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8-K - FORM 8-K - JONES LANG LASALLE INCd8k.htm
EX-99.2 - SUPPLEMENTAL INFORMATION TO FIRST QUARTER 2011 EARNINGS CALL - JONES LANG LASALLE INCdex992.htm

Exhibit 99.1

LOGO

 

Contact:

   Lauralee Martin

Title:

   Chief Operating and Financial Officer

Phone:

   +1 312 228 2073

Jones Lang LaSalle Reports First-Quarter 2011 Results

Revenue of $688 million, up 18 percent from the first quarter of 2010

CHICAGO, April 26, 2011 – Jones Lang LaSalle Incorporated (NYSE: JLL) today reported net income of $1.5 million on a U.S. GAAP basis, or $0.03 per share, for the quarter ended March 31, 2011, compared with net income of $0.2 million on a U.S. GAAP basis, or $0.01 per share, for the quarter ended March 31, 2010. Revenue for the first quarter of 2011 was $688 million, an increase of 18 percent in U.S. dollars, 16 percent in local currency, compared with the first quarter of 2010. The firm’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) were $28 million for the first quarter of 2011 compared with EBITDA of $29 million for the same period in 2010.

 

 

First-Quarter 2011 Highlights:

 

   

Solid revenue growth; transaction pipelines strengthening in all regions

 

   

Robust Americas Leasing performance with revenue up 35 percent

 

   

LaSalle Investment Management raised $1.5B of net capital commitments

 

   

Semi-annual dividend increased to $0.15 per share, from $0.10 per share

 

 

“Positive year-over-year revenue performance continued in the first quarter with good momentum building in our businesses,” said Colin Dyer, President and Chief Executive Officer of Jones Lang LaSalle. “Our healthy new business pipelines across the globe make us optimistic about our revenue and profit prospects as we move into the seasonally stronger quarters of the year,” Dyer added.


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 2

 

Consolidated Business Line Revenue Comparison (in millions)

 

     Three Months
Ended March 31,
     Percentage Change  
     2011      2010      % in USD     % in LC  

Real Estate Services (“RES”)

          

Leasing

   $ 210.1       $ 170.4         23     22

Capital Markets & Hotels

     66.0         52.3         26     22

Property & Facility Management

     186.5         160.5         16     12

Project & Development Services

     93.7         68.2         37     36

Advisory, Consulting and Other

     64.9         63.9         2     0
                      

Total RES revenue

   $ 621.2       $ 515.3         21     18

LaSalle Investment Management

          

Advisory fees

   $ 61.3       $ 58.4         5     2

Transaction and Incentive fees

     5.4         7.0         (23 %)      (27 %) 
                      

Total LaSalle Investment Management

   $ 66.7       $ 65.4         2     (1 %) 
                      

Total firm revenue

   $ 687.9       $ 580.7         18     16
                      

Operating expenses were $676 million for the first quarter, an increase of 20 percent, 18 percent in local currency, compared with operating expenses excluding Restructuring charges in 2010. The year-over-year increase was principally driven by variable costs to support revenue growth and by certain unusual expense items. These unusual items, while not classified as Restructuring charges, totaled more than $9 million and included accelerated compensation costs from acquisitions, reserves for third-party claims and a large contribution to Japanese disaster relief. Since the unusual items were incurred in the firm’s seasonally slowest quarter of the year, they impacted operating income and EBITDA margins more significantly than if they had been incurred in a later quarter.

Balance Sheet and Dividend

The firm’s net debt position, which includes deferred acquisition obligations, decreased by $184 million compared with March 31, 2010, to $512 million. Outstanding debt on the firm’s long-term credit facility decreased by $57 million compared with a year ago, to $278 million at quarter end.

The firm announced that its Board of Directors declared a semi-annual dividend of $0.15 per share, an increase from the $0.10 per share dividend payment made in December 2010. The dividend payment will be made on June 15, 2011, to holders of record at the close of business on May 16, 2011.

 

– more –


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 3

 

Business Segment First-Quarter Performance Highlights

Americas Real Estate Services

First-quarter revenue in the Americas region was $288 million, an increase of $60 million, or 26 percent, over the prior year. Leasing revenue grew 35 percent, demonstrating the strength and scale of Americas’ leasing business. Capital Markets and Hotels also generated strong growth in the quarter, more than doubling to $20 million.

 

     Three Months
Ended March 31,
     Percentage Change  
Americas (in millions)    2011      2010      % in USD     % in LC  

Leasing

   $ 143.1       $ 106.2         35     34

Capital Markets & Hotels

     19.8         9.5         108     107

Property & Facility Management

     66.7         58.2         15     14

Project & Development Services

     37.2         31.5         18     18

Advisory, Consulting and Other

     20.7         22.8         (9 %)      (10 %) 
                      

Operating revenue

   $ 287.5       $ 228.2         26     26

Equity earnings

     0.6         0.2         n/m        n/m   
                      

Total segment revenue

   $ 288.1       $ 228.4         26     26
                      

n/m – not meaningful

Operating expenses were $279 million in the first quarter, 27 percent higher than a year ago. The increase was largely due to higher incentive compensation expense and, to a lesser extent, the accounting treatment of approximately $3 million of accelerated compensation costs associated with acquisitions. Variable operating expenses such as Travel & Entertainment and Marketing also were higher as revenue-generating activities increased commensurate with stronger pipelines of future business. EBITDA increased to $19 million from $18 million in the first quarter of 2010.

EMEA Real Estate Services

EMEA’s revenue in the first quarter of 2011 was $168 million compared with $151 million in 2010, an increase of 11 percent, 10 percent in local currency. The most significant component of the revenue increase was in Project & Development Services (“PDS”), which includes the Tetris fit-out business where gross contracts include subcontractor costs. Market recoveries across the region continued to be mixed, resulting in varied performance from one country to the next. Performance in our three biggest countries, Germany, England and France, continued to be strong.

 

– more –


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 4

 

     Three Months
Ended March 31,
     Percentage Change  
EMEA (in millions)    2011     2010      % in USD     % in LC  

Leasing

   $ 37.2      $ 38.8         (4 %)      (5 %) 

Capital Markets & Hotels

     28.7        26.2         10     6

Property & Facility Management

     35.9        34.5         4     2

Project & Development Services

     38.4        26.0         48     47

Advisory, Consulting and Other

     28.0        25.9         8     7
                     

Operating revenue

   $ 168.2      $ 151.4         11     10

Equity losses

     (0.1     —           n/m        n/m   
                     

Total segment revenue

   $ 168.1      $ 151.4         11     10
                     

n/m – not meaningful

Operating expenses were $181 million in the first quarter, an increase of 13 percent from the prior year, 11 percent in local currency. Subcontractor costs related to the PDS business line increased by more than $8 million compared to the prior year. Variable compensation, driven by higher revenue, and operating costs, driven by a greater level of revenue-generating activities, also contributed to the increase. EBITDA was a loss of $8 million, compared with a loss of $5 million in the first quarter of 2010.

Asia Pacific Real Estate Services

Revenue in Asia Pacific was $165 million for the first quarter of 2011, compared with $136 million for the same period in 2010, an increase of 22 percent, 15 percent in local currency. The year-over-year increase was largely driven by growth in India, Greater China and Australia.

 

     Three Months
Ended March 31,
     Percentage Change  
Asia Pacific (in millions)    2011      2010      % in USD     % in LC  

Leasing

   $ 29.8       $ 25.4         17     11

Capital Markets & Hotels

     17.5         16.6         5     (1 %) 

Property & Facility Management

     83.9         67.8         24     16

Project & Development Services

     18.1         10.7         69     62

Advisory, Consulting and Other

     16.2         15.2         7     1
                      

Operating revenue

   $ 165.5       $ 135.7         22     15

Equity earnings

     —           —           n/m        n/m   
                      

Total segment revenue

   $ 165.5       $ 135.7         22     15
                      

n/m – not meaningful

 

– more –


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 5

 

Operating expenses for the region were $160 million for the quarter, an increase of 23 percent, 15 percent in local currency on a year-over-year basis. The increase was principally due to staff and vendor costs that related to a higher volume of PDS work as well as other corporate client activities. Unusual expense items related to the region included the firm’s $1.3 million donation for disaster relief in Japan. EBITDA totaled $8 million, consistent with the first quarter of 2010.

LaSalle Investment Management

LaSalle Investment Management’s first-quarter Advisory fees were $61 million, 5 percent higher compared with the first quarter of 2010, primarily related to favorable valuation increases in the securities business. The business also recognized $2 million of Transaction fees from asset purchases in the first quarter of 2011.

 

LaSalle Investment Management    Three Months
Ended March  31,
    Percentage Change  
(in millions)    2011     2010     % in USD     % in LC  

Advisory fees

   $ 61.3      $ 58.4        5     2

Transaction and Incentive fees

     5.4        7.0        (23 %)      (27 %) 
                    

Operating revenue

   $ 66.7      $ 65.4        2     (1 %) 

Equity losses

     (2.5     (6.3     n/m        n/m   
                    

Total revenue

   $ 64.2      $ 59.1        9     5
                    

n/m – not meaningful

During the quarter, LaSalle Investment Management raised $1.5 billion of net equity, primarily in equity commitments from separate account clients and in the public securities business. Assets under management were $43.0 billion, compared with $41.3 billion at December 31, 2010. EBITDA was $10 million, an increase from $9 million in the first quarter of 2010.

Summary

The firm’s revenue growth momentum continued in the first quarter of 2011 and prospects for the remainder of 2011 are positive. The firm’s corporate clients are showing increased confidence to make decisions, pipelines are robust and LaSalle continues to perform well and raise capital. The balance sheet remains strong and the firm is well positioned to take advantage of a consolidating industry.

 

– more –


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 6

 

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from 1,000 locations worldwide, including 185 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $43 billion of assets under management. For further information, please visit the company’s website, www.joneslanglasalle.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 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 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, 2010, 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. 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.

 

– more –


Jones Lang LaSalle Reports First-Quarter 2011 Results – Page 7

 

Conference Call

The firm will conduct a conference call for shareholders, analysts and investment professionals on Wednesday, April 27 at 9:00 a.m. EDT.

To participate in the teleconference, please dial into one of the following phone numbers five to 10 minutes before the start time:

 

•    U.S. callers:

  +1 877 800 0896

•    International callers:

  +1 706 679 7364

•    Pass code:

  59542775

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=78464 and follow instructions

3. Download free Windows Media Player software: (link located under registration form)

4. If you experience problems listening, send an e-mail to prnwebcast@multivu.com

Supplemental Information

Supplemental information regarding the first quarter 2011 earnings call has been posted to the Investor Relations section of the company’s website: www.joneslanglasalle.com.

Conference Call Replay

Available: 12:00 p.m. EDT Wednesday, April 27 through 11:59 p.m. EDT May 4 at the following numbers:

 

•    U.S. callers:

  +1 800 642 1687

•    International callers:

  +1 706 645 9291

•    Pass code:

  59542775

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.joneslanglasalle.com.

If you have any questions, call Yvonne Peterson of Jones Lang LaSalle’s Investor Relations department at +1 312 228 2919.

 

###


JONES LANG LASALLE INCORPORATED

Consolidated Statements of Operations

For the Three Months Ended March 31, 2011 and 2010

(in thousands, except share data)

(Unaudited)

 

     Three Months Ended March 31,  
     2011     2010  

Revenue

   $ 687,864      $ 580,662   

Operating expenses:

    

Compensation and benefits

     461,357        387,381   

Operating, administrative and other

     196,126        156,453   

Depreciation and amortization

     18,315        17,713   

Restructuring charges

     —          1,120   
                

Total operating expenses

     675,798        562,667   
                

Operating income

     12,066        17,995   

Interest expense, net of interest income

     7,963        11,330   

Equity losses from unconsolidated ventures

     (1,971     (6,127
                

Income before income taxes and noncontrolling interest

     2,132        538   

Provision for income taxes

     533        124   
                

Net income

     1,599        414   

Net income attributable to noncontrolling interest

     109        168   
                

Net income attributable to the Company

   $ 1,490      $ 246   
                

Net income attributable to common shareholders

   $ 1,490      $ 246   
                

Basic earnings per common share

   $ 0.03      $ 0.01   
                

Basic weighted average shares outstanding

     42,846,799        41,913,100   
                

Diluted earnings per common share

   $ 0.03      $ 0.01   
                

Diluted weighted average shares outstanding

     44,359,055        43,949,850   
                

EBITDA

   $ 28,301      $ 29,413   
                

Please reference attached financial statement notes.


JONES LANG LASALLE INCORPORATED

Segment Operating Results

For the Three Months Ended March 31, 2011 and 2010

(in thousands)

(Unaudited)

 

     Three Months Ended March 31,  
     2011     2010  

REAL ESTATE SERVICES

    

AMERICAS

    

Revenue:

    

Operating revenue

   $ 287,445      $ 228,199   

Equity earnings

     653        205   
                
     288,098        228,404   

Operating expenses:

    

Compensation, operating and administrative expenses

     269,557        210,450   

Depreciation and amortization

     9,908        8,856   
                
     279,465        219,306   
                

Operating income

   $ 8,633      $ 9,098   
                

EBITDA

   $ 18,541      $ 17,954   
                

EMEA

    

Revenue:

    

Operating revenue

   $ 168,245      $ 151,405   

Equity losses

     (113     (18
                
     168,132        151,387   

Operating expenses:

    

Compensation, operating and administrative expenses

     176,310        156,259   

Depreciation and amortization

     4,909        4,719   
                
     181,219        160,978   
                

Operating loss

   $ (13,087   $ (9,591
                

EBITDA

   $ (8,178   $ (4,872
                

ASIA PACIFIC

    

Revenue:

    

Operating revenue

   $ 165,450      $ 135,645   

Equity earnings

     —          —     
                
     165,450        135,645   

Operating expenses:

    

Compensation, operating and administrative expenses

     156,999        127,099   

Depreciation and amortization

     2,945        3,239   
                
     159,944        130,338   
                

Operating income

   $ 5,506      $ 5,307   
                

EBITDA

   $ 8,451      $ 8,546   
                

LASALLE INVESTMENT MANAGEMENT

    

Revenue:

    

Operating revenue

   $ 66,724      $ 65,413   

Equity losses

     (2,511     (6,314
                
     64,213        59,099   

Operating expenses:

    

Compensation, operating and administrative expenses

     54,618        50,026   

Depreciation and amortization

     552        899   
                
     55,170        50,925   
                

Operating income

   $ 9,043      $ 8,174   
                

EBITDA

   $ 9,595      $ 9,073   
                
                  

Total segment revenue

     685,893        574,535   

Reclassification of equity losses

     (1,971     (6,127
                

Total revenue

   $ 687,864      $ 580,662   
                

Total operating expenses before restructuring charges

     675,798        561,547   
                

Operating income before restructuring charges

   $ 12,066      $ 19,115   
                

Please reference attached financial statement notes.


JONES LANG LASALLE INCORPORATED

Consolidated Balance Sheets

March 31, 2011, December 31, 2010 and March 31, 2010

(in thousands)

 

     March 31,
2011
(Unaudited)
    December 31,
2010
    March 31,
2010
(Unaudited)
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 100,951      $ 251,897      $ 59,720   

Trade receivables, net of allowances

     698,292        721,486        595,767   

Notes and other receivables

     89,703        76,374        83,131   

Warehouse receivables

     113,257        —          —     

Prepaid expenses

     38,577        41,195        31,963   

Deferred tax assets

     78,359        82,740        79,634   

Other

     15,889        21,149        14,286   
                        

Total current assets

     1,135,028        1,194,841        864,501   

Property and equipment, net of accumulated depreciation

     202,774        198,685        200,674   

Goodwill, with indefinite useful lives

     1,479,418        1,444,708        1,422,745   

Identified intangibles, with finite useful lives, net of accumulated amortization

     29,189        29,025        33,833   

Investments in real estate ventures

     178,158        174,578        168,750   

Long-term receivables

     59,263        42,735        50,168   

Deferred tax assets

     144,081        149,020        139,565   

Other

     119,719        116,269        101,557   
                        

Total assets

   $ 3,347,630      $ 3,349,861      $ 2,981,793   
                        

LIABILITIES AND EQUITY

      

Current liabilities:

      

Accounts payable and accrued liabilities

   $ 335,228      $ 400,681      $ 299,556   

Accrued compensation

     354,898        554,841        275,747   

Short-term borrowings

     42,517        28,700        46,669   

Deferred tax liabilities

     3,942        3,942        1,164   

Deferred income

     44,506        45,146        32,646   

Deferred business acquisition obligations

     153,540        163,656        97,577   

Warehouse facility

     113,257        —          —     

Other

     117,467        99,346        108,815   
                        

Total current liabilities

     1,165,355        1,296,312        862,174   

Noncurrent liabilities:

      

Credit facilities

     278,000        197,500        334,999   

Deferred tax liabilities

     18,103        15,450        5,504   

Deferred compensation

     9,963        15,130        18,776   

Pension liabilities

     4,741        5,031        6,854   

Deferred business acquisition obligations

     138,784        134,889        275,619   

Minority shareholder redemption liability

     33,775        34,118        32,918   

Other

     83,882        79,496        78,427   
                        

Total liabilities

     1,732,603        1,777,926        1,615,271   

Company shareholders' equity:

      

Common stock, $.01 par value per share, 100,000,000 shares authorized;

      

42,910,988, 42,659,999 and 42,033,336 shares issued and outstanding as of

      

March 31, 2011, December 31, 2010, and March 31, 2010, respectively

     429        427        420   

Additional paid-in capital

     889,118        883,046        861,898   

Retained earnings

     677,887        676,397        531,703   

Shares held in trust

     (6,270     (6,263     (5,003

Accumulated other comprehensive income (loss)

     50,709        15,324        (26,164
                        

Total Company shareholders' equity

     1,611,873        1,568,931        1,362,854   

Noncontrolling interest

     3,154        3,004        3,668   
                        

Total equity

     1,615,027        1,571,935        1,366,522   
                        

Total liabilities and equity

   $ 3,347,630      $ 3,349,861      $ 2,981,793   
                        

Please reference attached financial statement notes.


JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2011 and 2010

(in thousands)

(Unaudited)

 

     Three Months Ended March 31,  
     2011     2010  

Cash used in operating activities

   $ (197,179   $ (146,332

Cash used in investing activities

     (31,587     (23,784

Cash provided by financing activities

     77,820        160,573   
                

Net decrease in cash and cash equivalents

     (150,946     (9,543

Cash and cash equivalents, beginning of period

     251,897        69,263   
                

Cash and cash equivalents, end of period

   $ 100,951      $ 59,720   
                

Please reference attached financial statement notes.

    


JONES LANG LASALLE INCORPORATED

Financial Statement Notes

 

1. EBITDA represents earnings before interest expense, net of interest income, income taxes, depreciation and amortization. Although EBITDA is a non-GAAP financial measure, it is used extensively by management and is useful to investors and lenders as a metric for evaluating operating performance and liquidity. The firm believes that EBITDA is an indicator of ability to service existing debt, to sustain potential future increases in debt and to satisfy capital requirements. EBITDA is also used in the calculations of certain covenants related to the firm’s revolving credit facility. However, EBITDA should not be considered as an alternative either to net income or net cash used in operating activities, both of which are determined in accordance with GAAP. Because EBITDA is not calculated under GAAP, the firm’s EBITDA may not be comparable to similarly titled measures used by other companies.

Below is a reconciliation of net income to EBITDA (in thousands):

 

     Three Months Ended
March 31,
 
     2011      2010  

Net income

   $ 1,490       $ 246   

Add:

     

Interest expense, net of interest income

     7,963         11,330   

Provision for income taxes

     533         124   

Depreciation and amortization

     18,315         17,713   
                 

EBITDA

   $ 28,301       $ 29,413   
                 

Below is a reconciliation of net cash used in operating activities, the most comparable cash flow measure on the consolidated statements of cash flows, to EBITDA (in thousands):

 

     Three Months Ended
March 31,
 
     2011     2010  

Net cash used in operating activities

   $ (197,179   $ (146,332

Add:

    

Interest expense, net of interest income

     7,963        11,330   

Change in working capital and non-cash expenses

     216,984        164,291   

Provision for income taxes

     533        124   
                

EBITDA

   $ 28,301      $ 29,413   
                


2. For purposes of segment operating results, the allocation of restructuring charges to the segments has been determined to not be meaningful to investors, so the performance of segment results has been evaluated without allocation of these charges.

 

3. 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.

 

4. 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 March 31, 2011, to be filed with the Securities and Exchange Commission shortly.

 

5. 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.

 

6. Certain prior year amounts have been reclassified to conform to the current presentation.