EXHIBIT 99.1
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JONES LANG LASALLE ANNUAL REPORT 2001
JONES LANG LASALLE
two thousand and ONE annual review
[ graphics containing "one" in 28 different languages ]
[ photo graphics at the following locations - amsterdam; atlanta; bangkok;
bangalore; beijing; brussels; chicago; dallas; denver; dublin; frankfurt;
hong kong; jakarta; london; los angeles; madrid; manila; mclean, va;
mexico city; milan; montreal; moscow; mumbai; new delhi; new york;
paris; san francisco; sao paulo; singapore; stockholm; sydney;
taipei; tokyo; toronto; warsaw; washington, dc ]
ONE PROMISE We are committed to meeting or
exceeding the highest expectations of
our clients by creating and delivering
exceptional strategic solutions and
investment performance.
ONE BRAND The Jones Lang LaSalle brand guides
and identifies us as a fully integrated
global firm, a client-oriented advisor
known for the quality of our market
knowledge and financial expertise.
ONE CULTURE Through our investments in award winning
research, leading-edge
technology, innovation and best
practices, our global team sets our
firm apart as the thought leader
in real estate.
ONE VISION We pursue our vision by addressing
our strategic goals: to exceed client
expectations by delivering superior
service consistently ... to develop a
high-performance team culture worldwide ...
to achieve sustainable and
profitable growth ... and to continually
build the Jones Lang LaSalle brand.
THE STRENGTH
OF ONE Jones Lang LaSalle is 7,230 people on
five continents working together as one.
To illustrate this theme, we asked
colleagues in 36 markets around the world
to offer their photographic perspective
of our business and our people.
MESSAGE FROM THE CEO
Fellow shareholders:
The events of 2001 tested Jones Lang LaSalle, as they did a great many
businesses. However, I am pleased to report that our people were equal to
the challenges.
In a truly difficult global economy, we continued to serve our clients
effectively, developing new strategies to address shifting market
conditions and changing client needs. Our people established new business
relationships while continuing to secure repeat assignments from the ranks
of the world's leading real estate owners, investors and occupiers. They
served our shareholders by identifying and introducing significant cost-
reduction efforts in all parts of our operations. It was our people who
made it possible for us to match our record 2000 performance.
NEW LEADERSHIP TEAM
On January 1, 2002, I assumed the position of Chief Executive Officer at
Jones Lang LaSalle, succeeding Stuart Scott, who continues to serve our
firm as Chairman of the Board. Also, Peter Roberts accepted new
responsibilities as the company's Chief Operating Officer, moving from his
position as Chief Financial Officer.
At the same time, we welcomed Lauralee Martin to the firm as our new Chief
Financial Officer. Previously she was CFO at Heller Financial and, before
that, was Heller's Group President for Real Estate Finance. Her skills and
experience in both corporate financial management and real estate finance
make her a valuable addition to our executive management team.
I am both enthusiastic and professionally energised by the prospects of
working alongside such talented colleagues in 2002 and into the future.
2001 FINANCIAL HIGHLIGHTS
Jones Lang LaSalle generated $40.5 million in adjusted net income on
revenues of $881.7 million in 2001. Adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA) was $137 million for the
year.
We continued to reduce our debt level in 2001 by approximately $28 million.
In the past two years, we have lowered our outstanding debt by $100
million, exceeding our original two-year target by $40 million.
In response to the worsening economic outlook and the reduced level of
market activity resulting from the downturn, we took decisive action in the
fourth quarter to restructure our business and lower our cost base. We
expect to capture at least $50 million in annualised savings as a result of
this initiative. Earlier in 2001, we incurred additional charges associated
with restructuring, and with write-downs of e-commerce investments,
reserves against potential liabilities associated with the bankruptcy of
two insurance companies, and exiting non-strategic business lines. Total
non-operational, non-recurring charges were $77 million for the year.
While accepting that these charges are certainly unpalatable, we believe
the resultant reduction in our ongoing cost base positions us well for
growth in 2002.
The e-commerce write-downs do not signal any retreat from our determination
to maintain the position of technology leader in our industry. Although we
will no longer focus on indirect investments in technology based service
providers, we will continue to make responsible investments in products and
systems that improve both our efficiency and the quality of our service to
clients. The major new business wins of 2001 fully justify this course of
action.
The swift pace and decisive nature of the restructuring demonstrated our
firm's agility and flexibility in the face of rapidly deteriorating market
conditions. Today, as a result, we have the right level of staffing with
the right quality of people and skills to serve our clients effectively
throughout the world.
INTEGRATED SERVICES, WORLD - CLASS TECHNOLOGY, GLOBAL PLATFORM
The prospect of securing global opportunities was a primary force driving
the creation of Jones Lang LaSalle in 1999. A fundamental strategic
objective has been to create a truly global investment management
operation. With the launch of our Asia Recovery Fund, this is now in place.
Also, we resolved right from the start to provide large multinational
companies with comprehensive and integrated real estate services, supported
by industry leading technology, delivered anywhere in the world with
consistent and uncompromising levels of quality service.
In 2001, we witnessed the power of our global platform. We significantly
increased our services to Bank of America, adding 15 million square feet
(1.4 square metres) in North America to our global mandate, which now
stands at 31 million square feet (2.9 square metres).
Late in the year, Microsoft Corporation named our firm as its preferred
worldwide real estate services provider. In making the announcement, James
Ableson, Microsoft's Manager of U.S. and International Real Estate, said:
"We selected Jones Lang LaSalle because they were the only service provider
that offered consistent integrated service delivery and a sophisticated
information technology system to streamline Microsoft's real estate
transaction and project management services worldwide."
Rockwell Automation selected us as its preferred worldwide provider of real
estate services in January 2002. More recently, Motorola formed a strategic
alliance with us to provide facility management and project management
services beginning with Motorola's largest properties in its U.S.
portfolio. We believe that the list will continue to grow.
Each new relationship reflects the meaning and spirit of this Annual
Review's theme, "The Strength of One." We attract such clients because we
can offer them the powerful unified force of a single promise, one brand,
one culture and one shared vision.
OUR VISION AND STRATEGY
I would like to take this opportunity in my first annual letter to comment
on our Vision and our Strategy. Our Vision, which defines success for Jones
Lang LaSalle, is "to be the chosen real estate expert and strategic advisor
to the leading owners, occupiers and investors around the world."
Guiding us toward the achievement of these objectives are five overarching
strategies: to exceed client expectations; to deliver a recognised and
differentiated brand; to develop a high-performance team culture; to
achieve sustainable, profitable growth; and to improve operational
efficiency.
To determine how well we measure up to our Vision, we benchmark performance
around our three key constituents: OUR CLIENTS, OUR PEOPLE AND OUR
SHAREHOLDERS. We have established three-year objectives for each group and
aligned our people and our compensation objectives to achieve success.
For each objective, we have established a series of long term actions and
short-term priorities. We expect the long-term issues to be fully
implemented and integrated into our operations within a three-year time
frame. We anticipate completing the short-term priorities by the end of
2002. We are making good progress in both categories.
OUR MISSION AND CLIENT SERVICE MODEL
Where our Vision defines success at Jones Lang LaSalle, our Mission defines
our service capability: "To deliver exceptional strategic, fully integrated
services and solutions for real estate owners, occupiers and investors
worldwide."
CLIENT SERVICE MODEL
Our Vision is to be the chosen real estate expert and strategic advisor to
the leading owners, occupiers and investors around the world.
Our Mission is to deliver exceptional strategic, fully integrated services
and solutions for real estate owners, occupiers and investors worldwide.
[ graphic - Client Service Model ]
OWNERS & OCCUPIERS / INVESTORS
STRATEGIC SOLUTIONS
RESEARCH ... TECHNOLOGY ... INNOVATION ... GLOBAL CAPABILITIES
CORPORATE SOLUTIONS INVESTMENT MANAGEMENT
- - Space Acquisition - Investment Strategy
- - Space Disposition - Private & Public Markets
- - Facilities Management - Direct & Indirect Investment
- - Project & Development - Income, Growth &
Services Opportunistic Programs
- - Consulting
INVESTOR SERVICES CAPITAL MARKETS
- - Buying & Selling - Acquisitions & Dispositions
- - Leasing - Corporate Finance
- - Property Management - Financial Restructuring
- - Project & Development - Sale & Leaseback
Services - Debt & Equity Raising
- - Consulting - Partnering
Our Client Service Model addresses how we deliver services and solutions to
our three client segments: real estate owners, occupiers and investors. Our
breadth of services includes leadership positions in the core real estate
services of leasing, property management, property acquisition and
disposition, and valuation. We are also experts in delivering the
sophisticated financial solutions of investment management, capital markets
and consulting.
This combination of skills and expertise sets us apart from our
competitors. Traditional real estate firms do not have the depth of our
financial expertise or our track record. Consultancy practices do not have
our implementation capability. Investment banks lack our local market
knowledge and real estate expertise. In fact, the market knowledge we
develop in Corporate Solutions and Investor Services helps us identify
investment opportunities and capital sources for Investment Management
and Capital Markets clients. The investments we structure and make for
Capital Markets clients help us identify new business opportunities for our
Investor Services and Corporate Solutions units.
We continue to set ourselves apart by leveraging all our services through
our unrivalled platforms of research, technology, innovation and global
reach, and we continue to invest in each to maintain a position of thought
leadership in our industry. Our strategic solutions capability and our
advisory culture are our ultimate differentiators and are integral to how
we serve our clients. We are able to address not only their real estate
needs but also their broader business and financial goals. This capability
to develop and deliver sound strategy drives our own ability to grow our
business and margins.
TOTAL PERFORMANCE MANAGEMENT
To fulfill our Mission and secure our Vision, we have created and
introduced Total Performance Management, or TPM. This firmwide initiative
is helping us enhance our relationships with clients and with each other.
At its heart, Total Performance Management defines the principles we need
to embody as a firm if we are to succeed in delivering on the tremendous
promise that is Jones Lang LaSalle.
One of our first TPM efforts was to develop a set of non-negotiable minimum
standards of behaviour. Now part of our culture, these 10 performance
standards are reflected in all business decisions and activities. In the
pursuit of excellence in client servicing, we have put new Client
Relationship Management systems in place. We are introducing new skills
training programs and Individual Career Management Planning procedures for
our people. To support leadership and the development of a high performance
culture, we designed and introduced a Web-based Individual Performance
Management Program for our employees in 2001.
The goal of Total Performance Management is to instil in all of our people
an unyielding commitment to be the best: THE real estate advisor our
clients want to work with and THE employer of choice in our industry.
Our efforts are already having a positive impact both on our clients and
our people, who are benefiting from increased training and coaching.
Total Performance Management is an eminently practical and continually
evolving approach to managing our firm. In simple terms, it represents "the
way we do things at Jones Lang LaSalle."
LOOKING AHEAD
I believe that our results for 2001 and the opportunities we have
identified for 2002 serve as welcome confirmation that our integrated
global platform is working effectively for our clients, while setting Jones
Lang LaSalle apart from competitors. We have a clear and well-defined
strategy, the best people in our business, the most sophisticated research
capabilities and the most advanced technology platform. We will continue to
build on these strengths this year, growing our business in 2002 and
achieving our financial goals.
As the global economy recovers, we will be ready to capitalise on the new
opportunities that emerge, driving additional new growth as we continue to
serve the best interests of our clients, our people, and our shareholders.
PERSONAL WORDS OF THANKS
In closing, I extend my thanks to Dr. David Li and John Walter, both of
whom are not standing for re-election to the Board as external directors,
for their support and valuable contributions to the firm over a number of
years.
Finally, I would like to express my appreciation publicly to Stuart Scott
for all the contributions he has made, to date, to Jones Lang LaSalle. A
key feature of our new executive leadership team is that, since Stuart
continues to serve as our Chairman, we sacrificed no talent to assemble it.
We are fortunate, indeed, that he remains available to us, and to our
clients, for wise counsel and sound guidance. I look forward to continuing
to work closely with Stuart as both a friend and a colleague.
/S/ Christopher A. Peacock
Christopher A. Peacock
President and Chief Executive Officer
March 2002
BUSINESS REVIEW AND OUTLOOK
Markets in all regions of the world were affected to one degree or another
by slowing economies and rising business uncertainty in 2001. Our ability
to perform under these conditions was a testament to the determination of
our people and the strength of our global platform.
CONDITIONS IN THE AMERICAS
Despite what was arguably the most difficult economic environment in a
decade in the Americas, we continued to attract important new clients to
Jones Lang LaSalle while expanding our relationships with existing clients.
Corporate Solutions, where multi-disciplinary teams serve our corporate
clients on a local, regional or global basis, secured ten strategic
alliances during the year. The list includes Aetna, AT&T Wireless, KPMG
Consulting and Microsoft. For Bank of America, we doubled our portfolio to
31 million square feet (2.9 million square meters) in America, Europe and
Asia Pacific. Early in 2002, we secured two new major clients. Rockwell
Automation selected us as its preferred worldwide real estate services
provider for its 16-million-square-foot (1.5-million-square-meter)
portfolio in 40 countries on five continents. In March, Motorola signed a
five-year contract for 12.5 million square feet (1.2 million square meters)
to provide facility management and project management services, beginning
with its largest U.S. facilities.
Investor Services delivered a full spectrum of property management,
acquisitions and sales, leasing, retail, and project and development
services to clients. Highlights in 2001 include winning the leasing
assignment from Sumitomo Life Realty for a prominent 1.2-million-square
foot (111,000-square-meter) office tower in Atlanta. Joint-venture partners
Citigroup Investments and NLI Properties Central, Inc., retained us to
lease and manage an 800,000-square-foot (74,000-square-meter) office
property in Chicago. We were selected to lease and manage a portfolio of
properties that includes 30 buildings at the 1.5-million-square-foot
(139,000-square-meter) Miami Koger Center in Florida, as well as a 1.2-
million square-foot (111,000-square-meter) office portfolio of Koger
Centers located in Virginia and North Carolina.
Although transaction levels in the capital markets were severely reduced in
2001, Capital Markets closed important transactions while building on our
backlog for 2002. We won our first assignment from Crescent Real Estate
Equities and executed the sale of a joint-venture interest in a major
office tower in Miami. More recently, the Capital Markets team completed
the sale of a $300 million loan portfolio for TIAA-CREF to Morgan Stanley.
In 2002, we also completed the sale of 500 West Monroe Street at the
highest per-square-foot sales price for an office building in Chicago in a
decade.
Looking ahead, consensus predicts that the most likely scenario for 2002 in
the Americas is a U-shaped rebound, with one to two percent growth in gross
domestic product for the year and the potential for higher growth rates by
the fourth quarter.
THE VIEW FROM EUROPE
While Europe encountered a broad slowdown in transaction activity in 2001,
we were able to complete a significant range of assignments in all areas of
our business.
We completed the disposition of the euro 1 billion Millennium portfolio in
Germany on behalf of Deutsche Telekom. We acted as advisors to MACIF, the
leading French insurance company, on the sale of a euro 595 million
shopping center portfolio to a Dutch investor. Working for LaSalle
Investment Management on behalf of the British Coal Pension Schemes, we
completed the sale of a <pound sterling>130 million UK shopping center
portfolio. Also in the UK, we represented the U.S.-based opportunity fund,
Westbrook Partners, and private clients of our firm in the <pound
sterling>358 million joint-venture acquisition of a mixed portfolio of 20
properties.
More recently, we executed the sale of the Hotel Arts Complex in Barcelona
for a Dutch-based holding company. The sale represented Europe's largest
single-asset hotel transaction in 2001 and was the largest single-asset
real estate transaction ever recorded in Spain.
In Brussels, we resolved the occupancy needs of two major state
authorities: SNCB, the national railway operator, and the Office Nationale
de la Securite Sociale (ONSS), the Belgian social security agency. SNCB
decided that Terminal One, a 45,000-square-meter (484,000-square-foot)
office building being constructed by its wholly owned development
subsidiary, would not meet its changing occupancy requirements. We
identified the 38,000-square-meter (409,000-square-foot) Midi Atrium
building as a more suitable alternative and represented SNCB in the euro 91
million acquisition of the property, the year's top asset-occupier
transaction in Europe. We represented SNCB in the sale of Terminal One to
ONSS.
Working for Accenture to assess the consulting firm's future space needs in
London, Global Consulting developed a comprehensive real estate strategy
for the client. The project led to a major space acquisition assignment for
the 50,000-square-meter (538,000-square-foot) London headquarters for
Accenture.
For the third year in a row, our European Capital Markets teams completed
transactions totaling more than euro 15 billion, with more than 50 percent
of these acquisitions and sales involving cross-border investors. This
level far exceeds previous years and stands as a strong endorsement of one
of our firm's key drivers for future growth.
Recently, Scottish Widows Investment Partnership awarded us a UK property
management portfolio, significantly extending our involvement with this
long-term client. The portfolio, which encompasses three shopping centers
and additional multi-occupied properties, has a total rent roll in excess
of <pound sterling>21 million and more than 200 tenants.
Europe is reporting limited gross domestic product growth at present, with
consensus forecasts projecting a 1.3 percent increase for 2002. Consumer
and business confidence surveys suggest that recovery will arrive
progressively through the second half of the year. Investment activity
continues to hold up well, however, supported by continuing low interest
rates.
OUTLOOK FOR ASIA PACIFIC
Weakness in the U.S. economy hurt such developed markets as Singapore, Hong
Kong, South Korea and Taiwan; and Japan's economy continued to shrink.
China's growth slowed, but remained healthy compared to most of the rest of
the world. Growth in the Australian economy also slowed. Against this
backdrop, 2001 proved to be a difficult year in the Asia Pacific region.
The benefits of realigning our business operations in the region began to
take effect by the end of 2001. To meet multinational client needs in the
region, our operations are now organized along business lines rather than
by geography.
Major 2001 business wins and extensions of existing relationships,
including our new strategic alliance with Exxon Mobil Global Real Estate in
Asia Pacific and EMEA (Europe, the Middle East and Africa), will fuel
future growth. With our appointment from the Development Bank of Singapore,
the largest outsourcing account in the region, we now manage the bank's
entire real estate portfolio in Singapore and handle key assignments in
Hong Kong and Thailand.
Credit Suisse First Boston, for whom we already provide project and
development services in Beijing, and space acquisition and disposition
services in Singapore and Hong Kong, called on us for Corporate Residential
Services in Singapore. Lehman Brothers also added Corporate Residential
Services to our mandate, retaining us to manage a Tokyo residential
portfolio of 400 properties.
We signed a four-year contract to manage the 799,000-square-meter (8.6-
million-square-foot) ANZ Bank portfolio in Australia. More recently, we
were appointed for three years to provide facility management services for
all Sun Microsystems properties in Asia Pacific.
Our presence in China continued to grow. At the end of 2001, we were
appointed as design consultant for a 232,000-square-meter (2.5-million-
square-foot) mixed use development in Finance City in Beijing. We were also
appointed as real estate consultant for the redevelopment of the Dalian
TianJin Street Retail Project, a 1.5-kilometer (0.9-mile) pedestrian
shopping destination.
Looking ahead in Asia Pacific, we see the region's economic engine shifting
from Japan to China, where long-term prospects are excellent, although
current regulatory hurdles continue to dampen immediate prospects. Recovery
in the United States can be expected to drive rapid recovery in developed
Asian markets. Given our strengthened presence in Korea, Taiwan and Japan,
we will be particularly well-positioned to take advantage of reviving
opportunities in those markets.
THE YEAR AT LASALLE INVESTMENT MANAGEMENT
Despite the economic downturn and the cautious outlook displayed by most
real estate investors, LaSalle Investment Management completed more than
150 acquisitions and dispositions valued in excess of $2.9 billion dollars
in 2001.
Most noteworthy in this depressed investment climate was the launching and
successful completion of the first close for each of three private equity
commingled funds in three regions of the world. The Asia Recovery Fund will
invest in selected developed and emerging Asian markets, focusing on
office, luxury residential, hotel and industrial properties. LaSalle Euro
Growth II will invest in value-added assets in Euro-zone markets that offer
above-average growth prospects. In the United States, our Medical Office
Fund will invest in existing medical facilities in established healthcare
submarkets and in selected medical office development opportunities.
At year-end, these three funds had sufficient capital to fund approximately
$800 million of investment acquisitions. In addition, each fund is
scheduled to complete a second close during the first half of 2002,
increasing buying power significantly.
Finally, LaSalle Investment Management renewed our single-largest separate
account client for a new contract that started in January 2002. Our ability
to generate above-index performance over the long term prompted the British
Coal Pension Schemes to retain us. The Coal Schemes' private equity
portfolio is currently valued at approximately <pound sterling>2.7 billion.
In 2001, real estate performed well for our institutional investors, by
acting as a shock absorber to offset losses in their stock and bond
portfolios. In 2002, we see allocations to real estate rising, as more
investors acknowledge the positive income-generating characteristics of
commercial real estate.
SCOPE OF SERVICES
OWNER AND OCCUPIER SERVICES
We serve real estate owners and occupiers locally, regionally and globally
through our business operations in the Americas, Europe and Asia Pacific.
Our Client Service Model focuses on:
CORPORATE SOLUTIONS
We help corporate occupiers by providing integrated transaction and
corporate property services to serve their space acquisition and
disposition, facilities management, project and development services, and
consulting needs.
INVESTOR SERVICES
We offer real estate owners a broad range of transactional and management
services in the areas of buying and selling assets, leasing, property
management, project and development services, and consulting.
CAPITAL MARKETS
Drawing on our real estate financial expertise, we serve the needs of
owners, occupiers and investors by providing them with a range of services
related to property acquisitions and dispositions, corporate finance,
financial restructuring, sale and leaseback, debt and equity raising, and
partnering.
INVESTMENT MANAGEMENT
LaSalle Investment Management, our global investment management business,
serves institutional investors, government entities, corporations and
private investors worldwide: we invest in real estate assets on their
behalf through a series of funds and separate account relationships. To
meet a broad range of risk-return objectives, we tailor investment strategy
to the needs of individual clients, developing income, growth and
opportunistic programs that invest in direct ownership of property and in
public real estate securities, as well as in joint ventures, partnerships
and private companies owning real estate.
ADJUSTED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
2001 2000
Adjusted Adjusted
(in thousands except per share data) (1) (1)(2)
---------- ----------
REVENUE
Fee based services. . . . . . . . . . $ 865,860 $ 900,844
Equity in earnings from uncon-
solidated ventures. . . . . . . . . 8,560 16,693
Other income. . . . . . . . . . . . . 7,256 5,171
---------- ----------
Total revenue . . . . . . . . . . . . 881,676 922,708
OPERATING EXPENSES
Compensation and benefits . . . . . . 545,609 581,322
Operating, administrative and other . 198,456 206,062
Depreciation and amortization . . . . 47,420 43,126
---------- ----------
Total operating expenses excluding
non-recurring and restructuring
charges . . . . . . . . . . . . . . 791,485 830,510
---------- ----------
Adjusted operating income
excluding non-recurring and
restructuring charges . . . . . . . 90,191 92,198
Interest expense, net of
interest income . . . . . . . . . . 20,156 27,182
---------- ----------
Adjusted income before provision
for income taxes. . . . . . . . . . 70,035 65,016
Net provision for income taxes. . . . 29,309 24,566
Minority interests in earnings
(losses) of subsidiaries. . . . . . 228 (21)
---------- ----------
Adjusted net income excluding
non-recurring and restructuring
charges . . . . . . . . . . . . . . $ 40,498 $ 40,471
========== ==========
Adjusted income per common
share (3) . . . . . . . . . . . . . $ 1.31 $ 1.31
========== ==========
Adjusted weighted average
shares outstanding (3). . . . . . . 30,975,315 30,854,743
========== ==========
Adjusted EBITDA (4) . . . . . . . . . $ 136,999 $ 135,228
========== ==========
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
(in thousands except per share data) 2001 2000(2)
---------- ----------
REVENUE
Fee based services. . . . . . . . . . $ 865,860 $ 900,844
Equity in earnings from uncon-
solidated ventures. . . . . . . . . 8,560 16,693
Other income. . . . . . . . . . . . . 7,256 5,171
---------- ----------
Total revenue . . . . . . . . . . . . 881,676 922,708
OPERATING EXPENSES
Compensation and benefits . . . . . . 545,609 581,322
Operating, administrative and other . 198,456 206,062
Depreciation and amortization . . . . 47,420 43,126
Non-operational non-recurring
charges . . . . . . . . . . . . . . 27,786 85,795
Restructuring charges . . . . . . . . 49,446 --
---------- ----------
Total operating expenses. . . . . . . 868,717 916,305
---------- ----------
Operating income. . . . . . . . . . . 12,959 6,403
Interest expense, net of
interest income . . . . . . . . . . 20,156 27,182
---------- ----------
Loss before provision for
income taxes and minority
interest. . . . . . . . . . . . . . (7,197) (20,779)
Net provision for income taxes. . . . 7,986 22,053
Minority interests in earnings
(losses) of subsidiaries. . . . . . 228 (21)
---------- ----------
Net loss before cumulative
effect of change in accounting
principle . . . . . . . . . . . . . $ (15,411) $ (42,811)
Cumulative effect of change in
accounting principle. . . . . . . . -- (14,249)
---------- ----------
Net loss. . . . . . . . . . . . . . . $ (15,411) $ (57,060)
========== ==========
Basic loss per common share
before cumulative effect of
change in accounting principle. . . $ (0.51) $ (1.72)
Cumulative effect of change in
accounting principle. . . . . . . . -- (0.58)
---------- ----------
Basic loss per common share . . . . . $ (0.51) $ (2.30)
========== ==========
Basic weighted average shares
outstanding . . . . . . . . . . . . 30,016,122 24,851,823
========== ==========
Diluted loss per common share
before cumulative effect of
change in accounting principle. . . $ (0.51) $ (1.72)
Cumulative effect of change in
accounting principle. . . . . . . . -- (0.58)
---------- ----------
Diluted loss per common share . . . . $ (0.51) $ (2.30)
========== ==========
Diluted weighted average shares
outstanding . . . . . . . . . . . . 30,016,122 24,851,823
========== ==========
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands) 2001 2000
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . $ 10,446 $ 18,843
Trade receivables,
net of allowances . . . . . . . . . 222,590 244,201
Other current assets. . . . . . . . . 53,477 58,017
---------- ----------
Total current assets. . . . . . . . . 286,513 321,061
Property and equipment, at cost,
less accumulated depreciation . . . 92,503 90,306
Intangibles resulting from
business acquisitions and
JLW merger, net of accumulated
amortization. . . . . . . . . . . . 328,169 350,129
Investments in real estate ventures . 56,899 74,565
Other investments . . . . . . . . . . -- 12,884
Other long-term assets. . . . . . . . 71,643 65,100
---------- ----------
$ 835,727 $ 914,045
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities . . . . . . . . . . . . $ 116,968 $ 111,738
Accrued compensation. . . . . . . . . 131,680 170,323
Short-term borrowings . . . . . . . . 15,497 8,836
Other current liabilities . . . . . . 23,490 16,809
---------- ----------
Total current liabilities . . . . . . 287,635 307,706
Long-term liabilities:
Credit facilities . . . . . . . . . . 59,854 85,565
9.0% Senior Notes, due 2007 . . . . . 146,768 155,546
Other long-term liabilities . . . . . 26,300 32,323
---------- ----------
Total liabilities . . . . . . . . . . 520,557 581,140
Commitments and contingencies
Minority interest in
consolidated subsidiaries . . . . . 789 567
Stockholders' equity:
Common stock, $.01 par value
per share, 100,000,000 shares
authorized; 30,183,450 and
30,700,150 shares issued and
outstanding as of December 31,
2001 and December 31,
2000, respectively. . . . . . . . . 302 307
Additional paid-in capital. . . . . . 463,926 461,272
Deferred stock compensation . . . . . (6,038) (4,322)
Retained deficit. . . . . . . . . . . (122,521) (107,110)
Stock held in trust . . . . . . . . . (1,658) (397)
Accumulated other comprehensive
income. . . . . . . . . . . . . . . (19,630) (17,412)
---------- ----------
Total stockholders' equity. . . . . . 314,381 332,338
---------- ----------
$ 835,727 $ 914,045
========== ==========
FINANCIAL STATEMENT NOTES
NOTE 1
Adjusted results for 2001 exclude non-recurring and restructuring charges.
Non-recurring charges include the write-down of investments in e-commerce,
reserves against potential liabilities associated with the bankruptcy of
two insurance providers and the asset impairment costs associated with the
global restructuring program, including the exit of certain non-strategic
business lines. Restructuring charges include severance and professional
fees associated with the realignment of our business and exiting certain
non-strategic business lines. Adjusted results for the twelve months ended
December 31, 2000 exclude merger related non-recurring charges representing
non-cash compensation expense resulting from the issuance of shares to
former employees of Jones Lang Wootton. Adjusted results for 2000 also
exclude the cumulative charge related to the adoption of SAB 101. There are
no merger-related non-recurring charges in 2001. This analysis is not
intended to be a presentation in accordance with generally accepted
accounting principles (GAAP). The table below reconciles the Consolidated
Statement of Earnings prepared in accordance with GAAP to the Adjusted
Consolidated Statement of Earnings.
(in millions, unaudited) Minority
Full Year 2001 Pre-tax Tax Interests Post-tax
- ----------------------- ------- ---- --------- --------
GAAP net loss . . . . . . . . . (7.2) 8.0 0.2 (15.4)
IMPACT OF NON-OPERATING,
NON-RECURRING CHARGES
E-commerce investment
impairment. . . . . . . . . . 18.0 2.9 0.0 15.1
Insolvent insurance
providers . . . . . . . . . . 1.9 0.6 0.0 1.3
Asset impairments related
to business realignment
and restructuring . . . . . . 13.4 3.3 0.0 10.1
Severance and other costs
associated with business
realignment and restruc-
turing. . . . . . . . . . . . 43.9 14.5 0.0 29.4
---- ---- ---- -----
Adjusted net earnings . . . . . 70.0 29.3 0.2 40.5
==== ==== ==== =====
The only reconciling items between GAAP Earnings and Adjusted Earnings for
the full year 2000 were $83.3 million (net of tax benefit of $2.5 million)
of merger-related non-cash compensation expense and $14.2 million (net of
tax benefit of $8.7 million) of a cumulative charge related to the adoption
of SAB 101.
NOTE 2
Certain prior year amounts have been reclassified to conform with the
current presentation.
NOTE 3
Adjusted earnings per common share represents adjusted net earnings divided
by the weighted average committed shares outstanding. Committed shares,
which are inclusive of shares subject to forfeiture, vesting and indemnity
provisions, are not considered in the calculation of weighted average basic
or diluted shares outstanding under generally accepted accounting
principles. As of December 31, 2000, all forfeiture, vesting and indemnity
provisions have been removed, therefore for 2001, these shares are included
in the weighted average shares outstanding under generally accepted
accounting principles.
NOTE 4
Adjusted EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization, and excludes Minority Interests in EBITDA.
2001 Adjusted EBITDA excludes non-recurring and restructuring charges. 2000
Adjusted EBITDA excludes merger-related non-recurring charges and the
cumulative charge related to the adoption of SAB 101. Management believes
that Adjusted EBITDA is useful to investors as a measure of operating
performance, cash generation and ability to service debt. However, Adjusted
EBITDA should not be considered an alternative to (i) net earnings
(determined in accordance with GAAP), (ii) operating cash flows (determined
in accordance with GAAP), or (iii) liquidity.
EXECUTIVE OFFICER & BOARD OF DIRECTORS
EXECUTIVE OFFICERS [ WITH PHOTOS ]
- ------------------
STUART L. SCOTT
Chairman
CHRISTOPHER A. PEACOCK
President and Chief Executive Officer
PETER C. ROBERTS
Executive Vice President and Chief Operating Officer
LAURALEE E. MARTIN
Executive Vice President and Chief Financial Officer
BOARD OF DIRECTORS
- ------------------
STUART L. SCOTT
Chairman
Jones Lang LaSalle
CHRISTOPHER A. PEACOCK
President and Chief Executive Officer
Jones Lang LaSalle
CHRISTOPHER M.G. BROWN
Chief Executive Officer
Asia Pacific
Jones Lang LaSalle
ROBIN BROADHURST
Chairman
Europe
Jones Lang LaSalle
HENRI-CLAUDE DE BETTIGNIES
Professor
INSEAD
DARRYL HARTLEY-LEONARD
Chairman and Chief Executive Officer
Production Group International
DEREK A. HIGGS
Chairman
Partnerships UK plc
DAVID K.P. LI
Chairman and Chief Executive
The Bank of East Asia
ROBERT S. ORR
Chief Executive Officer
Europe
Jones Lang LaSalle
PETER C. ROBERTS
Executive Vice President and Chief Operating Officer
Jones Lang LaSalle
THOMAS C. THEOBALD
Managing Director
William Blair Capital Partners
LYNN C. THURBER
Chief Executive Officer
LaSalle Investment Management
JOHN R. WALTER
Chairman of the Board
Manpower, Inc. and
Retired President and
Chief Operating Officer
AT&T
EARL E. WEBB
Chief Executive Officer
Americas
Jones Lang LaSalle
MANAGEMENT EXECUTIVE COMMITTEE
- ------------------------------
[ Management Executive Committee photo insert -- From left: Chris Peacock,
Robert Orr, Lynn Thurber, Lauralee Martin, Peter Barge, Chris Brown, Earl
Webb, Molly Kelly, John Minks and Peter Roberts ]
CHRISTOPHER A. PEACOCK
Management Executive
Committee Chairman
President and Chief Executive Officer
Jones Lang LaSalle
PETER BARGE
Chief Executive Officer
Corporate Solutions, Americas and Jones Lang LaSalle Hotels
CHRISTOPHER M.G. BROWN
Chief Executive Officer, Asia Pacific
LAWRENCE DEANS
Chief Human Resources Officer
MOLLY A. KELLY
Chief Marketing and Communications Officer
LAURALEE E. MARTIN
Executive Vice President and Chief Financial Officer
JOHN G. MINKS
Chief Executive Officer
Global Client Services and Corporate Solutions, Europe
ROBERT S. ORR
Chief Executive Officer, Europe
PETER C. ROBERTS
Executive Vice President and Chief Operating Officer
LYNN C. THURBER
Chief Executive Officer
LaSalle Investment Management
EARL E. WEBB
Chief Executive Officer, Americas
GLOBAL LOCATIONS
[ graphic - global map with countries/markets indicated ]
AMERICAS (5 COUNTRIES, 36 MARKETS)
Atlanta, Baltimore, Buenos Aires, Chicago, Cincinnati, Cleveland, Columbus,
Dallas, Denver, Detroit, Ft. Lauderdale, Houston, Los Angeles, McLean
(Virginia) +, Mexico City, Minneapolis +, Monterrey (Mexico), Montreal, New
York, Orange County, Orlando, Philadelphia, Phoenix, Pittsburgh+, Portland
(Oregon), Rio de Janeiro, Sacramento, St. Louis, Salt Lake City, San Diego,
San Francisco, Sao Paulo, Seattle, Toronto, Vancouver, Washington, DC
ASIA PACIFIC (11 COUNTRIES, 21 MARKETS)
Adelaide, Auckland, Bangalore, Bangkok, Beijing, Brisbane, Canberra, Hong
Kong, Jakarta, Manila, Melbourne, Mumbai, New Delhi, Perth, Seoul,
Shanghai, Singapore, Sydney, Taipei +, Tokyo, Wellington
EUROPE (17 COUNTRIES, 39 MARKETS)
Amsterdam, Antwerp, Barcelona, Berlin, Birmingham, Brussels, Budapest,
Dublin, Dusseldorf, Edinburgh, Eindhoven +, Frankfurt, Glasgow, Gothenburg,
Grenoble, The Hague, Hamburg, Leeds, Lisbon, London, Luxembourg, Lyon,
Madrid, Malmo, Manchester, Milan, Moscow, Munich, Norwich +, Paris, Prague,
Rotterdam, Seville, Stockholm, Tel Aviv, Utrecht, Valencia, Warsaw,
Wiesbaden
+ New market in 2001
CORPORATE INFORMATION
OPERATIONAL HEADQUARTERS
Jones Lang LaSalle Group
22 Hanover Square
London W1A 2BN
tel +44 20 7493 6040
fax +44 20 7408 0220
HOLDING COMPANY HEADQUARTERS
Jones Lang LaSalle Incorporated
200 East Randolph Drive
Chicago Illinois 60601
tel +1 312 782 5800
fax +1 312 782 4339
REGIONAL HEADQUARTERS
AMERICAS
200 East Randolph Drive
Chicago Illinois 60601
tel +1 312 782 5800
fax +1 312 782 4339
EUROPE
22 Hanover Square
London W1A 2BN
tel +44 20 7493 6040
fax +44 20 7408 0220
ASIA PACIFIC
9 Raffles Place
#39-00 Republic Plaza
Singapore 048619
tel +65 6220 3888
fax +65 6438 3360
TRANSFER AGENT AND REGISTRAR
Computershare Investor Services
2 North LaSalle Street
Chicago Illinois 60602
EURO NOTES TRUSTEE, PRINCIPAL PAYING AGENT,
REGISTRAR AND TRANSFER AGENT
The Bank of New York
101 Barclay Street
New York New York 10286
30 Cannon Street
London EC4M 6XH
EURO NOTES LISTING AGENT AND LUXEMBOURG
PAYING AND TRANSFER AGENT
Kredietbank S.A.
Luxembourgeoise
43, Boulevard Royal
L-2955 Luxembourg
SEC FORM 10-K AND OTHER INFORMATION
Requests for the 2001 Jones Lang LaSalle Annual Report on Form 10-K (which
will be provided free of charge) and any other inquiries from individuals
and institutional investors should be directed to:
Jones Lang LaSalle Incorporated
Investor Relations Department
200 East Randolph Drive
Chicago IL 60601
tel +1 312 228 2430
www.joneslanglasalle.com
INDEPENDENT AUDITORS
KPMG LLP
303 East Wacker Drive
Chicago IL 60601
COMMON SHARE MARKET PRICES
Jones Lang LaSalle's common stock is listed on the New York Stock Exchange
(NYSE), ticker symbol JLL
Following are the JLL high and low sales prices for 2001 and 2000 on the
NYSE:
2001 HIGH LOW
- ---- ------- -------
1Q $ 16.24 $ 12.20
2Q $ 14.05 $ 12.25
3Q $ 15.65 $ 12.50
4Q $ 18.20 $ 13.25
2000 HIGH LOW
- ---- ------- -------
1Q $ 15.50 $ 10.06
2Q $ 16.00 $ 13.38
3Q $ 15.13 $ 11.63
4Q $ 14.00 $ 12.25
DIVIDENDS
Jones Lang LaSalle has not paid cash dividends on its common stock to date.
Jones Lang LaSalle intends to retain its earnings to support the expansion
of the business and therefore does not intend to pay cash dividends for the
foreseeable future. Any payment of future dividends and the amounts thereof
will be at the discretion of the Board of Directors and will depend upon
Jones Lang LaSalle's financial condition, earnings, and other factors
deemed relevant by the Board of Directors. See Management's Discussion and
Analysis of Financial Condition and Results of Operations in Jones Lang
LaSalle's Annual Report on Form 10-K for information regarding restrictions
on Jones Lang LaSalle's ability to pay dividends.