The following discussion and analysis should be read in conjunction with the
consolidated financial statements, including the notes thereto, for the three
and six months ended June 30, 2012, and Jones Lang LaSalle's audited
consolidated financial statements and notes thereto for the fiscal year ended
December 31, 2011, which are included in our 2011 Annual Report on Form 10-K,
filed with the United States Securities and Exchange Commission ("SEC") and also
available on our website (www.joneslanglasalle.com). You should also refer to
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations, contained in our 2011 Annual Report on Form 10-K.
The following discussion and analysis contains certain forward-looking
statements which we generally identify by the words anticipates, believes,
estimates, expects, plans, intends and other similar expressions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause Jones Lang LaSalle's actual results, performance,
achievements, plans and objectives to be materially different from any future
results, performance, achievements, plans and objectives expressed or implied by
such forward-looking statements. See the Cautionary Note Regarding
Forward-Looking Statements in Part II, Item 5. Other Information.
We present our quarterly Management's Discussion and Analysis in five sections,
as follows:
(1) A summary of our critical accounting policies and estimates,
(2) Certain items affecting the comparability of results and certain market and
other risks that we face,
(3) The results of our operations, first on a consolidated basis and then for
each of our business segments,
(4) Consolidated cash flows, and
(5) Liquidity and capital resources.
Summary of Critical Accounting Policies and Estimates
An understanding of our accounting policies is necessary for a complete analysis
of our results, financial position, liquidity and trends. See Note 2 of notes to
consolidated financial statements in our 2011 Annual Report for a complete
summary of our significant accounting policies.
The preparation of our financial statements requires management to make certain
critical accounting estimates that impact the stated amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amount of revenue and expenses during the
reporting periods. These accounting estimates are based on management's judgment
and are considered to be critical because of their significance to the financial
statements and the possibility that future events may differ from current
judgments, or that the use of different assumptions could result in materially
different estimates. We review these estimates on a periodic basis to ensure
they are reasonable. Although actual amounts likely differ from such estimated
amounts, we believe such differences are not likely to be material.
Asset Impairments
We have recorded goodwill and other identified intangibles from a series of
acquisitions. We also invest in certain real estate ventures that own and
operate commercial real estate. We have investments in approximately 40 separate
property or fund co-investments with which we have an advisory agreement. Our
ownership percentages in these investments range from less than 1% to
approximately 15%.
Goodwill - We evaluate goodwill for impairment annually by first assessing
qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying amount as a basis for
determining whether it is necessary to perform the two-step goodwill impairment
test. During our last annual impairment test, in the third quarter of 2011, we
determined that no indicators of impairment existed primarily because (1) our
market capitalization has consistently exceeded our book value by a significant
margin, (2) our overall financial performance has been solid and improving in
the face of mixed economic environments, and (3) forecasts of operating income,
EBITDA and cash flows generated by our reporting units appear sufficient to
support the book values of net assets of the reporting units.
In addition to an annual impairment evaluation, we evaluate whether events or
circumstances have occurred in the period subsequent to our annual impairment
testing which indicate that it is more likely than not an impairment loss has
occurred.
It is possible our determination that goodwill for a reporting unit is not
impaired could change in the future if both economic conditions and our
operating performance deteriorate. We will continue to monitor the relationship
between the Company's market capitalization and book value, as well as the
ability of our reporting units to deliver current and projected operating
income, EBITDA and cash flows sufficient to support the book values of the net
assets of their respective businesses.
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Investments in Real Estate Ventures - We review investments in real estate
ventures accounted for under the equity method of accounting on a quarterly
basis for indications of (1) whether the carrying value of the real estate
assets underlying our investments in real estate ventures may be recoverable or
(2) whether our equity in these investments is other than temporarily impaired.
When events or changes in circumstances indicate that the carrying amount of a
real estate asset underlying one of our investments in real estate ventures may
be impaired, we review the recoverability of the carrying amount of the real
estate asset in comparison to an estimate of the future undiscounted cash flows
expected to be generated by the underlying asset. When the carrying amount of
the real estate asset is in excess of the future undiscounted cash flows, we use
a discounted cash flow approach to determine the fair value of the asset in
computing the amount of the impairment.
Equity in (losses) earnings from real estate ventures included impairment
charges of $2.7 million and $1.1 million, for the three months ended June 30,
2012 and 2011, respectively, and $4.3 million and $2.9 million, for the six
months ended June 30, 2012 and 2011, respectively, representing our share of the
impairment charges against individual assets held by our real estate ventures.
It is reasonably possible that if real estate values decline we may incur
impairment charges on our investments in real estate ventures in future periods.
For investments in real estate ventures for which the fair value option has been
elected, we increase or decrease our investment each reporting period by the
change in the fair value of these investments. These fair value adjustments are
reflected as gains or losses in our consolidated statement of comprehensive
(loss) income within Equity in (losses) earnings from real estate ventures. For
the three and six months ended June 30, 2012 we recognized fair value losses of
$1.6 million and $1.2 million, respectively, and no fair value adjustments were
recognized during the three and six months ended June 30, 2011. It is reasonably
possible that if real estate values decline we may incur charges as the fair
value of these investments decrease.
Self-Insurance Programs
In our Americas business we have chosen to retain certain risks regarding health
insurance and workers' compensation rather than purchase third-party insurance.
Estimating our exposure to such risks involves subjective judgments about future
developments. We supplement our traditional global insurance program by the use
of a captive insurance company to provide professional indemnity and employment
practices insurance on a "claims made" basis. Professional indemnity claims can
be complex and take a number of years to resolve, making it difficult to
estimate the ultimate cost of these claims.
? Health Insurance - We self-insure our health benefits for all U.S.-based
employees, although we purchase stop-loss coverage on an annual basis to limit
our exposure. We self-insure because we believe that on the basis of our
historic claims experience, the demographics of our workforce and trends in the
health insurance industry, we incur reduced expense by self-insuring our health
benefits as opposed to purchasing health insurance through a third party. We
estimate our full-year health costs at the beginning of the year and expense
this cost on a straight-line basis throughout the year. In the fourth quarter,
we estimate the required reserve for unpaid health costs required at year-end.
Given the nature of medical claims, it may take up to 24 months for claims to be
processed and recorded. The accrual balances for open medical claims related to
2012 and 2011 are $13.5 million and $2.1 million, respectively, at June 30,
2012. At December 31, 2011 our accrual balance for medical claims was $11.5
million.
The table below sets out certain information related to the cost of the health
insurance program for the three months and six months ended June 30, 2012 and
2011 ($ in millions):
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
Expense to
Company $ 8.0 8.9 17.0 16.5
Employee
contributions 2.4 2.7 5.2 5.0
Adjustment to
prior year
reserve - 0.4 - 0.4
Total program
cost $ 10.4 12.0 22.2 21.9
? Workers' Compensation Insurance - Given our historical experience that our
workforce has had fewer injuries than is normal for our industry, we have been
self-insured for workers' compensation insurance for a number of years. We
purchase stop-loss coverage to limit our exposure to large, individual claims.
We accrue workers' compensation expense using various state rates based on job
classifications. On an annual basis in the third quarter, we engage in a
comprehensive analysis to develop a range of potential exposure, and considering
actual experience, we reserve within that range. We accrue the estimated
adjustment to income for the differences between this estimate and our reserve.
The credits taken to income through the three months ended June 30, 2012 and
2011 were $1.0 million and $0.8 million, respectively. The credits taken to
income through the six months ended June 30, 2012 and 2011 were $2.0 million and
$1.5 million, respectively. Our accruals for workers compensation claims, which
can relate to multiple years, were $17.1 million and $17.5 million, as of June
30, 2012 and December 31, 2011, respectively.
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? Captive Insurance Company -In order to better manage our global insurance
program and support our risk management efforts, we supplement our traditional
insurance coverage for certain types of claims by using a wholly-owned captive
insurance company. The level of risk retained by our captive insurance company,
with respect to professional indemnity claims, is up to $2.5 million per claim.
Professional indemnity insurance claims can be complex and take a number of
years to resolve. Within our captive insurance company, we estimate the ultimate
cost of these claims by way of specific claim accruals developed through
periodic reviews of the circumstances of individual claims. As our revenue grows
we anticipate that the level of risk retained by the captive insurance company
will also grow and thus could result in an increase in the amount and the
volatility of our estimated accruals. With respect to the consolidated financial
statements, when a potential loss event occurs, management estimates the
ultimate cost of the claims and accrues the related cost when probable and
estimable.
The accrual for professional indemnity insurance claims facilitated through our
captive insurance company which relates to multiple years was $0.8 million and
$0.7 million, net of receivables, as of June 30, 2012 and December 31, 2011,
respectively.
Income Taxes
We account for income taxes under the asset and liability method. We recognize
deferred tax assets and liabilities for the future tax consequences attributable
to (1) differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases, and (2) operating loss
and tax credit carryforwards. We measure deferred tax assets and liabilities
using enacted tax rates expected to apply to taxable income in the years in
which we expect those temporary differences to be recovered or settled. We
recognize into income the effect on deferred tax assets and liabilities of a
change in tax rates in the period that includes the enactment date.
Because of the global and cross border nature of our business, our corporate tax
position is complex. We generally provide for taxes in each tax jurisdiction in
which we operate based on local tax regulations and rules. Such taxes are
provided on net earnings and include the provision of taxes on substantively all
differences between financial statement amounts and amounts used in tax returns,
excluding certain non-deductible items and permanent differences. We have not
provided a deferred U.S. tax liability on the unremitted earnings of
international subsidiaries because it is our intent to permanently reinvest such
earnings outside of the United States.
Our global effective tax rate is sensitive to the complexity of our operations
as well as to changes in the mix of our geographic profitability, as local
statutory tax rates range from 10% to 40% in the countries in which we have
significant operations. We evaluate our estimated annual effective tax rate on a
quarterly basis to reflect forecasted changes in:
(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.
We reflect the benefit from tax planning when we believe that it is probable
that it will be successful, which usually requires that certain actions have
been initiated. We provide for the effects of income taxes on interim financial
statements based on our estimate of the effective tax rate for the full year.
Based on our forecasted results for the full year, we have estimated an
effective tax rate of approximately 25.4% for 2012 due to the mix of our income
and the impact of tax planning activities. Lower tax rate jurisdictions (those
with effective national and local combined tax rates of 25% or lower)
contributing most significantly to our estimated effective tax rate include The
Netherlands (25%), The People's Republic of China (25%), Russia (20%), Poland
(19%), Singapore (17%), Hong Kong (16.5%), and Cyprus (10%). We estimate that
these low rate jurisdictions will contribute over half of the difference between
our forecasted income tax provision for international earnings and the
equivalent provision at the United States statutory rate.
Items Affecting Comparability
Macroeconomic Conditions
Our results of operations and the variability of these results are significantly
influenced by macroeconomic trends, the global and regional real estate markets
and the financial and credit markets. These macroeconomic conditions have had,
and we expect to continue to have, a significant impact on the variability of
our results of operations.
LaSalle Investment Management Revenue
Our investment management business is in part compensated through the receipt of
incentive fees where performance of underlying funds' investments exceeds
agreed-to benchmark levels. Depending upon performance and the contractual
timing of measurement periods with clients, these fees can be significant and
vary substantially from period to period.
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Equity in (losses) earnings from real estate ventures also may vary
substantially from period to period for a variety of reasons, including as a
result of (1) impairment charges, (2) changes in fair value, (3) realized gains
or losses on asset dispositions, or (4) incentive fees recorded as equity
earnings. The timing of recognition of these items may impact comparability
between quarters, in any one year, or compared to a prior year.
The comparability of these items can be seen in Note 4, Business Segments, of
the notes to consolidated financial statements and is discussed further in
Segment Operating Results included herein.
Transactional-Based Revenue
Transactional-based services for leasing, real estate investment banking,
capital markets activities and other transactional-based services within our RES
businesses increase the variability of the revenue we receive that relate to the
size and timing of our clients' transactions from period to period. The timing
and the magnitude of these fees can vary significantly from year to year and
quarter to quarter.
Foreign Currency
We conduct business using a variety of currencies, but report our results in
U.S. dollars, as a result of which the volatility of currencies against the U.S.
dollar may positively or negatively impact our reported results. This volatility
can make it more difficult to perform period-to-period comparisons of the
reported U.S. dollar results of operations, because these results may
demonstrate a rate of growth or decline that might not have been consistent with
the real underlying rate of growth or decline in the local operations. As a
result, we provide information about the impact of foreign currencies in the
period-to-period comparisons of the reported results of operations in our
discussion and analysis of financial condition in the Results of Operations
section below.
Seasonality
Our quarterly revenue and profits tend to grow progressively by quarter
throughout the year. This is the result of a general focus in the real estate
industry on completing transactions by fiscal year-end and the fact that certain
of our expenses are constant throughout the year.
Our Investment Management segment generally earns investment-generated
performance fees on clients' real estate investment returns and co-investment
equity gains when assets are sold, the timing of which is geared towards the
benefit of our clients. Within our RES segments, revenue for capital markets
activities relates to the size and timing of our clients' transactions and can
fluctuate significantly from period to period. Non-variable operating expenses,
which we treat as expenses when they are incurred during the year, are
relatively constant on a quarterly basis. Consequently, the results for the
periods ended June 30, 2012 and 2011 are not indicative of the results to be
obtained for the full fiscal year.
Termination of Stock Ownership Program
We have terminated our Stock Ownership Program (the "SOP") in connection with
incentive compensation (or "bonus") payments for 2012 performance. Since the
start of the SOP, our employee population has grown significantly and other
aspects of our compensation programs have evolved, as a result of which we have
determined that (1) there are other more targeted and strategic approaches we
can take in order to enhance our equity incentive compensation programs, and (2)
we can do so in a way that will be less dilutive to shareholders than the SOP
would be if we continued this plan.
In prior years, the SOP has been a mandatory element of the incentive
compensation for approximately the senior-most 5% of the Company's employees.
The SOP generally required that from 10% to 20% of incentive compensation,
including annual bonuses and periodic commission payments, be deferred and
delivered in restricted stock units, rather than paid immediately in cash. Half
of the restricted stock units granted under the SOP vested eighteen months from
January 1st in the year following the year of performance, and the remaining
half vested thirty months from that date. We amortized related compensation cost
to expense over the service period consisting of the 12 months of the year to
which payment of restricted stock relates, plus the periods over which the
restricted stock units vest.
Although we have terminated the SOP, we will continue to require at least 15% of
annual incentive compensation for members of the Global Executive Committee to
be paid in restricted stock units, and we will continue to amortize related
compensation costs to expense over the service period consisting of the 12
months of the year which payment of restricted stock relates, plus the period
over which the restricted stock units vest.
In prior years the SOP resulted in the deferral of applicable incentive
compensation over the service period, whereas the termination of this program
will result in all incentive compensation expense for 2012 being recognized in
2012, with no SOP deferral as we have recognized in prior years. If the SOP had
been eliminated in 2011, the comparative impact on our 2011 operating results
would have been to increase expense by $2.9 million and $4.4 million, for the
three and six months ended June 30, 2011, respectively. The impact on our 2011
full year operating results would have been an increase in expense of $12.4
million.
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Results of Operations
Reclassifications
We report "Equity in (losses) earnings from real estate ventures" in our
consolidated statement of comprehensive (loss) income after Operating income.
However, for segment reporting we reflect Equity in earnings (losses) from real
estate ventures within Total revenue. Also, vendor and subcontract costs on
certain client assignments in property and facilities management, and project
and development services ("gross contract costs"), are presented on a gross
basis in our consolidated statement of comprehensive (loss) income, but are
excluded from revenue and operating expenses in determining "fee revenue" and
"fee-based operating expenses," in our segment reporting. See Note 4, Business
Segments, of the notes to consolidated financial statements for Equity in
(losses) earnings from real estate ventures reflected within segment revenue, as
well as discussion of how the Chief Operating Decision Maker (as defined in Note
4) measures segment results with Equity in (losses) earnings from real estate
ventures included in segment revenue.
Three and Six Months Ended June 30, 2012 Compared to Three and Six Months Ended
June 30, 2011
In order to provide more meaningful year-over-year comparisons of our reported
results, we have included in the table below both the U.S. dollar and local
currency movements in the consolidated statements of earnings.
Three Months Three Months % Change
Ended Ended Change in in Local
($ in millions) June 30, 2012 June 30, 2011 U.S. dollars Currency
Revenue
Real Estate Services:
Leasing $ 299.0 281.4 17.6 6 % 10 %
Capital Markets and Hotels 115.7 103.2 12.5 12 % 17 %
Property & Facility Management (1) 199.0 179.2 19.8 11 % 15 %
Project & Development Services (1) 87.0 78.8 8.2 10 % 15 %
Advisory, Consulting and Other 92.4 86.4 6.0 7 % 11 %
LaSalle Investment Management 59.1 66.3 (7.2 ) (11 %) (8 %)
Fee revenue $ 852.2 795.3 56.9 7 % 11 %
Gross contract costs 69.1 50.0 19.1 38 % 47 %
Total revenue $ 921.3 845.3 76.0 9 % 13 %
Operating expenses, excluding
gross contract costs 757.5 704.2 53.3 8 % 11 %
Gross contract costs 69.1 50.0 19.1 38 % 47 %
Depreciation and amortization 20.0 19.4 0.6 3 % 6 %
Restructuring and acquisition
charges 16.6 6.1 10.5 n. m. n. m.
Total operating expenses 863.2 779.7 83.5 11 % 15 %
Operating income $ 58.1 65.6 (7.5 ) (11 %) (7 %)(1) Amounts adjusted to remove gross contract costs
(n.m. - not meaningful)
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Six Months Six Months % Change
Ended Ended Change in in Local
($ in millions) June 30, 2012 June 30, 2011 U.S. dollars Currency
Revenue
Real Estate Services:
Leasing $ 529.2 492.2 37.0 8 % 10 %
Capital Markets and Hotels 204.5 169.4 35.1 21 % 24 %
Property & Facility Management (1) 399.9 345.4 54.5 16 % 18 %
Project & Development Services (1) 165.4 145.9 19.5 13 % 17 %
Advisory, Consulting and Other 171.4 150.3 21.1 14 % 16 %
LaSalle Investment Management 126.7 133.0 (6.3 ) (5 %) (3 %)
Fee revenue $ 1,597.1 1,436.2 160.9 11 % 14 %
Gross contract costs 137.6 96.9 40.7 42 % 49 %
Total revenue $ 1,734.7 1,533.1 201.6 13 % 16 %
Operating expenses, excluding
gross contract costs 1,459.2 1,314.8 144.4 11 % 13 %
Gross contract costs 137.6 96.9 40.7 42 % 49 %
Depreciation and amortization 39.6 37.7 1.9 5 % 7 %
Restructuring and acquisition
charges 25.6 6.1 19.5 n. m. n. m.
Total operating expenses 1,662.0 1,455.5 206.5 14 % 17 %
Operating income $ 72.7 77.6 (4.9 ) (6 %) (4 %)(1) Amounts adjusted to remove gross contract costs
(n.m. - not meaningful)
Revenue for the second quarter of 2012 grew 9% over the second quarter of 2011,
13% in local currency. Capital Markets & Hotels revenue grew 17% in local
currency driven by growth in the Americas and EMEA partially offset by a decline
in Asia Pacific, where comparable revenue for Hotels in the second quarter of
2011 was significantly higher than in 2012. Leasing revenue increased 10% in
local currency driven by 20% growth in EMEA and 10% growth in the Americas.
Despite slower transactional revenue in Asia Pacific during the quarter, the
region's annuity revenue from Property & Facility Management built over the last
several years has resulted in a stable base profit performance. LaSalle
Investment Management's advisory fees were lower compared with the second
quarter of 2011, impacted by the sale of a fund in Asia in the first quarter and
the reduction of other funds in 2011, but were consistent with the first quarter
of 2012.
A portion of the consolidated revenue growth in the quarter resulted from new
and expanded contracts in the Property & Facility Management and Project &
Development Services ("PDS") business lines for which U.S. GAAP gross accounting
is required. Gross contract costs, which are included in both revenue and
expenses, totaled $69 million in the second quarter of 2012, compared with $50
million in the second quarter last year. Excluding these costs from revenue and
operating expenses more accurately reflects how the firm manages its expense
base and its operating margins. On a fee revenue basis, consolidated firm
revenue grew 11% in local currency, to $852 million, compared with the same
period last year.
Consolidated year-to-date revenue rose to $1.7 billion, 13% higher than the
first six months of 2011, 16% in local currency. Fee revenue for the first six
months of 2012 was $1.6 billion, an increase of 11%, 14% in local currency.
Operating expenses, excluding restructuring and acquisition charges, were $847
million for the quarter, an increase of 9%, 13% in local currency, compared with
$774 million in 2011. The increase was driven by higher compensation resulting
from increased headcount over the prior year, principally due to the King Sturge
merger, as well as higher variable compensation resulting from improved
transactional revenue. Compensation expense was impacted by the firm's
previously disclosed decision to eliminate its Stock Ownership Program ("SOP"),
which resulted in approximately $4 million more compensation expense during the
quarter. Total operating expenses were also driven by increased variable costs
to support client wins and to continue building the firm's pipeline for
2012. Fee-based operating expenses, excluding restructuring and acquisition
charges, were $778 million for the quarter, an increase of 7% in U.S. dollars
and 11% in local currency, compared with $724 million in the second quarter of
2011.
Second-quarter results included $17 million of restructuring and acquisition
charges, primarily related to integration costs for the second-quarter 2011
acquisition of King Sturge as we finalize merging operations and lease exit
costs as we consolidate office space in EMEA. Second-quarter results also
included $2 million of intangibles amortization related to the acquisition.
For the year to date, fee-based operating expenses excluding restructuring and
acquisition charges were $1.5 billion, an increase of 11% from last year, 13% in
local currency. Operating income margin year-to-date calculated on fee revenue,
adjusting for restructuring and acquisition charges, and King Sturge intangible
amortization of $4 million and $2 million for 2012 and 2011, respectively, was
6.4% for 2012, compared with 5.9% for 2011.
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The firm's net debt position, which includes deferred acquisition obligations,
decreased by $66 million during the second quarter to $802 million. Net interest
expense was $7.5 million, down from $9.6 million in the second quarter of
2011. On a year-to-date basis, net interest expense was $14.9 million, down $2.7
million compared with 2011, reflecting continued disciplined management of the
firm's investment-grade balance sheet.
Equity in (losses) earnings from real estate ventures resulted in a loss of less
than $0.1 million and income of $11.8 million for the three and six months ended
June 30, 2012, respectively, compared to income of $4.1 million and $2.2 million
for the three and six months ended June 30, 2011, respectively. The year to date
increase in equity earnings in 2012 was primarily due to first quarter earnings
related to the sale of assets within an Investment Management fund in Japan. The
decrease in second quarter equity earnings, compared to the prior year, was
primarily due an increase in impairment charges in 2012 and gains recognized on
asset sales in the second quarter of 2011.
The effective tax rate for the three and six months ended June 30, 2012, and our
forecasted tax rate for 2012, is 25.4%.
Segment Operating Results
We manage and report our operations as four business segments:
The three geographic regions of Real Estate Services ("RES"):
(i) Americas,
(ii) Europe, Middle East and Africa ("EMEA"),
(iii) Asia Pacific; and
(iv) Investment Management, which offers investment management services on a
global basis.
Each geographic region offers our full range of Real Estate Services including
agency leasing and tenant representation, capital markets and hotels, property
management, facilities management, project and development services, energy
management and sustainability, construction management, and advisory, consulting
and valuation services. We consider "property management" to be services
provided to non-occupying property investors and "facilities management" to be
services provided to owner-occupiers. The Investment Management segment provides
investment management services to institutional investors and high-net-worth
individuals.
For segment reporting, we show revenue net of gross contract costs in our RES
segments. Excluding these costs from revenue and expenses in a "net"
presentation of "fee revenue" and "fee-based operating expense" more accurately
reflects how we manage our expense base and operating margins. See Note 3,
Revenue Recognition, of the Notes to the Consolidated Financial Statements for
additional information on our gross and net accounting. For segment reporting we
also show Equity in earnings (losses) from real estate ventures within our
revenue line, since it is an integral part of our Investment Management segment.
Finally, our measure of segment reporting results also excludes restructuring
charges and certain acquisition related costs.
