EXHIBIT 99.1
- ------------
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 2002 NET INCOME IN LINE WITH GUIDANCE
CHICAGO AND LONDON, FEBRUARY 4, 2003 - Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and investment
management firm, today reported net income of $27.1 million, or $0.85 per
diluted share, for the fiscal year ended December 31, 2002. These results
are in line with revised guidance and compare favorably to the prior year's
net loss of $15.4 million, or $0.51 per share. Adjusted income of $34.3
million, which excludes after tax non-recurring and restructuring charges,
was $1.08 per diluted share, slightly better than the First Call consensus
estimate of $1.05, which also excluded the impact of these charges.
For the fourth quarter of 2002, net income was $17.5 million, or $0.55 per
share, as compared with a net loss of $3.8 million or $0.13 per share in
2001. The results for the fourth quarter of 2002 include $13.3 million of
non-recurring charges relating to the business restructuring approved by
the Board of Directors in December and the impairment of a residential land
co-investment from a business closed in 2001, offset by credits from the
finalization of expenses associated with the 2001 global business
restructuring. The results for the fourth quarter of 2001 included $49.1
million of non-recurring and restructuring charges primarily related to
severance and professional fees.
- -------------------------------------------------------------------------
2002 Results Highlights
. Net income of $27.1 million versus net loss of $15.4 million
in the prior year
. Delivered in excess of $50 million targeted cost reductions
. Paid down credit facilities by more than $34 million
- -------------------------------------------------------------------------
"Though it was disappointing to reduce our earnings targets for 2002 in the
third quarter, I am pleased that we have achieved our revised target in
markets which remain extremely difficult to forecast," said Chris Peacock,
President and Chief Executive Officer of Jones Lang LaSalle. "This was due
primarily to strong performance from LaSalle Investment Management and
highly effective expense management in our Americas region. It is
encouraging that Asia Pacific has been able to stabilize a long run of
declining performance, while in Europe we are working hard to respond to
challenging market conditions with appropriate organizational changes and
expense reductions. During the year we continued to win key new clients
and assignments and advance our market leadership."
Reflecting the continued slow economic conditions worldwide, revenues were
$270.3 million for the quarter and $840.4 million for the year, down three
percent and seven percent respectively in U.S. dollars and down seven and
ten percent in local currencies. A focus on tight expense controls,
together with the continuing benefits of 2001 management actions to bring
the organization in line with the expected 2002 business environment,
helped to offset the revenue declines. Operating expenses for the year,
excluding non-recurring and restructuring charges, were $770.9 million, a
five percent reduction on the prior year period in U.S. dollars, and $63
million or eight percent in local currency terms. The impact on
depreciation and amortization of the adoption of SFAS 142, effective
January 1, 2002, accounted for $10 million of this reduction, with the
remaining $53 million exceeding the targeted cost savings of $50 million
from the 2001 global business restructuring.
EBITDA was $38.4 million for the quarter and $90.7 million for the year, as
compared to the prior year of $20.6 million and $59.8 million respectively.
Reflecting the continued strong business cash flows, aggressive receivables
management and reduced capital expenditures, the firm paid down its credit
facilities by more than $34 million from the prior year period. The U.S.
dollar reported book value of the firm's Eurobonds increased by $26.3
million as a result of the strengthening euro. Interest expense of $17.0
million was $3.1 million lower than the previous year reflecting the
continued pay down of debt together with a generally lower interest rate
environment, offset by the strengthening euro. Included in the current
year tax expense of $11.0 million is a credit of $1.8 million associated
with certain 2001 restructuring expenses which previously were not
considered tax deductible. The 2002 effective tax rate, excluding the
impact of the non-recurring and restructuring charges, is 34 percent as
compared with 42 percent in 2001.
BUSINESS SEGMENT FOURTH QUARTER AND FULL-YEAR PERFORMANCE HIGHLIGHTS
OWNER AND OCCUPIER SERVICES
.. In the fourth quarter, the Americas region reported a three percent
decline in revenues from the prior year period to $102.3 million, as
the transactional businesses remained slow. Full-year 2002 revenues
of $290.9 million were down eleven percent from 2001. Operating
income for the quarter was $24.3 million, down slightly on the same
period last year, primarily as incentive compensation was recaptured.
For the year, operating income was up $5.7 million to $32 million,
reflecting strong cost savings with expenses down $42.7 million.
.. Europe had a weak fourth quarter with revenues at $97.3 million,
a nine percent decline on the prior year in U.S. dollars, eighteen
percent in local currencies. The revenue decline reflected the
weakened economic conditions in Germany and France and a softening in
the English leasing market. For the full year, Europe's revenues
declined nine percent in U.S. dollars from the previous year, to
$314.4 million. In local currencies the decline was fourteen
percent. Operating income for both the quarter and the year was down
more than fifty percent as cost savings were not sufficient to offset
reduced revenues.
.. The 2002 fourth quarter and full year revenues for Asia Pacific were
six percent and two percent lower than the same periods in 2001 as
gains in Japan and Korea were offset by continued reduced transaction
activity in Australia, Hong Kong and Singapore. The reduced revenues
in the fourth quarter resulted in a similar reduction in operating
income of $2.5 million as expenses were held flat. Operating income
for the year was essentially flat with 2001 as the reduced revenues
were offset through cost savings.
INVESTMENT MANAGEMENT
During the fourth quarter of 2002, LaSalle Investment Management revenues
were up $8.6 million from the prior year. This was a combination of
increased advisory and incentive fees offset by reduced equity earnings
from real estate co-investments. In addition, the impact of the stronger
euro and pound sterling increased the reported U.S. dollar revenues by $1.7
million. Operating income for the fourth quarter of $5.5 million was up
$1.0 million from the same period in 2001 as the increased revenues were
offset by the increase in the ongoing cost base as a result of the
investment in people for new fund growth, increased incentive compensation
accruals and the impact of the strengthening European currencies on
reported U.S. dollar expenses. Revenues for the year of $109.0 million
were up five percent on the prior year in U.S. dollars, two percent in
local currencies, reflecting strong advisory and implementation fees offset
by reduced equity earnings. The costs of investing in people to support
new fund growth, together with increased incentive compensation, resulted
in a $1.7 million reduction in operating income to $20.0 million.
2003 OUTLOOK
"We are a seasonal business with net income generated predominately in the
second half of the year; as such, we plan to give total year earnings
guidance later in the year when we have a more predictable view of the
economy and its impact on our clients," said Mr. Peacock. "Earnings
guidance continues to be challenging due to the timing delays occurring
with our clients' decisions around transactions and the resulting impact on
revenues. Subject to this caveat, we anticipate the first quarter of this
year will reflect a continued decline in Europe with relatively flat
revenues year-over-year in the balance of our business. As a result, our
guidance for the first quarter, where we normally experience a loss, is a
loss in the range of $0.25-0.35 per share."
"We believe the actions taken with the year-end restructuring will produce
improved year-over-year earnings performance. Most importantly, the long-
term sustainable growth we are pursuing for 2003 and beyond will come from
our continued strategic focus on excellence in client service, delivered by
the best people in our industry, supported by targeted investment in growth
areas."
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 $23 billion of assets
under management. For more information visit www.joneslanglasalle.com.
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 quarters ended March 31, June 30,
and September 30, 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.
# # #
CONFERENCE CALL
The firm will conduct a conference call for shareholders, analysts and
investment professionals on Wednesday, February 5 at 9 a.m. EST.
To participate in the teleconference, please dial into one of the following
phone numbers five to ten minutes before the start time:
.. United States callers: +1 800 967 7135
.. International callers: +1 719 457 2626
Replay Information Available: (Noon EST) Wednesday,
February 5 through (Midnight EST) Tuesday, February 11
at the following numbers
.. International Callers: +1 719 457 0820
.. U.S. Callers +1 888 203 1112
.. Pass code 297956
LIVE WEB CAST (available through February 12)
Follow these steps to listen to the web cast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log onto:
http://www.firstcallevents.com/service/ajwz373496796gf12.html
3. Download free Windows Media Player software: (link located
under registration form)
4. If you experience problems listening, send an e-mail to
webcastsupport@tfprn.com
This information is also available on the Company's website at
www.joneslanglasalle.com
<table>
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three and Twelve Months Ended December 31, 2002 and 2001
(in thousands, except share data)
(Unaudited)
<caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 (1) 2001 (1) 2002 (1)(2) 2001 (1)
---------- ---------- ----------- ----------
<s> <c> <c> <c> <c>
Revenue:
Fee based services . . . . . . . . . . . $ 268,153 271,266 831,096 889,633
Equity in earnings from unconsolidated
ventures. . . . . . . . . . . . . . . . 176 1,883 2,581 8,560
Other income. . . . . . . . . . . . . . . 1,987 4,111 6,752 7,256
---------- ---------- ---------- ----------
Total revenue . . . . . . . . . . . 270,316 277,260 840,429 905,449
Operating expenses:
Compensation and benefits . . . . . . . . 165,882 152,298 530,527 545,609
Operating, administrative and other . . . 53,452 55,212 203,211 222,229
Depreciation and amortization . . . . . . 8,886 11,954 37,125 47,420
Non-recurring and restructuring charges:
Compensation and benefits . . . . . . . 11,919 35,956 11,438 40,120
Operating, administrative and other . . 1,429 13,136 3,433 37,112
---------- ---------- ---------- ----------
Total operating expenses. . . . . . 241,568 268,556 785,734 892,490
---------- ---------- ---------- ----------
Operating income. . . . . . . . . . 28,748 8,704 54,695 12,959
Interest expense, net of interest income. . 4,057 4,372 17,024 20,156
---------- ---------- ---------- ----------
Income (loss) before provision
for income taxes and
minority interest . . . . . . . . 24,691 4,332 37,671 (7,197)
Net provision for income taxes. . . . . . . 8,164 8,079 11,037 7,986
Minority interests in earnings (losses)
of subsidiaries . . . . . . . . . . . . . (602) 15 711 228
---------- ---------- ---------- ----------
Net income (loss) before
extraordinary item and
cumulative effect of change
in accounting principle . . . . . $ 17,129 (3,762) 25,923 (15,411)
========== ========== ========== ==========
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings - Continued
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 (1) 2001 (1) 2002 (1)(2) 2001 (1)
---------- ---------- ----------- ----------
Extraordinary gain on the buy-out
of minority interest, net of tax (3). . . 341 -- 341 --
Cumulative effect of change in
accounting principle. . . . . . . . . . . -- -- 846 --
---------- ---------- ---------- ----------
Net income (loss) . . . . . . . . . $ 17,470 (3,762) 27,110 (15,411)
========== ========== ========== ==========
EBITDA (4). . . . . . . . . . . . . . . . . $ 38,444 20,623 90,722 59,767
========== ========== ========== ==========
Basic earnings (loss) per common share
before extraordinary item and cumulative
effect of change in accounting principle. $ 0.56 (0.13) 0.85 (0.51)
Extraordinary gain on the buy-out of
minority interest, net of tax . . . . . . 0.01 -- 0.01 --
Cumulative effect of change in
accounting principle. . . . . . . . . . . -- -- 0.03 --
---------- ---------- ---------- ----------
Basic earnings (loss) per common share. . . $ 0.57 (0.13) 0.89 (0.51)
========== ========== ========== ==========
Basic weighted average shares outstanding . 30,670,749 30,091,845 30,486,842 30,016,122
========== ========== ========== ==========
Diluted earnings (loss) per common share
before extraordinary item and cumulative
effect of change in accounting principle. $ 0.54 (0.13) 0.81 (0.51)
Extraordinary gain on the buy-out of
minority interest, net of tax . . . . . . 0.01 -- 0.01 --
Cumulative effect of change in
accounting principle. . . . . . . . . . . -- -- 0.03 --
---------- ---------- ---------- ----------
Diluted earnings (loss) per common share. . $ 0.55 (0.13) 0.85 (0.51)
========== ========== ========== ==========
Diluted weighted average shares outstanding 31,739,621 30,091,845 31,854,397 30,016,122
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
</table>
<table>
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three and Twelve Months ended December 31, 2002 and 2001
(in thousands)
(Unaudited)
<caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 (1) 2001 (1) 2002 (1)(2) 2001 (1)
---------- ---------- ----------- ----------
<s> <c> <c> <c> <c>
OWNER & OCCUPIER SERVICES -
AMERICAS
Revenue:
Implementation services . . . . . . . $ 56,356 59,440 135,013 158,775
Management services . . . . . . . . . 45,610 45,211 154,255 165,940
Equity earnings (losses). . . . . . . -- 280 (10) 366
Other services. . . . . . . . . . . . 271 627 1,170 1,665
Intersegment revenue. . . . . . . . . 101 292 476 1,191
---------- ---------- ---------- ----------
102,338 105,850 290,904 327,937
Operating expenses:
Compensation, operating and
administrative. . . . . . . . . . . 73,530 74,368 240,141 277,473
Depreciation and amortization . . . . 4,538 6,044 18,761 24,138
---------- ---------- ---------- ----------
Operating income (5). . . . . . . . $ 24,270 25,438 32,002 26,326
========== ========== ========== ==========
EUROPE
Revenue:
Implementation services . . . . . . . $ 72,736 76,689 228,155 252,608
Management services. . . . . . . . . 23,519 28,016 82,492 88,700
Other services . . . . . . . . . . . 1,089 2,517 3,767 3,532
---------- ---------- ---------- ----------
97,344 107,222 314,414 344,840
Operating expenses:
Compensation, operating and
administrative . . . . . . . . . . 84,148 80,030 286,238 289,664
Depreciation and amortization . . . . 2,287 3,314 10,421 12,652
---------- ---------- ---------- ----------
Operating income (5). . . . . . . . $ 10,909 23,878 17,755 42,524
========== ========== ========== ==========
JONES LANG LASALLE INCORPORATED
Segment Operating Results - Continued
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 (1) 2001 (1) 2002 (1)(2) 2001 (1)
---------- ---------- ----------- ----------
ASIA PACIFIC
Revenue:
Implementation services . . . . . . . $ 24,389 25,668 77,329 79,731
Management services . . . . . . . . . 12,933 13,728 47,625 47,945
Other services. . . . . . . . . . . . 580 865 1,624 1,878
---------- ---------- ---------- ----------
37,902 40,261 126,578 129,554
Operating expenses:
Compensation, operating and
administrative. . . . . . . . . . . 34,730 34,435 120,136 122,959
Depreciation and amortization . . . . 1,728 1,852 6,673 6,951
---------- ---------- ---------- ----------
Operating income (loss) (5) . . . . $ 1,444 3,974 (231) (356)
========== ========== ========== ==========
INVESTMENT MANAGEMENT-
Revenue:
Implementation services . . . . . . . $ 2,849 232 5,058 2,387
Advisory fees . . . . . . . . . . . . 29,760 22,344 101,169 93,558
Equity earnings . . . . . . . . . . . 176 1,603 2,591 8,194
Other services . . . . . . . . . . . 48 40 191 170
---------- ---------- ---------- ----------
32,833 24,219 109,009 104,309
Operating expenses:
Compensation, operating and
administrative. . . . . . . . . . . 27,027 18,969 87,699 78,933
Depreciation and amortization . . . . 333 744 1,270 3,679
---------- ---------- ---------- ----------
Operating income (5). . . . . . . . $ 5,473 4,506 20,040 21,697
========== ========== ========== ==========
JONES LANG LASALLE INCORPORATED
Segment Operating Results - Continued
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 (1) 2001 (1) 2002 (1)(2) 2001 (1)
---------- ---------- ----------- ----------
- ----------------------------------------------------------------------------------------------------------------
Total segment revenue . . . . . . . . . . $ 270,417 277,552 840,905 906,640
Intersegment revenue eliminations . . . . (101) (292) (476) (1,191)
---------- ---------- ---------- ----------
Total revenue . . . . . . . . . . . $ 270,316 277,260 840,429 905,449
========== ========== ========== ==========
Total segment operating expenses. . . . . $ 228,321 219,756 771,339 816,449
Intersegment operating expense
eliminations. . . . . . . . . . . . . . (101) (292) (476) (1,191)
---------- ---------- ---------- ----------
Total operating expenses before
non-recurring and restructuring
charges . . . . . . . . . . . . . $ 228,220 219,464 770,863 815,258
========== ========== ========== ==========
Operating income before non-recurring
and restructuring charges . . . . $ 42,096 57,796 69,566 90,191
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
</table>
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
December 31, 2002 and December 31, 2001
(in thousands)
(Unaudited)
December 31, December 31,
2002 2001 (1)
------------ ------------
ASSETS
- ------
Current assets:
Cash and cash equivalents . . . . . . $ 13,654 10,446
Trade receivables, net of allowances. 227,579 222,590
Notes receivable. . . . . . . . . . . 4,165 3,847
Other receivables . . . . . . . . . . 7,623 8,872
Prepaid expenses. . . . . . . . . . . 15,142 11,802
Deferred tax assets . . . . . . . . . 16,624 16,935
Other assets. . . . . . . . . . . . . 10,760 11,340
---------- ----------
Total current assets. . . . . . 295,547 285,832
Property and equipment, at cost,
less accumulated depreciation . . . . 81,652 92,503
Intangibles resulting from business
acquisitions and JLW merger,
net of accumulated amortization . . . 333,821 328,169
Investments in and loans to real estate
ventures. . . . . . . . . . . . . . . 74,994 64,528
Long-term receivables, net. . . . . . . 15,248 10,427
Prepaid pension asset . . . . . . . . . 9,646 14,384
Deferred tax assets . . . . . . . . . . 29,032 25,770
Debt issuance costs . . . . . . . . . . 4,343 5,407
Other assets, net . . . . . . . . . . . 7,668 8,707
---------- ----------
$ 851,951 835,727
========== ==========
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets - Continued
December 31, December 31,
2002 2001 (1)
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable and
accrued liabilities . . . . . . . . $ 88,180 107,668
Accrued compensation. . . . . . . . . 139,513 140,980
Short-term borrowings . . . . . . . . 15,863 15,497
Deferred tax liabilities. . . . . . . 819 23
Other liabilities . . . . . . . . . . 21,411 23,467
---------- ----------
Total current liabilities . . . 265,786 287,635
Long-term liabilities:
Credit facilities . . . . . . . . . . 26,077 60,621
9% Senior Euro Notes, due 2007. . . . 173,068 146,768
Deferred tax liabilities. . . . . . . 2,991 6,567
Other . . . . . . . . . . . . . . . . 17,071 18,966
---------- ----------
Total liabilities . . . . . . . 484,993 520,557
Commitments and contingencies
Minority interest in consolidated
subsidiaries. . . . . . . . . . . . . -- 789
Stockholders' equity:
Common stock, $.01 par value per
share, 100,000,000 shares authorized;
30,896,333 issued, 30,596,333
outstanding as of December 31, 2002;
30,183,450 shares issued and
outstanding as of December 31,
2001. . . . . . . . . . . . . . . . 309 302
Additional paid-in capital. . . . . . 494,283 463,926
Deferred stock compensation . . . . . (17,321) (6,038)
Retained deficit. . . . . . . . . . . (95,411) (122,521)
Stock held in treasury by subsidiary. (4,659) --
Stock held in trust . . . . . . . . . (460) (1,658)
Accumulated other comprehensive income (9,783) (19,630)
---------- ----------
Total stockholders' equity. . . 366,958 314,381
---------- ----------
$ 851,951 835,727
========== ==========
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
Twelve Months Ended December 31, 2002 and 2001
(in thousands)
(Unaudited)
2002 (6) 2001 (6)
---------- ----------
Cash provided by earnings . . . . . . . $ 83,402 73,899
Cash used in working capital. . . . . . (15,033) (19,796)
Cash used in investing activities . . . (26,340) (32,549)
Cash used in financing activities . . . (38,821) (29,951)
---------- ----------
Net increase (decrease) in cash . 3,208 (8,397)
Cash and cash equivalents,
beginning of period . . . . . . . . . 10,446 18,843
---------- ----------
Cash and cash equivalents,
end of period . . . . . . . . . . . . $ 13,654 10,446
========== ==========
Please reference attached financial statement notes.
<table>
JONES LANG LASALLE INCORPORATED
Adjusted Consolidated Statements of Earnings
For the Three and Twelve Months Ended December 31, 2002 and 2001
(in thousands, except share data)
(Unaudited)
<caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 2001 2002 2001
Adjusted Adjusted Adjusted Adjusted
(1)(7) (1)(7) (1)(7) (1)(7)
---------- ---------- ----------- ----------
<s> <c> <c> <c> <c>
Revenue:
Fee based services. . . . . . . . . . . . $ 268,153 271,266 831,096 889,633
Equity in earnings from unconsolidated
ventures. . . . . . . . . . . . . . . . 176 1,883 2,581 8,560
Other income. . . . . . . . . . . . . . . 1,987 4,111 6,752 7,256
---------- ---------- ---------- ----------
Total revenue . . . . . . . . . . . 270,316 277,260 840,429 905,449
Operating expenses:
Compensation and benefits . . . . . . . . 165,882 152,298 530,527 545,609
Operating, administrative and other . . . 53,452 55,212 203,211 222,229
Depreciation and amortization . . . . . . 8,886 11,954 37,125 47,420
---------- ---------- ---------- ----------
Total operating expenses excluding
non-recurring and restructuring
charges . . . . . . . . . . . . . 228,220 219,464 770,863 815,258
Adjusted operating income excluding
non-recurring and restructuring
charges . . . . . . . . . . . . . 42,096 57,796 69,566 90,191
Interest expense, net of interest income. . 4,057 4,372 17,024 20,156
---------- ---------- ---------- ----------
Adjusted income before provision for
income taxes, minority interest and
extraordinary item. . . . . . . . 38,039 53,424 52,542 70,035
JONES LANG LASALLE INCORPORATED
Adjusted Consolidated Statements of Earnings - Continued
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 2001 2002 2001
Adjusted Adjusted Adjusted Adjusted
(1)(7) (1)(7) (1)(7) (1)(7)
---------- ---------- ----------- ----------
Net provision for income taxes. . . . . . . 12,643 22,333 17,864 29,309
Minority interests in earnings (losses)
of subsidiaries . . . . . . . . . . . . . (602) 15 711 228
Extraordinary gain on the buy-out of
minority interest, net of tax (3) . . . . (341) -- (341) --
---------- ---------- ---------- ----------
Adjusted net income excluding
non-recurring and restructuring
charges . . . . . . . . . . . . . $ 26,339 31,076 34,308 40,498
========== ========== ========== ==========
Adjusted income per common share. . . . . . $ 0.83 $ 1.00 $ 1.08 $ 1.31
========== ========== ========== ==========
Adjusted weighted average shares outstanding 31,739,621 31,111,076 31,854,397 30,975,315
========== ========== ========== ==========
Adjusted EBITDA Calculation (8)
Adjusted operating income . . . . . . . . 42,096 57,796 69,566 90,191
Depreciation and amortization . . . . . . 8,886 11,954 37,125 47,420
Minority interests in EBITDA. . . . . . . 810 (35) (1,098) (612)
---------- ---------- ---------- ----------
Adjusted EBITDA . . . . . . . . . . $ 51,792 69,715 105,593 136,999
========== ========== ========== ==========
<fn>
Please reference attached financial statement notes.
</table>
<table>
JONES LANG LASALLE INCORPORATED
Reconciliation of Generally Accepted Accounting Principles (GAAP) Net Income to Adjusted Net Income
For the Three and Twelve Months Ended December 31, 2002 and 2001
(in thousands, except share data)
(Unaudited)
<caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 2001 2002 2001
---------- ---------- ----------- ----------
<s> <c> <c> <c> <c>
Non-Recurring & Restructuring Charges
- -------------------------------------
Impairment of E-Commerce Investments. . . . (276) 1,049 (276) 18,001
Land Investment & Development Group
Impairment Charges. . . . . . . . . . . . 975 0 2,979 3,533
2001 Global Restructuring Program
- - Compensation & Benefits . . . . . . . . . (810) 35,727 (1,291) 40,120
- - Operating, Administrative & Other . . . . 98 12,316 98 15,578
2002 Global Restructuring Program
- - Compensation & Benefits . . . . . . . . . 12,729 0 12,729 0
- - Operating, Administrative & Other . . . . 632 0 632 0
---------- ---------- ---------- ----------
Total Non-Recurring & Restructuring Charges 13,348 49,092 14,871 77,232
Net Benefit for Income Taxes on
Non-Recurring & Restructuring Charges . . 4,479 14,254 5,027 21,323
Additional Tax Benefit on 2001 Restructuring
Actions . . . . . . . . . . . . . . . . . 0 0 1,800 0
---------- ---------- ---------- ----------
Non-Recurring & Restructuring Charges
After Tax . . . . . . . . . . . . . . . . 8,869 34,838 8,044 55,909
Cumulative Effect of Change in
Accounting Principle. . . . . . . . . . . 0 0 (846) 0
---------- ---------- ---------- ----------
Net Adjustment to GAAP Net Income . . . . . 8,869 34,838 7,198 55,909
========== ========== ========== ==========
JONES LANG LASALLE INCORPORATED
Reconciliation of Generally Accepted Accounting Principles (GAAP) Net Income to Adjusted Net Income - Continued
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 2001 2002 2001
---------- ---------- ----------- ----------
Diluted Weighted Average Shares
Outstanding . . . . . . . . . . . . . . . 31,739,621 31,111,076 31,854,397 30,975,315
Net Adjustment Per Share. . . . . . . . . . 0.28 1.12 0.23 1.80
GAAP Earnings/(Loss) Per Share. . . . . . . 0.55 (0.13) 0.85 (0.51)
Dilution Impact (9) . . . . . . . . . . . . 0.00 0.01 0.00 0.02
Adjusted Earnings Per Share . . . . . . . . 0.83 1.00 1.08 1.31
<fn>
Please reference attached financial statement notes.
</table>
<table>
JONES LANG LASALLE INCORPORATED
CURRENCY ANALYSIS OF REVENUES AND ADJUSTED OPERATING INCOME
(in millions)
(Unaudited)
Pound Austra- US
Sterling lian Dollar
(10) Euro Dollar (10) Other TOTAL
-------- ------ ------- ------ ------ ------
$ $ $ $ $ $
<s> <c> <c> <c> <c> <c> <c>
REVENUES (1)
2002
Q1, 2002 . . . . . . . . . . . . . . . 34.5 32.7 9.2 63.2 25.7 165.3
Q2, 2002 . . . . . . . . . . . . . . . 46.8 31.9 12.5 70.2 32.9 194.3
Q3, 2002 . . . . . . . . . . . . . . . 42.7 35.7 11.9 89.8 30.4 210.5
Q4, 2002 . . . . . . . . . . . . . . . 60.3 44.9 15.3 108.5 41.3 270.3
----- ----- ----- ----- ----- -----
Total . . . . . . . . . . . . . . . . 184.3 145.2 48.9 331.7 130.3 840.4
===== ===== ===== ===== ===== =====
2001
Q1, 2001 . . . . . . . . . . . . . . . 46.3 43.1 11.2 77.5 24.3 202.4
Q2, 2001 . . . . . . . . . . . . . . . 42.6 35.0 10.6 85.7 30.0 203.9
Q3, 2001 . . . . . . . . . . . . . . . 38.9 39.1 12.5 101.4 29.9 221.8
Q4, 2001 . . . . . . . . . . . . . . . 61.5 46.8 16.5 113.7 38.8 277.3
----- ----- ----- ----- ----- -----
Total . . . . . . . . . . . . . . . . 189.3 164.0 50.8 378.3 123.0 905.4
===== ===== ===== ===== ===== =====
ADJUSTED OPERATING INCOME (7)(10)
2002
Q1, 2002 . . . . . . . . . . . . . . . -2.5 3.8 -2.5 -1.0 -1.9 -4.1
Q2, 2002 . . . . . . . . . . . . . . . 7.2 -0.2 -0.3 4.0 2.6 13.3
Q3, 2002 . . . . . . . . . . . . . . . 1.8 2.6 -0.1 14.8 -0.8 18.3
Q4, 2002 . . . . . . . . . . . . . . . 12.3 4.7 6.0 16.4 2.7 42.1
----- ----- ----- ----- ----- -----
Total . . . . . . . . . . . . . . . . 18.8 10.9 3.1 34.2 2.6 69.6
===== ===== ===== ===== ===== =====
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
Q3, 2001 . . . . . . . . . . . . . . . -2.3 9.0 -0.7 23.4 -3.5 25.9
Q4, 2001 . . . . . . . . . . . . . . . 19.4 8.1 4.9 18.8 6.6 57.8
----- ----- ----- ----- ----- -----
Total . . . . . . . . . . . . . . . . 18.5 29.7 2.9 41.9 -2.8 90.2
===== ===== ===== ===== ===== =====
<fn>
Please reference attached financial statement notes.
</table>
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
(1) Certain amounts described below have been reclassified to conform
with the current presentation.
Beginning in January 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 $4.3
million and $10.4 million in the three and twelve months ended
December 31, 2001, respectively.
Beginning in December 2002, pursuant to the FASB's Emerging Issues
Task Force ("EITF") No. 01-14, "Income Statement Characterization of
Reimbursements Received for 'Out-of-Pocket' Expenses Incurred", we
have reclassified reimbursements received for out-of-pocket expenses
to revenues in the income statement, as opposed to being shown as a
reduction of expenses. These out-of-pocket expenses amounted to $1.0
million and $4.0 million in the three and twelve months ended
December 31, 2001, respectively, and $0.9 million and $2.9 million in
the three and twelve months ended December 31, 2002, respectively.
Beginning in December 2002, pursuant to EITF No. 99-19, "Reporting
Revenue Gross as a Principal versus Net as an Agent", we have
reclassified our burden income, which represents our receipts above
our directly reimbursable management services costs, to revenues in
the income statement, as opposed to being shown as a reduction of
expenses. The amount of reimbursables totaled $2.5 million and $9.3
million in the three and twelve months ended December 31, 2001,
respectively, and $2.1 million and $9.7 million in the three and
twelve months ended December 31, 2002, respectively.
Beginning in September of 2002, we aggregated our loans to
co-investments with our investments in co-investments. The
co-investment loans in the December 31, 2001 balance sheet have been
reclassified to conform with this new presentation.
(2) The twelve months ended December 31, 2002 reflect an adjustment made
to the first six months of 2002 to separately identify the
non-recurring and restructuring charges relating to this period.
(3) In December 2002, we exercised our option to purchase the remaining
45% interest in the joint venture company Jones Lang LaSalle Asset
Management Services, which exclusively provides asset management
services for all Skandia Life properties in Sweden. The purchase
price was below the book value of the assets, resulting in an
after-tax extraordinary gain of $341,000.
(4) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization, and excludes Minority Interests in
EBITDA. For the three and twelve months ended December 31, 2002,
EBITDA excludes the cumulative effect of change in accounting
principle resulting from the adoption of SFAS 142 and the
extraordinary gain on the buy-out of minority interest. Management
believes that EBITDA is useful to investors as a measure of operating
performance, cash generation and ability to service debt. EBITDA is
also used in the calculation of certain covenants related to our
revolving credit facility. However, EBITDA should not be considered
an alternative to (i) net income (loss) (determined in accordance
with GAAP), (ii) cash flows (determined in accordance with GAAP), or
(iii) liquidity.
(5) 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.
JONES LANG LASALLE INCORPORATED
Financial Statement Notes - Notes
(6) The consolidated statements of cash flows are presented in summarized
form. Please reference our annual Form 10-K for detailed
consolidated statements of cash flows.
(7) Adjusted results for the twelve months ended December 31, 2002
exclude the cumulative effect of change in accounting principle
relating to the adoption of SFAS 142. Adjusted results for all
periods shown also exclude the effects of non-recurring and
restructuring charges. The twelve months ended December 31, 2002
reflect an adjustment made to the first six months of 2002 to
separately identify the non-recurring and restructuring charges
relating to this period. This analysis is not intended to be a
presentation in accordance with generally accepted accounting
principles (GAAP).
(8) Adjusted EBITDA represents earnings before interest expense, income
taxes, depreciation and amortization, and excludes Minority Interests
in EBITDA. For the three and twelve months ended December 31, 2002,
Adjusted EBITDA excludes the cumulative effect of change in
accounting principle resulting from the adoption of SFAS 142 and the
extraordinary gain on the buy-out of minority interest. For all
periods shown Adjusted EBITDA also 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 income (loss)
(determined in accordance with GAAP), (ii) cash flows (determined in
accordance with GAAP), or (iii) liquidity.
(9) Dilution impact represents the impact of including common stock
equivalents in the fully diluted weighted average shares outstanding
when converting GAAP results for the three and twelve months ended
December 31, 2001 to Adjusted. As a result of the GAAP net loss for
the three and twelve months ended December 31, 2001, the diluted
weighted average shares outstanding do not include common stock
equivalents, as to do so would be anti-dilutive. However, due to an
Adjusted net income for these periods, common stock equivalents are
included in the diluted weighted average shares outstanding.
(10) 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.