Skip Ribbon Commands
Skip to main content

News release

Chicago

Jones Lang LaSalle Reports Third Quarter 2009 Results

Adjusted EPS of $0.61 per share and adjusted EBITDA of $66 million, excluding restructuring and certain non-cash co-investment charges


 
CHICAGO, October 27, 2009 – Jones Lang LaSalle Incorporated (NYSE: JLL), the leading integrated financial and professional services firm specializing in real estate, today reported net income of $20 million on a U.S. GAAP basis, or $0.46 per share, for the quarter ended September 30, 2009, compared with $15 million, or $0.43 per share, for the quarter ended September 30, 2008.   Adjusting for Restructuring and certain non-cash co-investment charges in the third quarter of 2009, net income would have been $27 million, or $0.61 per share.  The firm’s adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) were $66 million for the third quarter of 2009.

On a year-to-date basis, the 2009 net loss was $56 million, or $1.50 per share.  Adjusting for Restructuring and co-investment charges, however, the year-to-date net income would have been $15 million, or $0.40 per share.  Adjusted EBITDA on a year-to-date basis was $126 million. 

Revenue for the third quarter of 2009 was $595 million, a 12 percent decrease in U.S. dollars, 9 percent in local currency, compared with the third quarter of 2008.  Revenue for the first nine months of 2009 was $1.7 billion, a 12 percent decrease from $1.9 billion in 2008 but down only 6 percent in local currency.
_________________________________________________________________________________
 
Third-Quarter 2009 Highlights:
  • Reported revenue of $595 million, down only 9 percent in local currency despite  generally weak real estate market  fundamentals

  • Corporate outsourcing trend continues to drive annuity revenue growth

  • Over $100 million of net debt repayment driven by strong cash generation, reduced spending and aggressive working capital management

  • Semi-annual dividend declared

_________________________________________________________________________________

Third-quarter results included $4 million of Restructuring charges as well as $4 million of non-cash co-investment charges.  There were $37 million of Restructuring charges and $48 million of non-cash co-investment charges in the first nine months of 2009.  Restructuring charges relate primarily to severance and also include integration costs from the 2008 acquisitions of The Staubach Company and Kemper’s.  Restructuring charges are excluded from segment operating results although they are included for consolidated reporting.  The non-cash charges are primarily impairments of our investments in real estate ventures and are included in Equity losses at the consolidated and segment reporting levels.

“We are pleased with our performance during the third quarter, particularly in our annuity businesses, and with the results of our continued focus on cost control,” said Colin Dyer, Chief Executive Officer of Jones Lang LaSalle.  “While real estate fundamentals remain generally weak, we see initial signs of recovery in some markets and industry sectors, and our focus remains on growing market share while providing the superior service that our clients have come to expect.”

Business Line Revenue Comparison for the periods ending September 30, 2009 and 2008:
(in millions, “LC” = local currency)
 
Business Line Revenue
 
The firm is realizing benefits from the cost actions taken and continues its cost discipline.  Excluding Restructuring charges, operating expenses were $546 million, compared with $633 million in the third quarter of 2008.  On a local currency basis, operating expenses excluding Restructuring charges were down 14 percent for the quarter, 11 percent in local currency, and down 12 percent for the first nine months of the year, 5 percent in local currency. 

On a year-to-date basis, operating expenses excluding Restructuring charges were $1.6 billion in 2009, compared with $1.8 billion for the first nine months of 2008.   
 
Balance Sheet and Dividend
 
At the end of the third quarter, the outstanding balance on the firm’s long-term credit facilities was $292 million, a $106 million reduction from June 30, 2009, resulting from strong cash generation, reduced acquisition and capital spending and aggressive working capital management.   The long-term credit facilities balance at the end of the third quarter 2008 was $543 million.  The firm was well within the covenant requirements under its bank agreements.    
 
The firm announced that its Board of Directors declared a semi-annual dividend of $0.10 per share of its common stock.  This is consistent with the semi-annual dividend paid in June 2009.  The dividend payment will be made on Tuesday, December 15, 2009, to holders of record at the close of business on Friday, November 13, 2009. 
 
Business Segment Third-Quarter Performance Highlights

Investor and Occupier Services
  • Third-quarter revenue in the Americas region was $239 million, a decrease of 6 percent from the prior year.  Revenue for the first nine months of 2009 was $687 million, an increase of 11 percent over the first nine months of 2008, primarily as a result of the Staubach acquisition in the third quarter of 2008.

    Transaction Services revenue decreased 3 percent in the third quarter, to $130 million, but increased 25 percent year to date, to $377 million.  Total Leasing revenue increased 23 percent in the quarter, to $120 million, up from $98 million in 2008.  In the first nine months of the year Leasing, revenue increased 53 percent, to $327 million.    Management Services revenue for the third quarter of 2009 decreased 10 percent, to $105 million, and 1 percent year to date, to $301 million, as revenue from new corporate outsourcing wins was more than offset by reductions in Project & Development Services with clients remaining cautious about capital expenditures. 

    Operating expenses were $209 million in the third quarter of 2009, a decrease of 12 percent from the same period of 2008 despite incurring 10 additional days of cost due to the inclusion of Staubach for the full third quarter of 2009 compared with a partial quarter in 2008.  Year-to-date operating expenses were $644 million, an increase of 9 percent from $590 million in 2008 primarily due to the additional cost structure from the Staubach acquisition in the third quarter of 2008, which has impacted all of 2009.
    The region’s EBITDA for the third quarter of 2009 was $39 million compared with $34 million in the third quarter of 2008.


  • EMEA’s third-quarter 2009 revenue was $154 million compared with $209 million in 2008, a decrease of 26 percent, 19 percent in local currency, driven by continued reductions in transaction volumes across the region.  Revenue on a year-to-date basis was $418 million, compared with $628 million for the first nine months of 2008, a reduction of 33 percent, 22 percent in local currency.  On a U.S. dollar basis, the decreases were driven by Capital Markets and Hotels, down $15 million in the third quarter and $69 million year to date, and Leasing revenue, down $27 million for the quarter and $70 million year to date.  Capital Markets and Hotels revenue was down 26 percent in local currency for the quarter and 42 percent on a year-to-date basis.  Leasing revenue was down 37 percent in local currency for the quarter and 31 percent for the first nine months of 2009.  Management Services revenue, which is primarily annuity revenue, increased 2 percent for the quarter, 10 percent in local currency.  For the first nine months of 2009, Management Services revenue was $150 million, down 8 percent compared with the same period of 2008 but up 7 percent in local currency.

    Operating expenses were $158 million in the third quarter, $444 million year to date, decreases of 22 and 29 percent, respectively, from the prior year.  Third quarter expenses included incentive compensation accruals in the period reflecting improved seasonal performance in certain businesses despite the regional loss.  In local currency, the quarterly and year-to-date decreases were 14 percent and 17 percent, respectively.  Cost reductions were the result of aggressive actions taken across the region. 

    The region’s EBITDA for the third quarter of 2009 was $1 million compared with $14 million in the third quarter of 2008.


  • Revenue for the Asia Pacific region was $136 million for the third quarter of 2009, compared with $133 million for the same period in 2008.  On a year-to-date basis, revenue was $361 million in 2009 compared with $392 million in 2008.  In local currency, revenue was up 5 percent in the quarter and down 1 percent year to date compared with 2008.

    Management Services revenue in the region increased to $72 million, a 17 percent increase from the third quarter of 2008, 18 percent in local currency.  On a year-to-date basis, Management Services revenue increased 15 percent, 22 percent in local currency.  The significant year-over-year increase demonstrates the firm’s continued strength in corporate outsourcing, facility management and property management. Transaction Services revenue was $62 million for the quarter, a 12 percent decrease from 2008, 9 percent in local currency.  Transaction Services revenue decreased 27 percent for the first nine months of the year, 20 percent in local currency, to $151 million.   Within Transaction Services revenue, Capital Markets and Hotels revenue was up 8 percent in local currency in the quarter but down 10 percent year to date.  Leasing revenue was down 19 percent in local currency for the quarter and 25 percent in local currency year to date.

    Operating expenses for the region were $129 million for the third quarter, $354 million for the first nine months of 2009.  Operating expenses decreased 3 percent for the quarter, 1 percent in local currency, and 10 percent year to date, 3 percent in local currency.  The decreases were achieved despite incremental costs primarily related to serving more corporate outsourcing clients compared with the same periods of 2008. 

    The region’s EBITDA for the third quarter of 2009 was $10 million compared with $4 million in the third quarter of 2008.
LaSalle Investment Management
LaSalle Investment Management’s third-quarter revenue was $61 million, compared with $81 million in the prior year.  On a year-to-date basis, revenue was $144 million compared with $261 million in the first nine months of 2008.  Equity losses of $5 million and $52 million, primarily from non-cash charges related to co-investments, were included in third-quarter and year-to-date 2009 revenue, respectively.  Advisory fees were $61 million in the quarter, down $10 million from the third quarter of 2008 or 14 percent, 10 percent in local currency.  Third-quarter 2009 Advisory fees compared favorably with Advisory fees of approximately $60 million in each of the first and second quarters of 2009 despite valuation decline impacts and market fee pressures.
 
The business recognized $4 million of Incentive fees in the third quarter of 2009 as a result of liquidating a matured fund, and $12 million in the first nine months of the year.  Asset purchases, a key driver of Transaction fees, continued to be limited by the cautious view of the market.
 
LaSalle Investment Management raised $1.5 billion of equity from clients during the third quarter of 2009, $3.1 billion year to date, and assets under management were $37.6 billion. 
Summary
The firm continues to benefit from its market-leading positions, strong annuity revenue base and aggressive cost management.  Generally weak real estate market fundamentals persist despite early improved global economic indicators.  The firm’s strong balance sheet provides operating flexibility to protect and enhance market positions and to emerge stronger when real estate markets recover. 
 

 
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, 2008, and in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, and June 30, 2009, 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.
 
Supplemental Information
 
Supplemental information regarding the third quarter 2009 earnings call has been posted to the Investor Relations section of the company's Web site:  http://www.joneslanglasalle.com/Pages/InvestorRelations.aspx.