-----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, HgKD8VMzZ0N3NWA/9M15zELHgKfE3zoAGIxRJZxiDFtr7VNdmL27SCKLBkwB2Qma 06upFNIytJy/PrFCA5DHGQ== 0000891092-03-003175.txt : 20031106 0000891092-03-003175.hdr.sgml : 20031106 20031105190549 ACCESSION NUMBER: 0000891092-03-003175 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031105 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031106 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: 03980712 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 e16138_8k.txt FORM 8-K 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): November 5, 2003 JONES LANG LASALLE INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Maryland 001-13145 36-4150422 -------- --------- ---------- (State or other (Commission File Number) (IRS Employer jurisdiction of Incorporation 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.) Item 7. Financial Statements and Exhibits (c) Exhibits The following exhibit is included with this Report: 99.1. Press release issued by Jones Lang LaSalle Incorporated dated November 5, 2003. Item 12. Results of Operations and Financial Condition. On November 5, 2003, Jones Lang LaSalle Incorporated (the "Company") issued a press release announcing its financial results for the quarter and nine months ended September 30, 2003. 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. In accordance with Securities and Exchange Commission Release No. 33-8216, the information in this Current Report on Form 8-K and the Exhibit attached hereto is being "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act, except if the Company specifically states that the information and the Exhibit is to be considered "filed" under the Exchange Act or incorporates it by reference into a filing under the Securities Act or the Exchange Act. 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: November 5, 2003 JONES LANG LASALLE INCORPORATED By: /s/ Lauralee E. Martin ---------------------------- Name: Lauralee E. Martin Title: Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit 99.1 Press release issued by Jones Lang LaSalle Incorporated November 5, 2003 announcing its financial results for the quarter and nine months ended September 30, 2003. EX-99.1 3 e16138ex99_1.txt PRESS RELEASE Exhibit 99.1 Jones Lang LaSalle Reports Third Quarter Results In Line With Its Expectations CHICAGO and LONDON, Nov. 5 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated (NYSE: JLL), the leading global real estate services and investment management firm, today reported GAAP net income of $7.4 million for the third quarter of 2003, or $.23 per share. Results were in line with the firm's guidance, although at the lower end of the range, as several significant transactions anticipated to close in the quarter did not close until after September 30. These results compare to prior year GAAP net income of $10.2 million, or $.32 per share. Consistent with previous performance, the firm continued to strengthen its balance sheet using its strong operating cash flows to pay down its credit facilities by $60 million from the prior year. Third Quarter Results Highlights -- Continued strong operating cash flow -- Credit facilities paid down by $60 million from prior year -- Growth in U.S. Corporate Solutions clients and revenues "We continue to see improving market trends in the U.S. and some early positive signals in Asia Pacific, but further downward pressure in some key European markets. In this mixed global environment, it is encouraging that earnings have met our guidance for the third quarter and that we continue to secure new business wins to underpin future growth," said Chris Peacock, President and Chief Executive Officer. "Given the weight of capital pursuing real estate, LaSalle Investment Management is focused on realizing strong equity gains for investors through sales, from which we will see benefit in the balance of the year, while remaining prudent in its acquisitions. Our growth areas of U.S.-led Corporate Solutions business, and North Asian and Central European markets continue to deliver strong pipelines of new revenue." Revenues were $218.1 million for the quarter and $619.5 million year-to- date, increases of 1 percent and 6 percent, respectively. In local currencies, revenues in the quarter declined 4 percent over the prior year period but less than 2 percent year-to-date. The most significant driver of the quarter-on-quarter decline in local currency revenues was in the Investment Management business, which earned a significant incentive fee in the third quarter of 2002, with no comparable fee in 2003. It was anticipated that this would be mitigated by a significant equity gain in the quarter from an asset sale, but the underlying transaction was not completed until the fourth quarter. Operating expenses over the prior year periods increased less than 2 percent for the quarter and 8 percent for the year-to-date to $202.1 million and $607.7 million, respectively. In local currencies, operating expenses decreased 3 percent for the quarter, and increased by less than 2 percent for the year-to-date. Compensation expense in local currencies was 5 percent lower for the quarter, principally due to the timing of incentive compensation recognition, and was 2 percent higher for the first nine months. Operating and administrative expense increased in local currencies by 6 percent for the quarter when compared to the prior year quarter. The prior year benefited from the reversal of a $2.0 million bad debt reserve that had originally been established in 1995. The comparison in year-to-date operating and administrative expense in local currencies over the prior year was also affected by a $2.5 million increase in insurance expense, reflective of the tightened insurance markets. Excluding these two items, operating and administrative expense year-to-date decreased more than 1 percent as a result of the firm's continued aggressive expense management. The third quarter results included an adjustment to previous non-recurring charges that resulted in a net credit of $1.5 million. The actual costs incurred associated with previous restructurings are closely monitored relative to original assumptions and adjustments are made accordingly. The adjustments relate principally to severance charges and the costs of excess leased space. Net interest expense for the third quarter of $4.7 million was essentially flat in U.S. dollars as compared to the same period last year, but was 11 percent lower in local currencies due to the continued lower debt levels of the firm. Year-to-date interest expense of $13.7 million was a 6 percent increase in U.S. dollars, but a decrease of 10 percent in local currencies, again reflecting the impact of sharply lower debt levels, offset by the impact of the stronger euro. As a result of continued focus on tax management, we have lowered our estimated 2003 year-to-date effective tax rate to 32 percent from the rate of 34 percent used through the first half of the year. The lower effective tax rate of 32 percent compares to a rate of 36 percent used through the first nine months of 2002. The tax expense for the three and nine months ending September 30, 2002, was further reduced by a tax benefit of $1.8 million related to certain costs incurred in restructuring actions taken in 2001. The firm continued to aggressively pay down its credit facilities, reducing the balance outstanding at September 30, 2003, by more than $60 million compared to the prior year period. This performance reflects strong business cash flows, active receivables management and a focus on capital expenditures. Although there was no change in the euro value of the outstanding Eurobond obligations, the U.S. dollar reported book value of these obligations increased by $29.3 million as compared to September 30, 2002, due to the stronger euro. A comparison of our financial results quarter-over-quarter should be analyzed in the context of the significantly strengthened currencies in several of our key markets relative to the U.S. dollar, primarily the euro, sterling and Australian dollar. As a result, the growth in the U.S. dollar reported revenues and expenses from the regions in which these currencies are utilized is not reflective of actual experience in the respective countries. The attached schedule on Currency Analysis of Revenues and Operating Income (Loss) provides further clarification. Business Segment Third Quarter Performance Highlights Owner and Occupier Services -- The Americas region reported revenues of $68.3 million for the quarter, a decrease of $3.0 million or 4 percent from the prior year period. Year-to-date revenues of $194.5 million were up 3 percent. Revenue increases came from continued new business wins in Project and Development Services and improved transaction flow in the Tenant Representation business. Revenue declines were experienced in the Capital Markets business as certain planned transactions slipped into the fourth quarter, and in New York where the underlying leasing market conditions, particularly for large transactions, remained soft. Operating income for the quarter of $7.8 million was up $1.5 million over the same period last year, as the reduction in revenue was offset by the timing of reduced incentive compensation. The business continued to demonstrate strong cost controls as compensation cost (excluding incentive compensation) and operating and administrative costs remained flat quarter-over-quarter. -- Total European revenues for the quarter were $81.9 million, a 10 percent increase in U.S. dollars over the last year and $235.2 million for the year-to-date, a 7 percent increase in U.S. dollars as compared to the prior year period. However, in local currencies, Europe reported flat revenues for the quarter and a 6 percent decline for the first nine months. The European business again experienced mixed results for the quarter, with the England Capital Markets group and Holland showing strong revenue increases, while there were continued declines in Germany. Revenue declines for the full year reflect market conditions in the key markets of France, Benelux and Germany. Reported U.S. dollar operating expenses increased by $5.5 million, or 7 percent, for the quarter and $19.5 million, or 9 percent, for the first nine months of 2003. However, local currency expenses declined $1.2 million, or 2 percent, for the quarter and $8.1 million, or 4 percent, for the first nine months compared to the prior year periods as the business focused on cost controls. Operating income for the quarter was $2.6 million compared to $863,000 in the third quarter of 2002. Despite the quarterly improvement, European markets remain challenging. -- Revenues in Asia Pacific for the third quarter were $42.1 million, an 18 percent increase in U.S. dollars and a 10 percent increase in local currencies relative to last year. For the first nine months, revenues were $115.9 million, a 13 percent increase in U.S. dollars and a 5 percent increase in local currencies. The increase in revenues was driven by strong performance in our strategic growth markets of North Asia and India. These increases were achieved despite the SARS epidemic, which caused a slowdown in activity across much of the region, particularly in China, Singapore, Taiwan and Hong Kong. Cost increases in local currencies year-to-date of 8 percent were principally the result of expansion investments made in North Asia and India, which have already begun to deliver performance payback. Investment Management LaSalle Investment Management's revenues for the third quarter were down $9.1 million, or 26 percent in U.S. dollars, and 28 percent in local currencies, as compared to last year. For the first nine months of 2003, revenues were down $1.9 million, or 2 percent in U.S. dollars and 7 percent in local currencies. The decline in local currency revenues for the quarter and year-to-date is the result of the timing of incentive fee recognition with the year-to-date offset by the growth of advisory fees. Incentive fees were $1.4 million in the third quarter of 2003 versus $10.8 million in the same period in 2002, which included one significant fee. The investment management business is focused on capitalizing on a strong sales investment marketplace to realize equity gains. Operating income for the third quarter of $4.6 million was down $6.5 million from the same period in 2002. Operating income for the first nine months was $7.4 million, down $7.2 million. The business anticipates a decline in assets under management in the short term as the challenges of prudently investing capital delays funds growth, while continued asset sales reduces asset levels. Outlook Consistent with previous guidance, the firm remains committed to exceeding its prior year adjusted performance, excluding the one time charge for the write-off of a property management system in Australia. Full year guidance is to meet or exceed $1.00 per share on a GAAP basis, which includes the $.11 charge for the referenced property management system. The firm continues to remain cautious as to transaction timing and the continuing economic challenges of Europe as the majority of its profits are achieved in the fourth quarter of the year. About Jones Lang LaSalle Jones Lang LaSalle is the leading global real estate services and investment 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 approximately 735 million square feet (68 million square meters) under management worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse real estate investment management firms, with approximately $21 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, 2002, under "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk," in Jones Lang LaSalle's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2003, in Jones Lang LaSalle's Proxy Statement dated April 4, 2003, and in other reports filed with the U.S. 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, November 6, at 9 a.m. EST. To participate in the teleconference, please dial into one of the following phone numbers five to ten minutes before the start time: -- United States callers: +1 877 809 9540 -- International callers: +1 706 679 7364 Replay Information Available: (12:00 p.m. EST) Thursday, November 6, through (Midnight EST) Thursday, November 20, at the following numbers: -- International callers: +1 706 645 9291 -- U.S. callers: +1 800 642 1687 -- Pass code: 3462491 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 onto: http://www.firstcallevents.com/service/ajwz393092401gf12.html 3. Download free Windows Media Player software: (link located under registration form) 4. If you experience problems listening, send an e-mail to webcastsupport@tfprn.com This information is also available on the Company's website at www.joneslanglasalle.com . JONES LANG LASALLE INCORPORATED Consolidated Statements of Earnings For the Three and Nine Months Ended September 30, 2003 and 2002 (in thousands, except share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 (A) 2002 (A) 2003 (A) 2002 (A) Revenue: Fee based services $213,169 $211,286 $608,135 $575,101 Equity in earnings (losses) from unconsolidated ventures (77) 987 (282) 2,405 Other income 4,983 4,255 11,691 8,781 Total revenue 218,075 216,528 619,544 586,287 Operating expenses: Compensation and benefits 137,276 137,444 407,054 374,116 Operating, administrative and other 57,176 51,386 169,845 156,462 Depreciation and amortization 9,082 9,418 28,058 28,239 Non-recurring and restructuring charges: Compensation and benefits (1,476) (615) (2,063) (481) Operating, administrative and other 25 1,087 4,765 2,004 Total operating expenses 202,083 198,720 607,659 560,340 Operating income 15,992 17,808 11,885 25,947 Interest expense, net of interest income 4,708 4,688 13,726 12,967 Income (loss) before provision (benefit) for income taxes and minority interest 11,284 13,120 (1,841) 12,980 Net provision (benefit) for income taxes 3,873 2,930 (590) 2,873 Minority interests in earnings of subsidiaries - 21 - 1,313 Net income (loss) before cumulative effect of change in accounting principle $7,411 $10,169 $(1,251) $8,794 Cumulative effect of change in accounting principle - - - 846 Net income (loss) $7,411 $10,169 $(1,251) $9,640 EBITDA (B) $25,074 $27,152 $39,943 $52,278 Basic earnings (loss) per common share before cumulative effect of change in accounting principle $0.24 $0.33 $(0.04) $0.29 Cumulative effect of change in accounting principle - - - 0.03 Basic earnings (loss) per common share $0.24 $0.33 $(0.04) $0.32 Basic weighted average shares outstanding 31,181,095 30,776,775 30,875,168 30,423,660 Diluted earnings (loss) per common share before cumulative effect of change in accounting principle $0.23 $0.32 $(0.04) $0.28 Cumulative effect of change in accounting principle - - - 0.03 Diluted earnings (loss) per common share $0.23 $0.32 $(0.04) $0.31 Diluted weighted average shares outstanding 32,409,506 32,004,389 30,875,168 31,897,311 Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Segment Operating Results For the Three and Nine Months ended September 30, 2003 and 2002 (in thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 (A) 2002 (A) 2003 (A) 2002 (A) OWNER & OCCUPIER SERVICES - AMERICAS Revenue: Implementation services $25,503 $31,594 $70,882 $78,657 Management services 41,389 38,519 119,709 106,589 Equity losses - - - (10) Other services 1,308 1,013 3,495 2,955 Intersegment revenue 93 173 432 375 68,293 71,299 194,518 188,566 Operating expenses: Compensation, operating and administrative 55,951 60,414 171,822 166,611 Depreciation and amortization 4,508 4,591 13,717 14,223 Operating income(C) $7,834 $6,294 $8,979 $7,732 EUROPE Revenue: Implementation services $57,854 $52,080 $162,742 $155,419 Management services 20,678 19,826 65,594 58,973 Other services 3,352 2,796 6,862 4,638 81,884 74,702 235,198 219,030 Operating expenses: Compensation, operating and administrative 76,539 70,973 223,345 204,050 Depreciation and amortization 2,785 2,866 8,331 8,134 Operating income(C) $2,560 $863 $3,522 $6,846 ASIA PACIFIC Revenue: Implementation services $23,316 $18,363 $60,383 $52,940 Management services 18,509 16,946 54,443 48,906 Other services 306 386 1,110 1,044 42,131 35,695 115,936 102,890 Operating expenses: Compensation, operating and administrative 41,084 33,998 116,179 99,620 Depreciation and amortization 1,519 1,639 5,098 4,945 Operating income (loss)(C) $(472) $58 $(5,341) $(1,675) INVESTMENT MANAGEMENT- Revenue: Implementation and other services $996 $1,177 $3,324 $2,352 Advisory fees 23,585 22,037 69,348 59,652 Incentive fees 1,356 10,804 1,934 11,757 Equity earnings (losses) (77) 987 (282) 2,415 25,860 35,005 74,324 76,176 Operating expenses: Compensation, operating and administrative 20,971 23,618 65,985 60,672 Depreciation and amortization 270 322 912 937 Operating income(C) $4,619 $11,065 $7,427 $14,567 Total segment revenue $218,168 $216,701 $619,976 $586,662 Intersegment revenue eliminations (93) (173) (432) (375) Total revenue $218,075 $216,528 $619,544 $586,287 Total segment operating expenses $203,627 $198,421 $605,389 $559,192 Intersegment operating expense eliminations (93) (173) (432) (375) Total operating expenses before non-recurring and restructuring charges $203,534 $198,248 $604,957 $558,817 Operating income before non-recurring and restructuring charges $14,541 $18,280 $14,587 $27,470 Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Consolidated Balance Sheets September 30, 2003 and December 31, 2002 (in thousands) September 30, 2003 December 31, (Unaudited) 2002 ASSETS Current assets: Cash and cash equivalents $13,601 $13,654 Trade receivables, net of allowances 182,764 227,579 Notes receivable 2,733 4,165 Other receivables 8,528 7,623 Prepaid expenses 18,351 15,142 Deferred tax assets 31,428 27,382 Other assets 10,411 10,760 Total current assets 267,816 306,305 Property and equipment, at cost, less accumulated depreciation 69,487 81,652 Intangibles resulting from business acquisitions and JLW merger, net of accumulated amortization 339,854 333,821 Investments in and loans to real estate ventures 66,918 74,994 Long-term receivables, net 12,722 15,248 Prepaid pension asset - 9,646 Deferred tax assets 23,441 18,839 Debt issuance costs 4,333 4,343 Other assets, net 7,965 7,668 $792,536 $852,516 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $86,988 $92,389 Accrued compensation 80,113 139,513 Short-term borrowings 10,052 15,863 Deferred tax liabilities 687 20 Other liabilities 29,243 21,411 Total current liabilities 207,083 269,196 Long-term liabilities: Credit facilities 6,000 26,077 9% Senior Euro Notes, due 2007 192,323 173,068 Deferred tax liabilities 838 146 Minimum pension liability 6,396 - Other 13,429 17,071 Total liabilities 426,069 485,558 Commitments and contingencies Stockholders' equity: Common stock, $.01 par value per share, 100,000,000 shares authorized; 31,556,318 and 30,896,333 shares issued and outstanding as of September 30, 2003 and December 31, 2002, respectively 316 309 Additional paid-in capital 502,023 494,283 Deferred stock compensation (14,450) (17,321) Retained deficit (96,662) (95,411) Stock held by subsidiary (4,659) (4,659) Stock held in trust (460) (460) Accumulated other comprehensive income (19,641) (9,783) Total stockholders' equity 366,467 366,958 $792,536 $852,516 Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Summarized Consolidated Statements of Cash Flows Nine Months Ended September 30, 2003 and 2002 (in thousands) (Unaudited) 2003 (D) 2002 (D) Cash provided by earnings $46,461 $50,261 Cash used in working capital (11,120) (30,038) Cash used in investing activities (7,639) (20,724) Cash used in financing activities (27,755) (612) Net decrease in cash (53) (1,113) Cash and cash equivalents, beginning of period 13,654 10,446 Cash and cash equivalents, end of period $13,601 $9,333 JONES LANG LASALLE INCORPORATED Schedule of Non-Recurring and Restructuring Charges For the Three and Nine Months Ended September 30, 2003 and 2002 (in thousands, except share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Non-Recurring & Restructuring Charges Land Investment & Development Group Impairment Charges - 1,087 - 2,004 Insolvent Insurance Providers - - (606) - Abandonment of Property Management Accounting System - Compensation & Benefits - - 113 - - Operating, Administrative & Other 97 - 4,919 - 2001 Global Restructuring Program - Compensation & Benefits 15 (615) 97 (481) - Operating, Administrative & Other - - - - 2002 Global Restructuring Program - Compensation & Benefits (1,491) - (2,273) - - Operating, Administrative & Other (72) - 452 - Total Non-Recurring & Restructuring Charges (1,451) 472 2,702 1,523 Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED CURRENCY ANALYSIS OF REVENUES AND OPERATING INCOME (LOSS) (in millions) (Unaudited) Pound US Sterling Australian Dollar (E) Euro Dollar (E) Other TOTAL $ $ $ $ $ $ REVENUES (A) 2003 Q1, 2003 37.7 37.2 13.7 70.0 29.3 187.9 Q2, 2003 43.9 36.5 18.7 75.9 38.6 213.6 Q3, 2003 50.7 36.7 19.6 84.0 27.1 218.1 Total 132.3 110.4 52.0 229.9 95.0 619.6 2002 Q1, 2002 34.9 32.7 12.4 63.3 26.6 169.9 Q2, 2002 47.1 32.2 16.5 70.2 33.8 199.8 Q3, 2002 43.6 35.7 17.1 89.7 30.4 216.5 Total 125.6 100.6 46.0 223.2 90.8 586.2 OPERATING INCOME (LOSS) (E) 2003 Q1, 2003 -2.6 2.9 -1.4 -2.4 -3.4 -6.9 Q2, 2003 -0.4 0.1 -4.1 1.9 5.3 2.8 Q3, 2003 4.8 1.9 0.7 7.4 1.2 16.0 Total 1.8 4.9 -4.8 6.9 3.1 11.9 2002 Q1, 2002 -2.5 3.8 -2.5 -1.0 -1.9 -4.1 Q2, 2002 7.2 -0.2 -0.3 2.9 2.7 12.3 Q3, 2002 1.8 2.6 0.4 13.8 -0.8 17.8 Total 6.5 6.2 -2.4 15.7 0.0 26.0 AVERAGE EXCHANGE RATES Q1, 2003 1.600 1.075 0.595 N/A N/A N/A Q2, 2003 1.624 1.140 0.644 N/A N/A N/A Q3, 2003 1.617 1.130 0.656 N/A N/A N/A Q1, 2002 1.426 0.877 0.520 N/A N/A N/A Q2, 2002 1.464 0.924 0.553 N/A N/A N/A Q3, 2002 1.551 0.985 0.548 N/A N/A N/A Please reference attached financial statement notes. JONES LANG LASALLE INCORPORATED Financial Statement Notes (A) Certain amounts described below have been reclassified to conform with the current presentation. These reclassifications have no impact on operating income (loss), net income (loss) or cash flows for any of the periods affected. Beginning in December 2002, pursuant to the FASB's Emerging Issues Task Force ("EITF") No. 01-14, "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred", we have reclassified reimbursements received for out-of-pocket expenses to revenues in the income statement, as opposed to being shown as a reduction of expenses. These out-of-pocket expenses amounted to $1.3 million and $3.9 million in the three and nine months ended September 30, 2003, respectively, and $1.1 million and $3.0 million in the three and nine months ended September 30, 2002, respectively. Beginning in December 2002, we reclassified as revenue our recovery of indirect costs related to our management services business, as opposed to being classified as a reduction of expenses in the income statement. The amount of reimbursables totaled $10.7 million and $27.6 million in the three and nine months ended September 30, 2003, respectively, and $8.3 million and $22.8 million in the three and nine months ended September 30, 2002, respectively. (B) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization, and excludes Minority Interests in EBITDA. For the nine months ended September 30, 2002, EBITDA excludes the cumulative effect of change in accounting principle resulting from the adoption of SFAS 142. Management believes that EBITDA is useful to investors as a measure of operating performance, cash generation and ability to service debt. EBITDA is also used in the calculation of certain covenants related to our revolving credit facility. However, EBITDA should not be considered an alternative to (i) net income (loss) (determined in accordance with GAAP), (ii) cash flows (determined in accordance with GAAP), or (iii) liquidity. Reconciliation from operating income to EBITDA (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Operating income $15,992 $17,808 $11,885 $25,947 Plus: Depreciation and amortization 9,082 9,418 28,058 28,239 Less: Minority interests in EBITDA - (74) - (1,908) EBITDA $25,074 $27,152 $39,943 $52,278 (C) For purposes of this analysis we have determined that the allocation of the non-recurring charges to our segments is not meaningful to investors. Additionally, we evaluate the performance of our segment results without these charges being allocated. (D) The consolidated statements of cash flows are presented in summarized form. Please reference our third quarter Form 10-Q for detailed consolidated statements of cash flows. (E) The objective of this presentation is to provide guidance as to the key currencies that the Company does business in and their significance to reported revenues and operating income. The operating income sourced in pound sterling and US dollars understates the profitability of the businesses in the United Kingdom and America because it includes the locally incurred expenses of our global offices in London and Chicago, respectively, as well as the European regional office in London. The revenues and operating income of the global investment management business are allocated to their underlying currency, which means that this analysis may not be consistent with the performance of the geographic OOS segments. In particular, as incentive fees are earned by this business, there may be significant shifts in the geographic mix of revenues and operating income. SOURCE Jones Lang LaSalle Incorporated -0- 11/05/2003 /CONTACT: Lauralee Martin, Chief Financial Officer of Jones Lang LaSalle Incorporated, +1-312-228-2073/ /Web site: http://www.joneslanglasalle.com / (JLL) CO: Jones Lang LaSalle Incorporated ST: Illinois, England IN: FIN RLT SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----