Maryland
|
36-4150422
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
200
East Randolph Drive, Chicago,
|
IL
60601
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer x
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Part
I
|
Financial
Information
|
|||
|
||||
Item
1.
|
3
|
|||
3
|
||||
4
|
||||
5
|
||||
6
|
||||
7
|
||||
Item
2.
|
19
|
|||
Item
3.
|
30
|
|||
Item
4.
|
31
|
|||
Part
II
|
Other
Information
|
|||
Item
1.
|
31
|
|||
Item
1A.
|
31
|
|||
|
||||
Item
2.
|
32
|
|||
Item
5.
|
33
|
|||
Item
6.
|
36
|
Part
I
|
Financial
Information
|
Item
1.
|
Financial
Statements
|
September 30, 2007
|
December 31,
|
|||||||
Assets
|
(unaudited)
|
2006
|
||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
48,172
|
50,612
|
|||||
Trade
receivables, net of allowances of $17,156 and $7,845
|
656,193
|
630,121
|
||||||
Notes
and other receivables
|
46,433
|
30,079
|
||||||
Prepaid
expenses
|
29,348
|
28,040
|
||||||
Deferred
tax assets
|
52,382
|
49,230
|
||||||
Other
assets
|
30,010
|
19,363
|
||||||
Total
current assets
|
862,538
|
807,445
|
||||||
Property
and equipment, net of accumulated depreciation of $193,116 and
$181,959
|
165,484
|
120,376
|
||||||
Goodwill,
with indefinite useful lives, net of accumulated amortization of
$39,649
and $38,701
|
617,748
|
520,478
|
||||||
Identified
intangibles, with finite useful lives, net of accumulated amortization
of
$66,257 and $58,594
|
40,055
|
37,583
|
||||||
Investments
in real estate ventures
|
134,076
|
131,789
|
||||||
Long-term
receivables, net
|
32,884
|
29,781
|
||||||
Deferred
tax assets
|
41,512
|
37,465
|
||||||
Other
assets, net
|
48,288
|
45,031
|
||||||
$ |
1,942,585
|
1,729,948
|
||||||
Liabilities
and Shareholders’ Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ |
194,971
|
221,356
|
|||||
Accrued
compensation
|
470,731
|
514,586
|
||||||
Short-term
borrowings
|
34,520
|
17,738
|
||||||
Deferred
tax liabilities
|
2,245
|
1,426
|
||||||
Deferred
income
|
25,541
|
31,896
|
||||||
Other
current liabilities
|
44,661
|
43,444
|
||||||
Total
current liabilities
|
772,669
|
830,446
|
||||||
Credit
facilities
|
83,561
|
32,398
|
||||||
Deferred
tax liabilities
|
6,978
|
648
|
||||||
Deferred
compensation
|
49,937
|
30,668
|
||||||
Pension
liability
|
20,581
|
19,252
|
||||||
Deferred
business acquisition obligations
|
47,174
|
34,178
|
||||||
Other
noncurrent liabilities
|
43,254
|
31,978
|
||||||
Total
liabilities
|
1,024,154
|
979,568
|
||||||
Commitments
and contingencies
|
||||||||
Minority
interest
|
10,236
|
—
|
||||||
Shareholders’
equity:
|
||||||||
Common
stock, $.01 par value per share, 100,000,000 shares authorized;
37,022,323
and 36,592,864 shares issued and outstanding
|
370
|
366
|
||||||
Additional
paid-in capital
|
664,791
|
676,270
|
||||||
Retained
earnings
|
396,234
|
255,914
|
||||||
Shares
held by subsidiary
|
(219,359 | ) | (197,543 | ) | ||||
Shares
held in trust
|
(1,894 | ) | (1,427 | ) | ||||
Accumulated
other comprehensive income
|
68,053
|
16,800
|
||||||
Total
shareholders’ equity
|
908,195
|
750,380
|
||||||
$ |
1,942,585
|
1,729,948
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenue
|
$ |
624,151
|
462,317
|
1,790,291
|
1,309,204
|
|||||||||||
Operating
expenses:
|
||||||||||||||||
Compensation
and benefits
|
412,920
|
313,711
|
1,174,842
|
863,326
|
||||||||||||
Operating,
administrative and other
|
132,828
|
99,796
|
375,082
|
284,353
|
||||||||||||
Depreciation
and amortization
|
13,893
|
11,523
|
38,828
|
31,877
|
||||||||||||
Restructuring
credits
|
—
|
—
|
(411 | ) | (670 | ) | ||||||||||
Operating
expenses
|
559,641
|
425,030
|
1,588,341
|
1,178,886
|
||||||||||||
Operating
income
|
64,510
|
37,287
|
201,950
|
130,318
|
||||||||||||
Interest
expense, net of interest income
|
4,378
|
4,112
|
10,046
|
11,799
|
||||||||||||
Gain
on sale of investments
|
—
|
—
|
6,129
|
—
|
||||||||||||
Equity
in earnings from real estate ventures
|
4,979
|
773
|
11,480
|
9,422
|
||||||||||||
Income
before provision for income taxes and minority interest
|
65,111
|
33,948
|
209,513
|
127,941
|
||||||||||||
Provision
for income taxes
|
17,384
|
9,251
|
55,940
|
33,648
|
||||||||||||
Minority
interest, net of tax
|
1,197
|
—
|
1,197
|
—
|
||||||||||||
Net
income before cumulative effect of change in accounting
principle
|
46,530
|
24,697
|
152,376
|
94,293
|
||||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
1,180
|
||||||||||||
Net
income
|
$ |
46,530
|
24,697
|
152,376
|
95,473
|
|||||||||||
Net
income available to common shareholders (Note 9)
|
$ |
46,530
|
24,697
|
151,704
|
94,951
|
|||||||||||
Basic
earnings per common share
|
$ |
1.44
|
0.77
|
4.73
|
2.99
|
|||||||||||
Basic
weighted average shares outstanding
|
32,416,773
|
32,106,994
|
32,060,102
|
31,771,247
|
||||||||||||
Diluted
earnings per common share
|
$ |
1.38
|
0.73
|
4.50
|
2.85
|
|||||||||||
Diluted
weighted average shares outstanding
|
33,610,782
|
33,751,054
|
33,701,963
|
33,319,566
|
Common
Stock
|
Additional
Paid-In
|
Retained
|
Shares
Held
by
|
Shares
Held
in
|
Accumulated
Other
Comprehensive
|
|||||||||||||||||||||||||||
Shares
(1)
|
Amount
|
Capital
|
Earnings
|
Subsidiary
|
Trust
|
Income
|
Total
|
|||||||||||||||||||||||||
Balances
at
December 31, 2006
|
36,592,864
|
$ |
366
|
676,270
|
255,914
|
(197,543 | ) | (1,427 | ) |
16,800
|
$ |
750,380
|
||||||||||||||||||||
Net
income
|
—
|
—
|
—
|
152,376
|
—
|
—
|
—
|
152,376
|
||||||||||||||||||||||||
Shares
issued under stock compensation programs
|
857,778
|
8
|
(21,341 | ) |
—
|
—
|
—
|
—
|
(21,333 | ) | ||||||||||||||||||||||
Tax
benefits of vestings and exercises
|
—
|
—
|
25,807
|
—
|
—
|
—
|
—
|
25,807
|
||||||||||||||||||||||||
Amortization
of stock compensation
|
—
|
—
|
28,395
|
—
|
—
|
—
|
—
|
28,395
|
||||||||||||||||||||||||
Retirement
of shares (1)
|
(428,319 | ) | (4 | ) | (44,340 | ) |
—
|
—
|
—
|
—
|
(44,344 | ) | ||||||||||||||||||||
Shares
acquired by subsidiary (1)
|
—
|
—
|
—
|
—
|
(21,816 | ) |
—
|
—
|
(21,816 | ) | ||||||||||||||||||||||
Shares
held in trust
|
—
|
—
|
—
|
—
|
—
|
(467 | ) |
—
|
(467 | ) | ||||||||||||||||||||||
Dividends
declared
|
—
|
—
|
—
|
(12,056 | ) |
—
|
—
|
—
|
(12,056 | ) | ||||||||||||||||||||||
Reclassification
adjustment for gain on sale of available-for-sale securities realized
in
net income
|
—
|
—
|
—
|
—
|
—
|
—
|
(2,256 | ) | (2,256 | ) | ||||||||||||||||||||||
Foreign
currency translation adjustments
|
—
|
—
|
—
|
—
|
—
|
—
|
53,509
|
53,509
|
||||||||||||||||||||||||
Balances
at September 30, 2007
|
37,022,323
|
$ |
370
|
664,791
|
396,234
|
(219,359 | ) | (1,894 | ) |
68,053
|
$ |
908,195
|
|
(1)
|
The
428,319 shares repurchased under our share repurchase programs
in the
third quarter of 2007 were canceled. The 220,581 shares repurchased
under
our share repurchase programs in the first six months of 2007 were
not
canceled, but are held by one of our subsidiaries. At September
30, 2007,
4,970,232 shares are held by one of our subsidiaries and are included
in
the 37,022,323 total shares outstanding, but are deducted from
shares
outstanding for purposes of calculating earnings per
share.
|
Nine
Months
|
Nine
Months
|
|||||||
Ended
|
Ended
|
|||||||
September
30,
|
September
30,
|
|||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ |
152,376
|
95,473
|
|||||
Reconciliation
of net income to net cash operating activities:
|
||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
(1,180 | ) | |||||
Depreciation
and amortization
|
38,828
|
31,877
|
||||||
Equity
in earnings from real estate ventures
|
(11,480 | ) | (9,422 | ) | ||||
Gain
on sale of investments
|
(6,129 | ) |
—
|
|||||
Operating
distributions from real estate ventures
|
10,592
|
15,243
|
||||||
Provision
for loss on receivables and other assets
|
8,012
|
4,916
|
||||||
Minority
interest
|
1,197
|
—
|
||||||
Amortization
of deferred compensation
|
31,068
|
26,931
|
||||||
Amortization
of debt issuance costs
|
438
|
519
|
||||||
Change
in:
|
||||||||
Receivables
|
(41,443 | ) | (68,752 | ) | ||||
Prepaid
expenses and other assets
|
(13,325 | ) | (10,878 | ) | ||||
Deferred
tax assets, net
|
(798 | ) | (448 | ) | ||||
Excess
tax benefits from share-based payment arrangements
|
(25,807 | ) | (24,475 | ) | ||||
Accounts
payable, accrued compensation and other accrued
liabilities
|
9,889
|
94,380
|
||||||
Net
cash provided by operating activities
|
153,418
|
154,184
|
||||||
Cash
flows from investing activities:
|
||||||||
Net
capital additions – property and equipment
|
(71,320 | ) | (44,126 | ) | ||||
Business
acquisitions
|
(86,984 | ) | (182,663 | ) | ||||
Capital
contributions and advances to real estate ventures
|
(26,841 | ) | (58,733 | ) | ||||
Distributions,
repayments of advances and sale of investments
|
34,523
|
16,551
|
||||||
Net
cash used in investing activities
|
(150,622 | ) | (268,971 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from borrowings under credit facilities
|
763,835
|
715,277
|
||||||
Repayments
of borrowings under credit facilities
|
(695,329 | ) | (584,454 | ) | ||||
Shares
repurchased for payment of employee taxes on stock awards
|
(29,282 | ) | (17,288 | ) | ||||
Shares
repurchased under share repurchase program
|
(66,160 | ) | (29,689 | ) | ||||
Excess
tax benefits from share-based payment arrangements
|
25,807
|
24,475
|
||||||
Common
stock issued under stock option plan and stock purchase
programs
|
7,949
|
20,504
|
||||||
Payment
of dividends
|
(12,056 | ) | (8,636 | ) | ||||
Net
cash (used in) provided by financing activities
|
(5,236 | ) |
120,189
|
|||||
Net
(decrease) increase in cash and cash equivalents
|
(2,440 | ) |
5,402
|
|||||
Cash
and cash equivalents, January 1
|
50,612
|
28,658
|
||||||
Cash
and cash equivalents, September 30
|
$ |
48,172
|
34,060
|
|||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ |
11,548
|
12,751
|
|||||
Income
taxes, net of refunds
|
39,624
|
27,562
|
||||||
Non-cash
financing activities:
|
||||||||
Deferred
business acquisition obligations
|
12,996
|
32,069
|
|
·
|
The
property owner, with ultimate approval rights relating to the employment
and compensation of on-site personnel, and bearing all of the economic
costs of such personnel, is determined to be the primary obligor
in the
arrangement;
|
|
·
|
Reimbursement
to Jones Lang LaSalle is generally completed simultaneously with
payment
of payroll or soon thereafter;
|
|
·
|
Because
the property owner is contractually obligated to fund all operating
costs
of the property from existing cash flow or direct funding from
its
building operating account, Jones Lang LaSalle bears little or
no credit
risk; and
|
|
·
|
Jones
Lang LaSalle generally earns no margin in the reimbursement aspect
of the
arrangement, obtaining reimbursement only for actual costs
incurred.
|
|
(i)
|
Investment
Management, which offers money management services on a global
basis,
and
|
|
The
three geographic regions of Investor and Occupier Services
("IOS"):
|
|
(ii)
|
Americas,
|
|
(iii)
|
Europe,
Middle East and Africa (“EMEA”) and
|
|
(iv)
|
Asia
Pacific.
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
Investor
and Occupier Services
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Americas
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Transaction
services
|
$ |
93,242
|
75,159
|
251,001
|
189,906
|
|||||||||||
Management
services
|
87,436
|
71,774
|
244,388
|
198,836
|
||||||||||||
Equity
earnings
|
1,262
|
373
|
1,682
|
657
|
||||||||||||
Other
services
|
6,026
|
2,823
|
18,161
|
8,256
|
||||||||||||
187,966
|
150,129
|
515,232
|
397,655
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Compensation,
operating and administrative services
|
161,285
|
128,159
|
450,959
|
358,097
|
||||||||||||
Depreciation
and amortization
|
6,501
|
5,852
|
18,507
|
16,435
|
||||||||||||
Operating
income
|
$ |
20,180
|
16,118
|
45,766
|
23,123
|
|||||||||||
EMEA
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Transaction
services
|
$ |
184,061
|
138,448
|
484,102
|
326,933
|
|||||||||||
Management
services
|
37,836
|
27,812
|
105,100
|
71,595
|
||||||||||||
Equity
earnings (losses)
|
174
|
22
|
(21 | ) | (284 | ) | ||||||||||
Other
services
|
2,774
|
3,406
|
9,542
|
10,771
|
||||||||||||
224,845
|
169,688
|
598,723
|
409,015
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Compensation,
operating and administrative services
|
205,892
|
152,518
|
541,448
|
386,113
|
||||||||||||
Depreciation
and amortization
|
4,704
|
3,518
|
13,151
|
8,867
|
||||||||||||
Operating
income
|
$ |
14,249
|
13,652
|
44,124
|
14,035
|
|||||||||||
Asia
Pacific
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Transaction
services
|
$ |
74,008
|
45,019
|
275,916
|
118,856
|
|||||||||||
Management
services
|
58,054
|
32,769
|
150,130
|
88,650
|
||||||||||||
Equity
earnings (losses)
|
253
|
(135 | ) |
485
|
1,714
|
|||||||||||
Other
services
|
1,702
|
622
|
5,112
|
3,319
|
||||||||||||
134,017
|
78,275
|
431,643
|
212,539
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Compensation,
operating and administrative services
|
124,764
|
78,339
|
377,480
|
206,639
|
||||||||||||
Depreciation
and amortization
|
2,368
|
1,819
|
5,998
|
5,579
|
||||||||||||
Operating
income (loss)
|
$ |
6,885
|
(1,883 | ) |
48,165
|
321
|
||||||||||
Investment
Management
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Transaction
and other services
|
$ |
9,336
|
4,218
|
17,267
|
19,153
|
|||||||||||
Advisory
fees
|
63,643
|
45,595
|
171,856
|
126,947
|
||||||||||||
Incentive
fees
|
6,033
|
14,672
|
57,716
|
145,982
|
||||||||||||
Equity
earnings
|
3,290
|
513
|
9,334
|
7,335
|
||||||||||||
82,302
|
64,998
|
256,173
|
299,417
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Compensation,
operating and administrative services
|
53,808
|
54,491
|
180,038
|
196,830
|
||||||||||||
Depreciation
and amortization
|
319
|
334
|
1,171
|
996
|
||||||||||||
Operating
income
|
$ |
28,175
|
10,173
|
74,964
|
101,591
|
|||||||||||
Segment
Reconciling Items:
|
||||||||||||||||
Total
segment revenue
|
$ |
629,130
|
463,090
|
1,801,771
|
1,318,626
|
|||||||||||
Reclassification
of equity earnings
|
(4,979 | ) | (773 | ) | (11,480 | ) | (9,422 | ) | ||||||||
Total
revenue
|
624,151
|
462,317
|
1,790,291
|
1,309,204
|
||||||||||||
Total
segment operating expenses
|
559,641
|
425,030
|
1,588,752
|
1,179,556
|
||||||||||||
Restructuring
credits
|
—
|
—
|
(411 | ) | (670 | ) | ||||||||||
Operating
income
|
$ |
64,510
|
37,287
|
201,950
|
130,318
|
Investor
and Occupier Services
|
||||||||||||||||||||
Asia
|
Investment
|
|||||||||||||||||||
Americas
|
EMEA
|
Pacific
|
Management
|
Consolidated
|
||||||||||||||||
Gross
Carrying Amount
|
||||||||||||||||||||
Balance
as of January 1, 2007
|
$ |
328,628
|
104,494
|
95,563
|
30,494
|
559,179
|
||||||||||||||
Additions
|
1,037
|
58,037
|
26,971
|
—
|
86,045
|
|||||||||||||||
Impact
of exchange rate movements
|
—
|
5,272
|
5,895
|
1,006
|
12,173
|
|||||||||||||||
Balance
as of September 30, 2007
|
329,665
|
167,803
|
128,429
|
31,500
|
657,397
|
|||||||||||||||
Accumulated
Amortization
|
||||||||||||||||||||
Balance
as of January 1, 2007
|
$ | (15,457 | ) | (6,429 | ) | (7,038 | ) | (9,777 | ) | (38,701 | ) | |||||||||
Impact
of exchange rate movements
|
—
|
(377 | ) | (413 | ) | (158 | ) | (948 | ) | |||||||||||
Balance
as of September 30, 2007
|
(15,457 | ) | (6,806 | ) | (7,451 | ) | (9,935 | ) | (39,649 | ) | ||||||||||
Net
book value as of September 30, 2007
|
$ |
314,208
|
160,997
|
120,978
|
21,565
|
617,748
|
Investor
and Occupier Service
|
||||||||||||||||||||
Asia
|
Investment
|
|||||||||||||||||||
Americas
|
EMEA
|
Pacific
|
Management
|
Consolidated
|
||||||||||||||||
Gross
Carrying Amount
|
||||||||||||||||||||
Balance
as of January 1, 2007
|
$ |
82,929
|
4,449
|
2,965
|
5,834
|
96,177
|
||||||||||||||
Additions
|
—
|
3,994
|
4,205
|
—
|
8,199
|
|||||||||||||||
Impact
of exchange rate movements
|
—
|
1,070
|
603
|
263
|
1,936
|
|||||||||||||||
Balance
as of September 30, 2007
|
82,929
|
9,513
|
7,773
|
6,097
|
106,312
|
|||||||||||||||
Accumulated
Amortization
|
||||||||||||||||||||
Balance
as of January 1, 2007
|
$ | (47,127 | ) | (2,668 | ) | (2,965 | ) | (5,834 | ) | (58,594 | ) | |||||||||
Amortization
expense
|
(4,913 | ) | (1,187 | ) | (688 | ) |
—
|
(6,788 | ) | |||||||||||
Impact
of exchange rate movements
|
—
|
(182 | ) | (430 | ) | (263 | ) | (875 | ) | |||||||||||
Balance
as of September 30, 2007
|
(52,040 | ) | (4,037 | ) | (4,083 | ) | (6,097 | ) | (66,257 | ) | ||||||||||
Net
book value as of September 30, 2007
|
$ |
30,889
|
5,476
|
3,690
|
—
|
40,055
|
2007
(remaining three months)
|
$ |
3.0
|
||
2008
|
9.6
|
|||
2009
|
6.0
|
|||
2010
|
4.6
|
|||
2011
|
4.0
|
|||
2012
|
3.5
|
|||
Thereafter
|
9.4
|
|||
Total
|
$ |
40.1
|
Shares
(thousands)
|
Weighted
Average Grant Date Fair Value
|
Weighted
Average Remaining Contractual Life
|
Aggregate
Intrinsic Value ($ in millions)
|
|||||||||||||
Unvested
at June 30, 2007
|
2,648.3
|
$ |
52.97
|
|||||||||||||
Granted
|
19.0
|
109.51
|
||||||||||||||
Vested
|
(845.9 | ) |
36.81
|
|||||||||||||
Forfeited
|
(26.2 | ) |
56.53
|
|||||||||||||
Unvested
at September 30, 2007
|
1,795.2
|
$ |
61.13
|
1.65 years
|
$ |
74.7
|
Shares
(thousands)
|
Weighted
Average Grant Date Fair Value
|
Weighted
Average Remaining Contractual Life
|
Aggregate
Intrinsic Value ($ in millions)
|
|||||||||||||
Unvested
at January 1, 2007
|
2,116.5
|
$ |
40.29
|
|||||||||||||
Granted
|
617.2
|
96.40
|
||||||||||||||
Vested
|
(880.0 | ) |
36.54
|
|||||||||||||
Forfeited
|
(58.5 | ) |
48.86
|
|||||||||||||
Unvested
at September 30, 2007
|
1,795.2
|
$ |
61.13
|
1.65 years
|
$ |
74.7
|
||||||||||
Unvested
shares expected to vest
|
1,685.2
|
$ |
60.45
|
1.60 years
|
|
$ |
71.3
|
Options
(thousands)
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life
|
Aggregate
Intrinsic Value ($ in millions)
|
|||||||||||||
Outstanding
at June 30, 2007
|
214.1
|
$ |
19.52
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
(17.7 | ) |
23.22
|
|||||||||||||
Forfeited
|
(5.0 | ) |
23.00
|
|||||||||||||
Outstanding
at September 30, 2007
|
191.4
|
$ |
19.08
|
2.44 years
|
$ |
16.0
|
Options
(thousands)
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life
|
Aggregate
Intrinsic Value ($ in millions)
|
|||||||||||||
Outstanding
at January 1, 2007
|
311.3
|
$ |
18.28
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
(113.9 | ) |
16.77
|
|||||||||||||
Forfeited
|
(6.0 | ) |
21.21
|
|||||||||||||
Outstanding
at September 30, 2007
|
191.4
|
$ |
19.08
|
2.44 years
|
$ |
16.0
|
||||||||||
Exercisable
at September 30, 2007
|
189.1
|
$ |
19.12
|
2.40 years
|
$ |
15.8
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Number
of options exercised
|
17,723
|
100,451
|
113,920
|
689,830
|
||||||||||||
Intrinsic
value
|
$ |
1.4
|
6.4
|
9.8
|
33.6
|
|||||||||||
Cash
received from options exercised
|
0.8
|
1.9
|
4.9
|
14.2
|
||||||||||||
Tax
benefit realized from option exercises
|
0.6
|
2.4
|
3.5
|
12.7
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Employer
service cost - benefits earned during the year
|
$ |
1,025
|
910
|
3,025
|
2,655
|
|||||||||||
Interest
cost on projected benefit obligation
|
2,665
|
2,313
|
7,869
|
6,740
|
||||||||||||
Expected
return on plan assets
|
(3,187 | ) | (2,670 | ) | (9,411 | ) | (7,779 | ) | ||||||||
Net
amortization/deferrals
|
501
|
538
|
1,482
|
1,566
|
||||||||||||
Recognized
actual loss
|
19
|
57
|
56
|
168
|
||||||||||||
Net
periodic pension cost
|
$ |
1,023
|
1,148
|
3,021
|
3,350
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
income before cumulative effect of change in accounting
principle
|
$ |
46,530
|
24,697
|
152,376
|
94,293
|
|||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
1,180
|
||||||||||||
Net
income
|
$ |
46,530
|
24,697
|
152,376
|
95,473
|
|||||||||||
Dividends
on unvested common stock, net of tax benefit
|
—
|
—
|
672
|
522
|
||||||||||||
Net
income available to common shareholders
|
$ |
46,530
|
24,697
|
151,704
|
94,951
|
|||||||||||
Basic
weighted average shares outstanding
|
32,416,773
|
32,106,994
|
32,060,102
|
31,771,247
|
||||||||||||
Basic
income per common share before cumulative effect of change in accounting
principle and dividends on unvested common stock
|
$ |
1.44
|
0.77
|
4.75
|
2.97
|
|||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
0.04
|
||||||||||||
Dividends
on unvested common stock, net of tax benefit
|
—
|
—
|
(0.02 | ) | (0.02 | ) | ||||||||||
Basic
earnings per common share
|
$ |
1.44
|
0.77
|
4.73
|
2.99
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Diluted
weighted average shares outstanding
|
33,610,782
|
33,751,054
|
33,701,963
|
33,319,566
|
||||||||||||
Diluted
income per common share before cumulative effect of change in accounting
principle and dividends on unvested common stock
|
$ |
1.38
|
0.73
|
4.52
|
2.83
|
|||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
0.04
|
||||||||||||
Dividends
on unvested common stock, net of tax benefit
|
—
|
—
|
(0.02 | ) | (0.02 | ) | ||||||||||
Diluted
earnings per common share
|
$ |
1.38
|
0.73
|
4.50
|
2.85
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
income
|
$ |
46,530
|
24,697
|
152,376
|
95,473
|
|||||||||||
Other
comprehensive income:
|
||||||||||||||||
Foreign
currency translation adjustments
|
33,331
|
2,662
|
53,509
|
29,804
|
||||||||||||
Unrealized
holding (loss) gain on investments
|
—
|
(900 | ) |
—
|
1,905
|
|||||||||||
Reclassification
adjustment for gain on sale of available-for-sale securities realized
in
net income
|
—
|
—
|
(2,256 | ) |
—
|
|||||||||||
Comprehensive
income
|
$ |
79,861
|
26,459
|
203,629
|
127,182
|
December 31,
2006
|
December 31,
2005
|
|||||||
Deferral
of compensation, net of related amortization expense
|
$ |
24.7
|
15.8
|
|||||
Increase
(decrease) to deferred compensation in the first quarter of the
following
year
|
1.6
|
(0.3 | ) |
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Current
compensation expense amortization for prior year programs
|
$ |
4.0
|
4.8
|
17.9
|
14.3
|
|||||||||||
Current
deferral net of related amortization
|
(4.4 | ) | (0.7 | ) | (19.5 | ) | (13.6 | ) |
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Expense
to Company
|
$ |
4.1
|
3.5
|
11.8
|
10.0
|
|||||||||||
Employee
contributions
|
1.0
|
0.9
|
2.8
|
2.7
|
||||||||||||
Adjustment
to prior year reserve
|
—
|
0.1
|
(1.5 | ) | (0.2 | ) | ||||||||||
Total
program cost
|
$ |
5.1
|
4.5
|
13.1
|
12.5
|
|
(i)
|
Our
geographic mix of income,
|
|
(ii)
|
Legislative
actions on statutory tax rates,
|
|
(iii)
|
The
impact of tax planning to reduce losses in jurisdictions where
we cannot
recognize the tax benefit of those losses,
and
|
|
(iv)
|
Tax
planning for jurisdictions affected by double
taxation.
|
Three
Months
|
Three
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
in
Local
|
||||||||||||||||||
2007
|
2006
|
Increase
in U.S.
Dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
624.1
|
462.3
|
161.8
|
35 | % | 29 | % | ||||||||||||
Compensation
and benefits
|
412.9
|
313.7
|
99.2
|
32 | % | 26 | % | |||||||||||||
Operating,
administrative and other
|
132.8
|
99.8
|
33.0
|
33 | % | 28 | % | |||||||||||||
Depreciation
and amortization
|
13.9
|
11.5
|
2.4
|
21 | % | 17 | % | |||||||||||||
Total
operating expenses
|
559.6
|
425.0
|
134.6
|
32 | % | 26 | % | |||||||||||||
Operating
income
|
$ |
64.5
|
37.3
|
27.2
|
73 | % | 68 | % |
Nine
Months
|
Nine
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
Increase
in U.S.
Dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
1,790.3
|
$ |
1,309.2
|
$ |
481.1
|
37 | % | 32 | % | ||||||||||
Compensation
and benefits
|
1,174.8
|
863.3
|
311.5
|
36 | % | 31 | % | |||||||||||||
Operating,
administrative and other
|
375.1
|
284.4
|
90.7
|
32 | % | 27 | % | |||||||||||||
Depreciation
and amortization
|
38.8
|
31.9
|
6.9
|
22 | % | 18 | % | |||||||||||||
Restructuring
credits
|
(0.4 | ) | (0.7 | ) |
0.3
|
n.m.
|
n.m.
|
|||||||||||||
Total
operating expenses
|
1,588.3
|
1,178.9
|
409.4
|
35 | % | 31 | % | |||||||||||||
Operating
income
|
$ |
202.0
|
$ |
130.3
|
$ |
71.7
|
55 | % | 53 | % |
|
(i)
|
Investment
Management, which offers money management services on a global
basis,
and
|
|
The
three geographic regions of Investor and Occupier Services
("IOS"):
|
|
(ii)
|
Americas,
|
|
(iii)
|
Europe,
Middle East and Africa (“EMEA”) and
|
|
(iv)
|
Asia
Pacific.
|
Three
Months
|
Three
Months
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2007
|
2006
|
Increase
|
||||||||||||||
Revenue
|
$ |
188.0
|
$ |
150.1
|
$ |
37.9
|
25 | % | ||||||||
Operating
expense
|
167.8
|
134.0
|
33.8
|
25 | % | |||||||||||
Operating
income
|
$ |
20.2
|
$ |
16.1
|
$ |
4.1
|
Nine
Months
|
Nine
Months
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2007
|
2006
|
Increase
|
||||||||||||||
Revenue
|
$ |
515.2
|
$ |
397.7
|
$ |
117.5
|
30 | % | ||||||||
Operating
expense
|
469.4
|
374.6
|
94.8
|
25 | % | |||||||||||
Operating
income
|
$ |
45.8
|
$ |
23.1
|
$ |
22.7
|
Three
Months
|
Three
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
Increase
in U.S.
dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
224.8
|
$ |
169.7
|
$ |
55.1
|
32 | % | 23 | % | ||||||||||
Operating
expense
|
210.6
|
156.0
|
54.6
|
35 | % | 26 | % | |||||||||||||
Operating
income
|
$ |
14.2
|
$ |
13.7
|
$ |
0.5
|
Nine
Months
|
Nine
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
Increase
in U.S.
dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
598.7
|
$ |
409.0
|
$ |
189.7
|
46 | % | 35 | % | ||||||||||
Operating
expense
|
554.6
|
395.0
|
159.6
|
40 | % | 30 | % | |||||||||||||
Operating
income
|
$ |
44.1
|
$ |
14.0
|
$ |
30.1
|
Three
Months
|
Three
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
Increase
in U.S.
dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
134.0
|
$ |
78.3
|
$ |
55.7
|
71 | % | 60 | % | ||||||||||
Operating
expense
|
127.1
|
80.2
|
46.9
|
58 | % | 49 | % | |||||||||||||
Operating
income (loss)
|
$ |
6.9
|
$ | (1.9 | ) | $ |
8.8
|
Nine
Months
|
Nine
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
Increase
in
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
U.S.
dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
431.6
|
$ |
212.5
|
$ |
219.1
|
103 | % | 94 | % | ||||||||||
Operating
expense
|
383.4
|
212.2
|
171.2
|
81 | % | 72 | % | |||||||||||||
Operating
income
|
$ |
48.2
|
$ |
0.3
|
$ |
47.9
|
Three
Months
|
Three
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
Increase
(Decrease)
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
in
U.S. dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
79.0
|
$ |
64.5
|
$ |
14.5
|
22 | % | 18 | % | ||||||||||
Equity
earnings
|
3.3
|
0.5
|
2.8
|
n.m.
|
n.m.
|
|||||||||||||||
Total
revenue
|
82.3
|
65.0
|
17.3
|
27 | % | 22 | % | |||||||||||||
Operating
expense
|
54.1
|
54.8
|
(0.7 | ) | (1 | %) | (3 | %) | ||||||||||||
Operating
income
|
$ |
28.2
|
$ |
10.2
|
$ |
18.0
|
Nine
Months
|
Nine
Months
|
|||||||||||||||||||
Ended
|
Ended
|
%
Change
|
||||||||||||||||||
September 30,
|
September 30,
|
Increase
(Decrease)
|
in
Local
|
|||||||||||||||||
2007
|
2006
|
in
U.S. dollars
|
Currency
|
|||||||||||||||||
Revenue
|
$ |
246.9
|
$ |
292.1
|
$ | (45.2 | ) | (15 | %) | (17 | %) | |||||||||
Equity
earnings
|
9.3
|
7.3
|
2.0
|
27 | % | 27 | % | |||||||||||||
Total
revenue
|
256.2
|
299.4
|
(43.2 | ) | (14 | %) | (16 | %) | ||||||||||||
Operating
expense
|
181.2
|
197.8
|
(16.6 | ) | (8 | %) | (10 | %) | ||||||||||||
Operating
income
|
$ |
75.0
|
$ |
101.6
|
$ | (26.6 | ) |
•
|
Interest
rates on our multi-currency credit facility;
and
|
•
|
Foreign
exchange risks
|
Total
number of shares purchased
|
Average
price paid per share (1)
|
Cumulative
number of shares purchased as part of publicly announced
plan
|
Shares
remaining to be purchased under plan (2)
|
|||||||||||||
January
1, 2007 –
|
||||||||||||||||
January
31, 2007
|
—
|
—
|
1,421,100
|
578,900
|
||||||||||||
February
1, 2007 –
|
||||||||||||||||
February
28, 2007
|
—
|
—
|
1,421,100
|
578,900
|
||||||||||||
March
1, 2007 –
|
||||||||||||||||
March
31, 2007
|
220,581
|
$ |
98.90
|
1,641,681
|
358,319
|
|||||||||||
April
1, 2007 –
|
||||||||||||||||
April
30, 2007
|
—
|
—
|
1,641,681
|
358,319
|
||||||||||||
May
1, 2007 –
|
||||||||||||||||
May
31, 2007
|
—
|
—
|
1,641,681
|
358,319
|
||||||||||||
June
1, 2007 –
|
||||||||||||||||
June
30, 2007
|
—
|
—
|
1,641,681
|
358,319
|
||||||||||||
July
1, 2007 –
|
||||||||||||||||
July
31, 2007
|
20,000
|
$ |
114.32
|
1,661,681
|
338,319
|
|||||||||||
August
1, 2007 –
|
||||||||||||||||
August
31, 2007
|
258,200
|
$ |
104.20
|
1,919,881
|
80,119
|
|||||||||||
September
1, 2007 –
|
||||||||||||||||
September
12, 2007
|
80,119
|
$ |
100.83
|
2,000,000
|
—
|
|||||||||||
September
13, 2007 –
|
||||||||||||||||
September
30, 2007
|
70,000
|
$ |
101.20
|
70,000
|
1,930,000
|
|||||||||||
Total
|
648,900
|
$ |
101.97
|
(1)
|
Total
average price paid per share is a weighted average for the nine
month
period.
|
(2)
|
Since
October 2002, our Board of Directors has approved five share
repurchase
programs. At September 30, 2007 the Company is authorized to
purchase
1,930,000 shares under the repurchase program approved on August
15, 2007.
Share repurchases through September 12, 2007 were made under
the share
repurchase program approved on September 15, 2005; the program
approved
September 15, 2005 was allowed to be fully utilized before the
program
approved August 15, 2007 came into use on September 13, 2007.
These share
repurchase programs allow the Company to purchase our common
stock in the
open market and in privately negotiated transactions. The repurchase
of
shares is primarily intended to offset dilution resulting from
both
restricted stock and stock option grants made under our existing
employee
compensation plans. The following table details the activities
for each of
our approved share repurchase
programs:
|
Repurchase
Plan Approval Date
|
Shares
Approved for Repurchase
|
Shares
Repurchased through September
30,
2007
|
||||||
October
30, 2002
|
1,000,000
|
700,000
|
||||||
February
27, 2004
|
1,500,000
|
1,500,000
|
||||||
November
29, 2004
|
1,500,000
|
1,128,551
|
||||||
September
15, 2005
|
2,000,000
|
2,000,000
|
||||||
August
15, 2007
|
2,000,000
|
70,000
|
||||||
|
5,398,551
|
|
•
|
The
effect of political, economic and market conditions and geopolitical
events;
|
|
•
|
The
logistical and other challenges inherent in operating in numerous
different countries;
|
|
•
|
The
actions and initiatives of current and potential
competitors;
|
|
•
|
The
level and volatility of real estate prices, interest rates, currency
values, liquidity in the capital markets and other market
indices;
|
|
•
|
The
outcome of pending litigation; and
|
|
•
|
The
impact of current, pending and future legislation and
regulation.
|
JONES
LANG LASALLE INCORPORATED
|
||
/s/
Lauralee E. Martin
|
||
By:
Lauralee E. Martin
|
||
Executive
Vice President and Chief Operating and Financial
Officer
|
||
(Authorized
Officer and Principal Financial
Officer)
|
Exhibit
|
||
Number
|
Description
|
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
||
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
||
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|