Revenue up 17% (21% in local currency1) to
$5.3 billion; fee revenue1
grew 19% (23% in local currency) to $2.1 billion
CHICAGO, August 3,
2022 /PRNewswire/ -- Jones Lang LaSalle
Incorporated (NYSE: JLL) today reported operating performance for
the second quarter of 2022 with diluted earnings per share of
$3.90, up from $3.82 in the prior-year quarter, and adjusted
diluted earnings per share1 of $4.48, up from $4.20 last year.
• Top-line expansion was broad-based as most
segments achieved 20% or greater growth
° Higher deal volume in the Americas
and EMEA led the 28% increase in Capital Markets fee revenue
° Strong leasing performance continued
across several asset classes, driving 23% growth in Markets
Advisory fee revenue
° Outsourcing wins and greater demand
in Project Management contributed to the 19% increase in Work
Dynamics fee revenue
• Incremental headcount and investments to
support existing and future growth more than offset higher
revenue
• Nearly $300
million of share repurchases this quarter, continuing the
return of capital to shareholders
"JLL showed strong and resilient performance through the second
quarter, with double-digit fee revenue growth across nearly all of
our business lines," said Christian
Ulbrich, JLL CEO. "We continue to see significant growth
opportunities and intend to strategically invest in people and
technology through the cycle in areas of our business which we
believe will drive outperformance in the coming years. Our
investment-grade balance sheet and free cash flow allow us to make
these investments while continuing to return capital to
shareholders."
Summary Financial
Results
($ in millions,
except per share data, "LC" = local currency)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
2022
|
|
2021
|
% Change in
USD
|
% Change in
LC
|
|
2022
|
|
2021
|
% Change in
USD
|
% Change in
LC
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
5,278.4
|
|
$
4,495.0
|
17 %
|
21 %
|
|
$
10,079.8
|
|
$
8,532.1
|
18 %
|
21 %
|
Fee
revenue1
|
2,138.8
|
|
1,794.3
|
19
|
23
|
|
4,039.3
|
|
3,218.8
|
25
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
193.9
|
|
$
200.0
|
(3) %
|
(1) %
|
|
$
339.5
|
|
$
303.0
|
12 %
|
15 %
|
Adjusted net income
attributable to common shareholders1
|
222.4
|
|
220.1
|
3
|
5
|
|
399.3
|
|
329.8
|
22
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
3.90
|
|
$
3.82
|
2 %
|
4 %
|
|
$
6.75
|
|
$
5.80
|
16 %
|
19 %
|
Adjusted diluted
earnings per share1
|
4.48
|
|
4.20
|
9
|
9
|
|
7.94
|
|
6.31
|
27
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
$
359.0
|
|
$
332.4
|
8 %
|
10 %
|
|
$
632.6
|
|
$
522.5
|
21 %
|
23 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow6
|
$
136.7
|
|
$
180.5
|
(24) %
|
n/a
|
|
$
(626.3)
|
|
$
(315.9)
|
(98) %
|
n/a
|
|
|
Note:
|
For discussion and
reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release.
|
Consolidated
Second-Quarter 2022 Performance Highlights:
|
|
Consolidated
($ in millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
|
Six Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Markets
Advisory
|
$
1,118.2
|
|
$
951.3
|
|
18 %
|
|
20 %
|
|
$
2,117.7
|
|
$
1,744.0
|
|
21 %
|
|
24 %
|
Capital
Markets
|
684.5
|
|
552.1
|
|
24
|
|
28
|
|
1,285.1
|
|
963.8
|
|
33
|
|
37
|
Work
Dynamics
|
3,310.5
|
|
2,836.2
|
|
17
|
|
21
|
|
6,344.1
|
|
5,534.3
|
|
15
|
|
18
|
JLL
Technologies
|
50.7
|
|
39.6
|
|
28
|
|
29
|
|
100.1
|
|
83.0
|
|
21
|
|
21
|
LaSalle
|
114.5
|
|
115.8
|
|
(1)
|
|
5
|
|
232.8
|
|
207.0
|
|
12
|
|
18
|
Total
revenue
|
$
5,278.4
|
|
$
4,495.0
|
|
17 %
|
|
21 %
|
|
$
10,079.8
|
|
$
8,532.1
|
|
18 %
|
|
21 %
|
Gross contract
costs1
|
(3,128.4)
|
|
(2,695.0)
|
|
16
|
|
20
|
|
(6,032.9)
|
|
(5,297.9)
|
|
14
|
|
17
|
Net non-cash MSR and
mortgage banking
derivative
activity
|
(11.2)
|
|
(5.7)
|
|
96
|
|
94
|
|
(7.6)
|
|
(15.4)
|
|
(51)
|
|
(51)
|
Total fee
revenue1
|
$
2,138.8
|
|
$
1,794.3
|
|
19 %
|
|
23 %
|
|
$
4,039.3
|
|
$
3,218.8
|
|
25 %
|
|
29 %
|
Markets
Advisory
|
855.8
|
|
711.0
|
|
20
|
|
23
|
|
1,597.0
|
|
1,263.6
|
|
26
|
|
29
|
Capital
Markets
|
660.7
|
|
533.5
|
|
24
|
|
28
|
|
1,252.2
|
|
926.7
|
|
35
|
|
39
|
Work
Dynamics
|
467.0
|
|
408.5
|
|
14
|
|
19
|
|
877.5
|
|
772.0
|
|
14
|
|
17
|
JLL
Technologies
|
48.0
|
|
32.8
|
|
46
|
|
48
|
|
93.3
|
|
62.7
|
|
49
|
|
50
|
LaSalle
|
107.3
|
|
108.5
|
|
(1)
|
|
5
|
|
219.3
|
|
193.8
|
|
13
|
|
19
|
Operating
income
|
$
235.1
|
|
$
224.3
|
|
5 %
|
|
6 %
|
|
$
410.8
|
|
$
305.0
|
|
35 %
|
|
37 %
|
Equity
earnings
|
$
53.6
|
|
$
40.8
|
|
31 %
|
|
31 %
|
|
$
72.1
|
|
$
89.3
|
|
(19) %
|
|
(19) %
|
Adjusted
EBITDA1
|
$
359.0
|
|
$
332.4
|
|
8 %
|
|
10 %
|
|
$
632.6
|
|
$
522.5
|
|
21 %
|
|
23 %
|
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
The company achieved revenue and fee revenue increases of 21%
and 23%, respectively, compared with the prior-year quarter.
Year-over-year fee revenue growth was substantially all organic,
broad-based across all segments, and led by transaction-based
businesses within Markets Advisory and Capital Markets, which
increased 23% and 28%, respectively. In addition, annuity-based
businesses continued to deliver solid fee revenue growth as
Workplace Management within Work Dynamics, for example, grew 15%.
LaSalle's 23% increase in advisory
fees was mostly offset by lower incentive fees. The following
charts reflect revenue and fee revenue by segment for the current
quarter, as well as the proportion of revenue and fee revenue
growth by segment, compared with the second quarter of 2021.
Refer to segment performance highlights for additional
detail.
Net income attributable to common shareholders for the second
quarter was $193.9 million, compared
with $200.0 million in 2021, and
Adjusted EBITDA was $359.0 million,
compared with $332.4 million last
year.
Diluted earnings per share for the second quarter were
$3.90, up from $3.82 in 2021; adjusted diluted earnings per
share were $4.48, compared with
$4.20 last year.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 16.8% in USD (and 16.5% local currency),
compared with 18.5% in 2021. The net decrease in margin was
primarily due to higher compensation expense - including higher
commissions and increased headcount - as well as higher T&E and
marketing expenses as business normalizes compared with the
prior-year quarter. These drivers more than offset the fee revenue
growth.
Net income attributable to common shareholders was $339.5 million for the six months ended
June 30, 2022, compared with $303.0
million last year, and Adjusted EBITDA was $632.6 million, compared with $522.5 million in 2021. Diluted earnings per
share were $6.75 for the six months
ended June 30, 2022, up from $5.80 in 2021; adjusted diluted earnings per
share were $7.94, compared with
$6.31 last year.
Cash Flows and Capital
Allocation:
Free Cash Flow6 was an outflow of $626.3 million for the first half of 2022,
compared with an outflow of $315.9
million in the prior year. The greater cash outflow was
driven by higher annual incentive compensation paid in 2022,
compared with 2021, partially offset by an increase in cash
provided by earnings. Free Cash Flow was an inflow of $136.7 million for the second quarter of 2022,
compared with an inflow of $180.5
million in the prior-year quarter. This lower cash inflow
was primarily attributable to higher commission payments made in
the current quarter.
In the second quarter of 2022, the company repurchased 1,397,915
shares for $297.7 million. Year to
date, 2,013,266 shares were repurchased returning $447.7 million to shareholders, compared with
172,500 shares repurchased and $37.9
million of capital returned in the first half of 2021. As of
June 30, 2022, approximately
$1.3 billion remained authorized for
repurchase under the share repurchase program.
Also in the second quarter of 2022, the company recognized a
$10.5 million loss on the disposition
of its Russia business. The loss
is included in Other income (expense) on the Consolidated Statement
of Operations and is excluded from adjusted EBITDA and adjusted
diluted earnings per share.
Net Debt, Leverage and
Liquidity6:
Total net debt was $1,575.9
million as of June 30, 2022,
representing an increase of $244.7
million from March 31, 2022,
and an increase of $927.4 million
from June 30, 2021. The increase from March 31, 2022, primarily reflected share
repurchase activity as discussed in the Capital Allocation section
above.
The company's Net Leverage Ratio was 1.0x as of June 30, 2022, up from 0.8x as of March 31, 2022, and up from 0.6x as of
June 30, 2021.
Corporate Liquidity was $1.9
billion as of June 30,
2022.
Markets Advisory
Second-Quarter 2022 Performance Highlights:
|
|
Markets
Advisory
($ in millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
|
Six Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Revenue
|
$
1,118.2
|
|
$
951.3
|
|
18 %
|
|
20 %
|
|
$
2,117.7
|
|
$
1,744.0
|
|
21 %
|
|
24 %
|
Gross contract
costs1
|
(262.4)
|
|
(240.3)
|
|
9
|
|
12
|
|
(520.7)
|
|
(480.4)
|
|
8
|
|
11
|
Fee
revenue1
|
$
855.8
|
|
$
711.0
|
|
20 %
|
|
23 %
|
|
$
1,597.0
|
|
$
1,263.6
|
|
26 %
|
|
29 %
|
Leasing
|
703.5
|
|
568.6
|
|
24
|
|
26
|
|
1,300.4
|
|
980.8
|
|
33
|
|
35
|
Property
Management
|
122.2
|
|
114.7
|
|
7
|
|
10
|
|
240.8
|
|
229.0
|
|
5
|
|
8
|
Advisory, Consulting
and Other
|
30.1
|
|
27.7
|
|
9
|
|
14
|
|
55.8
|
|
53.8
|
|
4
|
|
8
|
Segment operating
income
|
$
116.2
|
|
$
94.7
|
|
23 %
|
|
25 %
|
|
$
207.6
|
|
$
144.9
|
|
43 %
|
|
45 %
|
Adjusted
EBITDA1
|
$
134.0
|
|
$
113.9
|
|
18 %
|
|
20 %
|
|
$
245.2
|
|
$
179.9
|
|
36 %
|
|
38 %
|
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
Markets Advisory revenue and fee revenue growth was led by
Leasing, largely attributable to the U.S. (75% of the Leasing fee
revenue increase on a local currency basis), a result of increases
in average deal size and volume over the prior-year quarter.
Specifically for the U.S., the industrial sector growth was due to
larger average deal size, reflecting elevated demand with more
limited supply, while the increase in the office sector was
substantially due to higher deal volume. In addition to the
increased revenues in the U.S., EMEA Leasing grew 42% versus the
prior-year quarter, propelled primarily by growth in average
transaction size within office.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 15.7% in USD (15.6% in local currency),
compared with 16.0% in 2021. The lower margin was primarily due to
higher compensation expenses - driven largely by revenue producers
achieving higher commission tiers earlier in 2022 compared with
2021 and additional headcount to meet increased business demand -
and incremental T&E and marketing expenses. These drivers were
partially offset by the increased revenue described above as well
as the timing of non-commission incentive compensation accruals,
reflecting changes in annual compensation plans from 2021 to 2022,
which resulted in a lower percentage of expected full-year
incentive compensation accrued this quarter compared with the prior
year.
Capital Markets
Second-Quarter 2022 Performance Highlights:
|
|
Capital
Markets
($ in
millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
%
Change
in
USD
|
|
%
Change
in LC
|
|
Six Months Ended
June 30,
|
|
%
Change
in
USD
|
|
%
Change
in LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Revenue
|
$
684.5
|
|
$
552.1
|
|
24 %
|
|
28 %
|
|
$
1,285.1
|
|
$
963.8
|
|
33 %
|
|
37 %
|
Gross contract
costs1
|
(12.6)
|
|
(12.9)
|
|
(2)
|
|
8
|
|
(25.3)
|
|
(21.7)
|
|
17
|
|
26
|
Net non-cash MSR and
mortgage banking
derivative
activity
|
(11.2)
|
|
(5.7)
|
|
96
|
|
94
|
|
(7.6)
|
|
(15.4)
|
|
(51)
|
|
(51)
|
Fee
revenue1
|
$
660.7
|
|
$
533.5
|
|
24 %
|
|
28 %
|
|
$
1,252.2
|
|
$
926.7
|
|
35 %
|
|
39 %
|
Investment Sales,
Debt/Equity Advisory and
Other
|
528.0
|
|
413.4
|
|
28
|
|
31
|
|
996.5
|
|
699.4
|
|
42
|
|
46
|
Valuation
Advisory
|
92.3
|
|
89.5
|
|
3
|
|
10
|
|
175.4
|
|
166.7
|
|
5
|
|
11
|
Loan
Servicing
|
40.4
|
|
30.6
|
|
32
|
|
32
|
|
80.3
|
|
60.6
|
|
33
|
|
32
|
Segment operating
income
|
$
121.8
|
|
$
110.1
|
|
11 %
|
|
14 %
|
|
$
220.0
|
|
$
161.5
|
|
36 %
|
|
39 %
|
Adjusted
EBITDA1
|
$
126.7
|
|
$
120.8
|
|
5 %
|
|
8 %
|
|
$
244.9
|
|
$
179.9
|
|
36 %
|
|
39 %
|
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
Capital Markets fee revenue growth was broad-based, led by
increases in debt advisory and investment sales. Within Investment
Sales, Debt/Equity Advisory and Other, nearly all major asset
classes grew compared with prior-year quarter, notably in the
retail, land and residential sectors. Higher Loan Servicing revenue
was attributable to (i) continued growth of the servicing
portfolio, particularly from loans originated under the Fannie Mae
DUS program (approximately 55% of the increase) and (ii)
incremental prepayment fees.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 19.2% in USD (and 19.1% local currency),
compared with 22.6% in 2021. The reduction in margin was primarily
due to increased compensation expense from incremental headcount
and higher commissions, and an increase in T&E and marketing
expenses. These drivers were partially offset by the fee revenue
growth described above and reductions in other variable
compensation plans as a result of changes to the commission
structures.
Work Dynamics
Second-Quarter 2022 Performance Highlights:
|
|
Work
Dynamics
($ in
millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
|
Six Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Revenue
|
$
3,310.5
|
|
$
2,836.2
|
|
17 %
|
|
21 %
|
|
$
6,344.1
|
|
$
5,534.3
|
|
15 %
|
|
18 %
|
Gross contract
costs1
|
(2,843.5)
|
|
(2,427.7)
|
|
17
|
|
21
|
|
(5,466.6)
|
|
(4,762.3)
|
|
15
|
|
18
|
Fee
revenue1
|
$
467.0
|
|
$
408.5
|
|
14 %
|
|
19 %
|
|
$
877.5
|
|
$
772.0
|
|
14 %
|
|
17 %
|
Workplace
Management
|
184.9
|
|
164.9
|
|
12
|
|
15
|
|
366.9
|
|
318.3
|
|
15
|
|
18
|
Project
Management
|
214.9
|
|
184.5
|
|
16
|
|
22
|
|
390.6
|
|
347.7
|
|
12
|
|
17
|
Portfolio Services
and Other
|
67.2
|
|
59.1
|
|
14
|
|
17
|
|
120.0
|
|
106.0
|
|
13
|
|
16
|
Segment operating
income
|
$
39.7
|
|
$
34.7
|
|
14 %
|
|
12 %
|
|
$
58.1
|
|
$
43.3
|
|
34 %
|
|
30 %
|
Adjusted
EBITDA1
|
$
57.6
|
|
$
51.2
|
|
13 %
|
|
13 %
|
|
$
92.8
|
|
$
76.1
|
|
22 %
|
|
21 %
|
|
"Workplace Management"
was previously called Integrated Facilities Management (IFM).
"Project Management" was previously called Project &
Development Services.
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
Revenue growth for Work Dynamics was led by the commencement of
Workplace Management services for new client wins and expansion of
existing global mandates, predominantly in the United States. Project Management also
meaningfully contributed to revenue growth and led fee revenue
growth for the segment, largely from higher project demand which is
approaching pre-pandemic levels.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 12.4% in USD (11.9% in local currency),
compared with 12.5% in 2021. The slight margin contraction was
attributable to incremental investments in people, consistent with
the first quarter, and was substantially offset by the revenue
increases described above.
JLL Technologies Second-Quarter 2022
Performance Highlights:
|
|
JLL
Technologies
($ in
millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
|
Six Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Revenue
|
$
50.7
|
|
$
39.6
|
|
28 %
|
|
29 %
|
|
$
100.1
|
|
$
83.0
|
|
21 %
|
|
21 %
|
Gross contract
costs1
|
(2.7)
|
|
(6.8)
|
|
(60)
|
|
(61)
|
|
(6.8)
|
|
(20.3)
|
|
(67)
|
|
(67)
|
Fee
revenue1
|
$
48.0
|
|
$
32.8
|
|
46 %
|
|
48 %
|
|
$
93.3
|
|
$
62.7
|
|
49 %
|
|
50 %
|
Segment operating
loss
|
$
(35.6)
|
|
$
(19.9)
|
|
(79) %
|
|
(82) %
|
|
$
(70.5)
|
|
$
(43.4)
|
|
(62) %
|
|
(63) %
|
Equity
earnings
|
$
44.7
|
|
$
16.2
|
|
176 %
|
|
177 %
|
|
$
63.5
|
|
$
50.8
|
|
25 %
|
|
25 %
|
Adjusted
EBITDA1
|
$
12.9
|
|
$
(1.5)
|
|
960 %
|
|
906 %
|
|
$
0.6
|
|
$
12.5
|
|
(95) %
|
|
(95) %
|
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
JLL Technologies top-line growth included $8.3 million of incremental fee revenue from
acquisitions closed in the second half of 2021. Organic fee revenue
increased 22%, driven by new customers as well as growth from
existing customers in software and solutions offerings.
Equity earnings in both years were attributable to valuation
increases to JLL Technologies' investments in proptech funds and
early to mid-stage proptech companies, primarily reflecting
subsequent financing rounds at increased per-share values.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 27.0% in USD (25.7% in local currency),
compared with negative 4.6% in 2021. The margin expansion was due
to higher equity earnings, partially offset by incremental
compensation related to recent acquisitions and the continued ramp
up of operations to support future growth.
LaSalle Second-Quarter 2022 Performance
Highlights:
|
|
LaSalle
($ in
millions
"LC" = local currency)
|
Three Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
|
Six Months Ended
June 30,
|
|
% Change in
USD
|
|
% Change in
LC
|
2022
|
|
2021
|
|
|
|
2022
|
|
2021
|
|
|
Revenue
|
$
114.5
|
|
$
115.8
|
|
(1) %
|
|
5 %
|
|
$
232.8
|
|
$
207.0
|
|
12 %
|
|
18 %
|
Gross contract
costs1
|
(7.2)
|
|
(7.3)
|
|
(1)
|
|
—
|
|
(13.5)
|
|
(13.2)
|
|
2
|
|
3
|
Fee
revenue1
|
$
107.3
|
|
$
108.5
|
|
(1) %
|
|
5 %
|
|
$
219.3
|
|
$
193.8
|
|
13 %
|
|
19 %
|
Advisory
fees
|
98.2
|
|
84.9
|
|
16
|
|
23
|
|
188.9
|
|
164.2
|
|
15
|
|
21
|
Transaction fees and
other
|
8.1
|
|
8.4
|
|
(4)
|
|
1
|
|
25.2
|
|
14.4
|
|
75
|
|
85
|
Incentive
fees
|
1.0
|
|
15.2
|
|
(93)
|
|
(93)
|
|
5.2
|
|
15.2
|
|
(66)
|
|
(65)
|
Segment operating
income
|
$
18.9
|
|
$
22.8
|
|
(17) %
|
|
(18) %
|
|
$
41.0
|
|
$
34.0
|
|
21 %
|
|
26 %
|
Equity
earnings
|
$
7.0
|
|
$
23.4
|
|
(70) %
|
|
(70) %
|
|
$
5.1
|
|
$
36.4
|
|
(86) %
|
|
(86) %
|
Adjusted
EBITDA1
|
$
27.8
|
|
$
48.0
|
|
(42) %
|
|
(42) %
|
|
$
49.1
|
|
$
74.1
|
|
(34) %
|
|
(31) %
|
|
Note: For discussion
and reconciliation of non-GAAP financial measures, see the Notes
following the Financial Statements in this news release. Percentage
variances in the Performance Highlights below are calculated and
presented on a local currency basis, unless otherwise
noted.
|
LaSalle advisory fee growth was
concentrated in core open-end funds, driven by strong capital
raising and increases in fair value of assets under management over
the trailing twelve months. Prior-year incentive fees, which did
not reoccur in the current quarter, related to real estate
dispositions on behalf of clients, predominantly in Asia Pacific.
Current quarter's equity earnings included a loss of
$1.9 million due to negative share
price movement for a co-investment in a LaSalle-managed publicly traded REIT in
Japan, whereas the prior-year
quarter reflected a $9.5 million gain
related to the same investment. In addition, equity earnings in the
prior-year quarter were also partially driven by the recovery of
pandemic-driven valuation declines in 2020.
Adjusted EBITDA margin for the quarter, calculated on a
fee-revenue basis, was 26.0% in USD (24.3% in local currency),
compared with 44.2% in 2021. The margin contraction was primarily
attributable to the decrease in equity earnings, which drove over
80% of the margin contraction, and lower incentive fees, partially
offset by higher advisory fees and incremental advisory fee
platform scale.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. JLL shapes
the future of real estate for a better world by using the most
advanced technology to create rewarding opportunities, amazing
spaces and sustainable real estate solutions for our clients, our
people and our communities. JLL is a Fortune 500 company with
annual revenue of $19.4 billion,
operations in over 80 countries and a global workforce of more than
102,000 as of June 30, 2022. 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://www.instagram.com/jll
Live
Webcast
|
|
Conference
Call
|
Management will offer a
live webcast for shareholders, analysts and investment
professionals on Wednesday, August 3, 2022, at 9:00 a.m. Eastern.
Following the live broadcast, an audio replay will be available for
download or stream.
The link to the live
webcast and audio replay can be accessed at the Investor Relations
website: ir.jll.com.
|
|
Refer to ir.jll.com for
a registration link to receive unique credentials to access the
presentation of earnings via phone.
|
|
|
|
|
Supplemental
Information
|
|
Contact
|
Supplemental
information regarding the second quarter 2022 earnings call has
been posted to the Investor Relations section of JLL's website:
ir.jll.com.
|
|
If you have any
questions, please contact Scott Einberger, Investor Relations
Officer.
|
|
Phone:
|
+1 312 252
8943
|
|
Email:
|
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, objectives and shares 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, the
occurrence of which are outside JLL's control which may cause JLL'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 JLL's business in general,
please refer to those factors discussed under "Risk Factors,"
"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 filed Annual
Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form
10-Q for the quarter ended March 31,
2022, and 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, JLL 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)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Revenue
|
$
5,278.4
|
|
$
4,495.0
|
|
$
10,079.8
|
|
$
8,532.1
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Compensation and
benefits
|
$
2,554.4
|
|
$
2,208.8
|
|
$
4,965.2
|
|
$
4,197.8
|
Operating,
administrative and other
|
2,407.6
|
|
1,989.3
|
|
4,548.6
|
|
3,886.5
|
Depreciation and
amortization
|
55.4
|
|
54.5
|
|
109.8
|
|
107.5
|
Restructuring and
acquisition charges3
|
25.9
|
|
18.1
|
|
45.4
|
|
35.3
|
Total operating
expenses
|
5,043.3
|
|
4,270.7
|
|
9,669.0
|
|
8,227.1
|
|
|
|
|
|
|
|
|
Operating
income
|
235.1
|
|
224.3
|
|
410.8
|
|
305.0
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
15.7
|
|
10.6
|
|
25.9
|
|
21.0
|
Equity
earnings
|
53.6
|
|
40.8
|
|
72.1
|
|
89.3
|
Other income
(expense)(a)
|
135.3
|
|
(0.2)
|
|
135.5
|
|
11.6
|
|
|
|
|
|
|
|
|
Income before income
taxes and noncontrolling interest
|
408.3
|
|
254.3
|
|
592.5
|
|
384.9
|
Income tax
provision
|
72.8
|
|
54.9
|
|
113.1
|
|
83.1
|
Net income
|
335.5
|
|
199.4
|
|
479.4
|
|
301.8
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to noncontrolling interest(a)
|
141.6
|
|
(0.6)
|
|
139.9
|
|
(1.2)
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
193.9
|
|
$
200.0
|
|
$
339.5
|
|
$
303.0
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
3.98
|
|
$
3.90
|
|
$
6.89
|
|
$
5.91
|
Basic weighted average
shares outstanding (in 000's)
|
48,718
|
|
51,288
|
|
49,247
|
|
51,231
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
$
3.90
|
|
$
3.82
|
|
$
6.75
|
|
$
5.80
|
Diluted weighted
average shares outstanding (in 000's)
|
49,651
|
|
52,324
|
|
50,292
|
|
52,253
|
|
|
|
|
|
|
|
|
Please reference
accompanying financial statement notes.
|
|
|
|
|
|
|
|
|
(a) During the second
quarter of 2022, Other income included a $142.3 million gain by a
consolidated variable interest entity in which the company held no
equity interest. This gain, therefore, is also included in the
period's net income attributable to noncontrolling interest. As a
result, there is no net impact to Net income attributable to common
shareholders (or other measures like Adjusted EBITDA, Adjusted net
income and Adjusted diluted earnings per share).
|
JONES LANG LASALLE
INCORPORATED
|
Selected Segment
Financial Data (Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
MARKETS
ADVISORY
|
|
|
|
|
|
|
|
Compensation,
operating and administrative expenses
|
$
984.7
|
|
$
839.9
|
|
$
1,875.7
|
|
$
1,566.5
|
Depreciation and
amortization
|
17.3
|
|
16.7
|
|
34.4
|
|
32.6
|
Total segment
operating expenses
|
1,002.0
|
|
856.6
|
|
1,910.1
|
|
1,599.1
|
Gross contract
costs1
|
(262.4)
|
|
(240.3)
|
|
(520.7)
|
|
(480.4)
|
Total fee-based
segment operating expenses
|
$
739.6
|
|
$
616.3
|
|
$
1,389.4
|
|
$
1,118.7
|
|
|
|
|
|
|
|
|
Segment operating
income
|
$
116.2
|
|
$
94.7
|
|
$
207.6
|
|
$
144.9
|
Add:
|
|
|
|
|
|
|
|
Equity
earnings
|
0.4
|
|
0.1
|
|
0.9
|
|
0.5
|
Depreciation and
amortization(a)
|
16.3
|
|
16.7
|
|
33.4
|
|
32.6
|
Other
income
|
132.3
|
|
1.7
|
|
132.5
|
|
0.6
|
Net (income) loss
attributable to noncontrolling interest
|
(141.7)
|
|
0.7
|
|
(139.7)
|
|
1.3
|
Adjustments:
|
|
|
|
|
|
|
|
Loss on
disposition
|
10.5
|
|
—
|
|
10.5
|
|
—
|
Adjusted
EBITDA1
|
$
134.0
|
|
$
113.9
|
|
$
245.2
|
|
$
179.9
|
|
|
|
|
|
|
|
|
CAPITAL
MARKETS
|
|
|
|
|
|
|
|
Compensation,
operating and administrative expenses
|
$
547.3
|
|
$
425.3
|
|
$
1,034.1
|
|
$
769.7
|
Depreciation and
amortization
|
15.4
|
|
16.7
|
|
31.0
|
|
32.6
|
Total segment
operating expenses
|
562.7
|
|
442.0
|
|
1,065.1
|
|
802.3
|
Gross contract
costs1
|
(12.6)
|
|
(12.9)
|
|
(25.3)
|
|
(21.7)
|
Total fee-based
segment operating expenses
|
$
550.1
|
|
$
429.1
|
|
$
1,039.8
|
|
$
780.6
|
|
|
|
|
|
|
|
|
Segment operating
income
|
$
121.8
|
|
$
110.1
|
|
$
220.0
|
|
$
161.5
|
Add:
|
|
|
|
|
|
|
|
Equity
earnings
|
0.6
|
|
1.4
|
|
1.4
|
|
1.8
|
Depreciation and
amortization
|
15.4
|
|
16.7
|
|
31.0
|
|
32.6
|
Other income
(expense)
|
0.1
|
|
(1.7)
|
|
0.1
|
|
(0.6)
|
Adjustments:
|
|
|
|
|
|
|
|
Net non-cash MSR and
mortgage banking derivative activity
|
(11.2)
|
|
(5.7)
|
|
(7.6)
|
|
(15.4)
|
Adjusted
EBITDA1
|
$
126.7
|
|
$
120.8
|
|
$
244.9
|
|
$
179.9
|
|
|
(a)
|
This adjustment
excludes the noncontrolling interest portion of amortization of
acquisition-related intangibles which is not attributable to common
shareholders.
|
JONES LANG LASALLE
INCORPORATED
|
|
Selected Segment
Financial Data (Unaudited) Continued
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
WORK
DYNAMICS
|
|
|
|
|
|
|
|
|
Compensation,
operating and administrative expenses
|
$
3,253.8
|
|
$
2,784.7
|
|
$
6,252.5
|
|
$
5,458.0
|
|
Depreciation and
amortization
|
17.0
|
|
16.8
|
|
33.5
|
|
33.0
|
|
Total segment
operating expenses
|
3,270.8
|
|
2,801.5
|
|
6,286.0
|
|
5,491.0
|
|
Gross contract
costs1
|
(2,843.5)
|
|
(2,427.7)
|
|
(5,466.6)
|
|
(4,762.3)
|
|
Total fee-based
segment operating expenses
|
$
427.3
|
|
$
373.8
|
|
$
819.4
|
|
$
728.7
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income
|
$
39.7
|
|
$
34.7
|
|
$
58.1
|
|
$
43.3
|
|
Add:
|
|
|
|
|
|
|
|
|
Equity earnings
(losses)
|
0.9
|
|
(0.3)
|
|
1.2
|
|
(0.2)
|
|
Depreciation and
amortization
|
17.0
|
|
16.8
|
|
33.5
|
|
33.0
|
|
Adjusted
EBITDA1
|
$
57.6
|
|
$
51.2
|
|
$
92.8
|
|
$
76.1
|
|
|
|
|
|
|
|
|
|
|
JLL
TECHNOLOGIES
|
|
|
|
|
|
|
|
|
Compensation,
operating and administrative expenses(a)
|
$
82.4
|
|
$
57.3
|
|
$
162.9
|
|
$
121.3
|
|
Depreciation and
amortization
|
3.9
|
|
2.2
|
|
7.7
|
|
5.1
|
|
Total segment
operating expenses
|
86.3
|
|
59.5
|
|
170.6
|
|
126.4
|
|
Gross contract
costs1
|
(2.7)
|
|
(6.8)
|
|
(6.8)
|
|
(20.3)
|
|
Total fee-based
segment operating expenses
|
$
83.6
|
|
$
52.7
|
|
$
163.8
|
|
$
106.1
|
|
|
|
|
|
|
|
|
|
|
Segment operating
loss
|
$
(35.6)
|
|
$
(19.9)
|
|
$
(70.5)
|
|
$
(43.4)
|
|
Add:
|
|
|
|
|
|
|
|
|
Equity
earnings
|
44.7
|
|
16.2
|
|
63.5
|
|
50.8
|
|
Depreciation and
amortization
|
3.9
|
|
2.2
|
|
7.7
|
|
5.1
|
|
Other
income
|
2.9
|
|
—
|
|
2.9
|
|
12.0
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on
disposition
|
(3.0)
|
|
—
|
|
(3.0)
|
|
(12.0)
|
|
Adjusted
EBITDA1
|
$
12.9
|
|
$
(1.5)
|
|
$
0.6
|
|
$
12.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Included in
Compensation, operating and administrative expenses for JLL
Technologies is carried interest expense related to equity earnings
of the segment. Such amounts were $9.8 million and $16.0 million
for the three and six months ended June 30, 2022, respectively, and
$4.6 million and $8.8 million for the three and six months ended
June 30, 2021.
|
|
|
JONES LANG LASALLE
INCORPORATED
|
|
Selected Segment
Financial Data (Unaudited) Continued
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
LASALLE
|
|
|
|
|
|
|
|
|
Compensation,
operating and administrative expenses
|
$
93.8
|
|
$
90.9
|
|
$
188.6
|
|
$
168.8
|
|
Depreciation and
amortization
|
1.8
|
|
2.1
|
|
3.2
|
|
4.2
|
|
Total segment
operating expenses
|
95.6
|
|
93.0
|
|
191.8
|
|
173.0
|
|
Gross contract
costs1
|
(7.2)
|
|
(7.3)
|
|
(13.5)
|
|
(13.2)
|
|
Total fee-based
segment operating expenses
|
$
88.4
|
|
$
85.7
|
|
$
178.3
|
|
$
159.8
|
|
|
|
|
|
|
|
|
|
|
Segment operating
income
|
$
18.9
|
|
$
22.8
|
|
$
41.0
|
|
$
34.0
|
|
Add:
|
|
|
|
|
|
|
|
|
Equity
earnings
|
7.0
|
|
23.4
|
|
5.1
|
|
36.4
|
|
Depreciation and
amortization
|
1.8
|
|
2.1
|
|
3.2
|
|
4.2
|
|
Other
expense
|
—
|
|
(0.2)
|
|
—
|
|
(0.4)
|
|
Net loss (income)
attributable to noncontrolling interest
|
0.1
|
|
(0.1)
|
|
(0.2)
|
|
(0.1)
|
|
Adjusted
EBITDA1
|
$
27.8
|
|
$
48.0
|
|
$
49.1
|
|
$
74.1
|
|
|
|
|
|
|
|
|
|
|
JONES LANG LASALLE
INCORPORATED
|
Summarized
Consolidated Statements of Cash Flows4
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
|
|
|
Net cash used in
operating activities
|
$
(539.4)
|
|
$
(246.1)
|
|
|
|
|
Net cash used in
investing activities
|
(63.1)
|
|
(213.8)
|
|
|
|
|
Net cash provided by
financing activities
|
601.3
|
|
314.7
|
|
|
|
|
Effect of currency
exchange rate changes on cash, cash equivalents and restricted
cash
|
(37.6)
|
|
(9.7)
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
$
(38.8)
|
|
$
(154.9)
|
|
|
|
|
Cash, cash equivalents
and restricted cash, beginning of year
|
841.6
|
|
839.8
|
|
|
|
|
Cash, cash equivalents
and restricted cash, end of period
|
$
802.8
|
|
$
684.9
|
|
|
|
|
Reconciliation to
Free Cash Flow
|
|
Six Months Ended
June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
|
|
|
Net cash used in
operating activities
|
$
(539.4)
|
|
$
(246.1)
|
|
|
|
|
Net capital additions -
property and equipment
|
(86.9)
|
|
(69.8)
|
|
|
|
|
Free Cash
Flow6
|
$
(626.3)
|
|
$
(315.9)
|
|
|
|
|
|
|
|
|
Please reference
accompanying financial statement notes.
|
JONES LANG LASALLE
INCORPORATED
|
Consolidated Balance
Sheets
|
|
|
|
|
June
30,
|
|
December 31,
|
|
|
|
|
June
30,
|
|
December 31,
|
(in millions, except
share and per share data)
|
2022
|
|
2021
|
|
|
|
|
2022
|
|
2021
|
ASSETS
|
(Unaudited)
|
|
|
|
LIABILITIES AND
EQUITY
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Cash and cash
equivalents
|
$
568.0
|
|
$
593.7
|
|
|
Accounts payable and
accrued liabilities
|
$
947.0
|
|
$
1,262.8
|
|
Trade receivables, net
of allowance
|
1,859.8
|
|
2,004.1
|
|
|
Reimbursable
payables
|
1,308.3
|
|
1,350.0
|
|
Notes and other
receivables
|
400.6
|
|
389.3
|
|
|
Accrued compensation
and benefits
|
1,351.1
|
|
2,029.5
|
|
Reimbursable
receivables
|
1,780.0
|
|
1,734.5
|
|
|
Short-term
borrowings
|
128.3
|
|
147.9
|
|
Warehouse
receivables
|
634.8
|
|
822.3
|
|
|
Current maturities of
long-term debt, net
|
274.8
|
|
274.7
|
|
Short-term contract
assets, net of allowance
|
354.3
|
|
343.1
|
|
|
Short-term contract
liability and deferred income
|
235.4
|
|
208.2
|
|
Prepaid and
other
|
552.3
|
|
500.7
|
|
|
Short-term
acquisition-related obligations
|
47.5
|
|
45.8
|
|
|
Total current
assets
|
6,149.8
|
|
6,387.7
|
|
|
Warehouse
facilities
|
622.3
|
|
795.7
|
Property and equipment,
net of accumulated depreciation
|
731.7
|
|
740.0
|
|
|
Short-term operating
lease liability
|
153.1
|
|
153.8
|
Operating lease
right-of-use asset
|
771.4
|
|
723.4
|
|
|
Other
|
269.4
|
|
218.1
|
Goodwill
|
4,519.9
|
|
4,611.6
|
|
|
|
Total current
liabilities
|
5,337.2
|
|
6,486.5
|
Identified intangibles,
net of accumulated amortization
|
871.9
|
|
887.0
|
|
Noncurrent
liabilities:
|
|
|
|
Investments
|
901.9
|
|
745.7
|
|
|
Credit facility, net of
debt issuance costs
|
1,364.3
|
|
138.2
|
Long-term
receivables
|
289.2
|
|
316.4
|
|
|
Long-term debt, net of
debt issuance costs
|
364.4
|
|
395.6
|
Deferred tax assets,
net
|
277.9
|
|
330.8
|
|
|
Long-term deferred tax
liabilities, net
|
211.6
|
|
179.7
|
Deferred compensation
plans
|
528.1
|
|
528.8
|
|
|
Deferred
compensation
|
490.9
|
|
525.4
|
Other
|
230.5
|
|
233.6
|
|
|
Long-term
acquisition-related obligations
|
54.3
|
|
66.3
|
|
|
Total assets
|
$
15,272.3
|
|
$
15,505.0
|
|
|
Long-term operating
lease liability
|
748.6
|
|
714.4
|
|
|
|
|
|
|
|
|
Other
|
547.1
|
|
577.7
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
$
9,118.4
|
|
$
9,083.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
$
7.2
|
|
$
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company shareholders'
equity
|
|
|
|
|
|
|
|
|
|
Common stock
|
0.5
|
|
0.5
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
2,050.7
|
|
2,053.7
|
|
|
|
|
|
|
Retained
earnings
|
5,275.4
|
|
4,937.6
|
|
|
|
|
|
|
|
|
Treasury
stock
|
(824.7)
|
|
(406.3)
|
|
|
|
|
|
|
|
|
Shares held in
trust
|
(5.1)
|
|
(5.2)
|
|
|
|
|
|
|
|
Accumulated other
comprehensive loss
|
(583.9)
|
|
(395.4)
|
|
|
|
|
|
|
|
Total company
shareholders' equity
|
5,912.9
|
|
6,184.9
|
|
|
|
|
|
|
Noncontrolling
interest
|
233.8
|
|
228.5
|
|
|
|
|
|
|
|
Total equity
|
6,146.7
|
|
6,413.4
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
15,272.3
|
|
$
15,505.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Please reference
accompanying financial statement notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JONES LANG LASALLE
INCORPORATED
Financial Statement Notes
1. Management uses certain non-GAAP financial measures to
develop budgets and forecasts, measure and reward performance
against those budgets and forecasts, and enhance comparability to
prior periods. These measures are believed to be useful to
investors and other external stakeholders as supplemental measures
of core operating performance and include the following:
(i)
Fee revenue and Fee-based operating expenses,
(ii)
Adjusted EBITDA attributable to common shareholders ("Adjusted
EBITDA") and Adjusted EBITDA margin,
(iii)
Adjusted net income attributable to common shareholders and
Adjusted diluted earnings per share,
(iv)
Percentage changes against prior periods, presented on a local
currency basis, and
(v)
Free Cash Flow.
However, non-GAAP financial measures should not be considered
alternatives to measures determined in accordance with U.S.
generally accepted accounting principles ("GAAP"). Any measure that
eliminates components of a company's capital structure, cost of
operations or investments, or other results has limitations as a
performance measure. In light of these limitations, management also
considers GAAP financial measures and does not rely solely on
non-GAAP financial measures. Because the company's non-GAAP
financial measures are not calculated in accordance with GAAP, they
may not be comparable to similarly titled measures used by other
companies.
Adjustments to GAAP Financial Measures Used to Calculate
non-GAAP Financial Measures
Gross Contract Costs represent certain costs
associated with client-dedicated employees and third-party vendors
and subcontractors and are directly or indirectly reimbursed
through the fees we receive. These costs are presented on a gross
basis in Operating expenses with the equal amount of corresponding
fees in Revenue. Excluding gross contract costs from both Fee
revenue and Fee-based operating expenses more accurately reflects
how the company manages its expense base and operating margins and
also enables a more consistent performance assessment across a
portfolio of contracts with varying payment terms and
structures.
Net Non-Cash Mortgage Servicing Rights ("MSR") and
Mortgage Banking Derivative Activity consists of the
balances presented within Revenue composed of (i) derivative
gains/losses resulting from mortgage banking loan commitment and
warehousing activity and (ii) gains recognized from the retention
of MSR upon origination and sale of mortgage loans, offset by (iii)
amortization of MSR intangible assets over the period that net
servicing income is projected to be received. Non-cash derivative
gains/losses resulting from mortgage banking loan commitment and
warehousing activity are calculated as the estimated fair value of
loan commitments and subsequent changes thereof, primarily
represented by the estimated net cash flows associated with future
servicing rights. MSR gains and corresponding MSR intangible assets
are calculated as the present value of estimated cash flows over
the estimated mortgage servicing periods. The above activity is
reported entirely within Revenue of the Capital Markets segment.
Excluding net non-cash MSR and mortgage banking derivative activity
reflects how the company manages and evaluates performance because
the excluded activity is non-cash in nature.
Restructuring and Acquisition
Charges primarily consist of: (i) severance and
employment-related charges, including those related to external
service providers, incurred in conjunction with a structural
business shift, which can be represented by a notable change in
headcount, change in leadership or transformation of business
processes; (ii) acquisition, transaction and integration-related
charges, including fair value adjustments, which are generally
non-cash in the periods such adjustments are made, to assets and
liabilities recorded in purchase accounting such as earn-out
liabilities and intangible assets; and (iii) lease exit charges.
Such activity is excluded as the amounts are generally either
non-cash in nature or the anticipated benefits from the
expenditures would not likely be fully realized until future
periods. Restructuring and acquisition charges are excluded from
segment operating results and therefore not a line item in the
segments' reconciliation to Adjusted EBITDA.
Amortization of Acquisition-Related Intangibles,
primarily composed of the estimated fair value ascribed at closing
of an acquisition to assets such as acquired management contracts,
customer backlog and relationships, and trade name, is more notable
following the company's increase in acquisition activity in recent
years. Such non-cash activity is excluded as the change in
period-over-period activity is generally the result of longer-term
strategic decisions and therefore not necessarily indicative of
core operating results.
Gain or Loss on Disposition reflects the gain or
loss recognized on the sale of businesses. Given the low frequency
of business disposals by the company historically, the gain or loss
directly associated with such activity is excluded as it is not
considered indicative of core operating performance. In 2022, the
$7.5 million net loss included
$10.5 million of loss related to the
disposition of the Russia
business, partially offset by a $3.0
million gain related to a disposition within JLL
Technologies. In 2021, the $12.0
million gain related to a business disposition within JLL
Technologies during the first quarter of 2021.
Reconciliation of Non-GAAP Financial Measures
Below are reconciliations of (i) Revenue to Fee revenue and (ii)
Operating expenses to Fee-based operating expenses:
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Revenue
|
$
5,278.4
|
|
$
4,495.0
|
|
$
10,079.8
|
|
$
8,532.1
|
Gross contract
costs1
|
(3,128.4)
|
|
(2,695.0)
|
|
(6,032.9)
|
|
(5,297.9)
|
Net non-cash MSR and
mortgage banking derivative activity
|
(11.2)
|
|
(5.7)
|
|
(7.6)
|
|
(15.4)
|
Fee revenue
|
$
2,138.8
|
|
$
1,794.3
|
|
$
4,039.3
|
|
$
3,218.8
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
5,043.3
|
|
$
4,270.7
|
|
$
9,669.0
|
|
$
8,227.1
|
Gross contract
costs1
|
(3,128.4)
|
|
(2,695.0)
|
|
(6,032.9)
|
|
(5,297.9)
|
Fee-based operating
expenses
|
$
1,914.9
|
|
$
1,575.7
|
|
$
3,636.1
|
|
$
2,929.2
|
Below is (i) a reconciliation of Net income attributable to
common shareholders to EBITDA and Adjusted EBITDA, (ii) the Net
income margin attributable to common shareholders (against
Revenue), and (iii) the Adjusted EBITDA margin (presented on a
local currency and on a fee-revenue basis). Following this is the
(i) reconciliation to adjusted net income and (ii) components of
adjusted diluted earnings per share.
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
($ in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
193.9
|
|
$
200.0
|
|
$
339.5
|
|
$
303.0
|
Add:
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
15.7
|
|
10.6
|
|
25.9
|
|
21.0
|
Provision for income
taxes
|
72.8
|
|
54.9
|
|
113.1
|
|
83.1
|
Depreciation and
amortization(a)
|
54.4
|
|
54.5
|
|
108.8
|
|
107.5
|
EBITDA
|
$
336.8
|
|
$
320.0
|
|
$
587.3
|
|
$
514.6
|
Adjustments:
|
|
|
|
|
|
|
|
Restructuring and
acquisition charges3
|
25.9
|
|
18.1
|
|
45.4
|
|
35.3
|
Net loss (gain) on
disposition
|
7.5
|
|
—
|
|
7.5
|
|
(12.0)
|
Net non-cash MSR and
mortgage banking derivative activity
|
(11.2)
|
|
(5.7)
|
|
(7.6)
|
|
(15.4)
|
Adjusted
EBITDA
|
$
359.0
|
|
$
332.4
|
|
$
632.6
|
|
$
522.5
|
Net income margin
attributable to common shareholders
|
3.7 %
|
|
4.4 %
|
|
3.4 %
|
|
3.6 %
|
Adjusted EBITDA
margin
|
16.5 %
|
|
18.5 %
|
|
15.5 %
|
|
16.2 %
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(In millions, except
share and per share data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
193.9
|
|
$
200.0
|
|
$
339.5
|
|
$
303.0
|
Diluted shares (in
thousands)
|
49,651
|
|
52,324
|
|
50,292
|
|
52,253
|
Diluted earnings per
share
|
$
3.90
|
|
$
3.82
|
|
$
6.75
|
|
$
5.80
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
193.9
|
|
$
200.0
|
|
$
339.5
|
|
$
303.0
|
Adjustments:
|
|
|
|
|
|
|
|
Restructuring and
acquisition charges3
|
25.9
|
|
18.1
|
|
45.4
|
|
35.3
|
Net non-cash MSR and
mortgage banking derivative activity
|
(11.2)
|
|
(5.7)
|
|
(7.6)
|
|
(15.4)
|
Amortization of
acquisition-related intangibles(a)
|
15.8
|
|
13.3
|
|
32.7
|
|
26.3
|
Net loss (gain) on
disposition
|
7.5
|
|
—
|
|
7.5
|
|
(12.0)
|
Tax impact of adjusted
items(b)
|
(9.5)
|
|
(5.6)
|
|
(18.2)
|
|
(7.4)
|
Adjusted net income
attributable to common shareholders
|
$
222.4
|
|
$
220.1
|
|
$
399.3
|
|
$
329.8
|
Diluted shares (in
thousands)
|
49,651
|
|
52,324
|
|
50,292
|
|
52,253
|
Adjusted diluted
earnings per share
|
$
4.48
|
|
$
4.20
|
|
$
7.94
|
|
$
6.31
|
|
|
(a)
|
This adjustment
excludes the noncontrolling interest portion of amortization of
acquisition-related intangibles which is not attributable to common
shareholders.
|
(b)
|
For the second quarter
of 2022, the tax impact of adjusted items was calculated using the
applicable statutory rates by tax jurisdiction. For the first
quarter of 2022 and the first and second quarters of 2021, the tax
impact of adjusted items was calculated using the consolidated
effective tax rate as this was deemed to approximate the tax impact
of adjusted items calculated using applicable statutory tax
rates.
|
Operating Results - Local Currency
In discussing operating results, the company reports Adjusted
EBITDA margins and refers to percentage changes in local currency,
unless otherwise noted. Amounts presented on a local currency basis
are calculated by translating the current period results of foreign
operations to U.S. dollars using the foreign currency exchange
rates from the comparative period. Management believes this
methodology provides a framework for assessing performance and
operations excluding the effect of foreign currency
fluctuations.
The following table reflects the reconciliation to local
currency amounts for consolidated (i) revenue, (ii) fee revenue,
(iii) operating income and (iv) Adjusted EBITDA.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
($ in
millions)
|
2022
|
|
%
Change
|
|
2022
|
|
%
Change
|
Revenue:
|
|
|
|
|
|
|
|
At current period
exchange rates
|
$
5,278.4
|
|
17 %
|
|
$
10,079.8
|
|
18 %
|
Impact of change in
exchange rates
|
174.3
|
|
n/a
|
|
252.1
|
|
n/a
|
At comparative period
exchange rates
|
$
5,452.7
|
|
21 %
|
|
$
10,331.9
|
|
21 %
|
|
|
|
|
|
|
|
|
Fee
revenue:
|
|
|
|
|
|
|
|
At current period
exchange rates
|
$
2,138.8
|
|
19 %
|
|
$
4,039.3
|
|
25 %
|
Impact of change in
exchange rates
|
67.0
|
|
n/a
|
|
99.6
|
|
n/a
|
At comparative period
exchange rates
|
$
2,205.8
|
|
23 %
|
|
$
4,138.9
|
|
29 %
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
At current period
exchange rates
|
$
235.1
|
|
5 %
|
|
$
410.8
|
|
35 %
|
Impact of change in
exchange rates
|
3.7
|
|
n/a
|
|
6.9
|
|
n/a
|
At comparative period
exchange rates
|
$
238.8
|
|
6 %
|
|
$
417.7
|
|
37 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
At current period
exchange rates
|
$
359.0
|
|
8 %
|
|
$
632.6
|
|
21 %
|
Impact of change in
exchange rates
|
5.5
|
|
n/a
|
|
10.5
|
|
n/a
|
At comparative period
exchange rates
|
$
364.5
|
|
10 %
|
|
$
643.1
|
|
23 %
|
2. As part of the last phase of the company's Beyond
transformation, effective January 1,
2022, the company changed from its geographic-centric Real
Estate Services segments of Americas, EMEA and Asia Pacific to global business line segments
of Markets Advisory, Capital Markets, Work Dynamics and JLL
Technologies. The company's real estate investment management
business, LaSalle, continues as a
reporting segment. Beginning with the first quarter of 2022, the
company's financial results are presented on this basis. Comparable
periods in 2021 have been recast to align with the new reporting
structure.
3. Restructuring and acquisition charges are excluded from the
company's measure of segment operating results, although they are
included within consolidated Operating income calculated in
accordance with GAAP. For purposes of segment operating results,
the allocation of restructuring and acquisition charges to the
segments is not a component of management's assessment of segment
performance. The table below shows restructuring and acquisition
charges.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Severance and other
employment-related charges
|
$
8.3
|
|
$
(0.9)
|
|
$
11.6
|
|
$
0.9
|
Restructuring,
pre-acquisition and post-acquisition charges
|
16.6
|
|
17.9
|
|
33.5
|
|
33.4
|
Fair value adjustments
that resulted in a net decrease to earn-out liabilities from
prior-
period acquisition
activity
|
1.0
|
|
1.1
|
|
0.3
|
|
1.0
|
Total restructuring and
acquisition charges
|
$
25.9
|
|
$
18.1
|
|
$
45.4
|
|
$
35.3
|
4. The consolidated statements of cash flows are presented in
summarized form. For complete consolidated statements of cash
flows, please refer to the company's Form 10-Q for the quarter
ended June 30, 2022, to be filed with
the SEC in the near future.
5. As of June 30, 2022,
LaSalle had $82.1 billion of real estate assets under
management (AUM), composed of $39.6
billion invested in separate accounts, $38.3 billion invested in fund management
vehicles and $4.2 billion invested in
public securities. The geographic distribution of separate accounts
and fund management investments was $29.1
billion in North America,
$20.0 billion in the UK, $13.8 billion in Asia
Pacific and $7.5 billion in
continental Europe. The remaining
$7.5 billion relates to Global
Partner Solutions which is a global business line.
AUM increased 6% in USD (8% in local currency) from $77.8 billion as of March
31, 2022. The AUM increase resulted from (i) $3.9 billion of acquisitions, (ii) $3.1 billion of net valuation increases,
partially offset by (iii) $1.1
billion of dispositions and withdrawals and (iv)
$1.6 billion of foreign currency
decreases.
Assets under management data for separate accounts and fund
management amounts are reported on a one-quarter lag. In addition,
LaSalle raised $1.4 billion in private equity capital for the
quarter ended June 30, 2022.
6. "Net Debt" is defined as the sum of the (i) Credit facility,
(ii) Long-term debt and (iii) Short-term borrowings liability
balances less Cash and cash equivalents.
"Net Leverage Ratio" is defined as Net Debt divided by the
trailing-twelve-month adjusted EBITDA.
"Corporate Liquidity" is defined as the unused portion of the
company's Credit Facility plus cash and cash equivalents.
"Free Cash Flow" is defined as cash provided by operating
activities less net capital additions - property and equipment.
"EMEA" is defined as Europe,
Middle East and Africa.
7. n.m.: "not meaningful", represented by a percentage change of
greater than 1,000%, favorably or unfavorably.
Appendix: Revenue
and Fee Revenue Segment Detail
|
|
|
Three months ended
June 30, 2022
|
(in
millions)
|
Markets
Advisory
|
|
Capital
Markets
|
|
Work
Dynamics
|
|
|
|
|
|
|
|
Leasing
|
Property
Mgmt
|
Advisory, Consulting
and Other
|
|
Total Markets
Advisory
|
|
Invt Sales, Debt/Equity
Advisory and Other
|
Valuation
Advisory
|
Loan
Servicing
|
|
Total Capital
Markets
|
|
Workplace
Mgmt
|
Project Mgmt
|
Portfolio Services and
Other
|
|
Total Work
Dynamics
|
|
JLLT
|
|
LaSalle
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 708.4
|
378.2
|
31.6
|
|
$
1,118.2
|
|
$ 549.7
|
94.4
|
40.4
|
|
$ 684.5
|
|
$
2,434.0
|
754.8
|
121.7
|
|
$
3,310.5
|
|
$
50.7
|
|
$ 114.5
|
|
$
5,278.4
|
Gross contract
costs1
|
(4.9)
|
(256.0)
|
(1.5)
|
|
(262.4)
|
|
(10.5)
|
(2.1)
|
—
|
|
(12.6)
|
|
(2,249.1)
|
(539.9)
|
(54.5)
|
|
(2,843.5)
|
|
(2.7)
|
|
(7.2)
|
|
(3,128.4)
|
Net non-cash MSR
and
mortgage
banking
derivative
activity
|
—
|
—
|
—
|
|
—
|
|
(11.2)
|
—
|
—
|
|
(11.2)
|
|
—
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
(11.2)
|
Fee
revenue
|
$ 703.5
|
122.2
|
30.1
|
|
$ 855.8
|
|
$ 528.0
|
92.3
|
40.4
|
|
$ 660.7
|
|
$ 184.9
|
214.9
|
67.2
|
|
$ 467.0
|
|
$
48.0
|
|
$ 107.3
|
|
$
2,138.8
|
|
Three months ended June
30, 2021
|
(in
millions)
|
Markets
Advisory
|
|
Capital
Markets
|
|
Work
Dynamics
|
|
|
|
|
|
|
|
Leasing
|
Property
Mgmt
|
Advisory, Consulting
and Other
|
|
Total Markets
Advisory
|
|
Invt Sales, Debt/Equity
Advisory and Other
|
Valuation
Advisory
|
Loan
Servicing
|
|
Total Capital
Markets
|
|
Workplace
Mgmt
|
Project Mgmt
|
Portfolio Services and
Other
|
|
Total Work
Dynamics
|
|
JLLT
|
|
LaSalle
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 572.4
|
347.8
|
31.1
|
|
$ 951.3
|
|
$ 430.1
|
91.4
|
30.6
|
|
$ 552.1
|
|
$
2,107.2
|
617.8
|
111.2
|
|
$
2,836.2
|
|
$ 39.6
|
|
$ 115.8
|
|
$
4,495.0
|
Gross contract
costs1
|
(3.8)
|
(233.1)
|
(3.4)
|
|
(240.3)
|
|
(11.0)
|
(1.9)
|
—
|
|
(12.9)
|
|
(1,942.3)
|
(433.3)
|
(52.1)
|
|
(2,427.7)
|
|
(6.8)
|
|
(7.3)
|
|
(2,695.0)
|
Net non-cash MSR
and
mortgage
banking
derivative
activity
|
—
|
—
|
—
|
|
—
|
|
(5.7)
|
—
|
—
|
|
(5.7)
|
|
—
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.7)
|
Fee
revenue
|
$ 568.6
|
114.7
|
27.7
|
|
$ 711.0
|
|
$ 413.4
|
89.5
|
30.6
|
|
$ 533.5
|
|
$ 164.9
|
184.5
|
59.1
|
|
$ 408.5
|
|
$ 32.8
|
|
$ 108.5
|
|
$
1,794.3
|
Appendix: Revenue
and Fee Revenue Segment Detail (continued)
|
|
|
Six months ended
June 30, 2022
|
(in
millions)
|
Markets
Advisory
|
|
Capital
Markets
|
|
Work
Dynamics
|
|
|
|
|
|
|
|
Leasing
|
Property
Mgmt
|
Advisory, Consulting
and Other
|
|
Total Markets
Advisory
|
|
Invt Sales, Debt/Equity
Advisory and Other
|
Valuation
Advisory
|
Loan
Servicing
|
|
Total Capital
Markets
|
|
Workplace
Mgmt
|
Project Mgmt
|
Portfolio Services and
Other
|
|
Total Work
Dynamics
|
|
JLLT
|
|
LaSalle
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
1,309.3
|
748.7
|
59.7
|
|
$
2,117.7
|
|
$
1,025.8
|
179.0
|
80.3
|
|
$
1,285.1
|
|
$
4,754.4
|
1,367.1
|
222.6
|
|
$
6,344.1
|
|
$ 100.1
|
|
$ 232.8
|
|
$
10,079.8
|
Gross contract
costs1
|
(8.9)
|
(507.9)
|
(3.9)
|
|
(520.7)
|
|
(21.7)
|
(3.6)
|
—
|
|
(25.3)
|
|
(4,387.5)
|
(976.5)
|
(102.6)
|
|
(5,466.6)
|
|
(6.8)
|
|
(13.5)
|
|
(6,032.9)
|
Net non-cash MSR
and
mortgage
banking
derivative
activity
|
—
|
—
|
—
|
|
—
|
|
(7.6)
|
—
|
—
|
|
(7.6)
|
|
—
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
(7.6)
|
Fee
revenue
|
$
1,300.4
|
240.8
|
55.8
|
|
$
1,597.0
|
|
$ 996.5
|
175.4
|
80.3
|
|
$
1,252.2
|
|
$ 366.9
|
390.6
|
120.0
|
|
$ 877.5
|
|
$
93.3
|
|
$ 219.3
|
|
$
4,039.3
|
|
Six months ended June
30, 2021
|
(in
millions)
|
Markets
Advisory
|
|
Capital
Markets
|
|
Work
Dynamics
|
|
|
|
|
|
|
|
Leasing
|
Property
Mgmt
|
Advisory, Consulting
and Other
|
|
Total Markets
Advisory
|
|
Invt Sales, Debt/Equity
Advisory and Other
|
Valuation
Advisory
|
Loan
Servicing
|
|
Total Capital
Markets
|
|
Workplace
Mgmt
|
Project Mgmt
|
Portfolio Services and
Other
|
|
Total Work
Dynamics
|
|
JLLT
|
|
LaSalle
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 989.0
|
695.4
|
59.6
|
|
$
1,744.0
|
|
$ 732.1
|
171.1
|
60.6
|
|
$ 963.8
|
|
$
4,155.6
|
1,169.6
|
209.1
|
|
$
5,534.3
|
|
$ 83.0
|
|
$ 207.0
|
|
$
8,532.1
|
Gross contract
costs1
|
(8.2)
|
(466.4)
|
(5.8)
|
|
(480.4)
|
|
(17.3)
|
(4.4)
|
—
|
|
(21.7)
|
|
(3,837.3)
|
(821.9)
|
(103.1)
|
|
(4,762.3)
|
|
(20.3)
|
|
(13.2)
|
|
(5,297.9)
|
Net non-cash MSR
and
mortgage
banking
derivative
activity
|
—
|
—
|
—
|
|
—
|
|
(15.4)
|
—
|
—
|
|
(15.4)
|
|
—
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
(15.4)
|
Fee
revenue
|
$ 980.8
|
229.0
|
53.8
|
|
$
1,263.6
|
|
$ 699.4
|
166.7
|
60.6
|
|
$ 926.7
|
|
$ 318.3
|
347.7
|
106.0
|
|
$ 772.0
|
|
$ 62.7
|
|
$ 193.8
|
|
$
3,218.8
|
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SOURCE JLL-IR