charges, were $307 million for the quarter, compared with
$282 million last year.
- Operating income was $26 million for the quarter, compared with $16
million in 2014. Year-to-date operating income was $56 million, up from
$36 million in 2014.
- Adjusted EBITDA was $33 million for the quarter, compared with $23
million last year. Adjusted EBITDA margin calculated on a fee revenue
basis was 10.0 percent for the quarter, compared with 7.6 percent in
2014. Year-to-date Adjusted EBITDA was $74 million, up from $54 million
in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue
basis was 8.1 percent, compared with 6.4 percent in 2014.
Asia Pacific Real Estate Services
Asia Pacific Performance Highlights:
- Asia Pacific's performance during the third quarter was
significantly higher in local currencies than in U.S. dollars due to the
continued strength of the U.S. dollar, particularly against the
Australian dollar and Japanese yen.
- Fee revenue for the quarter was $233 million, an increase of 20
percent from 2014. Revenue growth was driven by Capital Markets &
Hotels up 48 percent, Leasing up 19 percent, and Property & Facility
Management up 18 percent, compared with last year. Growth in the region
was led by Australia, India and China's tier one cities, including
Beijing and Shanghai.
- Fee-based operating expenses, excluding restructuring and
acquisition charges, were $220 million for the quarter, compared with
$203 million last year.
- Operating income was $13 million for the quarter, compared with $15
million in 2014. Year-to-date operating income was $34 million, up from
$32 million in 2014.
- Adjusted EBITDA was $17 million for the quarter, compared with $16
million last year. Adjusted EBITDA margin calculated on a fee revenue
basis was 7.1 percent for the quarter, compared with 7.5 percent in
2014. Year-to-date Adjusted EBITDA was $44 million, up from $40 million
in 2014. Year-to-date Adjusted EBITDA margin calculated on a fee revenue
basis was 6.8 percent, compared with 6.5 percent in 2014.
LaSalle Investment Management
LaSalle Investment Management Performance Highlights:
- Total segment revenue was $155 million for the quarter,
compared with $162 million last year. This included advisory fee growth
of 7 percent, $69 million of incentive fees and $21 million of equity
earnings.
- Incentive fees and equity earnings were notable for the quarter,
despite a tough 2014 comparable. Incentive fees were driven by the sale
of assets as LaSalle realized gains from legacy investments, whereas
equity earnings were primarily valuation driven.
- Operating expenses were $92 million for the quarter, compared with
$95 million last year. Operating income was $63 million for the quarter,
compared with $68 million last year.
- Adjusted EBITDA was $63 million for the quarter, compared with $68
million last year. Adjusted EBITDA margin was 40.9 percent, compared
with 42.0 percent in 2014. Year-to-date Adjusted EBITDA was $130
million, up from $108 million in 2014. Year-to-date Adjusted EBITDA
margin was 36.3 percent, compared to 34.0 percent in 2014.
- Capital raise was $838 million for the quarter and $3.8 billion year-to-date.
- Assets under management were $57.2 billion as of September 30, 2015,
up from $56.0 billion as of June 30, 2015. The net increase in assets
under management resulted from $2.5 billion of acquisitions and
takeovers, $1.7 billion of dispositions and withdrawals, $0.7 billion of
net valuation decreases and $1.1 billion of net foreign currency
increases.
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 $57.2 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 quarters ended March 31,
2015 and June 30, 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.
Conference Call
Management will conduct a conference call with
shareholders, analysts and investment professionals on Wednesday,
October 28, 2015 at 9:00 a.m. EDT. If you would like to
participate in the teleconference, please dial into one of the following
phone numbers five to ten minutes before the start time (the passcode
will also be required):
U.S. callers: +1 844 231 9804
International callers: +1 402 858 7998
Passcode: 49805888
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=102889
3. Download free Windows Media Player software: (link located under registration form)
4. If you experience problems listening, please call the Webcast
Hotline +1 800 744 9473 and provide your Event ID (102889).
Supplemental Information
Supplemental information regarding the third-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, October 28, 2015
through 11:59 p.m. EST Saturday, November 28, 2015 at the following
numbers:
U.S. callers: +1 855 859 2056 or + 1 800 585 8367
International callers: +1 404 537 3406
Passcode: 49805888
Web Audio Replay
An audio replay will be available. 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.
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 nine months
ended September 30, 2015 and 2014.
*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 nine months ended September 30,
2015 and 2014. Adjusted net income in the table below for the three and
nine months ended September 30, 2014 no longer incorporates an
adjustment to exclude the net intangible amortization related to the
2011 King Sturge acquisition; such amounts were $0.5 million and $1.6
million of amortization expense for the three and nine months ended
September 30, 2014, respectively. There was no comparable activity
during the three and nine months ended September 30, 2015.
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:
*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:
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.
Restructuring and acquisition charges presented in the
Financial Statement Notes for the three and nine months ended September
30, 2014 includes a pre-tax benefit of $2.2 million associated with
acquisition-related activity that was presented within Operating,
administrative and other expenses in the consolidated statements of
operations for the quarter and reclassified for full-year 2014 reporting
comparability.
Restructuring and acquisition charges of $18 million in the
quarter ended September 30, 2015 include $13 million related to the
write-off of an indemnification asset which arose from prior period
acquisition activity. This write-off is offset by the recognition of a
tax benefit of an equal amount in the provision for income taxes, and
therefore has no impact on net income.
Excluding the impact of this item, the adjusted provision for
income taxes for the three months ended September 30, 2015 of $38.5
reflects a 25.4 percent effective tax rate on adjusted income before
taxes of $151.7 million.
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 September 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
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