Jones Lang LaSalle Reports Strong First Quarter 2007;
Net Income of $27.2 Million, $0.81 Per Share
Firm Declares Semi-Annual Dividend
CHICAGO, May 1 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading integrated global real estate services and money
management firm, today reported net income of $27.2 million, or $0.81 per
diluted share of common stock, for the quarter ended March 31, 2007, compared
with net income of $4.6 million, or $0.14 per share, for the first quarter of
2006. Revenue for the first quarter of 2007 was $490 million, an increase of 45
percent in U.S. dollars and 39 percent in local currencies from the prior year.
Operating income for the first quarter of 2007 was $36.4 million compared with
$8.7 million for the prior year.
Continued favorable market conditions, positive returns from strategic
investments made in 2005 and 2006, and the size and timing of transactions
contributed to revenue growth in all operating segments. Revenue and operating
income growth were particularly strong in EMEA, which had operating income of
$14.7 million in the first quarter of 2007 compared with a loss of $4.9 million
for the same period last year. Asia Pacific's revenue and LaSalle Investment
Management's advisory fees also had healthy increases over the prior year.
Operating income in the Americas region increased to $6.5 million from a loss of
$0.7 million in 2006.
First Quarter 2007 Highlights:
-- Revenue increased 45 percent to $490 million with growth in all
business segments
-- Operating income increased to $36.4 million from $8.7 million
-- Net income increased to $27.2 million from $4.6 million
-- Semi-annual dividend declared
"The strength of our first-quarter performance is a clear sign that we are
sustaining the momentum that drove us successfully through last year," said
Colin Dyer, Chief Executive Officer of Jones Lang LaSalle. "Our results reflect
the investments we have made over the past two years; healthy conditions in the
world's major economies, global real estate and capital markets; and the
commitment of our people to superior client service. This strong start positions
us well for the rest of 2007," Dyer added.
Operating expenses of $454 million for the first quarter of 2007
represented an increase of 38 percent in U.S. dollars and 32 percent in local
currencies compared with the prior year's expenses of $328 million. The increase
in operating expenses continued to be driven by significant additions to Global
Capital Markets and Leasing broker teams, additional client-service staff, and
the expansion of offices. Higher incentive compensation costs related to the
strong revenue and profit performance also contributed to the increase.
Declaration of Semi-Annual Dividend
The firm also announced that its Board of Directors has declared a
semi-annual dividend of $0.35 per share of its common stock. The dividend
payment will be made on June 15, 2007, to holders of record at the close of
business on May 15, 2007. A dividend-equivalent in the same amount also will be
paid simultaneously on outstanding but unvested shares of restricted stock units
granted under the Company's Stock Award and Incentive Plan.
Business Segment First Quarter Performance Highlights
Investor and Occupier Services
-- In the Americas region, revenue for the first quarter of 2007 was
$148 million, an increase of 31 percent over the same period last
year. The growth was driven mainly by Transaction Services, which
grew 51 percent for the quarter, while Management Services grew 14
percent for the same period over the prior year.
The current quarter's growth benefited from activity in both the
Markets group, whose focus is to maximize the firm's competitive
position in key local markets, and the Accounts organization, whose
focus is on delivering services and strategic advice to corporate
clients. The Markets group revenue growth of 29 percent resulted
from strong leasing markets and an increased number of large
transactions that closed in 2007. The Accounts group revenue grew 28
percent over the prior year due, in part, to transactions being
accelerated into the first quarter of 2007. Strong performance was
also seen in Capital Markets, where year-over-year revenue growth
was 84 percent. Revenue in Regional Operations (Canada and Latin
America) increased 28 percent for the quarter compared with the
prior year, primarily as the result of transactions closing in the
quarter that had been delayed from the last quarter of 2006.
Total operating expenses increased 24 percent for the first quarter
compared with 2006. Contributing to the increase was the addition of
significant staff, including 60 new strategic hires, and higher
incentive compensation expenses as a result of the growth in both
revenue-generating activities and profit performance.
-- EMEA's revenue for the first quarter of 2007 was $177 million, an
increase of 71 percent in U.S. dollars and 55 percent in local
currencies over the same period in 2006. Transaction Services
revenue grew 79 percent to $142 million for the quarter, while
Management Services revenue grew 51 percent to $32 million.
The region's growth benefited from an increased number of
revenue-generators, strong underlying market conditions and a large
Capital Markets portfolio transaction completed in Germany. As a
result, revenue in Germany increased nearly 300 percent compared
with the prior year. Throughout the region, Advisory Services and
Agency Leasing also had solid revenue growth in 2007 compared with
the prior year, with revenue up 72 and 23 percent, respectively. The
United Kingdom, the largest market in the region, also had strong
growth in 2007, as revenue increased 25 percent year over year. The
EMEA Hotels business had robust growth in the first quarter, with
revenue up over 200 percent compared with the prior year.
Operating expenses increased by 50 percent in U.S. dollars and 36
percent in local currencies for the first quarter of 2007 compared
with the prior year. The increase was primarily due to acquisitions,
staff additions to service clients and grow market share, and
increased incentive compensation driven by improved revenue and
profit performance.
-- Revenue for the Asia Pacific region for the first quarter of 2007
was $86 million, an increase of 49 percent in U.S. dollars and 44
percent in local currencies over the prior year. Growth for the
quarter resulted from both Management Services revenue, which
increased 62 percent, and Transaction Services revenue, which
increased 38 percent.
Geographically, the strongest revenue contributions were from the
growth markets of India, Japan, China and Korea. Revenue for this
group grew over 100 percent in 2007 compared with the prior year.
India and Japan led the growth, representing a combined 85 percent
of the group's growth. The core markets of Australia, Hong Kong and
Singapore also had healthy growth, with revenue up 21 percent
compared with the prior year.
Operating expenses for the region increased 52 percent in U.S.
dollars and 47 percent in local currencies over the prior year. The
increase in operating expenses at a faster pace than revenue was the
result of continued expansion of the geographic platform, client
service capabilities and technology infrastructure throughout the
region during 2006. These additional expenses support market
expansion through the opening of new offices and continued
investment in people, to maintain the firm's leading market position
and capitalize on continued growth opportunities in the region.
LaSalle Investment Management
LaSalle Investment Management's first-quarter revenue grew to $79
million, up 27 percent in U.S. dollars and 23 percent in local
currencies over the prior year. The increase in revenue was driven
both by the continued growth of the annuity-based business and by
incentive fees generated from strong performance of clients'
investments managed by the firm. The firm's continued focus on the
growth in annuity revenue led to a year-over-year increase in
Advisory fees of 41 percent over 2006. The growth in the annuity
business was principally due to a healthy increase in assets under
management.
Incentive fees vary significantly from period to period due to both
the performance of the underlying investments and the contractual
timing of the measurement periods for different clients. During the
first quarter of 2007, incentive fees were $21.9 million, up 61
percent from 2006.
LaSalle Investment Management raised over $1.4 billion of equity in
the first quarter of 2007, with global securities mandates
accounting for approximately 80 percent of the capital. Investments
made on behalf of clients in the first quarter of 2007 were $1.3
billion, approximately the same amount as 2006. Over the last 12
months, assets under management grew to $44.3 billion from $34.0
billion, an increase of 30 percent.
Summary
The firm experienced strong top-line growth across all segments in the
first quarter of 2007, the result of continued strength of the real estate
markets as well as continued investments in its globally diverse business
platform and service lines. The first quarter of 2007 was positively impacted by
increased incentive fees, as well as the size and timing of Capital Markets
transactions which, by their nature, vary significantly from period to period.
The aggressive strategic investments made by the firm over the last two years,
which have included several acquisitions and the addition of a significant
number of revenue-generators, service lines and infrastructure, also have
started to show a positive impact on margins.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL), the only real estate money management and
services firm named to FORTUNE magazine's "100 Best Companies to Work For" and
Forbes magazine's "400 Best Big Companies," has approximately 160 offices
worldwide and operates in more than 450 cities in over 50 countries. With 2006
revenue of over $2.0 billion, the company provides comprehensive integrated real
estate and investment management expertise on a local, regional and global level
to owner, occupier and investor clients. Jones Lang LaSalle is an industry
leader in property and corporate facility management services, with a portfolio
of over 1.0 billion square feet worldwide. In 2006, the firm completed Capital
Market sales and acquisitions, debt financing, and equity placements on assets
and portfolios valued at $70.9 billion. LaSalle Investment Management, the
company's investment management business, is one of the world's largest and most
diverse real estate money management firms, with approximately $44.3 billion of
assets under management. For further information, please visit our website,
http://www.joneslanglasalle.com .
Statements in this press release regarding, among other things, future
financial results and performance, achievements, plans and objectives, dividend
payments and share repurchases 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,
2006 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.
Conference Call
The firm will conduct a conference call for shareholders, analysts and
investment professionals on Wednesday, May 2 at 9:00 a.m. EDT.
To participate in the teleconference, please dial into one of the
following phone numbers five to ten minutes before the start time:
-- U.S. callers: +1 877 809 9540
-- International callers: +1 706 679 7364
-- Pass code: 6247756
Replay Information Available: (11:00 a.m. EDT) Wednesday, May 2 through
Midnight EDT May 9 at the following numbers:
-- U.S. callers: +1 800 642 1687
-- International callers: +1 706 645 9291
-- Pass code: 6247756
Live web cast
Follow these steps to listen to the web cast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to http://www.videonewswire.com/event.asp?id=39277 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
webcastsupport@tfprn.com
This information is also available on the company's website at
http://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 Earnings
For the Three Months Ended March 31, 2007 and 2006
(in thousands, except share data)
(Unaudited)
Three Months Ended March 31,
2007 2006
Revenue $490,054 $337,098
Operating expenses:
Compensation and benefits 325,657 231,246
Operating, administrative and other 115,736 87,663
Depreciation and amortization 12,625 9,976
Restructuring credits (411) (501)
Total operating expenses 453,607 328,384
Operating income 36,447 8,714
Interest expense, net of interest income 1,838 3,209
Gain on sale of investment 2,425 -
Equity in earnings (loss) from
unconsolidated ventures 133 (944)
Income before provision for income taxes 37,167 4,561
Provision for income taxes 9,923 1,181
Net income before cumulative
effect of accounting change 27,244 3,380
Cumulative effect of change in
accounting principle - 1,180
Net income $27,244 $4,560
Net income available to common shareholders $ 27,244 $ 4,560
EBITDA $ 51,630 $ 18,926
Basic earnings per common share $ 0.85 $ 0.14
Basic weighted average shares outstanding 31,929,818 31,511,880
Diluted earnings per common share $ 0.81 $ 0.14
Diluted weighted average shares outstanding 33,687,389 33,681,263
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three Months Ended March 31, 2007 and 2006
(in thousands)
(Unaudited)
Three Months Ended March 31,
2007 2006
INVESTOR & OCCUPIER SERVICES -
AMERICAS
Revenue:
Transaction services $72,688 $48,212
Management services 70,933 62,261
Equity earnings 150 149
Other services 4,496 2,542
148,267 113,164
Operating expenses:
Compensation, operating and
administrative 135,884 108,605
Depreciation and amortization 5,922 5,302
141,806 113,907
Operating income (loss) $6,461 $(743)
EMEA
Revenue:
Transaction services $142,138 $79,375
Management services 32,083 21,221
Equity loss (367) (220)
Other services 3,037 2,969
176,891 103,345
Operating expenses:
Compensation, operating and
administrative 157,726 105,719
Depreciation and amortization 4,515 2,508
162,241 108,227
Operating income (loss) $14,650 $(4,882)
ASIA PACIFIC
Revenue:
Transaction services $39,596 $28,648
Management services 45,059 27,840
Equity earnings 21 217
Other services 1,720 1,197
86,396 57,902
Operating expenses:
Compensation, operating and
administrative 87,520 56,773
Depreciation and amortization 1,773 1,822
89,293 58,595
Operating loss $(2,897) $(693)
LASALLE INVESTMENT MANAGEMENT
Revenue:
Transaction services $2,519 $11,020
Advisory fees 53,919 38,269
Incentive fees 21,866 13,544
Equity earnings (loss) 329 (1,090)
78,633 61,743
Operating expenses:
Compensation, operating and
administrative 60,263 47,812
Depreciation and amortization 415 344
60,678 48,156
Operating income $17,955 $13,587
Total segment revenue 490,187 336,154
Reclassification of equity
earnings (loss) 133 (944)
Total revenue $490,054 $337,098
Total segment operating expenses $454,018 $328,885
Operating income before non-recurring
items $36,036 $8,213
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets March 31, 2007, December
31, 2006 and March 31, 2006
(in thousands)
March 31, March 31,
2007 December 31, 2006
(Unaudited) 2006 (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $43,253 $50,612 $30,503
Trade receivables, net of
allowances 565,654 630,121 370,435
Notes and other receivables 44,163 30,079 20,152
Prepaid expenses 23,859 28,040 21,141
Deferred tax assets 47,806 49,230 23,679
Other assets 27,668 19,363 12,240
Total current assets 752,403 807,445 478,150
Property and equipment,
at cost, less accumulated
depreciation 131,024 120,376 83,834
Goodwill, with indefinite
useful lives, at cost, less
accumulated amortization 529,912 520,478 480,486
Identified intangibles,
with finite useful lives,
at cost, less accumulated
amortization 37,959 37,583 43,185
Investments in real estate
ventures 133,227 131,789 86,545
Long-term receivables 27,978 29,781 22,304
Deferred tax assets 39,434 37,465 70,130
Other assets 48,815 45,031 28,978
$1,700,752 $1,729,948 $1,293,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $176,125 $221,356 $123,491
Accrued compensation 283,099 514,586 162,264
Short-term borrowings 29,090 17,738 14,627
Deferred tax liabilities 1,734 1,426 3,296
Deferred income 22,988 31,896 29,479
Other liabilities 41,115 43,444 19,507
Total current liabilities 554,151 830,446 352,664
Long-term liabilities:
Credit facilities 236,770 32,398 267,532
Deferred tax liabilities 2,090 648 3,099
Deferred compensation 29,883 30,668 25,171
Minimum pension liability 19,749 19,252 17,024
Deferred business acquisition
obligations 40,319 34,178 31,518
Other liabilities 40,919 31,978 34,474
Total liabilities 923,881 979,568 731,482
Stockholders' equity:
Common stock, $.01 par value
per share, 100,000,000 shares
authorized; 36,785,205,
36,592,864 and 35,756,923
shares issued and outstanding
as of March 31, 2007, December
31, 2006 and March 31, 2006,
respectively 368 366 358
Additional paid-in capital 693,572 676,270 631,921
Retained earnings 283,158 255,914 104,702
Stock held by subsidiary (219,359) (197,543) (141,343)
Stock held in trust (1,427) (1,427) (996)
Accumulated other
comprehensive income (loss) 20,559 16,800 (32,512)
Total stockholders' equity 776,871 750,380 562,130
$1,700,752 $1,729,948 $1,293,612
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2007 and 2006
(in thousands)
(Unaudited)
Three Months Ended March 31,
2007 2006
Cash provided by earnings $56,137 $25,354
Cash used in working capital (238,554) (112,340)
Cash used in operating activities (182,417) (86,986)
Cash used in investing activities (24,547) (159,341)
Cash provided by financing activities 199,605 248,172
Net increase (decrease) in cash and
cash equivalents (7,359) 1,845
Cash and cash equivalents, beginning of period 50,612 28,658
Cash and cash equivalents, end of period 43,253 $30,503
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 as one of the primary metrics for evaluating
operating performance and liquidity. The firm believes that an increase
in EBITDA is an indicator of improved 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 provided by 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,
2007 2006
Net income $27,244 $4,560
Add:
Interest expense, net of interest income 1,838 3,209
Provision for income taxes 9,923 1,181
Depreciation and amortization 12,625 9.976
EBITDA $51,630 $18,926
Below is a reconciliation of net cash provided by operating activities,
the most comparable cash flow measure on the consolidated statements of
cash flows, to EBITDA (in thousands):
Three Months Ended March 31,
2007 2006
Net cash used in operating activities $(182,417) $(86,986)
Add:
Interest expense, net of interest income 1,838 3,209
Change in working capital and non-cash
expenses 222,286 101,522
Provision for income taxes 9,923 1,181
EBITDA $51,630 $18,926
2. Net debt represents the aggregate of Short-Term Borrowings and Credit
Facilities, less Cash and Cash Equivalents.
3. For purposes of segment operating results, the allocation of
restructuring charges to our segments has been determined to not be
meaningful to investors. Additionally, the performance of segment results
has been evaluated without these charges being allocated.
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,
2007, to be filed with the Securities and Exchange Commission shortly.
5. Earnings per common share is calculated by dividing net income available
to common shareholders by weighted average shares outstanding.
Three Months Ended
March 31,
2007 2006
Net income before cumulative effect of
change in accounting principle $27,244 $3,380
Cumulative effect of change in accounting
principle - 1,180
Net income available to common shareholders $27,244 $4,560
Basic weighted average shares
outstanding 31,929,818 31,511,880
Basic income per common share before
cumulative effect of change in
accounting principle and dividends on
unvested common stock $0.85 $0.10
Cumulative effect of change in
accounting principle - 0.04
Basic earnings per common share $0.85 $0.14
Diluted weighted average shares
outstanding 33,687,389 33,681,263
Diluted income per common share before
cumulative effect of change in
accounting principle and dividends on
unvested common stock $0.81 $0.10
Cumulative effect of change in
accounting principle - 0.04
Diluted earnings per common share $0.81 $0.14
6. Europe, Middle East, Africa - EMEA; previously referred to as Europe.
SOURCE Jones Lang LaSalle Incorporated
-0- 05/01/2007
/CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer, of
Jones Lang LaSalle Incorporated, +1-312-228-2073/
/Web site: http://www.joneslanglasalle.com /