Jones Lang LaSalle Inc. (JLL, Financial) filed Quarterly Report for the period ended 2009-06-30.
Jones Lang Lasalle Inc. is a leading full-service real estate firm that provides management services corporate and financial services and investment management services to corporations and other real estate owners users and investors worldwide. By offering a broad range of real estate products and services and through its extensive knowledge of domestic and international real estate markets the company is able to serve as a single source provider of solutions for its clients\' full range of real estate needs. Jones Lang LaSalle Inc. has a market cap of $1.86 billion; its shares were traded at around $45.05 with a P/E ratio of 24.2 and P/S ratio of 0.7. The dividend yield of Jones Lang LaSalle Inc. stocks is 0.5%. Jones Lang LaSalle Inc. had an annual average earning growth of 17.8% over the past 10 years. GuruFocus rated Jones Lang LaSalle Inc. the business predictability rank of 3-star.
In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 requires enhanced disclosures about an entity s derivative and hedging activities and became effective for the Company in the first quarter of 2009. As a firm, we do not enter into derivative financial instruments for trading or speculative purposes. However, we do use derivative financial instruments in the form of forward foreign currency exchange contracts to manage selected foreign currency risks that arise in the normal course of business. We mark these contracts to market each period and recognize in earnings changes in unrealized gains or losses as a component of Operating, administrative and other expenses and offset by gains and losses in associated intercompany loans such that the net impact to earnings is not significant (see Fair Value Measurements above). At June 30, 2009, we had forward exchange contracts in effect with a gross notional value of $571.0 million and a net fair value loss of $4.3 million, recorded as a current asset of $1.4 million in Other current assets and a current liability of $5.7 million in Other current liabilities. We have considered the counterparty credit risk related to these forward foreign currency exchange contracts and do not deem any counterparty credit risk material at this time.
Construction management fees, which are gross construction services revenues net of subcontract costs, were $2.6 million and $2.9 million for the three months ended June 30, 2009 and 2008, respectively, and $5.6 million and $6.6 million for the six months ended June 30, 2009 and 2008, respectively. Gross construction services revenues totaled $42.2 million and $56.8 million for the three months ended June 30, 2009 and 2008, respectively, and $84.8 million and $113.5 million for the six months ended June 30, 2009 and 2008, respectively. Subcontract costs totaled $39.6 million and $53.9 million for the three months ended June 30, 2009 and 2008, respectively, and $79.2 million and $106.9 million for the six months ended June 30, 2009 and 2008, respectively.
We include costs in excess of billings on uncompleted construction contracts of $6.7 million and $9.8 million in “Trade receivables,” and billings in excess of costs on uncompleted construction contracts of $2.7 million and $5.9 million in “Deferred income,” respectively, in our June 30, 2009 and December 31, 2008 consolidated balance sheets.
Most of our service contracts use the latter structure and we account for them on a net basis. We have always presented the above reimbursable contract costs on a net basis in accordance with U.S. GAAP. These costs aggregated approximately $316.5 million and $296.2 million for the three months ended June 30, 2009 and 2008, respectively, and approximately $580.8 million and $573.5 million for the six months ended June 30, 2009 and 2008, respectively. This treatment has no impact on operating income, net income or cash flows.
Read the The complete ReportJLL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
Jones Lang Lasalle Inc. is a leading full-service real estate firm that provides management services corporate and financial services and investment management services to corporations and other real estate owners users and investors worldwide. By offering a broad range of real estate products and services and through its extensive knowledge of domestic and international real estate markets the company is able to serve as a single source provider of solutions for its clients\' full range of real estate needs. Jones Lang LaSalle Inc. has a market cap of $1.86 billion; its shares were traded at around $45.05 with a P/E ratio of 24.2 and P/S ratio of 0.7. The dividend yield of Jones Lang LaSalle Inc. stocks is 0.5%. Jones Lang LaSalle Inc. had an annual average earning growth of 17.8% over the past 10 years. GuruFocus rated Jones Lang LaSalle Inc. the business predictability rank of 3-star.
Highlight of Business Operations:
We regularly use foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. We determine the fair value of these contracts based on widely accepted valuation techniques. The inputs for these valuation techniques are primarily Level 2 inputs in the hierarchy of SFAS 157. At June 30, 2009, we had forward exchange contracts in effect with a gross notional value of $571.0 million and a net fair value loss of $4.3 million, recorded as a current asset of $1.4 million and a current liability of $5.7 million. This net carrying loss is offset by a carrying gain in the associated intercompany loans such that the net impact to earnings is not significant.In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 requires enhanced disclosures about an entity s derivative and hedging activities and became effective for the Company in the first quarter of 2009. As a firm, we do not enter into derivative financial instruments for trading or speculative purposes. However, we do use derivative financial instruments in the form of forward foreign currency exchange contracts to manage selected foreign currency risks that arise in the normal course of business. We mark these contracts to market each period and recognize in earnings changes in unrealized gains or losses as a component of Operating, administrative and other expenses and offset by gains and losses in associated intercompany loans such that the net impact to earnings is not significant (see Fair Value Measurements above). At June 30, 2009, we had forward exchange contracts in effect with a gross notional value of $571.0 million and a net fair value loss of $4.3 million, recorded as a current asset of $1.4 million in Other current assets and a current liability of $5.7 million in Other current liabilities. We have considered the counterparty credit risk related to these forward foreign currency exchange contracts and do not deem any counterparty credit risk material at this time.
Construction management fees, which are gross construction services revenues net of subcontract costs, were $2.6 million and $2.9 million for the three months ended June 30, 2009 and 2008, respectively, and $5.6 million and $6.6 million for the six months ended June 30, 2009 and 2008, respectively. Gross construction services revenues totaled $42.2 million and $56.8 million for the three months ended June 30, 2009 and 2008, respectively, and $84.8 million and $113.5 million for the six months ended June 30, 2009 and 2008, respectively. Subcontract costs totaled $39.6 million and $53.9 million for the three months ended June 30, 2009 and 2008, respectively, and $79.2 million and $106.9 million for the six months ended June 30, 2009 and 2008, respectively.
We include costs in excess of billings on uncompleted construction contracts of $6.7 million and $9.8 million in “Trade receivables,” and billings in excess of costs on uncompleted construction contracts of $2.7 million and $5.9 million in “Deferred income,” respectively, in our June 30, 2009 and December 31, 2008 consolidated balance sheets.
Most of our service contracts use the latter structure and we account for them on a net basis. We have always presented the above reimbursable contract costs on a net basis in accordance with U.S. GAAP. These costs aggregated approximately $316.5 million and $296.2 million for the three months ended June 30, 2009 and 2008, respectively, and approximately $580.8 million and $573.5 million for the six months ended June 30, 2009 and 2008, respectively. This treatment has no impact on operating income, net income or cash flows.
Read the The complete ReportJLL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
