JONES LANG LASALLE INC - FORM 8-K - EX-99.1 - EXHIBIT

Attached files

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8-K - 8-K - JONES LANG LASALLE INC	q32014earningrelease-form8k.htm
EX-99.2 - SUPPLEMENTAL INFORMATION - JONES LANG LASALLE INC	a2014q3jllearningscallsu.htm

Exhibit 99.1

JLL Reports Record Third-Quarter 2014 Adjusted Earnings Per Share of $2.31, Up 55 Percent Over Last Year

Third-quarter fee revenue of $1.2 billion, up 19 percent

CHICAGO, October 29, 2014 - Jones Lang LaSalle Incorporated (NYSE: JLL) today reported adjusted earnings per share of $2.31 for the third quarter of 2014. Third-quarter fee revenue totaled $1.2 billion, up 19 percent from the third quarter of 2013. All percentage variances are calculated on a local currency basis.


•	Strong fee revenue growth across all service lines and geographic segments


•	Outstanding results for LaSalle Investment Management contributed to significant margin expansion


•	Continued strategic investment in technology


•	Healthy pipelines entering the seasonally strong fourth quarter


•	9 percent increase to semi-annual dividend, to $0.25 per share




Summary Financial Results ($ in millions, except per share data)	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013

Revenue	$	1,366	$	1,107	$	3,681	$	2,952
Fee Revenue¹	$	1,181	$	989	$	3,144	$	2,677
Adjusted Net Income²	$	105	$	67	$	198	$	135
U.S. GAAP Net Income	$	104	$	63	$	192	$	122
Adjusted Earnings per Share²	$	2.31	$	1.49	$	4.38	$	2.99
Earnings per Share	$	2.30	$	1.39	$	4.24	$	2.71
Adjusted EBITDA³	$	169	$	118	$	353	$	268
Adjusted EBITDA, Real Estate Services	$	101	$	101	$	245	$	217
Adjusted EBITDA, LaSalle Investment Management	$	68	$	17	$	108	$	51
See Financial Statement Notes (1), (2) and (3) following the Financial Statements in this news release

“We completed a record third quarter with broad-based growth in all service lines and superior results from LaSalle Investment Management,” said Colin Dyer, President and CEO of JLL. “Market conditions and sentiment remain strong in real estate markets around the world, and the healthy pipelines across our business signal continued growth into 2015,” Dyer added.

JLL Reports Third-Quarter 2014 Results - Page 2



Consolidated Revenue ($ in millions, “LC” = local currency)	Three Months Ended September 30,				% Change in LC	Nine Months Ended September 30,				% Change in LC
	2014		2013		% Change in LC	2014		2013		% Change in LC

Real Estate Services (“RES”)
Leasing	$	366.9	$	331.9	10%	$	1,001.9	$	856.5	17%
Capital Markets & Hotels	193.0		164.8		15%	492.3		445.9		8%
Property & Facility Management Fee Revenue¹	260.6		233.7		11%	765.0		656.8		17%
Property & Facility Management	377.2		304.3		24%	1,095.4		813.1		36%
Project & Development Services Fee Revenue¹	112.6		95.1		18%	302.9		258.2		17%
Project & Development Services	181.4		142.8		26%	508.8		376.8		34%
Advisory, Consulting and Other	105.2		95.7		8%	306.1		271.5		11%
Total RES Fee Revenue¹	$	1,038.3	$	921.2	12%	$	2,868.2	$	2,488.9	15%
Total RES Revenue	$	1,223.7	$	1,039.5	17%	$	3,404.5	$	2,763.8	23%

LaSalle Investment Management
Advisory Fees	$	60.9	$	55.4	8%	$	176.8	$	167.0	4%
Transaction Fees & Other	10.8		2.6		n/m	19.8		10.9		82%
Incentive Fees	70.6		9.3		n/m	79.5		10.5		n/m
Total LaSalle Investment Management Revenue	$	142.3	$	67.3	113%	$	276.1	$	188.4	46%

Total Firm Fee Revenue¹	$	1,180.6	$	988.5	19%	$	3,144.3	$	2,677.3	17%
Total Firm Revenue	$	1,366.0	$	1,106.8	23%	$	3,680.6	$	2,952.2	24%

n/m - not meaningful

Consolidated Performance Highlights:


•	Consolidated fee revenue for the quarter was $1.2 billion, up 19 percent from 2013. Growth was strong in Real Estate Services, up 12 percent, driven by both annuity and transaction revenue growth. LaSalle Investment Management grew advisory fees by 8 percent and earned incentive fees of $71 million.


•	Consolidated fee-based operating expenses, excluding restructuring and acquisition charges, were $1.1 billion for the quarter, compared with $897 million last year, an increase of 16 percent.


•	LaSalle Investment Management continued to successfully raise and deploy capital with $5 billion in equity raised, a single-quarter record for LaSalle.


•	Adjusted operating income margin calculated on a fee revenue basis was 10.8 percent for the third quarter, compared with 9.4 percent a year ago. Adjusted EBITDA margin calculated on a fee revenue basis was 14.3 percent for the third quarter, compared with 12.0 percent a year ago.

JLL Reports Third-Quarter 2014 Results - Page 3

Balance Sheet, Net Interest Expense and Dividend:


•	The firm’s total net debt was $517 million at quarter end, a decrease of $248 million from the third quarter last year as the firm’s strong cash generation continues.


•	Net interest expense for the quarter was $7.4 million, down from $9.6 million in 2013. On a year-to-date basis, net interest expense was $21.6 million, down from $26.6 million for year-to-date 2013.


•	The firm’s Board of Directors declared a semi-annual dividend of $0.25 per share, a nine percent increase from the $0.23 per share payment made in June 2014. The dividend payment will be made on December 15, 2014, to investors of record at the close of business on November 14, 2014.

JLL Reports Third-Quarter 2014 Results - Page 4

Business Segment Performance Highlights

Americas Real Estate Services



Americas Revenue ($ in millions, “LC” = local currency)	Three Months Ended September 30,					% Change in LC	Nine Months Ended September 30,				% Change in LC
	2014			2013		% Change in LC	2014		2013		% Change in LC

Leasing	$	255.9		$	232.6	10%	$	694.1	$	582.6	19%
Capital Markets & Hotels	72.3			46.7		55%	172.5		138.7		25%
Property & Facility Management Fee Revenue¹	106.2			98.0		9%	315.7		273.9		17%
Property & Facility Management	166.8			129.8		30%	467.0		348.5		37%
Project & Development Services Fee Revenue¹	57.2			48.4		19%	153.2		128.4		20%
Project & Development Services	57.2			48.6		18%	154.8		129.3		21%
Advisory, Consulting and Other	30.2			26.4		14%	85.1		77.9		10%
Operating Revenue	$	521.8		$	452.1	16%	$	1,420.6	$	1,201.5	19%

Equity (Losses) Earnings	(0.8		)	—		n/m	0.4		0.3		63%
Total Segment Fee Revenue¹	$	521.0		$	452.1	16%	$	1,421.0	$	1,201.8	19%
Total Segment Revenue	$	581.6		$	484.1	21%	$	1,573.9	$	1,277.3	24%

n/m - not meaningful

Americas Performance Highlights:


•	Fee revenue for the quarter was $521 million, an increase of 16 percent from 2013. Fee revenue growth was driven by Capital Markets & Hotels, up 55 percent, and Leasing, up 10 percent, compared with the third quarter of last year.


•	Fee-based operating expenses, excluding restructuring and acquisition charges, were $473 million for the quarter, compared with $407 million last year, an increase of 17 percent.


•	Operating income was $48 million for the quarter, compared with $45 million in 2013. Year-to-date operating income was $112 million, up from $95 million in 2013.


•	Adjusted EBITDA was $60 million for the quarter, compared with $56 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 11.4 percent, compared with 12.4 percent in 2013. Year-to-date adjusted EBITDA margin was 10.6 percent, compared with 10.7 percent in 2013.

JLL Reports Third-Quarter 2014 Results - Page 5

EMEA Real Estate Services



EMEA Revenue ($ in millions, “LC” = local currency)	Three Months Ended September 30,				% Change in LC	Nine Months Ended September 30,					% Change in LC
	2014		2013		% Change in LC	2014		2013			% Change in LC

Leasing	$	66.6	$	58.8	11%	$	188.3	$	167.9		8%
Capital Markets & Hotels	90.8		82.8		5%	238.6		204.2			11%
Property & Facility Management Fee Revenue¹	58.8		48.9		16%	171.2		131.4			24%
Property & Facility Management	81.6		62.8		25%	246.7		152.4			54%
Project & Development Services Fee Revenue¹	35.8		29.6		18%	98.5		81.1			16%
Project & Development Services	83.4		68.4		20%	257.9		180.5			37%
Advisory, Consulting and Other	46.2		45.6		(2)%	144.6		126.4			9%
Operating Revenue	$	298.2	$	265.7	9%	$	841.2	$	711.0		13%

Equity Losses	—		—		n/m	—		(0.5		)	n/m
Total Segment Fee Revenue¹	$	298.2	$	265.7	9%	$	841.2	$	710.5		13%
Total Segment Revenue	$	368.6	$	318.4	12%	$	1,076.1	$	830.9		24%

n/m - not meaningful

EMEA Performance Highlights:

•

Fee revenue for the quarter was $298 million, an increase of 9 percent from 2013. Continued investments in the platform throughout the year contributed to broad-based fee revenue growth across the service lines. The UK, Spain and MENA had strong quarters, with the UK driving the growth in Capital Markets & Hotels against a third quarter 2013 that was up 61 percent from 2012. Project & Development Services had double-digit fee revenue growth compared with 2013, while Leasing revenue was up 11 percent as a result of healthy expansion in leasing markets.


•	Fee-based operating expenses, excluding restructuring and acquisition charges, were $282 million for the quarter, compared with $248 million last year, an increase of 10 percent.


•	Adjusted operating income, which excludes King Sturge amortization, was $17 million for the quarter, compared with $18 million in 2013. Year-to-date adjusted operating income was $38 million, up from $31 million in 2013.


•	Adjusted EBITDA was $23 million for the quarter, consistent with last year. Adjusted EBITDA margin calculated on a fee revenue basis was 7.6 percent, compared with 8.7 percent in 2013. Year-to-date adjusted EBITDA margin was 6.4 percent, compared with 6.3 percent in 2013.

JLL Reports Third-Quarter 2014 Results - Page 6

Asia Pacific Real Estate Services



Asia Pacific Revenue ($ in millions, “LC” = local currency)	Three Months Ended September 30,				% Change in LC	Nine Months Ended September 30,				% Change in LC
	2014		2013		% Change in LC	2014		2013		% Change in LC

Leasing	$	44.4	$	40.5	9%	$	119.5	$	106.0	15%
Capital Markets & Hotels	29.9		35.3		(16)%	81.2		103.0		(19)%
Property & Facility Management Fee Revenue¹	95.6		86.8		10%	278.1		251.5		15%
Property & Facility Management	128.8		111.7		15%	381.7		312.2		27%
Project & Development Services Fee Revenue¹	19.6		17.1		14%	51.2		48.7		9%
Project & Development Services	40.8		25.8		57%	96.1		67.0		48%
Advisory, Consulting and Other	28.8		23.7		21%	76.4		67.2		16%
Operating Revenue	$	218.3	$	203.4	7%	$	606.4	$	576.4	8%

Equity Earnings	0.2		—		n/m	0.1		—		n/m
Total Segment Fee Revenue¹	$	218.5	$	203.4	7%	$	606.5	$	576.4	8%
Total Segment Revenue	$	272.9	$	237.0	15%	$	755.0	$	655.4	19%

n/m - not meaningful

Asia Pacific Performance Highlights:

•

Fee revenue for the quarter was $219 million, an increase of 7 percent from 2013. Revenue growth was driven by Property & Facility Management, up 10 percent, and Leasing, up 9 percent compared with the third quarter last year. Strong performance in Australia's valuations business contributed to the growth of Advisory, Consulting and Other revenue. Capital Markets & Hotels revenue for the quarter was down 16 percent against a third quarter 2013 that was up 56 percent from 2012.


•	Fee-based operating expenses, excluding restructuring and acquisition charges, were $203 million for the quarter, compared with $184 million last year, an increase of 10 percent.


•	Operating income was $15 million for the quarter, compared with $19 million in 2013. Year-to-date operating income was $32 million compared with $35 million in 2013.


•	Adjusted EBITDA was $19 million for the quarter, compared with $22 million last year. Adjusted EBITDA margin calculated on a fee revenue basis was 8.5 percent, compared with 10.8 percent in 2013. Year-to-date adjusted EBITDA margin was 6.9 percent, compared with 7.6 percent in 2013.

JLL Reports Third-Quarter 2014 Results - Page 7

LaSalle Investment Management



LaSalle Investment Management Revenue ($ in millions, “LC” = local currency)	Three Months Ended September 30,				% Change in LC	Nine Months Ended September 30,				% Change in LC
	2014		2013		% Change in LC	2014		2013		% Change in LC

Advisory Fees	$	60.9	$	55.4	8%	$	176.8	$	167.0	4%
Transaction Fees & Other	10.8		2.6		n/m	19.8		10.9		82%
Incentive Fees	70.6		9.3		n/m	79.5		10.5		n/m
Operating Revenue	$	142.3	$	67.3	113%	$	276.1	$	188.4	46%

Equity Earnings	20.1		6.6		n/m	40.4		21.4		88%
Total Segment Revenue	$	162.4	$	73.9	121%	$	316.5	$	209.8	50%

n/m - not meaningful

LaSalle Investment Management Performance Highlights:


•	Advisory fees were $61 million for the quarter, up 8 percent compared with $55 million for the third quarter of 2013. Total segment revenue, including transaction fees, $71 million of incentive fees and $20 million of equity earnings, was $162 million for the quarter, compared with $74 million last year.


•	Capital raise was a single-quarter record of $5.1 billion, bringing year-to-date capital raise to $7.3 billion.


•	Operating expenses were $95 million for the quarter, compared with $57 million in 2013, driven by increased compensation associated with the increase in revenue, particularly incentive fees.


•	Operating income was $68 million for the quarter, compared with $17 million in 2013. Adjusted EBITDA was $68 million for the quarter, compared with $17 million last year. Adjusted EBITDA margin was 41.9 percent, compared with 23.3 percent in 2013. Year-to-date adjusted EBITDA margin was 34.0 percent compared with 24.4 percent in 2013.


•	Assets under management were $53.0 billion as of September 30, 2014, up from $50.0 billion at June 30, 2014. The net increase in assets under management resulted from $2.9 billion of acquisitions and takeovers, $2.1 billion of dispositions and withdrawals, and $2.2 billion of net valuation and foreign currency increases.

JLL Reports Third-Quarter 2014 Results - Page 8

About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

200 East Randolph Drive Chicago Illinois 60601 │ 30 Warwick Street London W1B 5NH │ 9 Raffles Place #39-00 Republic Plaza Singapore 048619

Cautionary Note Regarding Forward-Looking Statements

Statements in this news release regarding, among other things, future financial results and performance, achievements, plans and objectives and dividend payments may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements, plans and objectives and dividend payments of JLL to be materially different from those expressed or implied by such forward-looking statements. For additional information concerning risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated in forward-looking statements, and risks to JLL’s business in general, please refer to those factors discussed under “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures about Market Risk,” and elsewhere in JLL’s Annual Report on Form 10-K for the year ended December 31, 2013, in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and in other reports filed with the Securities and Exchange Commission. There can be no assurance that future dividends will be declared since the actual declaration of future dividends, and the establishment of record and payment dates, remains subject to final determination by the Company’s Board of Directors. Any forward-looking statements speak only as of the date of this release, and except to the extent required by applicable securities laws, JLL expressly disclaims any obligation or undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in JLL’s expectations or results, or any change in events.

JLL Reports Third-Quarter 2014 Results - Page 9

Conference Call

Management will conduct a conference call with shareholders, analysts and investment professionals on Wednesday, October 29, 2014 at 9:00 a.m. EDT.

If you would like to participate in the teleconference, please dial into one of the following phone numbers five to ten minutes before the start time (the passcode will also be required):



∙	U.S. callers:	+1 877 800 0896
∙	International callers:	+1 706 679 7364
∙	Passcode:	19384622

Webcast

We are also offering a live webcast. Follow these steps to participate:


1.	You must have a minimum 14.4 Kbps Internet connection


2.	Log on to http://www.visualwebcaster.com/event.asp?id=100719


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


4.	If you experience problems listening, please call the Webcast Hotline +1 877 863 2113 and provide your Event ID (100719).

Supplemental Information

Supplemental information regarding the third-quarter 2014 earnings call has been posted to the Investor Relations section of the company's website: www.jll.com.

Conference Call Replay

Available: 9:00 p.m. EDT Wednesday, October 29, 2014 through 11:59 p.m. EST Sunday, November 30, 2014 at the following numbers:



∙	U.S. callers:	+1 855 859 2056	or + 1 800 585 8367
∙	International callers:	+1 404 537 3406
∙	Passcode:	19384622

Web Audio Replay

An audio replay will be available for download or stream. Information and the link can be found on the company’s website: www.jll.com.

If you have any questions, please contact JLL’s Investor Relations department at: JLLInvestorRelations@am.jll.com.

###



JONES LANG LASALLE INCORPORATED
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2014 and 2013
(in thousands, except share data)
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,

	2014			2013			2014			2013

Revenue	$	1,365,975		$	1,106,802		$	3,680,622		$	2,952,173

Operating expenses:
Compensation and benefits	828,241			699,031			2,226,804			1,897,351
Operating, administrative and other	388,290			296,012			1,141,376			808,118
Depreciation and amortization	22,023			19,742			67,214			58,996
Restructuring and acquisition charges ⁴	(37		)	4,919			41,379			14,689
Total operating expenses	1,238,517			1,019,704			3,476,773			2,779,154

Operating income ¹	127,458			87,098			203,849			173,019

Interest expense, net of interest income	(7,361		)	(9,631		)	(21,661		)	(26,603		)
Equity earnings from real estate ventures	19,552			6,574			40,945			21,132

Income before income taxes and noncontrolling interest ⁴	139,649			84,041			223,133			167,548
Provision for income taxes ⁴	34,912			20,925			29,889			41,719
Net income ⁴	104,737			63,116			193,244			125,829

Net income attributable to noncontrolling interest	453			259			1,116			3,286
Net income attributable to the Company	$	104,284		$	62,857		$	192,128		$	122,543

Dividends on unvested common stock, net of tax benefit	—			—			176			241
Net income attributable to common shareholders	$	104,284		$	62,857		$	191,952		$	122,302

Basic earnings per common share	$	2.33		$	1.42		$	4.30		$	2.77

Basic weighted average shares outstanding	44,809,133			44,407,468			44,637,429			44,197,610

Diluted earnings per common share ²	$	2.30		$	1.39		$	4.24		$	2.71

Diluted weighted average shares outstanding	45,290,595			45,063,360			45,241,766			45,070,603

EBITDA ³	$	169,033		$	113,414		$	312,008		$	253,147

Please reference attached financial statement notes.



JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Nine Months Ended September 30, 2014 and 2013
(in thousands)
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,

	2014			2013			2014			2013
REAL ESTATE SERVICES

AMERICAS
Revenue:
Operating revenue	$	582,387		$	484,054		$	1,573,552		$	1,277,014
Equity (losses) earnings	(756		)	(17		)	446			274
Total segment revenue	581,631			484,037			1,573,998			1,277,288
Gross contract costs¹	(60,601		)	(31,957		)	(152,863		)	(75,425		)
Total segment fee revenue	521,030			452,080			1,421,135			1,201,863

Operating expenses:
Compensation, operating and administrative expenses	521,987			427,817			1,423,746			1,149,036
Depreciation and amortization	11,658			11,279			38,500			33,279
Total segment operating expenses	533,645			439,096			1,462,246			1,182,315
Gross contract costs¹	(60,601		)	(31,957		)	(152,863		)	(75,425		)
Total fee-based segment operating expenses	473,044			407,139			1,309,383			1,106,890

Operating income	$	47,986		$	44,941		$	111,752		$	94,973

Adjusted EBITDA	$	59,644		$	56,220		$	150,252		$	128,252

EMEA
Revenue:
Operating revenue	$	368,564		$	318,372		$	1,076,088		$	831,422
Equity earnings (losses)	13			—			14			(536		)
Total segment revenue	368,577			318,372			1,076,102			830,886
Gross contract costs¹	(70,403		)	(52,659		)	(234,929		)	(120,385		)
Total segment fee revenue	298,174			265,713			841,173			710,501

Operating expenses:
Compensation, operating and administrative expenses	345,893			295,350			1,022,599			786,372
Depreciation and amortization	6,355			5,101			17,303			15,111
Total segment operating expenses	352,248			300,451			1,039,902			801,483
Gross contract costs¹	(70,403		)	(52,659		)	(234,929		)	(120,385		)
Total fee-based segment operating expenses	281,845			247,792			804,973			681,098

Operating income	$	16,329		$	17,921		$	36,200		$	29,403

Adjusted EBITDA	$	22,684		$	23,022		$	53,503		$	44,514



	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
ASIA PACIFIC
Revenue:
Operating revenue	$	272,708		$	237,027		$	754,890		$	655,370
Equity earnings	198			11			119			2
Total segment revenue	272,906			237,038			755,009			655,372
Gross contract costs¹	(54,419		)	(33,663		)	(148,483		)	(79,039		)
Total segment fee revenue	218,487			203,375			606,526			576,333

Operating expenses:
Compensation, operating and administrative expenses	254,352			215,138			713,111			611,435
Depreciation and amortization	3,444			2,968			9,869			9,220
Total segment operating expenses	257,796			218,106			722,980			620,655
Gross contract costs¹	(54,419		)	(33,663		)	(148,483		)	(79,039		)
Total fee-based segment operating expenses	203,377			184,443			574,497			541,616

Operating income	$	15,110		$	18,932		$	32,029		$	34,717

Adjusted EBITDA	$	18,554		$	21,900		$	41,898		$	43,937

LASALLE INVESTMENT MANAGEMENT
Revenue:
Operating revenue	$	142,316		$	67,349		$	276,092		$	188,367
Equity earnings	20,097			6,580			40,366			21,392
Total segment revenue	162,413			73,929			316,458			209,759

Operating expenses:
Compensation, operating and administrative expenses	94,299			56,738			208,724			158,626
Depreciation and amortization	566			394			1,542			1,386
Total segment operating expenses	94,865			57,132			210,266			160,012

Operating income	$	67,548		$	16,797		$	106,192		$	49,747

Adjusted EBITDA	$	68,114		$	17,191		$	107,734		$	51,133


SEGMENT RECONCILING ITEMS
Total segment revenue	$	1,385,527		$	1,113,376		$	3,721,567		$	2,973,305
Reclassification of equity earnings	19,552			6,574			40,945			21,132
Total revenue	$	1,365,975		$	1,106,802		$	3,680,622		$	2,952,173

Total operating expenses before restructuring and acquisition charges	1,238,554			1,014,785			3,435,394			2,764,465
Operating income before restructuring and acquisition charges	$	127,421		$	92,017		$	245,228		$	187,708

Restructuring and acquisition charges	(37		)	4,919			41,379			14,689
Operating income after restructuring and acquisition charges	$	127,458		$	87,098		$	203,849		$	173,019

Total adjusted EBITDA	$	168,996		$	118,333		$	353,387		$	267,836
Restructuring and acquisition charges	(37		)	4,919			41,379			14,689
Total EBITDA	$	169,033		$	113,414		$	312,008		$	253,147

Please reference attached financial statement notes.



JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
September 30, 2014, December 31, 2013 and September 30, 2013
(in thousands)
			(Unaudited)				(Unaudited)
			September 30,		December 31,		September 30,
			2014		2013		2013
ASSETS
Current assets:
	Cash and cash equivalents		$	162,568	$	152,726	$	119,704
	Trade receivables, net of allowances		1,216,322		1,237,514		980,955
	Notes and other receivables		193,324		94,519		117,901
	Warehouse receivables		185,797		—		60,099
	Prepaid expenses		84,484		56,491		70,448
	Deferred tax assets, net		122,353		130,822		51,241
	Other		29,399		52,156		20,626
		Total current assets	1,994,247		1,724,228		1,420,974

Property and equipment, net of accumulated depreciation			344,765		295,547		259,184
Goodwill, with indefinite useful lives			1,910,990		1,900,080		1,889,848
Identified intangibles, net of accumulated amortization			40,443		45,579		40,649
Investments in real estate ventures			290,674		287,200		287,747
Long-term receivables			94,170		65,353		85,745
Deferred tax assets, net			64,832		104,654		171,713
Other			194,665		174,712		170,085
		Total assets	$	4,934,786	$	4,597,353	$	4,325,945

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable and accrued liabilities		$	518,704	$	528,505	$	424,282
	Accrued compensation		665,556		810,425		508,952
	Short-term borrowings		43,292		24,522		35,478
	Deferred tax liabilities, net		11,606		11,274		10,113
	Deferred income		119,963		104,410		108,817
	Deferred business acquisition obligations		46,462		36,040		34,275
	Warehouse facility		185,797		—		60,099
	Minority shareholder redemption liability		10,909		—		—
	Other		157,987		143,248		105,309
		Total current liabilities	1,760,276		1,658,424		1,287,325

Noncurrent liabilities:
	Credit facility		250,000		155,000		445,000
	Long-term senior notes		275,000		275,000		275,000
	Deferred tax liabilities, net		18,029		18,029		3,106
	Deferred compensation		114,576		103,199		93,540
	Deferred business acquisition obligations		65,937		99,196		96,023
	Minority shareholder redemption liability		—		20,667		19,733
	Other		94,111		77,029		72,788
		Total liabilities	2,577,929		2,406,544		2,292,515



			(Unaudited)						(Unaudited)
			September 30,			December 31,			September 30,
			2014			2013			2013
Redeemable noncontrolling interest			13,638			—			—

Company shareholders' equity:
	Common stock, $.01 par value per share,100,000,000 shares authorized; 44,817,758, 44,447,958,and 44,434,717 shares issued and outstanding as of September 30, 2014, December 31, 2013 and September 30, 2013, respectively		448			444			444
	Additional paid-in capital		957,374			945,512			940,803
	Retained earnings		1,448,602			1,266,967			1,129,648
	Shares held in trust		(6,407		)	(8,052		)	(8,052		)
	Accumulated other comprehensive loss		(76,839		)	(25,202		)	(36,411		)
		Total Company shareholders' equity	2,323,178			2,179,669			2,026,432

	Noncontrolling interest		20,041			11,140			6,998
		Total equity	2,343,219			2,190,809			2,033,430

		Total liabilities and equity	$	4,934,786		$	4,597,353		$	4,325,945

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED

Summarized Consolidated Statements of Cash Flows

For the Nine Months September 30, 2014 and 2013

(in thousands)



	Nine Months Ended
	September 30,
	2014			2013

Cash provided by (used in) operating activities	$	38,576		$	(99,873	)

Cash used in investing activities	(111,503		)	(112,159		)

Cash provided by financing activities	82,769			179,577

Net increase (decrease) in cash and cash equivalents	$	9,842		$	(32,455	)

Cash and cash equivalents, beginning of period	152,726			152,159

Cash and cash equivalents, end of period	$	162,568		$	119,704

Please reference attached financial statement notes.

JONES LANG LASALLE INCORPORATED

Financial Statement Notes

1. Consistent with U.S. GAAP (“GAAP”), gross contract vendor and subcontractor costs (“gross contract costs”) which are managed on certain client assignments in the Property & Facility Management and Project & Development Services business lines are presented on a gross basis in both revenue and operating expenses. Gross contract costs are excluded from revenue and operating expenses in determining “fee revenue” and “fee-based operating expenses,” respectively. Excluding these costs from revenue and operating expenses more accurately reflects how the firm manages its expense base and its operating margins.

Adjusted operating income excludes the impact of restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition. “Adjusted operating income margin” is calculated by dividing adjusted operating income by fee revenue. Below are reconciliations of revenue and operating expenses to fee revenue and fee-based operating expenses, as well as adjusted operating income margin calculations, for the three and nine months ended September 30, 2014 and 2013.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
($ in millions)	2014			2013			2014			2013

Revenue	$	1,366.0		$	1,106.8		$	3,680.6		$	2,952.2
Gross contract costs	(185.4		)	(118.3		)	(536.3		)	(274.9		)
Fee revenue	$	1,180.6		$	988.5		$	3,144.3		$	2,677.3

Operating expenses	$	1,238.5		$	1,019.7		$	3,476.8		$	2,779.2
Gross contract costs	(185.4		)	(118.3		)	(536.3		)	(274.9		)
Fee-based operating expenses	$	1,053.1		$	901.4		$	2,940.5		$	2,504.3

Operating income	$	127.5		$	87.1		$	203.8		$	173.0

Add:
Restructuring and acquisition charges*	—			4.9			41.4			14.7
King Sturge intangible amortization	0.5			0.6			1.6			1.7
Adjusted operating income	$	128.0		$	92.6		$	246.8		$	189.4

Adjusted operating income margin	10.8		%	9.4		%	7.9		%	7.1		%

*See note 4 for more information on restructuring and acquisition charges

2. Charges excluded from GAAP net income attributable to common shareholders to arrive at adjusted net income for the three and nine months ended September 30, 2014, and 2013 are (a) net restructuring and acquisition charges and (b) net intangible amortization related to the 2011 King Sturge acquisition. Below are reconciliations of GAAP net income attributable to common shareholders to adjusted net income and calculations of earnings per share for each net income total:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
($ in millions, except per share data)	2014		2013		2014		2013

GAAP net income attributable to common shareholders	$	104.3	$	62.9	$	192.0	$	122.3
Shares (in 000s)	45,291		45,063		45,242		45,071
GAAP diluted earnings per share	$	2.30	$	1.39	$	4.24	$	2.71

GAAP net income attributable to common shareholders	$	104.3	$	62.9	$	192.0	$	122.3
Restructuring and acquisition charges, net*	—		3.6		5.1		11.0
King Sturge intangible amortization, net	0.3		0.5		1.2		1.3
Adjusted net income	$	104.6	$	67.0	$	198.3	$	134.6

Shares (in 000s)	45,291		45,063		45,242		45,071

Adjusted diluted earnings per share	$	2.31	$	1.49	$	4.38	$	2.99

*See note 4 for more information on restructuring and acquisition charges

3. Adjusted EBITDA represents earnings before interest expense net of interest income, income taxes, depreciation and amortization, adjusted for restructuring and acquisition charges. Although adjusted EBITDA and EBITDA are non-GAAP financial measures, they are used extensively by management and are useful to investors and lenders as metrics for evaluating operating performance and liquidity. EBITDA is used in the calculations of certain covenants related to the firm’s revolving credit facility. However, adjusted EBITDA and EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Because adjusted EBITDA and EBITDA are not calculated under GAAP, the firm’s adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies.

Below is a reconciliation of net income to EBITDA and adjusted EBITDA:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
($ in millions)	2014		2013		2014		2013

GAAP net income	$	104.7	$	63.1	$	193.2	$	125.8
Add:
Interest expense, net of interest income	7.4		9.6		21.7		26.6
Provision for income taxes	34.9		20.9		29.9		41.7
Depreciation and amortization	22.0		19.8		67.2		59.0

EBITDA	$	169.0	$	113.4	$	312.0	$	253.1
Add:
Restructuring and acquisition charges	—		4.9		41.4		14.7
Adjusted EBITDA	$	169.0	$	118.3	$	353.4	$	267.8

4. Restructuring and acquisition charges are excluded from segment operating results, although they are included for consolidated reporting. For purposes of segment operating results, the allocation of restructuring and acquisition charges to the segments has been determined not to be meaningful to investors, so the performance of segment results has been evaluated without allocation of these charges.

Restructuring and acquisition charges of $41 million for the nine months ended September 30, 2014 include $35 million related to the first quarter write-off of an indemnification asset which arose from prior period acquisition activity. This write-off was offset by the recognition of a tax benefit of an equal amount in the provision for income taxes, and therefore had no impact on net income.



	Three Months Ended						Nine Months Ended
	September 30, 2014						September 30, 2014
($ in millions)	GAAP		Adjusting Item		Adjusted		GAAP		Adjusting Item		Adjusted

Income before income taxes and noncontrolling interest	$	139.6	$	—	$	139.6	$	223.1	$	34.5	$	257.6
Provision for income taxes	34.9		—		34.9		29.9		34.5		64.4
Net income	$	104.7			$	104.7	$	193.2			$	193.2

Excluding the impact of this item, the adjusted provision for income taxes of $64.4 million for the nine months ended September 30, 2014, reflects a 25 percent effective tax rate on adjusted income before income taxes of $257.6 million for the nine months ended September 30, 2014. The effective tax rate on income before income taxes for the three months ended September 30, 2014 is also 25 percent.

5. Intangible amortization from the second-quarter 2011 King Sturge acquisition is included in depreciation and amortization in the firm’s consolidated results, as well as in EMEA’s segment results, but has been excluded from adjusted operating income and adjusted net income.

6. Each geographic region offers the firm’s full range of Real Estate Services businesses consisting primarily of tenant representation and agency leasing; capital markets; property management and facilities management; project and development services; and advisory, consulting and valuations services. LaSalle Investment Management provides investment management services to institutional investors and high-net-worth individuals.

7. The consolidated statements of cash flows are presented in summarized form. For complete consolidated statements of cash flows, please refer to the firm’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, to be filed with the Securities and Exchange Commission shortly.

8. EMEA refers to Europe, Middle East and Africa. MENA refers to Middle East and North Africa. Greater China includes China, Hong Kong, Macau and Taiwan. Southeast Asia refers to Singapore, Indonesia, Philippines, Thailand and Vietnam. The BRIC countries include Brazil, Russia, India and China.

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



Contact:	Christie B. Kelly
Title:	Global Chief Financial Officer
Phone:	+1 312 228 2316

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