EXHIBIT 99.3
- ------------
JONES LANG
LASALLE NEWS RELEASE
For Immediate Release 200 East Randolph Drive
Chicago, Illinois 60601
22 Hanover Square
London W1A 2BN
Contact: Lauralee Martin
Chief Financial Officer
Phone: +1 312 228 2073
Email: Lauralee.martin@am.joneslanglasalle.com
JONES LANG LASALLE REPORTS IMPROVED SECOND QUARTER RESULTS
CHICAGO AND LONDON, JULY 31, 2002 - Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and investment
management firm, today reported net income for the second quarter of $3.5
million, or $0.11 per share, in line with expectations and one cent ahead
of the First Call consensus estimates. Results compare favorably with the
prior year's second quarter adjusted net loss of $0.3 million, or $0.01 per
share, and GAAP net loss of $1.9 million, or $0.06 per share.
Reflecting the generally slow economic conditions worldwide, revenues
in the quarter declined to $190.9 million, down 5 percent from the prior
year period. Offsetting the lower revenues, operating expenses declined 8
percent to $178.4 million. The expense reductions were primarily due to the
benefits of management actions last year to bring the organization in line
with the expected 2002 business environment together with continued tight
expense controls.
- ---------------------------------------------------------------------------
SECOND QUARTER RESULTS HIGHLIGHTS
.. Second quarter net income of $3.5 million versus prior year loss
.. Operating expenses down 8 percent from 2001
.. Debt reduction of $37 million from prior year
- ---------------------------------------------------------------------------
EBITDA in the quarter increased to $20.1 million, up $2.6 million
from the prior year adjusted EBITDA of $17.5 million. Reflecting the
continued strong business cash flows and aggressive focus on receivables
management, debt was reduced from the prior year period by $37 million,
despite a $23 million increase in the book value of the company's Eurobonds
due to the weakening U.S. dollar. Lower debt balances in the quarter
resulted in a $1.3 million reduction in interest expense year over year.
--more--
JONES LANG LASALLE REPORTS IMPROVED SECOND QUARTER RESULTS - ADD ONE
"We are pleased to report results for the quarter in line with our
targets. The revenue declines, resulting from continued economic weakness
and lack of business confidence, underscore the importance of our quick
management actions in late 2001 to reduce costs throughout our business.
Our people have done an excellent job of managing the variables in our
control, including both new client and assignment wins and tight cost
controls," said Chris Peacock, President and Chief Executive Officer of
Jones Lang LaSalle.
Year to date, the company reported a loss of $1.4 million, or $0.05
per share, which compared favorably with the adjusted net loss of $3.2
million, or $0.11 per share, in the first half of 2001. Revenues year to
date of $352.7 million and expenses of $344.3 million were both down 12
percent. Year-to-date expense reductions of $49 million include $11
million related to bonus accrual timing that is temporary. EBITDA for the
six months totalled $25.4 million.
The second quarter and first half results include the benefit of $2.4
million and $4.8 million respectively, from adoption of the SFAS 142
accounting standard. No impairment charges were necessary with the adoption
of this standard. The adjusted results for second quarter of 2001 exclude
non-operational, non-recurring charges of $1.5 million for global business
restructuring and $1.1 million of e-commerce investment writedowns. For
the first half adjusted results of 2001, there was an additional $1.1
million non-operational, non-recurring charge for the writedown of a
broadband investment. The GAAP net loss for the first half of 2001 was
$5.5 million, or $0.18 per share.
BUSINESS SEGMENT PERFORMANCE HIGHLIGHTS
OWNER AND OCCUPIER SERVICES
. AMERICAS
Operating income in the second quarter was $3.0 million versus
$3.6 million for the prior year period. Year-to-date operating income of
$0.9 million compared strongly to a loss in the prior year of $7.2 million.
Results were driven by cost savings, with expenses down $17 million or 23
percent for the quarter and $34 million or 24 percent year to date.
Included in the expense reductions are lower bonus accruals of $3.3 million
and $6.1 million, respectively, that are booked relative to performance and
will be recaptured later in the year. Revenues in the second quarter of
$58.3 million were down 23 percent, principally due to Investor Services
leasing transaction declines. Converting the firm's strong leasing mandates
into completed transactions is expected to remain a challenge for the
balance of the year.
. EUROPE
Operating income in the second quarter of $6.0 million improved 5
percent over the prior year period. Year-to-date operating income was down
56 percent. Second quarter performance was driven by revenues of $79.2
million which showed a solid recovery from the weakness in the first
quarter of 2002. Strong performance in the Netherlands and a $3.5 million
incentive fee in the Swedish joint venture offset continued weakness in
England and Germany and a slippage in the timing of the completion of
transactions in France and Belgium. The strengthening European currencies
increased reported revenues and expenses in the quarter by $3 million when
compared to the prior year period. Underlying cost savings were masked by
the impact of the strengthening European currencies increasing reported
expenses and an increased bonus accrual of $3.2 million in the quarter
reflecting the stronger revenue performance. Year-to-date expenses were
down $12 million or 8 percent, including a lower bonus accrual of $4.8
million.
--more--
JONES LANG LASALLE REPORTS IMPROVED SECOND QUARTER RESULTS - ADD TWO
. ASIA PACIFIC
Operating income in the quarter improved to $1.3 million versus a
loss of $2.4 million in the second quarter of 2001, bringing the first half
improvement year over year to $3.1 million. Revenues of $32.0 million, up
11 percent, were driven by strong performances from Australia, Hong Kong,
Korea and Japan, which offset the continued slowdown in Singapore. The
strengthening Australian dollar increased reported revenues and expenses by
$1.0 million when compared to the prior year.
INVESTMENT MANAGEMENT
LaSalle Investment Management's second quarter operating income of
$2.3 million compared favorably against the prior period operating loss of
$0.5 million. Revenues of $21.6 million were up 10 percent with expenses
relatively flat due to tight cost controls while continuing to invest in
people required for new fund growth. Net co-investment fundings in the
quarter increased $8.2 million with the second close of Income and Growth
III and its acquisition of three properties. Year-to-date growth in net co-
investment fundings is $12.1 million.
OUTLOOK FOR REMAINDER OF 2002
"Our business is strong and we are winning major new assignments in
line with our global strategy, however, the current world economic outlook
continues to negatively affect real estate activities worldwide," said
Mr. Peacock. "We continue to be cautious about the balance of the year as
economic messages around the world are mixed and the timing of recoveries
remains uncertain. However, taking into account our aggressive focus on
costs, continued debt reduction and interest expense savings, and an
expected improvement in our effective tax rate, we are not at this point
changing our target range. For the third quarter we expect earnings to be
in the range of $0.35-$0.45 and for the full year $1.65-$1.70 per fully
diluted share, although the likely outcome will be around the lower end of
the range."
ABOUT JONES LANG LASALLE
Jones Lang LaSalle is the world's leading real estate services and
investment management firm, operating across more than 100 markets on five
continents. The company provides comprehensive integrated expertise,
including management services, implementation services and investment
management services on a local, regional and global level to owners,
occupiers and investors. Jones Lang LaSalle is also the industry leader in
property and corporate facility management services, with a portfolio of
approximately 725 million square feet (67 million square meters) under
management worldwide. LaSalle Investment Management, the company's
investment management business, is one of the world's largest and most
diverse real estate investment management firms, with in excess of $22
billion of assets under management.
--more--
JONES LANG LASALLE REPORTS IMPROVED SECOND QUARTER RESULTS - ADD THREE
Statements in this press release regarding, among other things, future
financial results and performance, achievements, plans and objectives may
be considered forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties and other factors which may cause actual
results, performance, achievements, plans and objectives of Jones Lang
LaSalle to be materially different from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include those discussed under "Business," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Quantitative and Qualitative Disclosures about Market Risk," and elsewhere
in Jones Lang LaSalle's Annual Report on Form 10-K for the year ended
December 31, 2001, under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Quantitative and Qualitative
Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, in
Jones Lang LaSalle's Proxy Statement dated April 4, 2002, and in other
reports filed with the Securities and Exchange Commission. Statements
speak only as of the date of this release. Jones Lang LaSalle expressly
disclaims any obligation or undertaking to update or revise any forward-
looking statements contained herein to reflect any change in Jones Lang
LaSalle's expectations or results, or any change in events.
# # #
NOTE TO EDITORS:
. Media contacts may listen only to the Jones Lang LaSalle second
quarter results discussion at 9 a.m. EDT on Aug 1 with
investors and market analysts by dialing +1 719 457 2693.
. A web cast of the conference call is available at
http://www.firstcallevents.com/service/ajwz363584876gf12.html
. A replay of the call may be accessed by dialing +1 719 457 0820
outside the United States and +1 888 203 1112 in the United
States from noon EDT on Aug. 1, 2002, through 5:00 p.m. (EDT)
on Aug. 15, 2002. The replay passcode is 233719.
<table>
JONES LANG LASALLE INCORPORATED
Adjusted Consolidated Statements of Earnings
For the Three and Six Months Ended June 30, 2002 and 2001
(in thousands, except share data)
(Unaudited)
<caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2002 2001
Adjusted Adjusted Adjusted
2002 (1)(2) (1) (1)(2)
---------- ----------- ---------- -----------
<s> <c> <c> <c> <c>
Revenue:
Fee based services. . . . . . . . $ 189,549 198,597 349,824 394,085
Equity in earnings from
unconsolidated ventures . . . . 659 1,341 501 3,857
Other income. . . . . . . . . . . 726 1,038 2,411 1,883
---------- ---------- ---------- ----------
Total revenue . . . . . . . . 190,934 200,976 352,736 399,825
Operating expenses:
Compensation and benefits . . . . 119,859 127,912 230,802 262,389
Operating, administrative and
other . . . . . . . . . . . . . 49,166 54,585 94,666 107,500
Depreciation and amortization . . 9,350 12,091 18,821 23,422
---------- ---------- ---------- ----------
Total operating expenses
excluding non-recurring and
restructuring charges . . . 178,375 194,588 344,289 393,311
---------- ---------- ---------- ----------
Adjusted operating income
excluding non-recurring and
restructuring charges . . . 12,559 6,388 8,447 6,514
Interest expense, net of interest
income. . . . . . . . . . . . . . 4,669 5,981 8,587 10,827
---------- ---------- ---------- ----------
5
JONES LANG LASALLE INCORPORATED
Adjusted Consolidated Statements of Earnings - Continued
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2002 2001
Adjusted Adjusted Adjusted
2002 (1)(2) (1) (1)(2)
---------- ----------- ---------- -----------
Adjusted income (loss) before
provision (benefit) for income
taxes and minority interest . . . 7,890 407 (140) (4,313)
Net provision (benefit) for
income taxes . . . . . . . . . . 3,155 155 (57) (1,639)
Minority interests in earnings
of subsidiaries . . . . . . . . . 1,229 565 1,292 531
---------- ---------- ---------- ----------
Adjusted net income (loss)
excluding non-recurring and
restructuring charges . . . $ 3,506 (313) (1,375) (3,205)
========== ========== ========== ==========
Adjusted income (loss) per
common share. . . . . . . . . . . $ 0.11 (0.01) (0.05) (0.11)
========== ========== ========== ==========
Adjusted weighted average
shares outstanding. . . . . . . . 31,871,256 29,775,259 30,244,245 29,946,909
========== ========== ========== ==========
Adjusted EBITDA Calculation (3)
Adjusted operating income . . . . $ 12,559 6,388 8,447 6,514
Depreciation and amortization . . 9,350 12,091 18,821 23,422
Minority interests in EBITDA. . . (1,764) (1,008) (1,834) (923)
---------- ---------- ---------- ----------
Adjusted EBITDA . . . . . . . $ 20,145 17,471 25,434 29,013
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
6
</table>
<table>
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three and Six Months Ended June 30, 2002 and 2001
(in thousands, except share data)
(Unaudited)
<caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2002 2001 (2) 2002 2001 (2)
---------- ----------- ---------- -----------
<s> <c> <c> <c> <c>
Revenue:
Fee based services. . . . . . . . $ 189,549 198,597 349,824 394,085
Equity in earnings from
unconsolidated ventures . . . . 659 1,341 501 3,857
Other income. . . . . . . . . . . 726 1,038 2,411 1,883
---------- ---------- ---------- ----------
Total revenue . . . . . . . . 190,934 200,976 352,736 399,825
Operating expenses:
Compensation and benefits . . . . 119,859 127,912 230,802 262,389
Operating, administrative and
other . . . . . . . . . . . . . 49,166 54,585 94,666 107,500
Depreciation and amortization . . 9,350 12,091 18,821 23,422
---------- ---------- ---------- ----------
Total operating expenses
before non-recurring and
restructuring charges . . . 178,375 194,588 344,289 393,311
---------- ---------- ---------- ----------
Operating income before non-recurring
and restructuring charges . . . . 12,559 6,388 8,447 6,514
Non-operational non-recurring
charges . . . . . . . . . . . . . -- 1,056 -- 2,111
Restructuring charges . . . . . . . -- 1,539 -- 1,539
---------- ---------- ---------- ----------
Total operating expenses. . . 178,375 197,183 344,289 396,961
---------- ---------- ---------- ----------
Operating income. . . . . . . 12,559 3,793 8,447 2,864
7
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings - Continued
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2002 2001 (2) 2002 2001 (2)
---------- ----------- ---------- -----------
Interest expense, net of interest
income. . . . . . . . . . . . . . 4,669 5,981 8,587 10,827
---------- ---------- ---------- ----------
Income (loss) before provision
(benefit) for income taxes and
minority interest . . . . . 7,890 (2,188) (140) (7,963)
Net provision (benefit) for
income taxes . . . . . . . . . . 3,155 (831) (57) (3,026)
Minority interests in earnings of
subsidiaries. . . . . . . . . . . 1,229 565 1,292 531
---------- ---------- ---------- ----------
Net income (loss) before
cumulative effect of change
in accounting principle . . 3,506 (1,922) (1,375) (5,468)
Cumulative effect of change in
accounting principle. . . . . . . -- -- 846 --
---------- ---------- ---------- ----------
Net income (loss) . . . . . . $ 3,506 (1,922) (529) (5,468)
========== ========== ========== ==========
Basic earnings (loss) per common
share before cumulative effect of
change in accounting principle. . $ 0.12 (0.06) (0.05) (0.18)
Cumulative effect of change in
accounting principle. . . . . . . -- -- 0.03 --
---------- ---------- ---------- ----------
Basic earnings (loss) per
common share. . . . . . . . . . . $ 0.12 (0.06) (0.02) (0.18)
========== ========== ========== ==========
Basic weighted average shares
outstanding . . . . . . . . . . . 30,278,032 29,775,259 30,244,245 29,946,909
========== ========== ========== ==========
8
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings - Continued
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2002 2001 (2) 2002 2001 (2)
---------- ----------- ---------- -----------
Diluted earnings (loss) per common
share before cumulative effect of
change in accounting principle. . $ 0.11 (0.06) (0.05) (0.18)
Cumulative effect of change in
accounting principle. . . . . . . -- -- 0.03 --
---------- ---------- ---------- ----------
Diluted earnings (loss) per
common share. . . . . . . . . . . $ 0.11 (0.06) (0.02) (0.18)
========== ========== ========== ==========
Diluted weighted average shares
outstanding . . . . . . . . . . . 31,871,256 29,775,259 30,244,245 29,946,909
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
9
</table>
<table>
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Six Months Ended June 30, 2002 and 2001
(in thousands)
(Unaudited)
<caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2002 2001
Adjusted Adjusted Adjusted
2002 (1)(2) (1) (1)(2)
---------- ----------- ---------- -----------
<s> <c> <c> <c> <c>
OWNER & OCCUPIER SERVICES -
AMERICAS
Revenue:
Implementation services . . . $ 26,482 38,301 47,063 63,797
Management services . . . . . 31,847 35,913 63,082 70,930
Equity earnings (losses). . . (472) 335 (482) 335
Other services. . . . . . . . 310 437 667 723
Intersegment revenue. . . . . 85 550 202 710
---------- ---------- ---------- ----------
58,252 75,536 110,532 136,495
Operating expenses:
Compensation, operating and
administrative . . . . . . 50,466 65,678 99,976 131,663
Depreciation and amortization 4,739 6,300 9,632 11,990
---------- ---------- ---------- ----------
Operating income (loss)(4) $ 3,047 3,558 924 (7,158)
========== ========== ========== ==========
EUROPE
Revenue:
Implementation services . . . $ 58,193 56,046 103,339 121,281
Management services . . . . . 20,803 21,304 39,147 41,570
Other services. . . . . . . . 155 249 1,002 436
---------- ---------- ---------- ----------
79,151 77,599 143,488 163,287
Operating expenses:
Compensation, operating and
administrative . . . . . . 70,473 68,771 131,984 142,786
Depreciation and amortization 2,712 3,128 5,268 6,185
---------- ---------- ---------- ----------
Operating income (4). . . $ 5,966 5,700 6,236 14,316
========== ========== ========== ==========
10
JONES LANG LASALLE INCORPORATED
Segment Operating Results - Continued
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2002 2001
Adjusted Adjusted Adjusted
2002 (1)(2) (1) (1)(2)
---------- ----------- ---------- -----------
ASIA PACIFIC
Revenue:
Implementation services . . . $ 19,685 16,766 34,577 33,154
Management services . . . . . 12,030 11,539 22,957 22,694
Other services. . . . . . . . 253 354 658 697
---------- ---------- ---------- ----------
31,968 28,659 58,192 56,545
Operating expenses:
Compensation, operating and
administrative . . . . . . 29,106 29,365 56,640 58,204
Depreciation and amortization 1,587 1,681 3,306 3,275
---------- ---------- ---------- ----------
Operating income (loss)(4) $ 1,275 (2,387) (1,754) (4,934)
========== ========== ========== ==========
INVESTMENT MANAGEMENT -
Revenue:
Implementation services . . . . $ -- 1,044 353 1,839
Advisory fees . . . . . . . . . 20,517 17,663 39,308 38,768
Equity earnings . . . . . . . 1,131 1,006 983 3,522
Other services. . . . . . . . . -- 19 82 79
---------- ---------- ---------- ----------
21,648 19,732 40,726 44,208
Operating expenses:
Compensation, operating and
administrative . . . . . . . 19,065 19,233 37,070 37,946
Depreciation and amortization . 312 982 615 1,972
---------- ---------- ---------- ----------
Operating income (loss)(4) $ 2,271 (483) 3,041 4,290
========== ========== ========== ==========
11
JONES LANG LASALLE INCORPORATED
Segment Operating Results - Continued
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2002 2001
Adjusted Adjusted Adjusted
2002 (1)(2) (1) (1)(2)
---------- ----------- ---------- -----------
Total segment revenue . . . . . . . $ 191,019 201,526 352,938 400,535
Intersegment revenue eliminations . (85) (550) (202) (710)
---------- ---------- ---------- ----------
Total revenue . . . . . . $ 190,934 200,976 352,736 399,825
========== ========== ========== ==========
Total segment operating expenses. . $ 178,460 195,138 344,491 394,021
Intersegment operating expense
eliminations. . . . . . . . . . . (85) (550) (202) (710)
---------- ---------- ---------- ----------
Total operating expenses
before non-recurring and
restructuring charges . $ 178,375 194,588 344,289 393,311
========== ========== ========== ==========
Operating income before
non-recurring and
restructuring charges . $ 12,559 6,388 8,447 6,514
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
12
</table>
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
June 30, 2002 and December 31, 2001
(in thousands)
(Unaudited)
June 30, December 31,
2002 2001
----------- ------------
ASSETS
- ------
Current assets:
Cash and cash equivalents . . . . . . . $ 7,964 10,446
Trade receivables, net of allowances. . 169,572 222,590
Notes receivable and advances to
real estate ventures. . . . . . . . . 3,808 3,847
Other receivables . . . . . . . . . . . 14,580 9,553
Prepaid expenses. . . . . . . . . . . . 11,213 11,802
Deferred tax assets . . . . . . . . . . 17,579 16,935
Other assets. . . . . . . . . . . . . . 15,045 11,340
---------- ----------
Total current assets. . . . . . . . 239,761 286,513
Property and equipment, at cost,
less accumulated depreciation . . . . . 84,821 92,503
Intangibles resulting from business
acquisitions and JLW merger, net of
accumulated amortization. . . . . . . . 333,044 328,169
Investments in real estate ventures . . . 66,350 56,899
Long-term receivables, net. . . . . . . . 22,986 17,375
Prepaid pension asset . . . . . . . . . . 12,086 14,384
Deferred tax assets . . . . . . . . . . . 24,066 25,770
Debt issuance costs . . . . . . . . . . . 4,857 5,407
Other assets, net . . . . . . . . . . . . 8,311 8,707
---------- ----------
$ 796,282 835,727
========== ==========
13
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets - Continued
June 30, December 31,
2002 2001
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable and
accrued liabilities . . . . . . . . . $ 91,051 116,968
Accrued compensation . . . . . . . . . 59,874 131,680
Short-term borrowings . . . . . . . . . 15,765 15,497
Deferred tax liabilities. . . . . . . 206 23
Other liabilities . . . . . . . . . . . 18,384 23,467
---------- ----------
Total current liabilities . . . . 185,280 287,635
Long-term liabilities:
Credit facilities . . . . . . . . . . . 88,716 59,854
9% Senior Notes, due 2007 . . . . . . . 163,564 146,768
Deferred tax liabilities. . . . . . . . 4,827 6,567
Other . . . . . . . . . . . . . . . . . 24,701 19,733
---------- ----------
Total liabilities . . . . . . . . 467,088 520,557
Commitments and contingencies
Minority interest in
consolidated subsidiaries . . . . . . . 2,266 789
Stockholders' equity:
Common stock, $.01 par value per share,
100,000,000 shares authorized;
30,386,902 and 30,183,450 shares
issued and outstanding as of June 30,
2002 and December 31, 2001,
respectively. . . . . . . . . . . . . 304 302
Additional paid-in capital. . . . . . . 474,478 463,926
Deferred stock compensation . . . . . . (10,714) (6,038)
Retained deficit. . . . . . . . . . . . (123,050) (122,521)
Stock held in trust . . . . . . . . . (460) (1,658)
Accumulated other comprehensive income. (13,630) (19,630)
---------- ----------
Total stockholders' equity. . . . 326,928 314,381
---------- ----------
$ 796,282 835,727
========== ==========
Please reference attached financial statement notes.
14
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
Six Months Ended June 30, 2002 and 2001
(in thousands)
(Unaudited)
2002 (5) 2001 (5)
---------- ----------
Cash provided by earnings . . . . . . . . $ 27,591 31,220
Cash used in working capital. . . . . . . (47,035) (97,252)
Cash used in investing activities . . . . (15,028) (4,021)
Cash provided by financing activities . . 31,990 61,285
---------- ----------
Net decrease in cash. . . . . . (2,482) (8,768)
Cash and cash equivalents,
beginning of period . . . . . . . . . . 10,446 18,843
---------- ----------
Cash and cash equivalents,
end of period . . . . . . . . . . . . . $ 7,964 10,075
========== ==========
Please reference attached financial statement notes.
15
<table>
JONES LANG LASALLE INCORPORATED
CURRENCY ANALYSIS OF REVENUES AND ADJUSTED OPERATING INCOME
(in millions)
(Unaudited)
<caption>
Pound US
Sterling Australian Dollar
(6) Euro Dollar (6) Other Total
-------- -------- ---------- -------- -------- --------
$ $ $ $ $ $
<s> <c> <c> <c> <c> <c> <c>
REVENUES (1)
2002
Q1, 2002 34.5 32.7 9.2 59.7 25.7 161.8
Q2, 2002 47.1 31.9 12.5 66.6 32.8 190.9
------ ------ ------ ------ ------ ------
Total 81.6 64.6 21.7 126.3 58.5 352.7
====== ====== ====== ====== ====== ======
2001
Q1, 2001 46.3 43.1 11.2 73.9 24.3 198.8
Q2, 2001 42.6 35.0 10.6 82.8 30.0 201.0
------ ------ ------ ------ ------ ------
Total 88.9 78.1 21.8 156.7 54.3 399.8
====== ====== ====== ====== ====== ======
ADJUSTED OPERATING INCOME (1)(6)
2002
Q1, 2002 -2.5 3.8 -2.5 -1.0 -1.9 -4.1
Q2, 2002 7.5 -0.2 -0.3 2.9 2.6 12.5
------ ------ ------ ------ ------ ------
Total 5.0 3.6 -2.8 1.9 0.7 8.4
====== ====== ====== ====== ====== ======
2001
Q1, 2001 -0.4 8.7 -0.5 -4.2 -3.5 0.1
Q2, 2001 1.8 3.9 -0.8 3.9 -2.4 6.4
------ ------ ------ ------ ------ ------
Total 1.4 12.6 -1.3 -0.3 -5.9 6.5
====== ====== ====== ====== ====== ======
Please reference attached financial statement notes.
16
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
(1) Adjusted results for the six months ended June 30, 2002 exclude
the cumulative effect of change in accounting principle relating to
the adoption of SFAS 142. There were no adjustments to the results
for the three months ended June 30, 2002. Adjusted results for the
three and six months ended June 30, 2001 exclude non-recurring and
restructuring charges. Non-recurring charges relate to the
write-down of investments in e-commerce ventures. Restructuring
charges relate to severance and professional fees associated with the
realignment of our business. This analysis is not intended to be a
presentation in accordance with generally accepted accounting
principles (GAAP).
(2) Certain prior year amounts have been reclassified to conform with
the current presentation. In particular, in 2002, we began
accounting for the revenues of our Global Consulting unit on a gross
basis, as opposed to netting these revenues into expenses. These
revenues amounted to $2.4 million and $4.1 million in the three and
six months ended June 30, 2001, respectively.
(3) Adjusted EBITDA represents earnings before interest expense, income
taxes, depreciation and amortization, and excludes Minority Interests
in EBITDA. For the six months ended June 30, 2002, Adjusted EBITDA
excludes the cumulative effect of change in accounting principle
resulting from the adoption of SFAS 142. For the three and six
months ended June 30, 2001, Adjusted EBITDA excludes non-recurring
and restructuring charges. 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.
(4) For purposes of this analysis we have determined that the allocation
of the non-recurring charges to our segments is not meaningful to
investors. Additionally, we evaluate the performance of our segment
results without these charges being allocated.
(5) The consolidated statements of cash flows are presented in summarized
form. Please reference our second quarter Form 10-Q for detailed
consolidated statements of cash flows.
(6) The objective of this presentation is to provide guidance as to the
key currencies that the Company does business in and their
significance to reported revenues and adjusted operating income. The
adjusted operating income sourced in pound sterling and US dollars
understates the profitability of the businesses in the United Kingdom
and America because it includes the locally incurred expenses of our
global offices in London and Chicago, respectively, as well as the
European regional office in London. The revenues and adjusted
operating income of the global investment management business are
allocated to their underlying currency, which means that this
analysis may not be consistent with the performance of the geographic
OOS segments. In particular, as incentive fees are earned by this
business, there may be significant shifts in the geographic mix of
revenues and adjusted operating income.
17