-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QxzgSxKi2gBkHswtR4DviK+O3eYMsFMjKuzXcoZXPmF44DAzito4+h1z1yl8Al0F DYnPyl3ZaFwc3kF9qQ3knw== 0001275287-05-002788.txt : 20050728 0001275287-05-002788.hdr.sgml : 20050728 20050727181208 ACCESSION NUMBER: 0001275287-05-002788 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES LANG LASALLE INC CENTRAL INDEX KEY: 0001037976 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531] IRS NUMBER: 364150422 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13145 FILM NUMBER: 05978445 BUSINESS ADDRESS: STREET 1: 200 E RANDOLPH DR CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3127825800 MAIL ADDRESS: STREET 1: C/O JONES LANG LASALLE INC STREET 2: 200 EAST RANDOLPH DRIVE CITY: CHICAGO STATE: IL ZIP: 60601 FORMER COMPANY: FORMER CONFORMED NAME: LASALLE PARTNERS INC DATE OF NAME CHANGE: 19970417 8-K 1 jl3190.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of report (Date of earliest event reported): July 27, 2005 JONES LANG LASALLE INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Maryland 001-13145 36-4150422 ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 200 East Randolph Drive, Chicago, IL 60601 ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (312) 782-5800 Not Applicable -------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 27, 2005, Jones Lang LaSalle Incorporated issued a press release announcing its financial results for the second quarter ended June 30, 2005. The full text of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits The following exhibit is included with this Report: 99.1. Press release issued by Jones Lang LaSalle Incorporated on July 27, 2005 announcing its financial results for the second quarter ended June 30, 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 27, 2005 JONES LANG LASALLE INCORPORATED By: /s/ Lauralee E. Martin --------------------------- Name: Lauralee E. Martin Title: Executive Vice President, Chief Financial Officer and Chief Operating Officer EXHIBIT INDEX Exhibit 99.1 Press release issued by Jones Lang LaSalle Incorporated on July 27, 2005 announcing its financial results for the second quarter ended June 30, 2005. EX-99.1 2 jl3190ex991.txt Exhibit 99.1 JONES LANG LASALLE REPORTS SOLID SECOND QUARTER FINANCIAL RESULTS CHICAGO, July 27 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated (NYSE: JLL), the leading global real estate services and money management firm, today reported net income of $24.8 million, or $0.74 per diluted share of common stock for the second quarter of 2005, and net income of $16.2 million, or $0.48 per share, for year-to-date 2005. In 2004, net income for the second quarter was $5.1 million, or $0.16 per share, with a year-to-date net loss of $1.0 million, or $0.03 per share. Included in the prior year's second quarter figures was a $0.26 per share expense related to the redemption of the firm's euro 165 million 9 percent Senior Notes. All segments of the firm reported year-over-year improvements in revenue for both the quarter and the first half of this year. For the quarter, revenues increased 23 percent in U.S. dollars, 20 percent in local currencies, to $325.1 million from $264.0 million in 2004. Revenues increased 17 percent in U.S. dollars, 14 percent in local currencies, to $565.3 million for the first half of 2005 compared to $484.7 million for the same period in 2004. Second Quarter Highlights: -- Revenues increased 23 percent in U.S. dollars and 20 percent in local currencies -- Operating income increased to $29.9 million from $15.3 million -- LaSalle Investment Management completed record capital raise; nearly $28 billion of assets under management Growth in Asia Pacific, the result of market-share expansion and economic improvement, and the strong quarter of LaSalle Investment Management were the important contributors to increased revenues and operating income. Second quarter revenues from Asia Pacific increased 32 percent year over year in U.S. dollars, 26 percent in local currencies. Asia Pacific achieved operating income of $8.1 million for the second quarter of 2005, representing an increase of $7.0 million over the prior year, and operating income of $4.6 million for the first half of 2005, compared with an operating loss of $3.5 million in the prior year. LaSalle Investment Management benefited in the quarter from significant advisory fees accelerated by the closing of the newest fund in Asia, LaSalle Asia Opportunity Fund II, and from significant transaction fees from both a major asset acquisition and disposition. Revenues in this business were up 32 percent for the quarter and 22 percent in U.S. dollars for the first half of the year compared with the same periods in 2004, while operating income increased $5.0 million and $5.9 million for the quarter and year to date, respectively. "We achieved solid financial results across all of our business segments during the second quarter, driven by healthy market conditions, excellent work for our clients and the dedication of our people," said Colin Dyer, the firm's Chief Executive Officer. "The majority of this year's revenues and profits still have to be earned and we are focused on delivering current performance balanced with continued revenue investments, to drive our ambitious international growth plans," Dyer added. Operating expenses were $295.2 million for second quarter of 2005 and $248.7 million for the same period in 2004, an increase of 19 percent in U.S. dollars, 16 percent in local currencies. Operating expenses for the first half of the year increased 15 percent in U.S. dollars and 12 percent in local currencies from the prior year. The increase included continuing investments to strengthen the firm's positions in key local and regional markets as well as extending the global service lines of Corporate Solutions, Capital Markets and LaSalle Investment Management. The increase also included higher accrued incentive compensation, reflecting the accelerated timing of revenues compared with the prior year. Interest expense for the second quarter of 2005 was $1.4 million, compared with $15.2 million for the same period in 2004, and $1.7 million for the first half of 2005, compared with $19.0 million for the same period in 2004. The prior year's interest expense included an $11.6 million expense incurred in June of 2004 related to the redemption of the 9 percent Senior Notes. As a result of this redemption, the firm's effective interest rate decreased significantly in the first half of 2005 compared to the same period of 2004. Net debt as of June 30, 2005 was $132 million, a $45 million reduction from the prior year. The firm also repurchased 683,500 shares of common stock during the second quarter, bringing year-to-date repurchases to approximately 1 million shares at a cost of $42.9 million. The estimated effective tax rate for the second quarter and year to date for 2005 was 25.4 percent, as compared with 28.0 percent for the same period last year. This rate improvement was achieved through disciplined global tax planning and is expected to be sustainable for the full year. Business Segment Second Quarter Highlights Investor and Occupier Services -- The Americas region maintained its momentum into the second quarter of 2005, reporting a 16 percent year-over-year increase in total revenues for both the quarter and the first half of the year. Management services revenues increased 20 percent for the quarter, 19 percent year to date, while transaction revenues grew 11 percent for both the quarter and the first half compared with 2004. The Real Estate Occupier Services business, marketed as Corporate Solutions, generated over 51 percent of the region's revenues for the quarter and 52 percent for the first half of the year. Compared with 2004, Corporate Solutions revenues grew 18 percent for the quarter and 16 percent for the first half of the year. Within Corporate Solutions, Project and Development Services revenues increased 31 percent for the quarter and 26 percent year to date while Public Institutions revenues increased 35 percent for the quarter and 52 percent year to date. During the second quarter, the U.S. Hotels business completed the acquisition of ThompsonCalhounFair Hotel Brokerage, a leading hotel real estate broker and advisory firm. This acquisition extends the region's service delivery capabilities to clients operating in the select service hotel sector. Total operating expenses increased 18 percent for the quarter and 20 percent year to date compared with 2004. The increase reflects higher staffing levels necessary to service new client wins, as well as strategic hiring to expand market coverage in both leasing and Capital Markets. Increased accrued incentive compensation also contributed to the higher operating expenses. Operating income of $7.7 million for the second quarter of 2005 was stable compared to the prior year; however, operating income for the first half of the year decreased to $2.7 million as a result of strategic investments being made in targeted markets. -- The European region's second-quarter revenues increased 17 percent in U.S. dollars, 14 percent in local currencies, and 7 percent in U.S. dollars, 3 percent in local currencies, for the first half of the year. The strong increase in the quarter resulted in part from the closing of transactions that slipped from the first quarter of 2005. The fourth-quarter 2004 restructuring efforts in Germany, which included realigning resources and hiring a new country leader, are having a positive impact. Revenues in Germany increased 48 percent in the quarter and almost 40 percent year to date in U.S. dollars compared with 2004. Year to date, the English business was up 11 percent in U.S. dollars while the French business declined compared with the prior year, which had benefited from several large Capital Markets and Agency Leasing transactions. Operating expenses increased by 17 percent in U.S. dollars for the quarter year over year and 13 percent in local currencies, while increasing 9 percent in U.S. dollars and 6 percent in local currencies on a year-to-date basis due to accelerated accrued incentive compensation. Operating income of $6.1 million for the second quarter of 2005 was up from the prior year by $1.0 million. The operating loss of $1.9 million for the first half of 2005 reflects a slower start in the transactional businesses compared with the prior year. -- Second quarter revenues for the Asia Pacific region were up 32 percent in U.S. dollars and 26 percent in local currencies from the prior year and, on a year-to-date basis, up 28 and 23 percent in U.S. dollars and local currencies, respectively. Growth for the quarter and year to date in U.S. dollars came from both transaction activity, which grew 37 and 34 percent, respectively, and management services revenues, which grew 23 and 19 percent, respectively. Revenues from growth markets, which include China, Japan and India, increased by 64 percent year to date in U.S. dollars over the prior year. In addition, revenues in Hong Kong, where the firm has a leading market position, increased approximately 30 percent for both the quarter and year to date in U.S. dollars. The Asian Hotels business also had a very strong quarter as a result of increased transaction volume and continued to increase market share. Total operating expenses for the Asia Pacific region for the second quarter of 2005 increased 19 percent in U.S. dollars, 14 percent in local currencies, over the prior year. For the first half of the year, operating expenses were up 18 percent in U.S. dollars and 14 percent in local currencies. The increase is primarily the result of continued investment in people and technology in the growth markets of China, Japan and India, as well as new offices being opened in Macau and Osaka. Increased accrued incentive compensation also contributed to the overall increase in operating expenses. LaSalle Investment Management -- Revenues for the second quarter of 2005 were up 32 percent in U.S. dollars, 30 percent in local currencies, and, year to date, up 22 percent in U.S. dollars and 20 percent in local currencies over the prior year. Contributing to the quarter's revenues were accelerated annuity fees from the newest fund in Asia Pacific, together with significant transaction fees from both an asset acquisition and disposition which occurred earlier in the year than expected. The business continues to emphasize growth in its annuity revenues from advisory fees, which increased 34 percent from 2004 in U.S. dollars for the quarter and 21 percent on a year-to-date basis. Advisory fees accounted for nearly 70 percent of LaSalle Investment Management's second quarter revenues. Equity earnings were down $2.2 million for the quarter and down $4.8 million year to date, as several larger transactions closed during the first half of 2004. The overall revenue strength resulted in operating income improvements from 2004 of 66 percent for the quarter and 58 percent in U.S. dollars for the first half of the year. Continued strong response from investors to product offerings is resulting in the business being well ahead of its expected capital- raising activities with respect to funds planned for launch during 2005. Acquisitions, which also exceeded expectations for the first half of the year, have resulted in assets under management reaching $28 billion. Outlook The firm benefited from strong performance in the second quarter, amplified by transactions that closed ahead of the seasonal pattern of the prior year. While profits remain concentrated in the fourth quarter, the firm believes that if healthy market conditions continue, the current full-year analyst consensus expectation of $2.40 per share should be achievable. Overall, the firm continues to emphasize growth in annuity revenues as well as enhancement of profit margins in all product and service lines. The firm plans to continue its announced strategic investments in 2005, balancing the achievement of current performance with its ambitious long-term growth objectives. About Jones Lang LaSalle Jones Lang LaSalle is the world leading real estate services and money management firm, operating across more than 100 markets around the globe. The company provides comprehensive integrated expertise, including management services, implementation services and investment management services on a local, regional and global level to owners, occupiers and investors. Jones Lang LaSalle is also the industry leader in property and corporate facility management services, with a portfolio of over 879 million square feet under management worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse real estate money management firms, with approximately $28 billion of assets under management. Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives 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," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's Annual Report on Form 10-K for the year ended December 31, 2004 and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and in other reports filed with the Securities and Exchange Commission. Statements speak only as of the date of this release. 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. Conference Call The firm will conduct a conference call for shareholders, analysts and investment professionals on Thursday, July 28, 2005 at 9:00 a.m. EDT. To participate in the teleconference, please dial into one of the following phone numbers five to ten minutes before the start time: -- U.S. callers: +1 877 809 9540 -- International callers: +1 706 679 7364 Replay Information Available: (12:00 p.m. EDT) Thursday, July 28 through (Midnight EDT) Thursday, August 6 at the following numbers: -- U.S. callers: +1 800 642 1687 -- International callers: +1 706 645 9291 -- Pass code: 7895673 Live web cast Follow these steps to listen to the web cast: 1. You must have a minimum 14.4 Kbps Internet connection 2. Log on to http://www.joneslanglasalle.com/shareholders/index.asp and follow instructions 3. Download free Windows Media Player software: (link located under registration form) If you experience problems listening, send an e-mail to webcastsupport@tfprn.com This information is also available on the company's website at http://www.joneslanglasalle.com . JONES LANG LASALLE INCORPORATED Segment Operating Results For the Three and Six Months Ended June 30, 2005 and 2004 (in thousands) (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, ----------------------------- ----------------------------- 2005 2004 2005 2004 ------------- ------------- ------------- ------------- INVESTOR & OCCUPIER SERVICES - AMERICAS Revenue: Implementation services $ 41,940 $ 37,917 $ 69,039 $ 61,993 Management services 49,405 41,305 94,388 79,296 Equity earnings 182 - 181 467 Other services 2,174 1,465 3,751 2,742 Intersegment revenue 240 299 529 381 93,941 80,986 167,888 144,879 Operating expenses: Compensation, operating and administrative 82,550 69,925 157,887 131,040 Depreciation and amortization 3,671 3,361 7,283 7,024 Operating Income $ 7,720 $ 7,700 $ 2,718 $ 6,815 EUROPE Revenue: Implementation services $ 92,969 $ 75,971 $ 151,986 $ 141,602 Management services 24,409 24,326 47,873 46,724 Equity earnings (226) - (226) - Other services 2,785 2,077 5,358 3,956 119,937 102,374 204,991 192,282 Operating expenses: Compensation, operating and administrative 111,409 94,626 201,881 183,656 Depreciation and amortization 2,454 2,676 5,005 5,455 Operating Income (Loss) $ 6,074 $ 5,072 $ (1,895) $ 3,171 ASIA PACIFIC Revenue: Implementation services $ 41,312 $ 30,233 $ 66,212 $ 49,406 Management services 26,263 21,271 49,706 41,933 Other services 943 409 1,535 757 68,518 51,913 117,453 92,096 Operating expenses: Compensation, operating and administrative 58,593 49,238 109,140 92,432 Depreciation and amortization 1,863 1,589 3,668 3,145 Operating Income (Loss) $ 8,062 $ 1,086 $ 4,645 $ (3,481) LASALLE INVESTMENT MANAGEMENT Revenue: Implementation and other services $ 8,989 $ 3,454 10,891 $ 4,918 Advisory Fees 32,518 24,325 60,768 50,021 Incentive Fees 1,381 1,243 3,757 1,311 Equity earnings 4,674 6,914 3,783 8,570 47,562 35,936 79,199 64,820 Operating expenses: Compensation, operating and administrative 34,787 28,149 62,436 54,034 Depreciation and amortization 347 317 690 621 Operating Income $ 12,428 $ 7,470 $ 16,073 $ 10,165 Total segment revenue 329,958 271,209 569,531 494,077 Intersegment revenue eliminations (240) (299) (529) (381) Equity earnings (4,630) (6,914) (3,738) (9,037) Total revenue $ 325,088 $ 263,996 $ 565,264 $ 484,659 Total segment operating expenses 295,674 249,881 547,990 477,407 Intersegment operating expense eliminations (240) (299) (529) (381) Total operating expenses before non-recurring charges (credits) $ 295,434 $ 249,582 $ 547,461 $ 477,026 Operating income before non-recurring charges (credits) $ 29,654 $ 14,414 $ 17,803 $ 7,633
JONES LANG LASALLE INCORPORATED Consolidated Statements of Earnings For the Three and Six Months Ended June 30, 2005 and 2004 (in thousands, except share data) (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, ----------------------------- ----------------------------- 2005 2004 2005 2004 ------------- ------------- ------------- ------------- Revenue: Fee based services $ 318,765 $ 259,556 $ 553,947 $ 476,596 Other income 6,323 4,438 11,317 8,061 Total revenue 325,088 263,994 565,264 484,657 Operating expenses: Compensation and benefits 209,639 175,385 381,765 330,450 Operating, administrative and other 77,460 66,254 149,051 130,331 Depreciation and amortization 8,335 7,941 16,645 16,243 Non-recurring and restructuring charges: Compensation and benefits (250) 73 (250) (137) Operating, administrative and other - (983) (1,569) (793) Total operating expenses 295,184 248,670 545,642 476,094 Operating income 29,904 15,324 19,622 8,563 Interest and other costs: Interest expense, net of interest income 1,356 3,642 1,686 7,456 Loss on extinguishment of Euro Notes - 11,561 - 11,561 1,356 15,203 1,686 19,017 Equity in earnings from unconsolidated ventures 4,630 6,916 3,738 9,039 Income (loss) before provision (benefit) for income taxes 33,178 7,037 21,674 (1,415) Net provision (benefit) for income taxes 8,427 1,970 5,505 (396) Net income (loss) $ 24,751 $ 5,067 $ 16,169 $ (1,019) EBITDA (1) $ 42,869 $ 18,620 $ 40,005 $ 22,284 Basic income (loss) per common share $ 0.80 $ 0.17 $ 0.52 $ (0.03) Basic weighted average shares outstanding 31,039,575 30,449,030 31,153,475 30,889,639 Diluted income (loss) per common share $ 0.74 $ 0.16 $ 0.48 $ (0.03) Diluted weighted average shares outstanding 33,512,356 32,652,871 33,624,487 30,889,639
Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Consolidated Balance Sheets June 30, 2005, December 31, 2004 and June 30, 2004 (in thousands) (unaudited)
June 30, December 31, June 30, 2005 2004 2004 ------------- ------------- ------------- (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 21,339 $ 30,143 $ 24,462 Trade receivables, net of allowances 269,024 328,876 230,538 Notes receivable 4,708 2,911 2,814 Other receivables 9,262 11,432 8,567 Prepaid expenses 24,705 22,279 26,584 Deferred tax assets 26,282 28,427 23,428 Other assets 9,437 12,189 5,790 Total current assets 364,757 436,257 322,183 Property and equipment, at cost, less accumulated depreciation 71,475 75,531 67,486 Goodwill, with indefinite useful lives, at cost, less accumulated amortization 339,352 343,314 331,837 Identified intangibles, with definite useful lives, at cost, less accumulated amortization 7,055 8,350 10,760 Investments in and loans to real estate ventures 78,752 73,570 66,437 Long-term receivables, net 14,646 16,179 10,954 Prepaid pension asset 1,915 2,253 13,229 Deferred tax assets 41,870 43,202 45,888 Debt issuance costs, net 1,367 1,704 2,110 Other assets, net 19,461 12,017 11,742 $ 940,650 $ 1,012,377 $ 882,626 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 96,277 $ 130,489 $ 83,294 Accrued compensation 127,660 244,659 106,124 Short-term borrowings 13,778 18,326 14,473 Deferred tax liabilities 643 262 2,466 Deferred income 20,814 16,106 20,800 Other liabilities 15,569 17,221 15,475 Total current liabilities 274,741 427,063 242,632 Long-term liabilities: Credit facilities 139,194 40,585 186,990 Deferred tax liabilities - 671 4,348 Deferred compensation 14,789 8,948 9,139 Minimum pension liability 2,111 3,040 - Other 23,817 24,090 14,143 Total liabilities 454,652 504,397 457,252 Stockholders' equity: Common stock, $.01 par value per share, 100,000,000 shares authorized; 34,229,868, 33,243,527 and 32,178,613 shares issued and outstanding as of June 30, 2005, December 31, 2004 and June 30, 2004, respectively 341 332 322 Additional paid-in capital 599,913 575,862 532,803 Deferred stock compensation (24,672) (34,064) (21,022) Retained earnings (deficit) 21,065 4,896 (60,364) Stock held by subsidiary (101,754) (58,898) (33,062) Stock held in trust (530) (530) (230) Accumulated other comprehensive income (8,365) 20,382 6,927 Total stockholders' equity 485,998 507,980 425,374 $ 940,650 $ 1,012,377 $ 882,626
Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Summarized Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2005 and 2004 (in thousands) (unaudited) Six Months Ended June 30, --------------------------- 2005 2004 ------------ ------------ Cash provided by earnings $ 47,405 $ 22,712 Cash used in working capital (104,470) (38,849) Net cash used in operating activities (57,065) (16,137) Cash used in investing activities (27,198) (3,858) Cash provided by (used in) financing activities 75,459 (18,648) Net decrease in cash and cash equivalents (8,804) (38,643) Cash and cash equivalents, beginning of period 30,143 63,105 Cash and cash equivalents, end of period $ 21,339 $ 24,462 Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Financial Statement Notes 1. EBITDA represents earnings before interest expense, net of interest income, income taxes, depreciation and amortization. Although EBITDA is a non-GAAP financial measure, it is used extensively by management and is useful to investors as one of the primary metrics for evaluating operating performance and liquidity. The firm believes that an increase in EBITDA is an indicator of improved ability to service existing debt, to sustain potential future increases in debt and to satisfy capital requirements. EBITDA is also used in the calculations of certain covenants related to the firm's revolving credit facility. However, EBITDA should not be considered as an alternative either to net income or net cash provided by operating activities, both of which are determined in accordance with GAAP. Because EBITDA is not calculated under GAAP, the firm's EBITDA may not be comparable to similarly titled measures used by other companies. Below is a reconciliation of net income (loss) to EBITDA (in thousands): Six Months Ended June 30, --------------------------- 2005 2004 ------------ ------------ Net income (loss) $ 16,169 $ (1,019) Add: Interest expense, net of interest income 1,686 7,456 Depreciation and amortization 16,645 16,243 Deduct: Net income tax expense (benefit) 5,505 (396) EBITDA $ 40,005 $ 22,284 Below is a reconciliation of net cash used in operating activities, the most comparable cash flow measure on the consolidated statements of cash flows, to EBITDA (in thousands): Six Months Ended June 30, ---------------------------- 2005 2004 ------------ ------------ Net cash used in operating activities $ (57,065) $ (16,137) Add: Interest expense, net of interest income 1,686 7,456 Change in working capital and non-cash expenses 89,879 31,361 Less: Net income tax expense (benefit) 5,505 (396) EBITDA $ 40,005 $ 22,284 2. Effective the fourth quarter of 2004, 'Equity in earnings from unconsolidated ventures' has been reclassified, for all periods presented on the Consolidated Statement of Earnings, from 'Revenue' to be presented as a separate line item between 'Total interest and other costs' and 'Income before provision for income taxes', in accordance with Rule 5-03 of Regulation S-X. As a result, 'Operating income' has been adjusted for the comparative year. Since equity earnings are an integral part of the money management business, equity earnings has been included within 'Revenue' in segment operating results for discussion purposes only. 3. Net debt represents the aggregate of 'Short-term borrowings,' 'Credit facilities,' and '9% Senior Euro Notes' less 'Cash and cash equivalents'. 4. For purposes of segment operating results, the allocation of the non- recurring charges (credits) to the segments has been determined to not be meaningful to investors. Additionally, the performance of segment results has been evaluated without these charges being allocated. 5. The consolidated statements of cash flows are presented in summarized form. For complete consolidated statements of cash flows, please refer to the firm's Quarterly Report on Form 10-Q for the period ended June 30, 2005, to be filed with the Securities and Exchange Commission shortly. SOURCE Jones Lang LaSalle -0- 07/27/2005 /CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer of Jones Lang LaSalle, +1-312 228 2073/ /Web site: http://www.joneslanglasalle.com http://www.joneslanglasalle.com/shareholders/index.asp / - - -----END PRIVACY-ENHANCED MESSAGE-----