UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________

Commission file number 1-13145

JONES LANG LASALLE INCORPORATED
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

Maryland 36-4150422
------------------------- ---------------------------------
(State or other jurisdic- (IRS Employer Identification No.)
tion of incorporation or
organization)

200 East Randolph Drive, Chicago, IL 60601
- --------------------------------------- ----------
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/782-5800

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Outstanding at
Class May 12, 2000
----- --------------

Common Stock ($0.01 par value) 30,280,218

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements . . . . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . 15

Item 3. Quantitative and Qualitative Disclosures about
Market Risk. . . . . . . . . . . . . . . . . . . . . 23

PART II OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 24

Item 5. Other Matters. . . . . . . . . . . . . . . . . . . . 24

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 24

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JONES LANG LASALLE INCORPORATED
CONSOLIDATED BALANCE SHEETS

MARCH 31, 2000 AND DECEMBER 31, 1999
(in thousands, except share data)
(UNAUDITED)

MARCH 31, DECEMBER 31,
2000 1999
------------- -----------
ASSETS
- ------
Current assets:
Cash and cash equivalents. . . . . . . . . $ 15,771 23,308
Trade receivables, net of allowances
of $10,996 and $9,871 in 2000
and 1999, respectively . . . . . . . . . 235,090 270,593
Notes receivable and advances to
real estate ventures . . . . . . . . . . 4,616 4,519
Other receivables. . . . . . . . . . . . . 4,570 7,045
Income tax refund receivable . . . . . . . 14,500 14,500
Prepaid expenses . . . . . . . . . . . . . 10,117 9,598
Deferred tax assets. . . . . . . . . . . . 16,699 13,673
Other assets . . . . . . . . . . . . . . . 16,563 5,446
---------- ---------
Total current assets . . . . . . . 317,926 348,682

Property and equipment, at cost,
less accumulated depreciation of
$60,015 and $55,943 in 2000
and 1999, respectively . . . . . . . . . . 78,505 76,470
Intangibles resulting from business
acquisitions and JLW merger, net of
accumulated amortization of $31,599
and $27,515 in 2000 and 1999,
respectively . . . . . . . . . . . . . . . 363,700 367,215
Investments in real estate ventures. . . . . 73,246 67,305
Long-term receivables, net . . . . . . . . . 27,494 27,962
Prepaid pension asset. . . . . . . . . . . . 22,800 23,956
Deferred tax assets. . . . . . . . . . . . . 5,188 5,270
Other assets, net. . . . . . . . . . . . . . 8,813 7,940
---------- ----------
$ 897,672 924,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable and
accrued liabilities. . . . . . . . . . . $ 92,029 88,257
Accrued compensation . . . . . . . . . . . 70,758 142,960
Short-term borrowings. . . . . . . . . . . 181,394 162,643
Deferred tax liabilities . . . . . . . . . 231 --
Other liabilities. . . . . . . . . . . . . 21,614 26,259
---------- ----------
Total current liabilities. . . . . 366,026 420,119

Long-term liabilities:
Credit facilities. . . . . . . . . . . . . 194,466 159,743
Deferred tax liabilities . . . . . . . . . 7,225 7,535
Other. . . . . . . . . . . . . . . . . . . 15,539 12,878
---------- ----------

Total liabilities. . . . . . . . . 583,256 600,275

Commitments and contingencies

JONES LANG LASALLE INCORPORATED
CONSOLIDATED BALANCE SHEETS - CONTINUED

MARCH 31, 2000 AND DECEMBER 31, 1999
(in thousands, except share data)
(UNAUDITED)

MARCH 31, DECEMBER 31,
2000 1999
------------- -----------

Minority interest in consolidated
subsidiaries . . . . . . . . . . . . . . . 554 589

Stockholders' equity:
Common stock, $.01 par value per share,
100,000,000 shares authorized;
30,288,978 and 30,285,472 shares
issued and outstanding as of 2000
and 1999, respectively . . . . . . . . . 303 303
Additional paid-in capital . . . . . . . . 449,132 442,699
Unallocated ESOT shares. . . . . . . . . . (7) (7)
Deferred stock compensation. . . . . . . . (56,531) (70,106)
Retained deficit . . . . . . . . . . . . . (75,022) (50,050)
Accumulated other comprehensive
income (loss). . . . . . . . . . . . . . (4,013) 1,097
---------- ----------
Total stockholders' equity . . . . 313,862 323,936
---------- ----------
$ 897,672 924,800
========== ==========

See accompanying notes to consolidated financial statements.

JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(in thousands, except share data)
(UNAUDITED)

2000 1999
---------- ----------
Revenue:
Fee-based services . . . . . . . . . . . . . $ 180,423 100,704
Equity in earnings from unconsolidated
ventures . . . . . . . . . . . . . . . . . 5,940 181
Other income . . . . . . . . . . . . . . . . 617 536
---------- ----------
Total revenue. . . . . . . . . . . . . 186,980 101,421

Operating expenses:
Compensation and benefits. . . . . . . . . . 130,237 75,439
Operating, administrative and other. . . . . 51,485 31,317
Depreciation and amortization. . . . . . . . 10,694 6,955
---------- ----------
Total operating expenses before
merger related non-recurring
charges. . . . . . . . . . . . . . . 192,416 113,711
---------- ----------
Operating loss before merger
related none-recurring charges . . . (5,436) (12,290)

Merger related non-recurring charges:
Stock compensation expense . . . . . . . . . 18,326 46,199
Integration and transition expenses. . . . . -- 7,844
---------- ----------
Total merger related non-recurring
charges. . . . . . . . . . . . . . . 18,326 54,043
---------- ----------
Total operating expenses . . . . . . . 210,742 167,754
---------- ----------
Operating loss . . . . . . . . . . . . (23,762) (66,333)

Interest expense, net of interest income . . . 6,675 2,642
---------- ----------
Loss before benefit for income taxes . (30,437) (68,975)

Net benefit for income taxes . . . . . . . . . (5,465) (13,560)
---------- ----------
Net loss . . . . . . . . . . . . . . . $ (24,972) (55,415)
========== ==========

Other comprehensive income:
Foreign currency translation adjustments . . $ (5,110) (433)
---------- ----------
Comprehensive loss . . . . . . . . . . . . . . $ (30,082) (55,848)
========== ==========
Basic loss per common share. . . . . . . . . . $ (1.02) (3.09)
========== ==========
Weighted average shares outstanding. . . . . . 24,395,021 17,914,221
========== ==========
Diluted loss per common share. . . . . . . . . $ (1.02) (3.09)
========== ==========
Diluted weighted average shares outstanding. . 24,395,021 17,914,221
========== ==========

See accompanying notes to consolidated financial statements.

JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

PERIODS ENDED MARCH 31, 2000 AND DECEMBER 31, 1999
(in thousands, except share data)
(UNAUDITED)

Accumu-
lated
Other
Additi- Unallo- Deferred Compre-
Common Stock tional cated Stock Retained hensive
------------------- Paid-In ESOT Compen- Earnings Income
Shares Amount Capital Shares sation (Deficit) (Loss) Total
---------- ------ -------- ------- -------- --------- ------- -------

Balances at
December 31,
1998. . . . . . . . 16,264,176 163 123,543 -- -- 44,792 1,074 169,572

Net loss. . . . . -- -- -- -- -- (94,842) -- (94,842)
Shares issued in
connection with:
Stock option
plan . . . . . 21,292 -- 495 -- -- -- -- 495
Stock purchase
programs . . . 199,587 2 3,695 -- -- -- -- 3,697
Share activity
related to JLW
merger:
Shares issued
at closing . . 14,254,116 143 355,233 (9) (160,253) -- -- 195,114
Adjustment
shares sub-
sequently
retained . . . (453,699) (5) (8,462) -- -- -- -- (8,467)
ESOT shares
allocated. . . -- -- 1,597 2 -- -- -- 1,599
Stock compensa-
tion adjust-
ments . . . . . -- -- (33,402) -- 27,906 -- -- (5,496)
Amortization of
deferred stock
compensation. . -- -- -- -- 62,241 -- -- 62,241
Cumulative effect
of foreign
currency
translation
adjustments . . -- -- -- -- -- -- 23 23
---------- ----- ------- -------- -------- -------- -------- --------

JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - CONTINUED

Net loss . . . . . . -- -- -- -- -- (24,972) -- (24,972)
Shares issued in
connection with:
Stock purchase
programs . . . . 65,306 1 2,425 -- -- -- -- 2,426
Share activity re-
lated to JLW merger:
Shares repurchased
for payment of
taxes on ESOT
Shares allocated
at December 31,
1999 . . . . . . (61,800) (1) (743) -- -- -- -- (744)
Stock compensa-
tion adjustments . -- -- 4,751 -- (4,304) -- -- 447
Amortization of
deferred stock
compensation . . . -- -- -- -- 17,879 -- -- 17,879
Other. . . . . . . . -- -- -- -- -- -- (5,110) (5,110)
---------- ----- ------- ------- -------- -------- -------- --------

Balances at
March 31, 2000 . . 30,288,978 $ 303 449,132 (7) (56,531) (75,022) (4,013) 313,862
========== ===== ======= ======= ======== ======== ======== ========

<FN>
See accompanying notes to consolidated financial statements.

JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(in thousands, unless otherwise noted)
(UNAUDITED)

2000 1999
---------- ----------
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . $ (24,972) (55,415)
Reconciliation of net loss to net cash
used in operating activities:
Depreciation and amortization. . . . . . . 10,694 6,955
Equity in earnings from unconsolidated
ventures . . . . . . . . . . . . . . . . (5,940) (181)
Provision for loss on receivables and
other assets . . . . . . . . . . . . . . 1,455 2,524
Stock compensation expense . . . . . . . . 18,326 46,199
Amortization of deferred compensation. . . 691 --
Changes in:
Receivables. . . . . . . . . . . . . . . . 33,639 16,729
Prepaid expenses and other assets. . . . . (1,552) (4,894)
Deferred tax assets and income tax
refund receivable. . . . . . . . . . . . (9,426) (20,180)
Accounts payable, accrued liabilities
and accrued compensation . . . . . . . . (76,948) (23,412)
--------- --------
Net cash used in
operating activities . . . . . . . . (54,033) (31,675)

Cash flows provided by (used in) investing
activities:
Net capital additions - property and
equipment. . . . . . . . . . . . . . . . . (10,266) (5,888)
Cash paid in connection with Jones
Lang Wootton merger, net of cash
balances assumed . . . . . . . . . . . . . -- (33,930)
Other acquisitions and investments,
net of cash balances assumed . . . . . . . (1,250) (1,380)
Investments in real estate ventures:
Capital contributions and advances to
real estate ventures . . . . . . . . . . (2,363) (366)
Distributions, repayments of advances
and sale of investments. . . . . . . . . 4,475 3,525
--------- --------
Net cash used in
investing activities . . . . . . . . (9,404) (38,039)

Cash flows provided by financing activities:
Proceeds from borrowings under credit
facilities . . . . . . . . . . . . . . . . 117,356 118,556
Repayments of borrowings under
credit facilities. . . . . . . . . . . . . (63,882) (27,159)
Common stock issued under stock
option plan and stock purchase
programs . . . . . . . . . . . . . . . . . 2,426 1,363
--------- --------
Net cash provided by
financing activities . . . . . . . . 55,900 92,760
--------- --------
Net (decrease) increase in
cash and cash equivalents. . . . . . (7,537) 23,046

Cash and cash equivalents,
beginning of period. . . . . . . . . . . . . 23,308 16,941
--------- --------
Cash and cash equivalents, end of period . . . $ 15,771 39,987
========= ========

JONES LANG LASALLE INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(in thousands, unless otherwise noted)

2000 1999
---------- ----------

Supplemental disclosure of cash flow
information:

Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . $ 5,665 2,595
Taxes, net of refunds. . . . . . . . . . . 2,609 10,041

Non-cash investing and financing
activities:
Acquisitions and merger:
Shares issued in connection with
merger . . . . . . . . . . . . . . . . $ -- 149,521
Fair value of assets acquired. . . . . . 174 (206,992)
Fair value of liabilities assumed. . . . 3,797 179,025
Goodwill . . . . . . . . . . . . . . . . (3,971) (156,864)
Other investments. . . . . . . . . . . . (1,250) --
--------- --------
Cash paid, net of cash
balances assumed . . . . . . . . . $ (1,250) (35,310)
========= ========

See accompanying notes to consolidated financial statements.

JONES LANG LASALLE INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except where otherwise noted)

(UNAUDITED)

Readers of this quarterly report should refer to our audited financial
statements for the year ended December 31, 1999, which are included in our
1999 Form 10-K, filed with the Securities and Exchange Commission, as
certain footnote disclosures which would substantially duplicate those
contained in such audited financial statements have been omitted from this
report.

(1) ACCOUNTING POLICIES

INTERIM INFORMATION

The consolidated financial statements as of March 31, 2000 and for
the three month periods ended March 31, 2000 and 1999 are unaudited;
however, in the opinion of management, all adjustments (consisting solely
of normal recurring adjustments) necessary for a fair presentation of the
consolidated financial statements for these interim periods have been
included. The results for the periods ended March 31, 2000 and 1999 are
not necessarily indicative of the results to be obtained for the full
fiscal year.

Certain prior year amounts have been reclassified to conform with the
current presentation.

BONUS INCENTIVE COMPENSATION

In the first quarter of 2000, Jones Lang LaSalle changed its method
of estimating and allocating bonus incentive compensation to interim
periods. The impact of this change for the three months ended March 31,
2000 was to reduce compensation expense by approximately $8.2 million.
This change does not impact the overall compensation cost that will be
incurred during the year ended December 31, 2000, but rather the periods in
which it is recognized.

EARNINGS PER SHARE

The basic and diluted losses per common share were calculated based
on basic weighted average shares outstanding of 24.4 million and 17.9
million for the three month periods ended March 31, 2000 and 1999,
respectively. As a result of the operating losses incurred for these
periods, diluted weighted average shares outstanding for the three month
periods ended March 31, 2000 and 1999 do not give effect to common stock
equivalents, as to do so would be anti-dilutive. These common stock
equivalents consist principally of consideration shares issued in
connection with the JLW merger that are subject to vesting provisions or
are contingently returnable. To a lesser extent, common stock equivalents
also include outstanding stock options whose exercise price was less than
the average market price of Jones Lang LaSalle's stock for the period and
shares to be issued under employee stock compensation programs.

STATEMENT OF CASH FLOWS

The effects of foreign currency translation on cash balances are
reflected in cash flows from operating activities on the Consolidated
Statements of Cash Flows.

(2) JONES LANG WOOTTON MERGER

On March 11, 1999, LaSalle Partners Incorporated merged its
businesses with those of the Jones Lang Wootton companies ("JLW") and
changed its name to Jones Lang LaSalle Incorporated. In accordance with
the purchase and sale agreements, Jones Lang LaSalle issued 14.3 million
shares of common stock and paid cash consideration of $6.2 million. This
transaction, which was principally structured as a share exchange, has been
treated as an acquisition and is being accounted for using both APB Opinion
No. 16, "Business Combinations" and APB Opinion No. 25, "Accounting for
Stock Issued to Employees." See our Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 for a full discussion of this
transaction and the related accounting treatment.

The total value attributed to the issuance of the 7.2 million shares
accounted for under APB No. 16 of $141.9 million, in addition to the cash
payment of $6.2 million and capitalizable transaction costs of
approximately $15.8 million, have been allocated to the identifiable assets
acquired and liabilities assumed, based on management's estimates of fair
value, which totaled $251.4 million and $244.5 million, respectively. The
resulting excess purchase price of $157.0 million was allocated to goodwill
which is being amortized on a straight-line basis over 40 years based on
management's estimate of useful lives. Included in the assets acquired was
$32.2 million in cash and included in the liabilities assumed was $47.4
million of obligations to former partners of undistributed earnings. The
liabilities assumed also included employee termination costs of $9.3
million, as well as office rental payments in excess of sublease rental
income of $.3 million and telecommunication lease termination costs of $.8
million related to the closing of offices with geographic overlap in the
United States. As of March 31, 2000, $.4 million of employee termination
costs remain unpaid and will be paid in the remainder of 2000.
Approximately $1.1 million of office closure costs remain unpaid as of
March 31, 2000. These amounts will be recognized through 2002.

In relation to the transaction, 4.6 million of the shares issued are
subject to forfeiture or vesting provisions and therefore, pursuant to APB
Opinion No. 25, have been accounted for as deferred compensation with
compensation expense to be recognized over the forfeiture or vesting
period. In addition, 1.3 million shares are deemed to be contingently
returnable and therefore, are being accounted for as a variable stock award
plan. Under a variable stock award plan, the amount of compensation expense
and value of deferred compensation will be adjusted at the end of each
quarter based on the change in stock price from the previous quarter until
the final number of shares to be issued is known.

Compensation expense incurred for the three months ended March 31,
2000 related to the amortization of deferred compensation totaled $18.3
million, net of the quarterly adjustment for the change in stock price.
Compensation expense incurred for the three months ended March 31, 1999
related to the issuance of shares and the amortization of deferred
compensation totaled $46.2 million, net of the quarterly adjustment for the
change in stock price. Deferred compensation at March 31, 2000 totaled
$56.5 million, including the effect of the quarterly adjustment for the
change in stock price, which will be amortized into compensation expense
during the remainder of 2000. Such compensation expense, in addition to
compensation expense anticipated to be incurred at December 31, 2000
associated with the final allocation of the shares in the employee stock
ownership trust ("ESOT"), is expected to result in a significant non-cash
net loss for Jones Lang LaSalle for the year.

(3) BUSINESS SEGMENTS

Operations are classified into five business segments: two global
businesses, (i) Investment Management and (ii) Hotel Services; and Owner
and Occupier Services which is divided into three geographic regions, (iii)
the Americas, (iv) Europe and (v) Asia Pacific. The Investment Management
segment provides real estate investment management services to
institutional investors, corporations, and high net worth individuals. The
Hotels Services segment provides strategic advisory, sales, acquisition,
valuation and asset management services related solely to hotel, conference
and resort properties. Owner and Occupier Services consist primarily of
tenant representation and agency leasing, investment disposition and
acquisition, and valuation services (collectively, "implementation
services") and property management, corporate property services,
development and project management services (collectively, "management
services").

Total revenue by industry segment includes revenue derived from
services provided to other segments. Operating income represents total
revenue less direct and indirect allocable expenses. Jones Lang LaSalle
allocates all expenses, other than interest and income taxes, as nearly all
expenses incurred benefit one or more of the segments. Merger related non-
recurring charges are not allocated to the segments.

Summarized unaudited financial information by business segment for
the three month periods ended March 31, 2000 and 1999 is as follows ($ in
thousands):
SEGMENT
OPERATING RESULTS
-----------------------
MARCH 31,
2000 1999
---------- ----------
OWNER AND OCCUPIER SERVICES -
AMERICAS
Revenue:
Implementation services. . . . . . . . . . $ 20,704 17,159
Management services. . . . . . . . . . . . 29,229 26,610
Equity losses. . . . . . . . . . . . . . . (360) (180)
Other services . . . . . . . . . . . . . . 188 522
Intersegment revenue . . . . . . . . . . . 395 62
---------- ----------
50,156 44,173
Operating expenses:
Compensation, operating and
administrative expenses. . . . . . . . . 59,594 57,086
Depreciation and amortization. . . . . . . 5,382 5,043
---------- ----------
Operating loss . . . . . . . . . . . $ (14,820) (17,956)
========== ==========
EUROPE
Revenue:
Implementation services. . . . . . . . . . $ 59,586 21,468
Management services. . . . . . . . . . . . 20,176 6,331
Equity losses. . . . . . . . . . . . . . . -- (21)
Other services . . . . . . . . . . . . . . 236 5
---------- ----------
79,998 27,783
Operating expenses:
Compensation, operating and
administrative expenses. . . . . . . . . 72,128 21,189
Depreciation and amortization. . . . . . . 2,749 615
---------- ----------
Operating income . . . . . . . . . . $ 5,121 5,979
========== ==========

SEGMENT
OPERATING RESULTS
-----------------------
MARCH 31,
2000 1999
---------- ----------
ASIA PACIFIC
Revenue:
Implementation services. . . . . . . . . . $ 18,688 6,210
Management services. . . . . . . . . . . . 11,414 3,426
Equity losses. . . . . . . . . . . . . . . -- (24)
Other services . . . . . . . . . . . . . . 167 115
---------- ----------
30,269 9,727
Operating expenses:
Compensation, operating and
administrative expenses. . . . . . . . . 28,193 11,371
Depreciation and amortization. . . . . . . 1,550 406
---------- ----------
Operating income (loss). . . . . . . $ 526 (2,050)
========== ==========
HOTEL SERVICES -
Revenue:
Implementation services. . . . . . . . . . $ 3,380 854
Management services. . . . . . . . . . . . 344 --
Other services . . . . . . . . . . . . . . 1 --
---------- ----------
3,725 854
Operating expenses:
Compensation, operating and
administrative expenses. . . . . . . . . 3,353 920
Depreciation and amortization. . . . . . . 28 11
---------- ----------
Operating income (loss). . . . . . . $ 344 (77)
========== ==========
INVESTMENT MANAGEMENT -
Revenue:
Implementation services. . . . . . . . . . $ 2,969 1,861
Advisory fees. . . . . . . . . . . . . . . 13,933 16,614
Equity earnings. . . . . . . . . . . . . . 6,300 406
Other services . . . . . . . . . . . . . . 25 65
Intersegment revenue . . . . . . . . . . . -- 35
---------- ----------
23,227 18,981
Operating expenses:
Compensation, operating and
administrative expenses. . . . . . . . . 18,849 16,286
Depreciation and amortization. . . . . . . 985 881
---------- ----------
Operating income . . . . . . . . . . $ 3,393 1,814
========== ==========

Total segment revenue. . . . . . . . . . . . . $ 187,375 101,518
Intersegment revenue eliminations. . . . . . . (395) (97)
---------- ----------
Total revenue. . . . . . . . . . . . $ 186,980 101,421
========== ==========

Total segment operating expenses . . . . . . . $ 192,811 113,808
Intersegment operating expense
eliminations . . . . . . . . . . . . . . . . (395) (97)
---------- ----------
Total operating expenses
before merger related
non-recurring charges. . . . . . . $ 192,416 113,711
========== ==========
Operating loss before merger
related non-recurring charges. . . $ (5,436) (12,290)
========== ==========

(4) SUBSEQUENT EVENT

Jones Lang LaSalle increased its unsecured credit agreement to $425
million, through the addition of five new banks to its credit group. The
credit agreement is now comprised of a $250 million revolving facility
maturing in October 2002 and a $175 million term facility maturing on
October 15, 2000. Jones Lang LaSalle intends to refinance its term
facility and has engaged a financial advisor to assist in evaluating
alternatives.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto for the three months
ended March 31, 2000, included herein, and our audited consolidated
financial statements and notes thereto for the fiscal year ended
December 31, 1999 which have been filed with the Securities and Exchange
Commission as part of our Annual Report on Form 10-K.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1999

Operating results in 1999 include the results of JLW effective
March 1, 1999, therefore results for the three months ended March 31, 1999
include only one month of results for the former JLW operations.

REVENUE

Total revenue, after elimination of intersegment revenue, increased
$85.6 million, or 84.4%, to $187.0 million for the three months ended
March 31, 2000 from $101.4 million for the three months ended March 31,
1999. A primary driver in this increase was the inclusion of an additional
two months of revenue in the three months ended March 31, 2000, compared to
the three months ended March 31, 1999, for the former JLW operations. In
addition, the Europe and Asia Pacific regions of Owner and Occupier
Services benefitted from the strong European economy and recovering Asian
markets, respectively. The increase in equity earnings is related to our
share of the gain on sale and the performance-related fee from the
commencement of the liquidation of a French property portfolio managed by
the Investment Management segment.

OPERATING EXPENSES

Total operating expenses, after elimination of intersegment expenses
and excluding the effect of merger related non-recurring charges, increased
$78.7 million, or 69.2%, to $192.4 million for the three months ended
March 31, 2000 as compared with $113.7 million for the three months ended
March 31, 1999. This increase was primarily due to the timing of the JLW
merger, resulting in an additional two months of JLW expenses in the March
31, 2000 expenses. This transaction also resulted in increases in
personnel and office occupancy costs related to the global infrastructure
added to support the larger size of the combined company, as well as an
increase in amortization expense due to the amortization of the resulting
goodwill. These increases were partially offset by decreases in operating
expenses resulting from the continued success in the implementation of cost
savings initiatives in the Americas region of the Owner and Occupier
services segment, as well as a change in Jones Lang LaSalle's method of
estimating and allocating bonus incentive compensation to interim periods.
The impact of this change for the three months ended March 31, 2000 was to
reduce compensation expense by approximately $8.2 million. This change
does not impact the overall compensation cost that will be incurred during
the year ended December 31, 2000, but rather the periods in which it is
recognized. This change is weighted towards the Americas region of the
Owner and Occupier Services segment, which is the most seasonal of the
segments.

Merger related non-recurring charges totaled $18.3 million for the
three months ended March 31, 2000, compared to $54.0 million for the three
months ended March 31, 1999. These charges represent non-cash compensation
expense recorded as a result of shares issued to certain former employees
of JLW in connection with the merger, as well as in 1999, $7.8 million of
non-recurring transition and integration costs.

OPERATING LOSS

Due to the seasonal nature of our business, Jones Lang LaSalle
typically reports a loss in the first quarter, followed by rising
profitability throughout the remainder of the year (see Seasonality section
for further discussion). Consistent with this pattern, our operating loss
for the three months ended March 31, 2000, excluding the effect of merger
related non-recurring charges, totaled $5.4 million, as compared to an
operating loss of $12.3 million for the three months ended March 31, 1999,
representing an improvement of $6.9 million, or 56.1%. This improvement
over the prior year period is primarily due to continued growth in the
Europe and Asia Pacific real estate markets, the positive effects of cost-
saving initiatives implemented by the Americas region of Owner and Occupier
Services and the change in Jones Lang LaSalle's method of estimating and
allocating bonus incentive compensation to interim periods as discussed
above.

Including the effect of the merger related non-recurring charges, the
operating loss for the three months ended March 31, 2000 totaled $23.8
million compared to a loss of $66.3 million for the three months ended
March 31, 1999.

SEGMENT OPERATING RESULTS

See Note 3 in Notes to Consolidated Financial Statements, included
herein, for a discussion of Jones Lang LaSalle's segment reporting.

INVESTMENT MANAGEMENT

Investment Management revenue increased $4.2 million, or 22.1%, to
$23.2 million for the three months ended March 31, 2000 from $19.0 million
for the three months ended March 31, 1999. The increase is primarily
attributable to the equity earnings recognized in relation to our share of
the gain on sale and the performance-related fee from the commencement of
the liquidation of the segment's French property portfolio as well as a
gain on sale related to the Income Parking Fund. The French portfolio was
structured in such a manner that the performance incentive fee is received
as a preferred distribution of earnings rather than as an incentive fee.
As a result, for financial reporting purposes, the fee is classified as
equity earnings rather than advisory fees.

Operating expenses increased $2.6 million, or 15.1%, to $19.8 million
for the three months ended March 31, 2000, as compared with $17.2 million
for the three months ended March 31, 1999. The increase is primarily
attributable to an increase in personnel and office occupancy costs related
to the timing of the JLW merger.

HOTEL SERVICES

Hotel Services had total revenue of $3.7 million for the three months
ended March 31, 2000, as compared to $.9 million for the three months ended
March 31, 1999. This increase was a result of the timing of the JLW
merger, as well as strong activity in the Europe hotel market for the three
months ended March 31, 2000. This activity was partially the result of
transactions which closed in the current period, that were delayed from
closing in the fourth quarter of 1999 as originally expected.

Operating expenses for the segment were $3.4 million for the three
months ended March 31, 2000, as compared to $.9 million for the three
months ended March 31, 1999. The increase is primarily related to the
merger with JLW. These expenses mainly represent personnel costs and
office occupancy costs.

OWNER AND OCCUPIER SERVICES

AMERICAS

Revenue for the Americas region increased $6.0 million, or 13.6%, to
$50.2 million for the three months ended March 31, 2000, as compared to
$44.2 million for the three months ended March 31, 1999. Increased
revenues were primarily attributable to an increased volume of leasing
transactions completed by the Tenant Representation and Corporate Property
Services units, an increased number of projects in process by the Project
Development unit and the benefit of new corporate management assignments
added by the Corporate Property Services unit during the latter part of
1999. These revenue gains were partially offset by reduced performance
fees generated by the Investment Banking unit as compared to the prior year
period, as well as a reduction in the number of investment dispositions
performed.

Operating expenses for the Americas region increased $2.9 million, or
4.7%, to $65.0 million for the three months ended March 31, 2000 from $62.1
million for the three months ended March 31, 1999. The increase is
attributable to increased compensation levels resulting from annual
performance evaluations, increased headcount generally as a result of
higher transaction volumes and new client engagements, in addition to
office costs associated with the increased capacity needs resulting from
the merger with JLW and increased personnel levels. These increased costs
were substantially offset by the change in the method of estimating and
allocating bonus incentive compensation to interim periods, as well as the
cost reduction program initiated during the second half of 1999, and
further expanded during February of 2000.

EUROPE

Revenue for the Europe region totaled $80.0 million for the three
months ended March 31, 2000, as compared to $27.8 million for the three
months ended March 31, 1999. This increase is due primarily to the timing
of the JLW merger, as well as continued strong activity in the UK, Germany
and France in the current period. In addition, the increase was partially
due to the commencement on January 1, 2000 of a property management venture
with Skandia Fastighet AB, the real estate subsidiary of Sweden's leading
insurance company. This venture, of which we own 55%, established Jones
Lang LaSalle as one of the leading real estate services firms in the Nordic
region. The effect of a strong transaction flow was partially offset by a
weakening of the euro, and to a lesser extent the British pound, against
the U.S. dollar in the three month period ended March 31, 2000, as compared
to the prior year period.

Operating expenses for the region were $74.9 million for the three
months ended March 31, 2000, as compared to $21.8 million for the three
months ended March 31, 1999. This increase is primarily the result of the
timing of the JLW merger. In addition, the increase resulted from higher
personnel and office occupancy costs related to infrastructure and
personnel added in the latter half of 1999 in anticipation of strong
business prospects throughout Europe. The increase is also caused by the
amortization of goodwill associated with the JLW merger.

ASIA PACIFIC

Revenue for the Asia Pacific region totaled $30.3 million for the
three months ended March 31, 2000, as compared to $9.7 million for the
three months ended March 31, 1999. The increase was due primarily to the
timing of the JLW merger. This region continues to benefit from several
positive trends in the Australian real estate market, including continued

economic growth funded by strong consumer spending and the outsourcing of
property management functions by corporations and the Australian
government. Australasia experienced strong activity in the Agency Leasing,
Property Management and Capital Markets units in the current period.
Asia's real estate activity continues to be boosted by a gradual economic
recovery within the Asian markets. However, conditions vary from country to
country, and the benefits from the recovery in certain areas were partially
offset by the stagnant market conditions in other areas of Asia,
particularly Thailand and Indonesia. The currency valuation throughout most
of Asia remained stable for the period, inflation remains low, and property
prices and rents in a number of the Asia markets remain stable.

Operating expenses for Asia Pacific totaled $29.7 million for the
three months ended March 31, 2000, as compared to $11.8 for the three
months ended March 31, 1999. The increase is primarily a result of the
timing of the JLW merger. These expenses mainly represent personnel costs
and office occupancy costs, as well as added infrastructure to support the
needs of public company reporting and enhanced technology support. The
increase is also caused by the amortization of goodwill associated with the
JLW merger. These increases were partially offset by the change in the
method of estimating and allocating bonus incentive compensation to interim
periods discussed above.

INTEREST EXPENSE

Interest expense, net of interest income, increased $4.1 million to
$6.7 million for the three months ended March 31, 2000, as compared to $2.6
million for the three months ended March 31, 1999. This increase is a
result of the higher average level of borrowings outstanding on the credit
facilities for the three months ended March 31, 2000, as compared to the
three months ended March 31, 1999. The increase in the average level of
borrowings was due to higher working capital needs, primarily for the
payment of higher bonus accruals in the first quarter of 2000, as compared
to the first quarter of 1999, as well as borrowings made during 1999 to
fund the payment of integration and transition expenses related to the JLW
merger. In addition, the effective interest rate was 8.2% for the three
months ended March 31, 2000, as compared to 5.8% for the three months ended
March 31, 1999. The $380.0 million credit agreement in place during the
three months ended March 31, 2000 bore a higher interest rate than the
credit facilities in place during the three months ended March 31, 1999.
Interest expense is expected to be significantly higher in 2000 than in
1999 as a result of an increase in the average level of borrowings
outstanding, generally increasing interest rates and the likely refinancing
of the portion of the credit facilities due October 15, 2000 at a higher
rate of interest.

BENEFIT FOR INCOME TAXES

The benefit for income taxes decreased $8.1 million, or 59.6%, to $5.5
million for the three months ended March 31, 2000 as compared to $13.6
million for the three months ended March 31, 1999. The decrease is
primarily attributable to the generally lower level of losses before
benefit for income taxes, exclusive of the compensation expense associated
with the issuance of shares to former JLW employees in connection with the
merger which is largely nondeductible for tax purposes. Excluding the
impact of merger related compensation expense and non-recurring transition
and integration expense, the effective tax rate on recurring operations was
38% for the three months ended March 31, 2000 and 1999.

NET LOSS

Net loss, excluding the effect of merger related non-recurring
charges, was $7.5 million for the three months ended March 31, 2000 as
compared to $9.3 million for the three months ended March 31, 1999, a
decrease of $1.8 million or 19.4%.

Including the effect of the merger related non-recurring charges, the
net loss for the three months ended March 31, 2000 was $25.0 million
compared to $55.4 million for the three months ended March 31, 1999, an
improvement of $30.4 million, or 54.9%.

LIQUIDITY AND CAPITAL RESOURCES

Historically, Jones Lang LaSalle has financed its operations,
acquisitions and co-investment activities with internally generated funds,
the common stock of Jones Lang LaSalle and borrowings under its credit
facilities. Jones Lang LaSalle increased its unsecured credit agreement
from $380.0 million to $425.0 million, through the addition of five banks
to its credit group. The credit agreement is now comprised of a $250.0
million revolving facility maturing in October 2002 and a $175.0 million
term facility, which matures on October 15, 2000 (collectively, the
"Facilities"). Jones Lang LaSalle intends to refinance its term facility
and has engaged a financial advisor to assist in evaluating alternatives.
The revolving facility is available for working capital, co-investments and
acquisitions. As of March 31, 2000 there was $361.4 million outstanding on
the Facilities, of which $166.9 million was classified as current.

The Facilities are guaranteed by certain of Jones Lang LaSalle's
subsidiaries. Jones Lang LaSalle must maintain a certain level of
consolidated net worth and a ratio of funded debt to earnings before
interest expense, taxes, depreciation and amortization ("EBITDA"). Jones
Lang LaSalle must also meet a minimum interest coverage ratio, minimum
liquidity ratio, and minimum EBITDA. Additionally, Jones Lang LaSalle is
restricted from, among other things, incurring certain levels of
indebtedness to lenders outside of the Facilities, disposing of a
significant portion of its assets, and paying dividends until the term
facility is repaid. Lender approval is required for certain levels of co-
investment. The Facilities bear variable rates of interest based on market
rates. Jones Lang LaSalle uses interest rate swaps to convert a portion of
the floating rate indebtedness to a fixed rate. The effective interest rate
on the Facilities was 8.2% for the three months ended March 31, 2000,
including the effect of interest rate swap agreements. The interest rate
swap agreements had a notional amount as of March 31, 2000 of $20.0
million.

Jones Lang LaSalle has additional access to liquidity via various
interest-bearing overdraft facilities and short-term credit facilities in
Europe and Asia Pacific. The aggregate amount available under these
facilities is approximately $33.4 million, of which $13.0 million was
outstanding as of March 31, 2000. Borrowings on these facilities are
currently limited to $50.0 million under the terms of the Facilities.

Management believes that the Facilities, along with local borrowing
facilities and cash flow generated from operations, will provide adequate
liquidity and financial flexibility to meet working capital requirements.
As previously mentioned, Jones Lang LaSalle intends to refinance the term
facility due October 15, 2000 and has engaged a financial advisor to assist
in evaluating alternatives.

During the three months ended March 31, 2000, cash flows used in
operating activities totaled $54.0 million compared to $31.7 million for
the three months ended March 31, 1999. The increased use is primarily the
result of the payment, in the first quarter of 2000, of a higher level of
bonuses than in the first quarter of 1999. This higher level of bonuses
was primarily due to the JLW merger. This increased use was partially
offset by improved collection of receivables in the three months ended
March 31, 2000, as compared to the three months ended March 31, 1999.

Jones Lang LaSalle expects to continue to pursue co-investment
opportunities with investment management clients for which the holding
period typically ranges from three to seven years. While this program
remains very important to the continued growth of the Investment Management
segment, the future commitment to co-investment is completely discretionary
(other than with respect to the $28.4 million of commitments discussed
below) and can be increased or decreased based on the availability of
capital and other factors. The performance of the Investment Management
segment would likely be negatively impacted if a substantial decrease in
co-investment activity were to occur. Management anticipates that co-
investment activity within the Americas and Europe regions will continue,
with probable expansion into Asia Pacific, as appropriate opportunities
arise. This strategy should serve to grow the assets under management,
generate returns on investment and create potential opportunities to
provide other services. Such co-investments are generally represented by
non-controlling general partner, limited partner and limited liability
company interests. In addition to a share of investment returns, Jones Lang
LaSalle typically earns investment management fees, and in some cases,
property management, leasing, financing and disposition fees on these
investments. The equity earnings from these co-investments have
historically had a relatively small impact on current earnings and cash
flow. However, increased investment participation and changes in the
structure of underlying performance fees could increase fluctuations in net
earnings and cash flow as a result of the timing and magnitude of the gains
or losses and potential performance fees, if any, to be recognized upon the
disposition of these assets. Jones Lang LaSalle generally does not have
complete discretion to control the timing of the disposition of such
investments. Jones Lang LaSalle anticipates that significant equity
earnings will be recorded in 2000 relating to the disposition of the French
property portfolio of which $4.0 million was recognized for the three
months ended March 31, 2000. As of March 31, 2000, there were total
investments of $73.2 million in 35 separate property or fund co-investments
with additional capital commitments of $28.4 million for future fundings of
co-investments.

Capital expenditures are anticipated to be approximately $40.0 million
for 2000, of which $10.3 million was spent in the three months ended
March 31, 2000. These 2000 expenditures are associated primarily with the
continual improvements to Jones Lang LaSalle's computer hardware and
information systems, including the implementation of global reporting and
communication systems, office renewals and expansions and the scheduled
replacement of fleet cars primarily within the European countries.

Net cash used in investing activities was $9.4 million for the three
months ended March 31, 2000 compared with $38.0 million for the three
months ended March 31, 1999. The decreased use of cash is primarily
attributable to the net cash paid in connection with the JLW merger in the
first quarter of 1999 of $33.9 million. This decrease is partially offset
by the increased capital needs since the merger with JLW for upgrades and
improvements to information systems and computer hardware.

Net cash provided by financing activities of $55.9 million for the
three months ended March 31, 2000 was comprised primarily of proceeds from
borrowings under credit facilities, net of repayments, of $53.5 million to
fund working capital requirements. Cash flows provided by financing
activities of $92.8 million for the three months ended March 31, 1999 were
primarily composed of borrowings under credit facilities, net of
repayments, of $91.4 million to fund the payment of transaction costs and
integration and transition expenses related to the JLW merger and the
acquisition of COMPASS.

SEASONALITY

Historically, Jones Lang LaSalle's revenue, operating profits and net
earnings in the first three calendar quarters are substantially lower than
in the fourth quarter. Other than in Investment Management, this
seasonality is due to a calendar-year-end focus, primarily in the United
States, on the completion of transactions, which is consistent with the
real estate industry generally. The Investment Management segment earns
performance fees on clients' returns on their real estate investments. Such
performance fees are generally earned when the asset is disposed of, the
timing of which Jones Lang LaSalle does not have complete discretion over.
Non-variable operating expenses, which are treated as expenses when
incurred during the year, are relatively constant on a quarterly basis.
Therefore, Jones Lang LaSalle typically sustains a loss in the first
quarter of each calendar year, reports a small profit or loss in the second
and third quarters and records a substantial majority of its earnings in
the fourth calendar quarter, barring the recognition of investment
generated gains and performance fees in earlier quarters. As discussed
earlier, Jones Lang LaSalle changed its method of estimating and allocating
bonus incentive compensation to interim periods to more meaningfully
reflect the seasonal nature of the underlying business.

INFLATION

Jones Lang LaSalle's operations are directly affected by various
national and local economic conditions, including interest rates, the
availability of credit to finance real estate transactions and the impact
of tax laws. To date, management does not believe that general inflation
has had a material impact on operations, as revenue, bonuses and other
variable costs related to revenue are primarily impacted by real estate
supply and demand rather than general inflation.

OTHER MATTERS

NEW ACCOUNTING STANDARDS

In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 137, Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133, which deferred the effective date of SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities, for
one year. SFAS No. 137 is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. The impact of adopting SFAS No. 133
is not expected to have a material impact on the consolidated financial
statements.

During December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements," ("SAB 101"), which provides guidance on various revenue
recognition matters. Historically, Jones Lang LaSalle and certain other
real estate service companies have recorded the full amount of lease
commissions as revenue upon the completion of leasing services and the
closing of the transaction, when invoicing for a portion of the commission
was to be delayed until actual tenant occupancy. This policy was based
upon the fact that Jones Lang LaSalle had fulfilled all of its contractual
obligations and the likelihood of the tenant defaulting under the lease was
extremely remote. We understand that the SEC staff believes that under SAB
101, such lease commission revenue should be deferred until the parties to
the lease contract have fulfilled their respective obligations. As a
result, Jones Lang LaSalle plans to modify its revenue recognition policy
in the second quarter of 2000 in accordance with SAB 101, and will record a

cumulative change in accounting principle effective as of January 1, 2000.
This will be reflected by a one-time after-tax charge to defer commission
revenue where the contractual right to invoice was contingent on the
occupancy of the leased space by the tenant. Thereafter, Jones Lang
LaSalle will recognize the revenue associated with those remaining
commissions generally at the time the tenant occupies the leased space.
This change in accounting policy will not affect cash flows or the amount
of earnings the company will ultimately recognize. The one-time after-tax
charge will be recognized as earnings in future periods when the revenue is
recognized. Management believes that this change in accounting policy will
help to reduce the seasonality in the financial performance reported by
Jones Lang LaSalle by shifting lease commission revenue out of the fourth
quarter and into other quarters. The amount of the cumulative effect of
this change in accounting principle to be recorded in the second quarter of
2000, but effective as of January 1, 2000, is still being determined, but
is currently expected to be no more than $20.0 million.

E-COMMERCE INITIATIVES

On April 26, 2000, Jones Lang LaSalle announced the formation of an e-
commerce alliance with two other leading U.S. real estate services firms.
This alliance will develop e-business solutions for the real estate
services industry and will focus on procurement, transactions, support
services and other business-to-business activities. On May 5, 2000, Jones
Lang LaSalle announced its intent to join eleven other leading North
American real estate firms to form a real estate e-business company. This
company will form, incubate and sponsor real estate-related Internet, e-
commerce and broadband enterprises; acquire interests in existing leading
companies on a synergistic basis; and act as an opportunistic consolidator
across property sectors in the emerging real estate technology area. The
final terms and conditions of the agreements related to these ventures are
currently being negotiated. Management feels that the commitment to these
initiatives is important to the continued growth of Jones Lang LaSalle and
has allocated approximately $7.0 million in capital investment thereto.

EURO CONVERSION ISSUES

On January 1, 1999, certain countries of the European Monetary Union
("EMU") adopted a common currency, the euro. For a three-and-one-half-year
transition period, non-cash transactions may be denominated in either the
euro or in the old national currencies. After July 1, 2002, the euro will
be the sole legal tender for the EMU countries. The adoption of the euro
affected a multitude of financial systems and business applications as the
commerce of these nations is now transacted in the euro and the existing
national currency.

Although the impact of the January 1, 1999 euro conversion was
minimal, Jones Lang LaSalle continues to evaluate the potential impact
relating to the EMU countries yet to convert. Management does not expect
the impact of euro conversion issues to be material to Jones Lang LaSalle,
however there can be no assurance that external factors will not have a
material adverse effect on operations.

YEAR 2000 ISSUES

The "Year 2000 Issue" was the result of computer programs and systems
having been designed and developed to use two digits, rather than four, to
define the applicable year. As a result, these computer programs and
systems had the potential to recognize a date using "00" as the year 1900
rather than the year 2000. This could have resulted in system failure or
miscalculations causing disruption of operations, including, among other
things, a temporary inability to process transactions, pay invoices or
engage in similar normal business activities.

Jones Lang LaSalle successfully modified its software and hardware to
meet Year 2000 requirements and experienced no significant disruption of
its operations. Although Jones Lang LaSalle is not aware of any threatened
claims related to the Year 2000, it may become subject to litigation
arising from such claims, and, depending on the outcome, such litigation
could have a material adverse affect on Jones Lang LaSalle. It is not clear
whether insurance coverage would be adequate to offset these and other
business risks related to the Year 2000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

Jones Lang LaSalle is exposed to interest rate changes primarily as a
result of its lines of credit used to maintain liquidity and to fund
capital expenditures, acquisitions, co-investments and operations. Jones
Lang LaSalle's interest rate risk management objective is to limit the
impact of interest rate changes on earnings and cash flows and to lower
overall borrowing costs. To achieve this objective, Jones Lang LaSalle
borrows primarily at variable rates and enters into derivative financial
instruments such as interest rate swap agreements when appropriate. Jones
Lang LaSalle does not enter into derivative or interest rate transactions
for trading or speculative purposes.

As of March 31, 2000, Jones Lang LaSalle had entered into interest
rate swap agreements with a notional amount of $20.0 million providing for
an average fixed interest rate of approximately 5.65%. These agreements
have terms which expire through June 15, 2000. Such interest rate swap
agreements had no significant market value at March 31, 2000. The carrying
value of the debt approximates its fair value. As of March, 2000, the
outstanding borrowings on the Facilities were $361.4 million. The
Facilities bear variable rates of interest based on market rates. The
effective interest rate on the Facilities was 8.2% for the three months
ended March 31, 2000, including the effect of interest rate swap
agreements.

FOREIGN CURRENCY RISK

Jones Lang LaSalle's reporting currency is the U.S. dollar. Business
is transacted in various foreign currencies throughout Europe and Asia
Pacific. The financial statements of subsidiaries outside the United
States, except those located in highly inflationary economies, are
generally measured using the local currency as the functional currency. As
a result, fluctuations in the U.S. dollar relative to the other currencies
in which earnings are generated can impact Jones Lang LaSalle's business,
operating results and financial condition as reported in U.S. dollars. For
the three months ended March 31, 2000 (excluding the effect of stock
compensation expense) Jones Lang LaSalle reported a net loss of $7.5
million, of which $13.9 million of net losses were attributable to
operations having U.S. dollars as their functional currency and $6.4
million of net income was attributable to operations having other
functional currencies. Revenues and expenses are primarily earned and
incurred in the currency of the location where the operations generating
the revenues and expenses have occurred, thereby limiting exposure to
exchange rate fluctuations to some extent.

On a limited basis, Jones Lang LaSalle enters into forward foreign
currency exchange contracts to manage currency risks and reduce exposure
resulting from fluctuations in the designated foreign currency associated
with existing commitments, assets or liabilities. At March 31, 2000, Jones
Lang LaSalle had forward exchange contracts in effect with a notional value
of approximately $25.0 million with no market value and no carrying value.
Jones Lang LaSalle does not enter into forward foreign currency exchange
contracts for trading or speculative purposes.

DISCLOSURE OF LIMITATIONS

As the information presented above includes only those exposures that
exist as of March 31, 2000, it does not consider those exposures or
positions, which could arise after that date. Moreover, because firm
commitments are not presented, the information represented herein has
limited predictive value. As a result, the ultimate realized gain or loss
with respect to interest rate and foreign currency fluctuations will depend
on the exposures that arise during the period, the hedging strategies at
the time and interest and foreign currency rates.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Jones Lang LaSalle is a defendant in various litigation matters
arising in the ordinary course of business, some of which involve claims
for damages that are substantial in amount. Many of these matters are
covered by insurance. In the opinion of Management, the ultimate resolution
of such litigation is not expected to have a material adverse effect on the
financial condition, results of operations and liquidity of Jones Lang
LaSalle.

ITEM 5. OTHER MATTERS

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this filing and elsewhere (such as in reports,
other filings with the Securities and Exchange Commission, press releases,
presentations and communications by Jones Lang LaSalle or its management
and written and oral statements) may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. 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. Such factors are discussed in our Annual Report on Form 10-K
for the year ended December 31, 1999 in Item 1. "Business," Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," Item 7A. "Quantitative and Qualitative Disclosures About
Market Risk," and elsewhere, and in other reports filed with the Securities
and Exchange Commission. Jones Lang LaSalle expressly disclaims any
obligation or undertaking to update or revise any forward-looking
statements to reflect any changes in events or circumstances or in its
expectations or results.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) A list of exhibits is set forth in the Exhibit Index which
immediately precedes the exhibits and which is incorporated by reference
herein.

(b) Reports on Form 8-K

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

JONES LANG LASALLE INCORPORATED

Dated: May 15, 2000 BY: /S/ WILLIAM E. SULLIVAN
------------------------------
William E. Sullivan
Executive Vice President and
Chief Financial Officer
(Authorized Officer and
Principal Financial Officer)

EXHIBIT INDEX

Exhibit
Number Description
- ------- -----------

27.1 Financial Data Schedule.