Investor Presentation
..40,000 employees….185 offices….60 countries….1 global platform..
June 2011
Table of Contents
I.
Company Description
II.
Market Environment
III. 2011 Priorities and Global Growth Strategy
IV. Financial Overview
Statements in this presentation 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 of Jones Lang LaSalle to be materially different from those expressed
or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed
under “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
“Quantitative and Qualitative Disclosures about Market Risk,” “Cautionary Note Regarding Forward-Looking Statements” and
elsewhere in Jones Lang LaSalle’s Annual Report on Form 10-K for the year ended December 31, 2010 and in the Quarterly Report on
Form 10-Q for the quarter ended March 31, 2011 and in other reports filed with the Securities and Exchange Commission. There can be
no assurance that future dividends will be declared since the actual declaration of future dividends, and the establishment of record
and payment dates, remains subject to final determination by the Company’s Board of Directors. Statements speak only as of the date
of this presentation. Jones Lang LaSalle expressly disclaims any obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect any change in Jones Lang LaSalle’s expectations or results, or any change in events.
© Jones Lang LaSalle IP, Inc. 2011. All rights reserved. No part of this publication may be reproduced by any means, whether
graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic
tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle IP, Inc.
2
Company Description
Jones Lang LaSalle
Company history
1783
1968
1997
1999 2008 2011
Jones Lang Wootton founded in London
LaSalle Partners founded, operating primarily in the Americas
LaSalle Partners initial public offering
LaSalle Partners and Jones Lang Wootton merge to create Jones Lang LaSalle
Integrated global platform (NYSE ticker “JLL”)
The Staubach Company and Jones Lang LaSalle combine operations
Largest merger in JLL history transforms U.S. local markets position
King Sturge and Jones Lang LaSalle merge EMEA operations
Enhances strength
g and depth
p of service capabilities in the U.K. and EMEA
2010
Revenue
$2.9B
‡
‡
‡
‡
‡
‡
‡
Integrated global services platform
Industry-leading research
Superior client relationship management
Consistent service delivery
Innovative solutions to maximize value
Strong brand
Investment grade balance sheet
3
Jones Lang LaSalle
Medium-term outlook continues to benefit from cyclical recovery
‡ Consolidator in a consolidating industry - more than
35 mergers and acquisitions since 2005
‡ Corporate Solutions driving growth and providing
annuity revenue as outsourcing trend continues
‡ LaSalle Investment Management - a premier global
investment manager winning new mandates
‡ Cash generating business model with investment
grade balance sheet
2010 Revenue = $2.9 billion
Property &
Facility
Management
LaSalle
Inv.
Mgmt.
9%
24%
Project &
Development
Services
12%
Capital
Markets
10%
Advisory
Consulting &
Other 11%
Leasing
34%
Diversified Service Lines…
Revenue by Segment (1)
FY 2010
FY 2009
Americas
43%
42%
EMEA
25%
26%
Japan 4%
Asia Pacific
23%
22%
Greater China
5%
LaSalle Investment Mgmt.
Consolidated
(1)
9%
10%
100%
100%
United
States 44%
Developing &
Other Countries
10%
India 4%
Australia
7%
United
Kingdom
11%
Continental
Europe
15%
… And Global Market Reach
Excludes equity losses
Market Share and Service Line Expansion
More than 35 acquisitions since 2005
Staubach
Spaulding & Slye Standard Group
Klatskin
Zietsman
CRA
ECD
GGP
PCA
Americas
TCF
HIA
Alkas
Area Zero
Meghraj
Tetris
Strengthening
Rogers Chapman
Sallmanns
our platform
Creevy LLH Ltd.
Churston Heard
and
RL Davis
Hargreaves Goswell
connecting
Kemper’s
our people
NSC
Upstream
RECF
Creer
King Sturge
Littman Partnership
Asset Realty Managers
KHK Group
Camilli & Veiel
Troostwijk Makelaars
Shore Industrial
RSP Group
Leechiu
Brune
GVA
Asia
Pacific
EMEA
Market share gro
growth
‡ Middle Market C
Corporate Solutions
‡ Leasing
‡ Capital Markets
‡ Property Manage
Management
‡ Project & Develo
Development Services
Product and services
ser
expansion
‡ Retail
‡ Industrial
Sustai
‡ Energy & Sustainability
Services
‡ Infrastructure
‡ Hospital / Health
Healthcare
4
LaSalle Investment Management
A decade of accomplishments
‡ Global platform: More than 300 institutional clients worldwide - investor base greater than 90% institutional
‡ Investment Expertise: Core, value add, opportunistic private investing across major property types
‡ Consistent client service delivery system - worldwide
‡ Fully integrated global management team, compensation linked to growth in high-margin advisory revenue
‡ Results: Ability to weather global property cycles, annuity revenue growth ĺ financial stability, achieved scalable operations
2005 to 2010 Advisory Fees: 13% Compound Annual Growth Rate
($ millions)
Building Advisory Fees in Healthy Markets
Global Financial Crisis
Stabilized Advisory Fees
$300
$250
$150
$100
$277.9
$245.1
$200
$242.2
$237.5
$178.1
$127.8
$50
$0
2005
AUM
$29.8 B
2006
2007
2008
2009
2010
$40.6 B
$49.7 B
$46.2 B
$39.9 B
$41.3 B
Jones Lang LaSalle
More than 40,000 employees driving growth across service lines
Investment assets
under management
Property and corporate facilities
under management (s.f.)
$41B
1.8B
Advisory
Consulting &
Other 11%
Annual energy savings for
clients
$125M
Project &
Development
Services 12%
Global JLL Capital Markets
Activity
$33B
LEED-accredited professionals
LaSalle Inv.
Mgmt. 9%
Property & Facility
Management 24%
585
Tenant representation
transactions (s.f.)
8,400 transactions
Capital
Markets 10%
Leasing 34%
159M
Global JLL Hotels Activity
Agency leasing transactions (s.f.)
19,400 transactions
$4.1B
323M
Return to Table of Contents
5
Market Environment
Capital Markets Leading Real Estate Fundamentals
Increasingly synchronized recovery
Capital Values
Leasing Fundamentals
Shanghai
Beijing
London
Amsterdam,
Capital Value
Capital Value
Hong Kong,
growth slowing
falling
Washington DC,
Sao Paulo
Capital Value
Capital Value
New York,
San Francisco
bottoming out
growth
Singapore
accelerating
Toronto,
Moscow
Chicago
Stockholm
Detroit
Seoul, Tokyo
Berlin, Paris, Sydney
Dallas, Milan
Brussels, Mumbai
Americas
EMEA
Asia Pacific
Sao Paulo,
London
Rental growth
slowing
Rental
Beijing,
Hong Kong,
growth
Washington DC
accelerating
San Francisco,
Singapore
New York, Shanghai
Moscow, Stockholm
Sydney, Toronto
Berlin, Paris
Mumbai, Tokyo
The Jones Lang LaSalle Property Clocks SM
As of Q1 2011
6
Rental growth
falling
Rents
bottoming
out
Detroit
Seoul
Chicago
Brussels
Amsterdam,
Dallas
Milan
Local and Regional Real Estate Services
Asia Pacific
EMEA
Americas
Leasing and Capital Markets capturing incremental revenue
Leasing
Q1 2011:
Capital Markets
23% (1)
($ in millions)
$125
$133
$159
$781
$203
$108
$557
$173
$104
$247
$227
$241
2007
$317
$638
$373
2008
26% (1)
($ in millions)
$1,000
$753
$593
Q1 2011:
$500
2009
2010
$306
$60
$203
$81
$196
$141
2010
$339
$114
$61
$58
$107
$38
2007
2008
2009
$84
Full Year Comparison
Full Year Comparison
(1) Compared to
Q1 2010
Global Markets Perspective
Prime offices – projected value change in 2011
Rental Values
Capital Values
Hong Kong, Moscow
Hong Kong, Moscow
San Francisco, Washington DC
+ 10-20%
Shanghai, Singapore, Washington DC
San Francisco, London*, New York*,
Toronto, Sao Paulo
Shanghai, Singapore
New York*, Toronto
Sao Paulo, London*
+ 5-10%
Paris, Mumbai
Sydney
Paris, Chicago
Los Angeles, Mumbai
+ 0-5%
Frankfurt, Amsterdam
Chicago, Los Angeles
Sydney, Frankfurt,
Amsterdam, Mexico City
- 0-5%
Brussels, Tokyo
Mexico City
Brussels, Tokyo
- 5-10%
Madrid
Madrid
- 10-20%
Dubai
Dubai
+ 20%
Click here to see the JLL 2011 Real Estate Outlook, including our Top 10 trends for 2011
*New York – Midtown, London – West End. Nominal rates in local currency.
Source: Jones Lang LaSalle, April 2011 Global Market Perspective
7
Return to Table of Contents
2011 Priorities & Global Growth Strategy
2011 Priorities
Enhance margin and strengthen income quality
‡ Leverage strengthening local markets positions
- Maximize King Sturge impact on U.K. scale
‡ Continue growing share in Corporate Solutions
‡ Maintain LaSalle Investment Management’s stable advisory fee margins;
enhance with transaction and incentive fees
‡ Grow operating margin to medium term target of 12%
Margin Performance
Historic Adjusted Operating Income Margin
15%
Historic Adjusted EBITDA Margin
15.0%
14.7%
10%
11.9%
5%
11.5%
10.0%
9.6%
6.7%
6.6%
2008
2009
12.0%
9.1%
0%
2007
2010
Medium term
Target
Note: Adjusted Operating Income excludes restructuring charges, adjusted EBITDA excludes restructuring charges and non-cash
co-investment charges. 2007 results have been adjusted to exclude significant advisory fees from one large corporate portfolio.
8
JLL Global Strategy for Renewed Growth
Capture consolidation opportunities reappearing in the marketplace
‡ Align with our G5 strategy
‡ Benefit our clients’ best interests
Strategy
G1
G2
G3
G4
G5
‡ Fit our culture
‡ Meet our financial goals
Financial Objective
Opportunity Target
Secure market leadership – Goal to be #1, #2 or
#3 in targeted local and regional market services
‡ Major growth to
shareholders
‡ Accretive within
12-18 months
‡ Maintain
investment grade
strength
Provide specialized technical services to
Corporate Solutions outsourcing clients
Capture recovering cross-border capital flows and
strengthen Hotels market
Maximize opportunities created by financial
regulatory legislation and financial crisis fallout
Differentiate by connecting across the firm, and
with clients
Local and Regional Services
G1 Staubach merger transforms U.S. local markets position
Merger Impact: Tenant Representation Market Leadership
‡
‡
‡
‡
Reinforced JLL’s position as the high quality brand for occupier clients
Significantly improved our market position; 990 brokers in the field today; up more than 200% over 2007
Attained a market leading tenant representation position in 27 markets (vs. 6 markets in 2007)
Built Industrial market presence; 220 professional brokers in 40 markets; #3 or better in top 8 markets
2007
Chicago
Silicon Valley
San Francisco
Southern
California
(excluding San
Diego)
Dallas / Ft.
Worth
Market Leader – #1-2-3
Offices
2010
Boston
Suburbs/ Boston CBD
Seattle
Cambridge
Boston
Westchester
New York
New York
Philadelphia
Northern
Philadelphia
Chicago Suburbs
Northern
Sacramento
New
Jersey
Northern
VA
DC Metro
Chicago CBD
New Jersey
Silicon Valley
Baltimore
Richmond
San Francisco
Suburban
Denver
Raleigh/Durham
Maryland
Raleigh/Durham
Charlotte
Charlotte
Los Angeles Orange County
Dallas / Ft.
Atlanta
Atlanta
Phoenix
San Diego
Worth
Orlando
West Palm Beach
Tampa
Houston
Ft Lauderdale
Miami
Americas Leasing revenue growth of 29% in 2010
As of Year End ‘10; Market share based on SF of completed deals of 10,000+ SF
Source: JLL Research & CoStar
9
Local and Regional Services
G1 King Sturge secures market leadership
‡ Strengthens JLL’s leading position in both the UK and EMEA markets
- London is a mature and highly transparent market; #1 destination of international capital the last
two years
‡ Complementary service offerings; each firm brings important strengths
- King Sturge was Property Week’s U.K. Investment Agency of the Year; Jones Lang LaSalle
was Property Week’s U.K. Office Agent of the Year
European Investment Volume
- Clients benefit from powerful combined Capital
Jones Lang LaSalle /
21.4
Markets team with access to JLL’s global platform
King Sturge
16.4
CB Richard Ellis
- Depth and scale added to services including
Cushman & Wakefield
9.8
industrial, global logistics, and retail
6.4
Savills
- King Sturge’s Advisory and Property Management
6.2
Catela Property Group
businesses complement JLL and increase
Colliers International
4.9
EMEA’s resiliency to economic cycles
BNP Paribas
4.6
- King Sturge's strong high-end London residential
4.2
DTZ
platform gains access to JLL's market leading
$0
$10
$20
Asian network
(€ in billions)
Strategic
Rationale
Source: PropertyEU Research, PropertyEU Magazine May 2011
Based on European investment transactions in excess of €20 million in 2010.
King Sturge Overview
G1 A merger of equals in EMEA
‡ King Sturge is a market-leading London-based mixed property services business
- Over 85 partners and approximately 1,600 employees, over 1,300 U.K. based
King Sturge ‡ Client focused, strong team ethic and highly respected in the market
Overview
‡ Annual revenue approximately £160 million ($259 million)
- U.K. revenue over 85%
Transaction
Highlights
‡ JLL and King Sturge merged operations on May 31, 2011
‡ Purchase price £197 million ($319 million) with a five-year deferred payment structure
‡ JLL and King Sturge have a shared culture of excellence, teamwork and collaboration
- Combined Firm becomes largest real estate services provider across the EMEA region with
complementary service offerings
‡ Operating margins, ex-transaction related charges, strongly accretive to the higher
end of JLL EMEA’s medium-term Operating Income Margin target of 8-10%
Note: Assumes GBP/USD conversion rate of 1.62
10
Corporate Solutions
G2 Global
Leading position with unique expertise across services & geographies
‡ Accelerate new client wins and innovate for existing clients to broaden relationship
- 60 new wins, 33 expansions and 32 renewals in 2010
- More than 700 million sq ft under management as of December 31, 2010; 18% compound
annual growth rate over the past 5 years
‡ Target new industry segments for continued market share growth
- Replicate Financial/Pharma/IT success
Corporate
Retail
Services
Corporate
Finance /
CMG
Project
Management
Strategic
Consulting
Energy &
Sustainable
Services
Client
Relationship
Management
Integrated
Facility
Management
2010 Highlights
Transaction
Management
‡ Property & Facility Management revenue up
14% vs. 2009
Lease
Administration
‡ Project & Development Services revenue up 8%
vs. 2009; corporates starting to re-open capital
expenditure budgets
Mobile
Engineering
Corporate Solutions
G2 Global
Asia Pacific gaining share with local and multinational
onal ccorporates
Alcatel-Lucent
Philips
Sanyo
Sony
Wipro
Infosys
Citi
Merck
Telestra
AFP
Centrelink
Fonterra
11
Capture Global Capital Flows for Investment Sales
G3 Positioned to leverage leading share as markets recover
Development &
Construction
Management
2011 volumes expected to increase a further 35-40%
Strategic
Review
Research on
Local Martkets
Investment
Sales
Direct Commercial Real Estate Investment, 2005-2011
350
Connecting
clients to
innovative
solutions
Leasing
Receivership
Services
($ in billions)
300
Loan
Restructuring &
Debt Advisory
Property & Asset
Management
250
Planning &
Developing
+30%
200
+60%
150
2010 Highlights
+15-20%
‡ Volumes continuing cyclical recovery
‡ Demand high for core products;
supply remains constrained
‡ Global Hotels business gaining
momentum; captured $4.1B of $24.3B
total deal volume in 2010
100
50
0
Americas
2005
2006
Europe
2007
2008
2009
Asia Pacific
2010
2011 Projection
Source: Jones Lang LaSalle
For more information on Jones Lang LaSalle Hotels, visit www.joneslanglasallehotels.com.
Investment Management
G4 LaSalle
A premier global investment manager
New Business Activity
‡ $5 billion of net new capital raised in 2010, 2nd best year in
LaSalle history
‡ Strong capital raising continues, $1.5 billion of net new capital
commitments in Q1 2011
‡ Momentum continues with new separate account mandates
Product
Assets Under
Management
($ in billions)
Average
Performance
Private Equity
U.K.
Continental Europe
$11.0
Above benchmark
$4.3
Return: +1x equity
North America
$10.2
Above benchmark
Asia Pacific
$8.0
Return: +1x equity
$9.5
Above benchmark
Public Securities
Total Q1 2011 AUM
$43.0 B
Fund
Management
$16.3
Separate
Accounts
$17.2
Public
Securities
$9.5
AUM by Fund type
($ in billions)
Note: AUM data reported on a one-quarter lag
12
Connecting Across the Firm and With Clients
G5 Technology enabling value added connections
JLL
Brand
Extensive
Capabilities
& Products
Market
Knowledge &
Experience
Connecting
JLL to add
value for
clients
Colleagues
Sharing
Relationships
Thought
Leadership &
Research
Technology
JLL OneView
www.joneslanglasalle.com
Client First
and Sustainability Services
G5 Energy
Energy conservation and cost savings a growing priority
Making an Impact
‡ Nearly 600 LEED Accredited Professionals
‡ 116 LEED projects globally, including
‡ 1st LEED Platinum high-rise; One Bryant Park, New York
‡ 1st LEED building registered in India; Sohrabji Godrej Green
‡ 1st LEED-EB O&M multi-tenant building in the U.S.; 550 W.
Washington, Chicago
‡ Documented over $125M in energy savings for clients
“I chose Ray Quartararo and Jones
Lang LaSalle because of our
successful history together taking on
and figuring out difficult projects and
the company’s deep sustainability
expertise and track record.”
--Anthony E. Malkin, Building Owner,
Empire State Building Company
‡ Reduced 563,000 tons of greenhouse gas emissions
‡ Equivalent to the emissions of nearly 70 million gallons of
gasoline consumed
Return to Table of Contents
13
Financial Overview
Consolidated Earnings Scorecard
Demonstrating competitive strength
Strong Performance in FY 2010…
FY 2010
FY 2009
$2.9B
$2.5B
18%
(8%)
$154M
($4M)
Adjusted Net Income (1)
$166M
$70M
Earnings Per Share
$3.48
($0.11)
$3.77
$1.75
Adjusted EBITDA
$336M
$238M
Adjusted EBITDA margin
11.5%
9.6%
$3.6B
$2.5B
Revenue
% change
Net Income
Adjusted Earnings Per Share (1)
Market Capitalization
‡ Record revenue of $2.9 billion, up 18% over 2009
‡ Global Leasing revenue reaches $1 billion; up
28% over 2009
‡ LaSalle Investment Management raised $5 billion
in net capital commitments; AUM = $41 billion
‡ Adjusted operating income margin of 9.1% vs.
6.6% in 2009
…Continuing Momentum in Q1 2011
‡ Revenue up 18% over Q1 2010; Americas Leasing
revenue up 35%
‡ Transaction pipelines strengthening in all regions
‡ Strong LIM capital raising continues, $1.5 billion
of net new capital commitments in Q1 2011
(1)
Adjusted for restructuring and non-cash co-investment charges
14
FY 2010 Revenue Performance
($ in millions)
Americas
EMEA
13%
22%
LaSalle
Asia Pacific
26%
18%
$1,261.5
$1,031.6
$728.8
$643.7
$538.9
2009
2009
2010
2010
2009
$678.5
2010
$207.6
$245.4
2009
2010
18%
Consolidated
$2,925.6
$2,480.7
2009
2010
Note: Equity losses of $58.9M and $11.4M in 2009 and 2010, respectively, are included in segment results, however, are
excluded from Consolidated totals.
2010 Real Estate Services Revenue
($ in millions)
Americas
EMEA
Asia Pacific
Total RES
Revenue
Leasing
$637.9
28%
$202.6
17%
$159.4
42%
$999.9
28%
Capital Markets &
Hotels
$84.1
120%
$141.2
32%
$80.4
38%
$305.7
50%
Property & Facility
Management
$269.4
19%
$142.9
5%
$303.7
14%
$716.0
14%
Project &
Development Services
$158.9
1%
$115.0
6%
$63.5
44%
$337.4
8%
Advisory, Consulting
& Other
$110.9
1%
$127.2
4%
$71.4
17%
$309.5
5%
Total RES
Operating Revenue
$1,261.2
22%
$728.9
13%
$678.4
25%
$2,668.5
20%
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses).
15
Q1 2011 Real Estate Services Revenue
($ in millions)
Americas
EMEA
Asia Pacific
Total RES
Revenue
Leasing
$143.1
35%
$37.2
4%
$29.8
17%
$210.1
23%
Capital Markets &
Hotels
$19.8
108%
$28.7
10%
$17.5
5%
$66.0
26%
Property & Facility
Management
$66.7
15%
$35.9
4%
$83.9
24%
$186.5
16%
Project &
Development Services
$37.2
18%
$38.4
48%
$18.1
69%
$93.7
37%
Advisory, Consulting
& Other
$20.7
9%
$28.0
8%
$16.2
7%
$64.9
2%
Total RES
Operating Revenue
$287.5
26%
$168.2
11%
$165.5
22%
$621.2
21%
Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses).
Solid Cash Flows and Balance Sheet
Positioned to drive growth and investment
($ in millions)
2010 Free Cash Flow (1)
Disciplined CapEx spending
Effective tax management
(24% effective tax rate)
Cash Paid Taxes
9%
Cash Interest 4%
Investment grade balance
sheet
(1) Free
Acquisitions &
Deferred Obligations
30%
Capital Expenditures
11%
$440
Opportunity to grow and
invest in the business
Co-Investment
4%
Dividends & Other
Financing 7%
Net Debt
Repayment
35%
cash flow calculated as EBITDA plus non-cash charges and change in working capital
16
Solid Cash Flows and Balance Sheet Position
($ in millions)
Cash Flows
Q1 2011
Q1 2010
Cash from Earnings
Working Capital
Cash used in Operations
$42
(239)
($197)
$46
(192)
($146)
Primary Uses
Capital Expenses (1)
Acquisitions & Deferred Payment Obligations
Co-Investment
Dividends
Net Cash Outflows
Net Share Activity & Other Financing
Net Bank Debt (Borrowings) / Repayments
(17)
(25)
(2)
($44)
(4)
($245)
(5)
(27)
(10)
($42)
(5)
($193)
Balance Sheet
Q1 2011
Cash
Short Term Borrowings
Credit Facility
Net Bank Debt
Deferred Business Obligations
Total Net Debt
$101
42
278
$219
293
$512
(1)
Q1 2010
$60
47
335
$322
374
$696
Q1 2011 Highlights
‡ Healthy position after Q1 2011
incentive compensation payments
‡ Net debt repayment of $184 million
over the last twelve months
‡ Cash interest expense of $1.8 million,
down 51% from Q1 2010 expense of
$3.7 million
‡ Investment grade ratings:
Standard & Poor’s:
BBB- (Outlook: Stable)
Moody’s Investor Services:
Baa2 (Outlook: Stable)
Capital Expenditures for Q1 2011 and Q1 2010 net of tenant improvement allowances received were $16 million and $4 million, respectively
Jones Lang LaSalle
Leading brand well positioned for growth
Market Trends
Jones Lang LaSalle Opportunity
Early stages of cyclical recovery
Leverage leading global market positions for improved
transactional revenue
Outsourcing trend continuing and
broadening across sectors
Continue Corporate Solutions leadership; capture emerging
sectors (e.g. Healthcare, Government and Infrastructure)
Strongest real estate asset managers
attracting capital
LaSalle raised $5 billion of net new capital in 2010; strong
capital raising continues with $1.5 billion in Q1 2011
Industry consolidation resuming
Pursue growth within G5 strategy and financial objectives
Return to Table of Contents
17
Appendix
King Sturge Transaction Details
Financial summary
‡ Purchase price = £197 million ($319 million) all cash; five-year deferred payment structure
Valuation
Overview
- Additional £16 million ($26 million) to be paid as retention to King Sturge non-partners and treated
as expense over two years under U.S. GAAP
‡ Payment structure
- £98 million ($159 million) funded upfront
- Deferred payments spread evenly over five years
‡ Collaborative approach including leadership positions for both firms
Integration ‡ Strong retention structure including deferred payments and employment agreements
- Currently projecting approximately £15 million ($24 million) of integration costs
Transaction
Impact
Q1 2011
Pro Forma
Capitalization
Cash
Short Term Borrowings
Credit Facility
Net Bank Debt
Deferred Business Obligations
Total Net Debt
Pro Forma
Q1 2011
$101
$ -
42
-
42
278
159
437
$219
$159
293
143
$512
$302
(1) $143 million
$101
$378
(1)
reflects the present value of the deferred payments at the time of closing.
Note: Assumes GBP/USD conversion rate of 1.62
A-1
436
$814
Return to Table of Contents
Reconciliation of GAAP Net Income (Loss) to
Adjusted Net Income
($ in millions)
FY 2010
$ 153.5
44,084
$ 3.48
GAAP net income (loss)
Shares (in 000's)
GAAP earnings (loss) per share
$
GAAP net income (loss)
Restructuring, net of tax
Non-cash co-investment charges, net of tax
Adjusted net income
Shares (in 000's)
Adjusted earnings per share
$
153.5
4.9
7.9
166.3
$
44,084
3.77
FY 2009
$
(4.1)
38,543
$ (0.11)
$
$
(4.1)
35.6
38.5
70.0
$
40,106
1.75
Note: Basic shares outstanding are used in the calculation of GAAP EPS for the twelve months ending December 31, 2009, as the use of dilutive shares outstanding
would cause that EPS calculation to be anti-dilutive.
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Reconciliation of GAAP Operating Income to Adjusted
Operating Income and Net Income (Loss) to EBITDA
and
Adjusted EBITDA
($ in millions)
GAAP Operating Income
Restructuring charges
Adjusted Operating Income
FY 2010 FY 2009
$ 260.7 $ 116.4
6.4
47.4
$ 267.1 $ 163.8
Net income (loss)
$
153.5 $
(4.1)
$
45.8
49.0
71.6
319.9 $
55.0
5.7
83.3
139.9
$
10.4
6.4
336.7 $
51.3
47.4
238.6
Interest expense, net of interest income
Provision (benefit) for income taxes
Depreciation and amortization
EBITDA
Non-cash co-investment charges
Restructuring
Adjusted EBITDA
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A-2
Reconciliation of GAAP Net Income (Loss) to
EBITDA and Free Cash Flows
($ in millions)
FY 2010
Net Income (Loss)
Interest Expense, net of interest income
Provision (benefit) for income taxes
Depreciation and amortization
EBITDA
Change in working capital
Deferred Compensation Amortization and
non-cash co-investment charges
Free Cash Flow
FY 2009
$154
($4)
46
49
72
55
6
83
$321
$140
68
7
51
97
$440
$244
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A-3