JLL Reports Financial Results for First-Quarter 2024
JLL reported strong financial results for the first quarter of 2024 with revenue reaching $5.1 billion, a 9% increase from the previous year. Net income attributable to common shareholders rose significantly to $66.1 million from a loss of $9.2 million. Diluted earnings per share improved to $1.37 from a loss of $0.19, while adjusted diluted earnings per share were $1.78, up from $0.71. The company's cost mitigation actions and revenue growth led to improved profitability, especially in Resilient and Transactional business lines. JLL's CEO highlighted the company's resilience and strategic focus amid an uncertain commercial real estate environment.
Revenue for the first quarter of 2024 increased by 9% compared to the previous year, reaching $5.1 billion.
Net income attributable to common shareholders rose significantly to $66.1 million from a loss of $9.2 million in the prior year.
Diluted earnings per share improved to $1.37 from a loss of $0.19, and adjusted diluted earnings per share were $1.78, up from $0.71.
The company's cost mitigation actions and revenue growth led to improved profitability, particularly in the Resilient and Transactional business lines.
CEO Christian Ulbrich emphasized the company's ability to navigate challenges and focus on delivering value for stakeholders amid uncertain market conditions.
Despite revenue growth, net cash used in operating activities was $677.5 million for the first quarter of 2024, compared to $716.3 million in the prior-year quarter.
Free Cash Flow was an outflow of $720.7 million in the first quarter of 2024, higher than the $765.6 million outflow in the prior year.
LaSalle reported a decrease in revenue, primarily due to lower advisory fees and dampened investment sales transaction volumes globally.
Although Adjusted EBITDA improved across segments, JLL Technologies saw a decline in revenue, attributed to cost-out activities that impacted contract signings.
Insights
The report from JLL indicates a substantial improvement in financial performance, with net income showing an impressive turnaround from a loss of <$9.2 million> to a gain of <$66.1 million>. This signifies a robust
Further, an increase in adjusted EBITDA by
However, a free cash flow outflow of <$720.7 million> compared with <$765.6 million> last year, despite showing improvement, still signifies substantial cash outflows. These figures should be carefully considered by investors as they may influence the company’s financial flexibility and ability to sustain dividends or fund expansions.
Overall, for investors, this comprehensive financial growth, with a particular focus on profitability and revenue enhancement across diverse business streams, provides a reassuring sign of strong company fundamentals and efficient cost control measures.
The real estate advisory sector, where JLL operates, is notably sensitive to economic cycles and interest rate fluctuations. The reported 9% revenue growth in local currency is indicative of the company's strong footing despite a challenging commercial real estate environment. This performance is supported by a
Transactional revenue streams showed a modest increase of
The balance between the company's ability to grow in core areas, while still managing fluctuations in transactional revenues, is important for maintaining investor confidence. The strong performance in their resilient revenue streams can be seen as a buffer against the uncertainties in transactional activities, which is reassuring for stakeholders looking at the long-term health of the company.
JLL's performance within the real estate services industry is notably impressive given the backdrop of economic uncertainty, particularly in the commercial sector. An uptick in Property Management and Workplace Management reflects a strategic alignment with market demands for efficient space management and optimization, areas that have seen increased focus post-pandemic. Participation in these growth areas aligns with broader industry trends towards more agile and technology-integrated real estate services.
Moreover, the company's performance in Capital Markets and Markets Advisory segments, especially with regards to investment sales and leasing, outpacing broader market contractions, demonstrates a strong brand and execution capability. This could potentially safeguard them against market volatility and provide a stable revenue base to counteract cyclical pressures within the industry.
Investors with a focus on the real estate sector should note JLL's diversified revenue streams and the effectiveness of their cost mitigation strategies, which are indicative of a robust business model capable of weathering sector-specific storms. Continued performance in this vein could indicate an advantageous positioning for JLL within the competitive landscape.
Diluted earnings per share were
- First-quarter revenue was
$5.1 billion 9% in local currency1 - Resilient6 revenues collectively increased
12% in local currency and Transactional6 revenues collectively increased1% in local currency- Work Dynamics achieved double-digit growth, highlighted by continued momentum in Workplace Management from recent wins
- Property Management, within Markets Advisory, increased
8% with contributions from most geographies - Capital Markets delivered broad-based growth, up
6% , despite first-quarter investment sales market volumes being at a 12-year low - Leasing, within Markets Advisory, increased
2% as performance in the U.S. office sector outpaced declines in other regions and sectors
- Bottom-line improvement reflected revenue growth and the benefit of cost mitigation actions
"JLL's strong start to 2024 was driven by growth in both our resilient and transactional business lines. In addition, the impact of our cost actions over the last year allowed us to meaningfully improve our profitability while still investing in our business to take advantage of growth opportunities ahead," said Christian Ulbrich, JLL CEO. "With an uncertain outlook, our clients are relying on JLL's advisory services, data capabilities and real estate expertise more than ever. We continue to execute on our strategy, focusing on helping our clients navigate a difficult commercial real estate environment and delivering value for our stakeholders."
Summary Financial Results ($ in millions, except per share data, "LC" = local currency) | Three Months Ended March 31, | ||||
2024 | 2023 | % Change | % Change | ||
Revenue | $ 5,124.5 | $ 4,715.5 | 9 % | 9 % | |
Net income (loss) attributable to common shareholders | $ 66.1 | $ (9.2) | 818 % | 883 % | |
Adjusted net income attributable to common shareholders1 | 86.0 | 34.2 | 151 | 167 | |
Diluted earnings (loss) per share | $ 1.37 | $ (0.19) | 821 % | 871 % | |
Adjusted diluted earnings per share1 | 1.78 | 0.71 | 151 | 168 | |
Adjusted EBITDA1 | $ 187.1 | $ 112.9 | 66 % | 70 % | |
Cash flows from operating activities | $ (677.5) | $ (716.3) | 5 % | n/a | |
Free Cash Flow5 | (720.7) | (765.6) | 6 | n/a | |
Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. | |||||
Consolidated First-Quarter 2024 Performance Highlights:
Consolidated
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Markets Advisory | $ 950.1 | $ 906.4 | 5 % | 5 % | |||
Capital Markets | 377.6 | 357.1 | 6 | 6 | |||
Work Dynamics | 3,639.5 | 3,276.2 | 11 | 11 | |||
JLL Technologies | 53.9 | 61.4 | (12) | (12) | |||
103.4 | 114.4 | (10) | (8) | ||||
Total revenue | $ 5,124.5 | $ 4,715.5 | 9 % | 9 % | |||
Gross contract costs5 | $ 3,498.7 | $ 3,133.3 | 12 % | 12 % | |||
Platform operating expenses | 1,509.9 | 1,528.7 | (1) | (1) | |||
Restructuring and acquisition charges4 | 1.7 | 35.7 | (95) | (96) | |||
Total operating expenses | $ 5,010.3 | $ 4,697.7 | 7 % | 7 % | |||
Net non-cash MSR and mortgage banking derivative activity1 | $ (9.0) | $ (1.8) | (400) % | (405) % | |||
Adjusted EBITDA1 | $ 187.1 | $ 112.9 | 66 % | 70 % | |||
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 | |||||||
Revenue
Revenue increased
Refer to segment performance highlights for additional detail.
The following chart reflects changes in revenue ($ in millions), and percentage changes, for the first quarter of 2024 compared with 2023.
Net income and Adjusted EBITDA
Net income attributable to common shareholders for the first quarter was
Diluted earnings per share for the first quarter were
The growth in consolidated profit was primarily attributable to (i) higher revenues, particularly Resilient revenues as well as certain Transactional revenue streams like investment sales within Capital Markets, and (ii) the benefit of cost reduction actions executed in the last twelve months coupled with continued cost discipline.
The following chart reflects the aggregation of segment Adjusted EBITDA for the first quarter of 2024 and 2023.
Cash Flows and Capital Allocation:
Net cash used in operating activities was
In the first quarter of 2024, the company repurchased 110,726 shares for
Net Debt, Leverage and Liquidity5:
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||
Total Net Debt (in millions) | $ 1,900.8 | 1,150.3 | 2,099.3 | ||
Net Leverage Ratio | 1.9x | 1.2x | 2.0x | ||
Corporate Liquidity (in millions) | $ 2,301.7 | 3,085.0 | 1,735.4 |
The increase in Net Debt from December 31, 2023, reflected typical seasonality and was primarily attributable to annual incentive compensation payments made in the first quarter. The Net Debt reduction from March 31, 2023, was largely attributable to improved cash flows from operations over the trailing twelve months ended March 31, 2024, compared with the twelve-month period ended March 31, 2023.
Markets Advisory First-Quarter 2024 Performance Highlights:
Markets Advisory
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Revenue | $ 950.1 | $ 906.4 | 5 % | 5 % | |||
Leasing | 497.3 | 487.0 | 2 | 2 | |||
Property Management | 429.7 | 400.2 | 7 | 8 | |||
Advisory, Consulting and Other | 23.1 | 19.2 | 20 | 20 | |||
Segment operating expenses | $ 871.7 | $ 850.8 | 2 % | 3 % | |||
Segment platform operating expenses | 566.8 | 571.7 | (1) | (1) | |||
Gross contract costs5 | 304.9 | 279.1 | 9 | 10 | |||
Adjusted EBITDA1 | $ 95.3 | $ 71.6 | 33 % | 33 % | |||
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 | |||||||
Markets Advisory revenue growth was largely driven by Property Management and a mid-single digit increase in
The Adjusted EBITDA increase was predominantly driven by revenue growth and the continued impact of cost management actions taken in the last twelve months.
Capital Markets First-Quarter 2024 Performance Highlights:
Capital Markets
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Revenue | $ 377.6 | $ 357.1 | 6 % | 6 % | |||
Investment Sales, Debt/Equity Advisory and Other | 258.7 | 240.6 | 8 | 8 | |||
Value and Risk Advisory | 80.2 | 79.1 | 1 | 2 | |||
Loan Servicing | 38.7 | 37.4 | 3 | 3 | |||
Segment operating expenses | $ 378.4 | $ 365.2 | 4 % | 4 % | |||
Segment platform operating expenses | 364.8 | 355.9 | 3 | 3 | |||
Gross contract costs5 | 13.6 | 9.3 | 46 | 50 | |||
Net non-cash MSR and mortgage banking derivative activity1 | $ (9.0) | $ (1.8) | (400) % | (405) % | |||
Adjusted EBITDA1 | $ 25.0 | $ 10.7 | 134 % | 145 % | |||
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 | |||||||
Capital Markets revenue increased across all business lines though market uncertainty persisted, especially around the future of interest rates. Investment Sales and Debt/Equity Advisory revenue increased compared to the prior-year quarter across most asset classes, with strength in
The Adjusted EBITDA improvement was largely attributable to the revenue growth described above and the benefit associated with cost management actions taken over the trailing twelve months. These drivers overcame
Work Dynamics First-Quarter 2024 Performance Highlights:
Work Dynamics
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Revenue | $ 3,639.5 | $ 3,276.2 | 11 % | 11 % | |||
Workplace Management | 2,871.7 | 2,497.2 | 15 | 15 | |||
Project Management | 656.4 | 676.3 | (3) | (3) | |||
Portfolio Services and Other | 111.4 | 102.7 | 8 | 8 | |||
Segment operating expenses | $ 3,610.4 | $ 3,270.0 | 10 % | 10 % | |||
Segment platform operating expenses | 439.8 | 435.8 | 1 | 1 | |||
Gross contract costs5 | 3,170.6 | 2,834.2 | 12 | 12 | |||
Adjusted EBITDA1 | $ 50.9 | $ 25.7 | 98 % | 102 % | |||
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 | |||||||
Work Dynamics revenue growth was led by continued strong performance in Workplace Management, as 2023 contract wins and mandate expansions in the
The increase in Adjusted EBITDA was primarily attributable to the (i) top-line performance described above, most notably from Workplace Management, (ii) the absence of
JLL Technologies First-Quarter 2024 Performance Highlights:
JLL Technologies
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Revenue | $ 53.9 | $ 61.4 | (12) % | (12) % | |||
Segment operating expenses | $ 63.5 | $ 83.5 | (24) % | (24) % | |||
Segment platform operating expenses(a) | 62.3 | 79.9 | (22) | (22) | |||
Gross contract costs5 | 1.2 | 3.6 | (67) | (68) | |||
Adjusted EBITDA1 | $ (5.1) | $ (18.2) | 72 % | 73 % | |||
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 | |||||||
(a) Included in Segment platform operating expenses is a reduction in carried interest expense of | |||||||
The decline in JLL Technologies revenue was partially due to 2023 cost-out activities in the business's go-to-market approach aimed at improving profitability and resulted in lower contract signings in the second half of 2023. In addition, the lower revenue reflected delayed decisions on technology spend from existing solutions clients, which included certain contract renewals.
The improvement in Adjusted EBITDA was driven by the reduction of certain expenses associated with cost management actions and improved operating efficiency over the trailing twelve months, which outpaced the impact of lower revenue.
LaSalle First-Quarter 2024 Performance Highlights:
($ in millions, "LC" = local currency) | Three Months Ended March 31, | % Change | % Change | ||||
2024 | 2023 | ||||||
Revenue | $ 103.4 | $ 114.4 | (10) % | (8) % | |||
Advisory fees | 92.3 | 100.5 | (8) | (7) | |||
Transaction fees and other | 8.9 | 10.4 | (14) | (10) | |||
Incentive fees | 2.2 | 3.5 | (37) | (38) | |||
Segment operating expenses | $ 84.6 | $ 92.5 | (9) % | (9) % | |||
Segment platform operating expenses | 76.2 | 85.4 | (11) | (11) | |||
Gross contract costs5 | 8.4 | 7.1 | 18 | 19 | |||
Adjusted EBITDA1 | $ 21.0 | $ 23.1 | (9) % | (2) % | |||
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 | |||||||
The slight decline in Adjusted EBITDA reflected lower revenues which were nearly offset by the benefit of cost management actions over the last twelve months and lower variable compensation accruals.
As of March 31, 2024,
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of
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Live Webcast | Conference Call | ||
Management will offer a live webcast for shareholders, analysts and investment The link to the live webcast and audio replay can be accessed at the Investor | The conference call can be accessed live over the phone by | ||
Supplemental Information | Contact | ||
Supplemental information regarding the first quarter 2024 earnings call has been | If you have any questions, please contact Scott Einberger, | ||
Phone: | +1 312 252 8943 | ||
Email: | |||
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, 2023, soon to be filed Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 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 March 31, | |||
(in millions, except share and per share data) | 2024 | 2023 | |
Revenue | $ 5,124.5 | $ 4,715.5 | |
Operating expenses: | |||
Compensation and benefits | $ 2,415.6 | $ 2,253.0 | |
Operating, administrative and other | 2,532.0 | 2,351.5 | |
Depreciation and amortization | 61.0 | 57.5 | |
Restructuring and acquisition charges4 | 1.7 | 35.7 | |
Total operating expenses | $ 5,010.3 | $ 4,697.7 | |
Operating income | $ 114.2 | $ 17.8 | |
Interest expense, net of interest income | 30.5 | 26.3 | |
Equity losses | (3.7) | (2.6) | |
Other income | 1.5 | 0.1 | |
Income (loss) before income taxes and noncontrolling interest | 81.5 | (11.0) | |
Income tax provision (benefit) | 15.9 | (2.3) | |
Net income (loss) | 65.6 | (8.7) | |
Net (loss) income attributable to noncontrolling interest | (0.5) | 0.5 | |
Net income (loss) attributable to common shareholders | $ 66.1 | $ (9.2) | |
Basic earnings (loss) per common share | $ 1.39 | $ (0.19) | |
Basic weighted average shares outstanding (in 000's) | 47,485 | 47,555 | |
Diluted earnings (loss) per common share | $ 1.37 | $ (0.19) | |
Diluted weighted average shares outstanding (in 000's) | 48,280 | 47,555 | |
Please reference accompanying financial statement notes. | |||
JONES LANG LASALLE INCORPORATED | |||
Selected Segment Financial Data (Unaudited) | |||
Three Months Ended March 31, | |||
(in millions) | 2024 | 2023 | |
MARKETS ADVISORY | |||
Revenue | $ 950.1 | $ 906.4 | |
Platform compensation and benefits | $ 462.5 | $ 461.0 | |
Platform operating, administrative and other | 86.9 | 93.6 | |
Depreciation and amortization | 17.4 | 17.1 | |
Segment platform operating expenses | 566.8 | 571.7 | |
Gross contract costs5 | 304.9 | 279.1 | |
Segment operating expenses | $ 871.7 | $ 850.8 | |
Segment operating income | $ 78.4 | $ 55.6 | |
Add: | |||
Equity earnings | 0.4 | 0.3 | |
Depreciation and amortization(a) | 16.4 | 16.1 | |
Other income | 0.9 | 0.3 | |
Net income attributable to noncontrolling interest | (0.1) | (0.2) | |
Adjustments: | |||
Interest on employee loans, net of forgiveness | (0.7) | (0.5) | |
Adjusted EBITDA1 | $ 95.3 | $ 71.6 | |
(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 March 31, | |||
(in millions) | 2024 | 2023 | |
CAPITAL MARKETS | |||
Revenue | $ 377.6 | $ 357.1 | |
Platform compensation and benefits | $ 287.6 | $ 283.9 | |
Platform operating, administrative and other | 60.8 | 56.1 | |
Depreciation and amortization | 16.4 | 15.9 | |
Segment platform operating expenses | 364.8 | 355.9 | |
Gross contract costs5 | 13.6 | 9.3 | |
Segment operating expenses | $ 378.4 | $ 365.2 | |
Segment operating loss | $ (0.8) | $ (8.1) | |
Add: | |||
Equity earnings | 0.1 | 0.6 | |
Depreciation and amortization | 16.4 | 15.9 | |
Other income (expense) | 0.6 | (0.2) | |
Adjustments: | |||
Net non-cash MSR and mortgage banking derivative activity | 9.0 | 1.8 | |
Interest on employee loans, net of forgiveness | (0.3) | 0.7 | |
Adjusted EBITDA1 | $ 25.0 | $ 10.7 | |
JONES LANG LASALLE INCORPORATED | |||
Selected Segment Financial Data (Unaudited) Continued | |||
Three Months Ended March 31, | |||
(in millions) | 2024 | 2023 | |
WORK DYNAMICS | |||
Revenue | $ 3,639.5 | $ 3,276.2 | |
Platform compensation and benefits | $ 319.8 | $ 305.0 | |
Platform operating, administrative and other | 99.3 | 111.5 | |
Depreciation and amortization | 20.7 | 19.3 | |
Segment platform operating expenses | 439.8 | 435.8 | |
Gross contract costs5 | 3,170.6 | 2,834.2 | |
Segment operating expenses | $ 3,610.4 | $ 3,270.0 | |
Segment operating income | $ 29.1 | $ 6.2 | |
Add: | |||
Equity earnings | 0.7 | 0.4 | |
Depreciation and amortization | 20.7 | 19.3 | |
Net loss (income) attributable to noncontrolling interest | 0.4 | (0.2) | |
Adjusted EBITDA1 | $ 50.9 | $ 25.7 | |
JONES LANG LASALLE INCORPORATED | ||||
Selected Segment Financial Data (Unaudited) Continued | ||||
Three Months Ended March 31, | ||||
(in millions) | 2024 | 2023 | ||
JLL TECHNOLOGIES | ||||
Revenue | $ 53.9 | $ 61.4 | ||
Platform compensation and benefits(a) | $ 47.3 | $ 61.3 | ||
Platform operating, administrative and other | 10.5 | 14.7 | ||
Depreciation and amortization | 4.5 | 3.9 | ||
Segment platform operating expenses | 62.3 | 79.9 | ||
Gross contract costs5 | 1.2 | 3.6 | ||
Segment operating expenses | $ 63.5 | $ 83.5 | ||
Segment operating loss | $ (9.6) | $ (22.1) | ||
Add: | ||||
Depreciation and amortization | 4.5 | 3.9 | ||
Adjusted EBITDA1 | $ (5.1) | $ (18.2) | ||
Equity (losses) earnings | $ (1.0) | $ 4.9 | ||
(a) Included in Platform compensation and benefits is a reduction in carried interest expense of | ||||
Three Months Ended March 31, | ||||
(in millions) | 2024 | 2023 | ||
Revenue | $ 103.4 | $ 114.4 | ||
Platform compensation and benefits | $ 61.3 | $ 68.9 | ||
Platform operating, administrative and other | 12.9 | 15.2 | ||
Depreciation and amortization | 2.0 | 1.3 | ||
Segment platform operating expenses | 76.2 | 85.4 | ||
Gross contract costs5 | 8.4 | 7.1 | ||
Segment operating expenses | $ 84.6 | $ 92.5 | ||
Segment operating income | $ 18.8 | $ 21.9 | ||
Add: | ||||
Depreciation and amortization | 2.0 | 1.3 | ||
Net loss (income) attributable to noncontrolling interest | 0.2 | (0.1) | ||
Adjusted EBITDA1 | $ 21.0 | $ 23.1 | ||
Equity losses | $ (3.9) | $ (8.8) | ||
JONES LANG LASALLE INCORPORATED | ||||||||
Consolidated Statement of Cash Flows (Unaudited) | ||||||||
Three Months Ended March 31, | Three Months Ended March 31, | |||||||
(in millions) | 2024 | 2023 | 2024 | 2023 | ||||
Cash flows from operating activities7: | Cash flows from investing activities: | |||||||
Net income (loss) | $ 65.6 | $ (8.7) | Net capital additions – property and equipment | $ (43.2) | $ (49.3) | |||
Reconciliation of net income to net cash used in operating activities: | Capital contributions to investments | (17.4) | (32.8) | |||||
Depreciation and amortization | 61.0 | 57.5 | Distributions of capital from investments | 5.7 | 9.2 | |||
Equity losses | 3.7 | 2.6 | Other, net | 0.6 | (1.1) | |||
Distributions of earnings from investments | 3.2 | 3.8 | Net cash used in investing activities | (54.3) | (74.0) | |||
Provision for loss on receivables and other assets | 9.9 | 7.1 | Cash flows from financing activities: | |||||
Amortization of stock-based compensation | 11.2 | 16.7 | Proceeds from borrowings under credit facility | 2,760.0 | 2,668.0 | |||
Net non-cash mortgage servicing rights and mortgage banking derivative activity | 9.0 | 1.8 | Repayments of borrowings under credit facility | (1,990.0) | (1,793.0) | |||
Accretion of interest and amortization of debt issuance costs | 1.4 | 1.0 | Net repayments of short-term borrowings | (18.7) | (62.3) | |||
Other, net | (8.6) | 0.9 | Payments of deferred business acquisition obligations and earn-outs | (3.1) | (13.6) | |||
Change in: | Repurchase of common stock | (20.0) | — | |||||
Receivables | 156.2 | 160.6 | Noncontrolling interest distributions, net | (1.5) | — | |||
Reimbursable receivables and reimbursable payables | (193.4) | (181.6) | Other, net | (23.3) | (23.8) | |||
Prepaid expenses and other assets | (18.7) | (26.5) | Net cash provided by financing activities | 703.4 | 775.3 | |||
Income taxes receivable, payable and deferred | (24.4) | (43.7) | Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | (9.7) | 4.5 | |||
Accounts payable, accrued liabilities and other liabilities | (154.5) | (56.0) | Net change in cash, cash equivalents and restricted cash | $ (38.1) | $ (10.5) | |||
Accrued compensation (including net deferred compensation) | (599.1) | (651.8) | Cash, cash equivalents and restricted cash, beginning of the period | 663.4 | 746.0 | |||
Net cash used in operating activities | $ (677.5) | $ (716.3) | Cash, cash equivalents and restricted cash, end of the period | $ 625.3 | $ 735.5 | |||
Please reference accompanying financial statement notes. | ||||||||
JONES LANG LASALLE INCORPORATED | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||
(in millions, except share and per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||
ASSETS | (Unaudited) | LIABILITIES AND EQUITY | (Unaudited) | |||||||||
Current assets: | Current liabilities: | |||||||||||
Cash and cash equivalents | $ 396.7 | $ 410.0 | Accounts payable and accrued liabilities | $ 1,232.8 | $ 1,406.7 | |||||||
Trade receivables, net of allowance | 1,915.2 | 2,095.8 | Reimbursable payables | 1,612.0 | 1,796.9 | |||||||
Notes and other receivables | 441.2 | 446.4 | Accrued compensation and benefits | 1,092.9 | 1,698.3 | |||||||
Reimbursable receivables | 2,326.8 | 2,321.7 | Short-term borrowings | 124.6 | 147.9 | |||||||
Warehouse receivables | 322.4 | 677.4 | Short-term contract liability and deferred income | 219.0 | 226.4 | |||||||
Short-term contract assets, net of allowance | 322.2 | 338.3 | Warehouse facilities | 322.2 | 662.7 | |||||||
Prepaid and other | 590.6 | 567.4 | Short-term operating lease liability | 158.1 | 161.9 | |||||||
Total current assets | 6,315.1 | 6,857.0 | Other | 337.5 | 345.3 | |||||||
Property and equipment, net of accumulated depreciation | 600.1 | 613.9 | Total current liabilities | 5,099.1 | 6,446.1 | |||||||
Operating lease right-of-use asset | 744.0 | 730.9 | Noncurrent liabilities: | |||||||||
Goodwill | 4,569.1 | 4,587.4 | Credit facility, net of debt issuance costs | 1,381.4 | 610.6 | |||||||
Identified intangibles, net of accumulated amortization | 762.6 | 785.0 | Long-term debt, net of debt issuance costs | 770.2 | 779.3 | |||||||
Investments | 816.2 | 816.6 | Long-term deferred tax liabilities, net | 45.3 | 44.8 | |||||||
Long-term receivables | 353.3 | 363.8 | Deferred compensation | 594.2 | 580.0 | |||||||
Deferred tax assets, net | 490.2 | 497.4 | Long-term operating lease liability | 758.9 | 754.5 | |||||||
Deferred compensation plans | 627.1 | 604.3 | Other | 425.7 | 439.6 | |||||||
Other | 204.7 | 208.5 | Total liabilities | $ 9,074.8 | $ 9,654.9 | |||||||
Total assets | $ 15,482.4 | $ 16,064.8 | ||||||||||
Company shareholders' equity | ||||||||||||
Common stock | 0.5 | 0.5 | ||||||||||
Additional paid-in capital | 1,975.8 | 2,019.7 | ||||||||||
Retained earnings | 5,857.6 | 5,795.6 | ||||||||||
Treasury stock | (901.2) | (920.1) | ||||||||||
Shares held in trust | (10.3) | (10.4) | ||||||||||
Accumulated other comprehensive loss | (628.9) | (591.5) | ||||||||||
Total company shareholders' equity | 6,293.5 | 6,293.8 | ||||||||||
Noncontrolling interest | 114.1 | 116.1 | ||||||||||
Total equity | 6,407.6 | 6,409.9 | ||||||||||
Total liabilities and equity | $ 15,482.4 | $ 16,064.8 | ||||||||||
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) Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA"),
(ii) Adjusted net income (loss) attributable to common shareholders and Adjusted diluted earnings (loss) per share,
(iii) Free Cash Flow, and
(iv) Percentage changes against prior periods, presented on a local currency basis.
However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with
Effective January 1, 2024, the definitions of Adjusted EBITDA and Adjusted net income attributable to common shareholders were updated to exclude certain equity earnings/losses as further described below. Comparable periods have been recast to conform to the revised presentation.
Also effective with first-quarter 2024 reporting, the company no longer reports the non-GAAP measures "Fee revenue" and "Fee-based operating expenses" following the conclusion of a comment letter from the Securities and Exchange Commission Staff in February 2024.
Adjustments to GAAP Financial Measures Used to Calculate non-GAAP Financial Measures
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 are not line items 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.
Interest on Employee Loans, Net of Forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in our Leasing and Capital Markets businesses) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.
Equity Earnings/Losses (JLL Technologies and
Reconciliation of Non-GAAP Financial Measures
Below are (i) a reconciliation of Net income attributable to common shareholders to EBITDA and Adjusted EBITDA, (ii) a reconciliation to Adjusted net income and (iii) components of Adjusted diluted earnings per share.
Three Months Ended March 31, | |||
(in millions) | 2024 | 2023 | |
Net income (loss) attributable to common shareholders | $ 66.1 | $ (9.2) | |
Add: | |||
Interest expense, net of interest income | 30.5 | 26.3 | |
Income tax provision (benefit) | 15.9 | (2.3) | |
Depreciation and amortization(a) | 60.0 | 56.5 | |
EBITDA | $ 172.5 | $ 71.3 | |
Adjustments: | |||
Restructuring and acquisition charges4 | 1.7 | 35.7 | |
Net non-cash MSR and mortgage banking derivative activity | 9.0 | 1.8 | |
Interest on employee loans, net of forgiveness | (1.0) | 0.2 | |
Equity losses - JLL Technologies and | 4.9 | 3.9 | |
Adjusted EBITDA | $ 187.1 | $ 112.9 | |
Three Months Ended March 31, | |||
(In millions, except share and per share data) | 2024 | 2023 | |
Net income (loss) attributable to common shareholders | $ 66.1 | $ (9.2) | |
Diluted shares (in thousands)(b) | 48,280 | 47,555 | |
Diluted earnings (loss) per share | $ 1.37 | $ (0.19) | |
Net income (loss) attributable to common shareholders | $ 66.1 | $ (9.2) | |
Adjustments: | |||
Restructuring and acquisition charges4 | 1.7 | 35.7 | |
Net non-cash MSR and mortgage banking derivative activity | 9.0 | 1.8 | |
Amortization of acquisition-related intangibles(a) | 15.2 | 16.5 | |
Interest on employee loans, net of forgiveness | (1.0) | 0.2 | |
Equity losses - JLL Technologies and | 4.9 | 3.9 | |
Tax impact of adjusted items(c) | (9.9) | (14.7) | |
Adjusted net income attributable to common shareholders | $ 86.0 | $ 34.2 | |
Diluted shares (in thousands) | 48,280 | 48,360 | |
Adjusted diluted earnings per share | $ 1.78 | $ 0.71 | |
(a) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders. |
(b) For the three months ended March 31, 2023, basic shares outstanding were used in the calculation of dilutive loss per share as the impact of unvested stock-based compensation awards would be anti-dilutive. |
(c) For the first quarter of 2024 and 2023, the tax impact of adjusted items was calculated using the applicable statutory rates by tax jurisdiction. |
Below is a reconciliation of net cash used in operating activities to Free Cash Flow5.
Three Months Ended March 31, | |||
(in millions) | 2024 | 2023 | |
Net cash used in operating activities | $ (677.5) | $ (716.3) | |
Net capital additions - property and equipment | (43.2) | (49.3) | |
Free Cash Flow5 | $ (720.7) | $ (765.6) | |
Operating Results - Local Currency
In discussing operating results, the company 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
The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.
Three Months Ended March 31, | |||
($ in millions) | 2024 | % Change | |
Revenue: | |||
At current period exchange rates | $ 5,124.5 | 9 % | |
Impact of change in exchange rates | 5.6 | n/a | |
At comparative period exchange rates | $ 5,130.1 | 9 % | |
Operating income: | |||
At current period exchange rates | $ 114.2 | 542 % | |
Impact of change in exchange rates | 5.3 | n/a | |
At comparative period exchange rates | $ 119.5 | 569 % | |
Adjusted EBITDA: | |||
At current period exchange rates | $ 187.1 | 66 % | |
Impact of change in exchange rates | 5.3 | n/a | |
At comparative period exchange rates | $ 192.4 | 70 % | |
2. n.m.: "not meaningful", represented by a percentage change of greater than 1,
3. As of March 31, 2024,
Compared with AUM of
Assets under management data for separate accounts and fund management amounts are reported on a one-quarter lag. In addition, LaSalle raised
4. 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 March 31, | |||
(in millions) | 2024 | 2023 | |
Severance and other employment-related charges | $ 4.5 | $ 25.7 | |
Restructuring, pre-acquisition and post-acquisition charges | 7.7 | 10.0 | |
Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior- | (10.5) | — | |
Total Restructuring and acquisition charges | $ 1.7 | $ 35.7 | |
5. "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 corresponding fees in Revenue).
"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.
6. The company defines "Resilient" revenue as (i) Property Management, within Markets Advisory, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets, (iii) Workplace Management, within Work Dynamics, (iv) JLL Technologies and (v) Advisory Fees, within
The company defines "Transactional" revenue as (i) Leasing and Advisory, Consulting and Other, within Markets Advisory, (ii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, (iii) Project Management and Portfolio Services and Other, within Work Dynamics and (iv) Incentive fees and Transaction fees and other, within
7. Within the Consolidated Statements of Cash Flows, the company made certain presentation changes and recast prior-period information to conform with the current presentation. More specifically, the company recast certain components and captions within Cash flows from operating activities, which had no impact on previously-reported Net cash provided by operating activities or on the other consolidated financial statements.
Appendix: Additional Segment Detail
Three Months Ended March 31, 2024 | |||||||||||||||||||||||
(in millions) | Markets Advisory | Capital Markets | Work Dynamics | ||||||||||||||||||||
Leasing | Property | Advisory, | Total | Invt Sales, | Value and | Loan | Total | Workplace | Project | Portfolio | Total Work | JLLT | Total | ||||||||||
Revenue(a) | $ 497.3 | 429.7 | 23.1 | $ 950.1 | $ 258.7 | 80.2 | 38.7 | $ 377.6 | $ 2,871.7 | 656.4 | 111.4 | $ 53.9 | $ 103.4 | ||||||||||
Gross contract costs5 | $ 4.2 | 298.5 | 2.2 | $ 304.9 | $ 11.1 | 2.5 | — | $ 13.6 | $ 2,663.1 | 445.9 | 61.6 | $ 1.2 | $ 8.4 | ||||||||||
Platform operating | $ 566.8 | $ 364.8 | $ 439.8 | $ 62.3 | $ 76.2 | ||||||||||||||||||
Adjusted EBITDA1 | $ 95.3 | $ 25.0 | $ 50.9 | $ (5.1) | $ 21.0 | $ 187.1 | |||||||||||||||||
(a) Included as a reduction to Revenue is Net non-cash MSR and mortgage banking derivative activity of |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||
(in millions) | Markets Advisory | Capital Markets | Work Dynamics | ||||||||||||||||||||
Leasing | Property | Advisory, | Total | Invt Sales, | Value and | Loan | Total | Workplace | Project | Portfolio | Total Work | JLLT | Total | ||||||||||
Revenue(a) | $ 487.0 | 400.2 | 19.2 | $ 906.4 | $ 240.6 | 79.1 | 37.4 | $ 357.1 | $ 2,497.2 | 676.3 | 102.7 | $ 61.4 | $ 114.4 | ||||||||||
Gross contract costs5 | $ 4.5 | 273.1 | 1.5 | $ 279.1 | $ 7.2 | 2.1 | — | $ 9.3 | $ 2,314.0 | 465.4 | 54.8 | $ 3.6 | $ 7.1 | ||||||||||
Platform operating | $ 571.7 | $ 355.9 | $ 435.8 | $ 79.9 | $ 85.4 | ||||||||||||||||||
Adjusted EBITDA1 | $ 71.6 | $ 10.7 | $ 25.7 | $ (18.2) | $ 23.1 | $ 112.9 | |||||||||||||||||
(a) Included as a reduction to Revenue is Net non-cash MSR and mortgage banking derivative activity of |
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SOURCE JLL-IR
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