Exhibit 99.1
JONES LANG LASALLE REPORTS STRONG RESULTS GLOBALLY; 2004 NET INCOME OF
$64.2 MILLION, $1.96 PER SHARE
CHICAGO, Feb. 2 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and money management firm,
today reported net income of $64.2 million, or $1.96 per diluted share of common
stock, for the year ended December 31, 2004. The prior year's net income was
$36.1 million, or $1.12 per diluted share. For comparison purposes, the 2004
results included non-recurring and restructuring charges of $2.6 million, or
$0.06 per diluted share, while 2003 included charges of $4.4 million, or $0.10
per diluted share. The 2004 results also included an expense of $11.6 million,
or $0.26 per diluted share, associated with the planned early redemption of the
firm's euro 165 million 9 percent Senior Notes ("Senior Notes"). Operating
income for the year was $89.5 million compared to $54.2 million in 2003.
For the fourth quarter of 2004, net income was $50.0 million, or $1.52 per
diluted share, compared with a net income of $37.3 million, or $1.14 per diluted
share, for the same period in 2003. The fourth quarter results of 2004 included
a charge for non-recurring and restructuring of $5.0 million, or $0.11 per
diluted share, while the 2003 results for the same quarter included a charge for
non-recurring and restructuring of $1.7 million, or $0.04 per diluted share.
Full Year 2004 Highlights:
-- Revenues increased 17 percent in local currencies and 24 percent in
U.S. dollars
-- Operating income increased 65 percent with margin improvement in all
business segments
-- Net debt decreased almost $120 million from the prior year to end the
year at $29 million
"The profit performance around the globe reflects the value of our product
offerings and services to our clients as well as the performance focus of our
people. From this position of strength, we will concentrate in 2005 on investing
in all geographies and in each of our major service lines to maximize future
growth to the benefit of clients and shareholders," said Colin Dyer, the firm's
Chief Executive Officer.
Revenues were $412.4 million for the 2004 fourth quarter and $1,167.0
million for the full year, an increase of 28 percent and 24 percent in U.S.
dollars, respectively, and a 23 and 17 percent increase in local currencies.
Revenue growth resulted from a strong increase in transaction activity across
the Investor and Occupier Services ("IOS") businesses of leasing and capital
markets, driven by continued economic and business improvement worldwide as well
as investor appetite for real estate as an asset category. This investor
appetite also increased opportunities for LaSalle Investment Management, the
firm's real estate money management business, to realize value for its clients.
LaSalle Investment Management generated significant equity earnings where the
firm has co-invested alongside clients, as well as incentive fees, as investment
performance exceeding targeted returns continued to be delivered.
Operating expenses were $352.7 million for the 2004 fourth quarter and
$1,077.4 million for the full year, an increase of 26 percent and 21 percent in
U.S. dollars, respectively, and an increase of 21 and 15 percent in local
currencies. The increase in expenses for both the quarter and year is primarily
due to compensation and benefits as a result of the stronger year- over-year
revenue and profit performance. Compensation and benefits increased for both the
quarter and full year by 19 and 18 percent, respectively, in local currencies.
Operating, administrative and other expenses also increased 24 percent for the
quarter and 13 percent for the year in local currencies, as costs related to
revenue generation supported the increased business activity.
Non-recurring and restructuring expense for the year included a credit of
$4.3 million for cash received as part of the settlement of litigation related
to the 2003 abandonment of a property management system in our Australian
business. The $4.3 million is the first installment of a total settlement amount
of $7.1 million, the additional $2.8 million to be received in installments in
2005. Each of these future installments will be recorded as a credit to
non-recurring and restructuring expense when the cash is received. Approximately
$1.5 million of charges have been netted against this credit, including an
additional charge of $0.5 million recorded during the fourth quarter. Also
included in non-recurring and restructuring charges was a net charge of $0.5
million for impairment of investments made by the closed residential land
business and a net charge of $0.3 million related to excess lease space as a
result of the 2002 restructuring program. During the fourth quarter, the
European segment recorded a charge of $4.5 million, primarily related to
severance in Germany and the northern European markets where business activity
has continued to remain at low levels.
Interest expense of $0.8 million for the quarter was significantly lower
than the $4.1 million incurred in the fourth quarter of 2003, reflecting the
continued pay-down of debt and the early redemption of the 9 percent Senior
Notes in June 2004. The year-to-date interest expense of $20.9 million includes
$11.6 million for the premium paid for the early redemption and associated
accelerated debt issuance costs. Net debt as of December 31, 2004 was $29
million, a $119 million reduction from the prior year.
The current-year tax expense of $21.9 million reflects a 25.4 percent
effective tax rate for 2004. The prior-year tax expense of $8.3 million included
a credit of $3.0 million from the reversal of a reserve from an e-commerce
investment write-down. The 2004 effective tax rate is slightly more favorable
than what was ultimately achieved for 2003 reflecting the continued discipline
of management of the global tax position.
Business Segment Fourth Quarter and Full Year Performance Highlights
Investor and Occupier Services
-- The Americas region continued the year-over-year favorable performance
trend set earlier in 2004 and had a very strong finish to the year.
Operating performance continued to improve due to the favorable
execution of its core businesses which, together with performance of
strategic investments in New York, resulted in strength across all
business lines. Revenues increased 20 percent in the quarter and 18
percent for the year, compared to the prior year. Revenue from
transactions, reported as implementation services, was the main driver
of the growth, increasing 25 and 32 percent for the quarter and full
year respectively, compared to 2003. The performance of our New York
business confirmed the strategic investments the firm has made in that
market, first in 2002 for an expanded markets team and then in 2004 for
expanded project and development capabilities by acquiring Quartararo &
Associates, a 40-person consultative project management firm. New York
revenues were up 148 percent for the 2004 fourth quarter and 88 percent
year-to-date.
The Real Estate Occupier Services business, marketed as Corporate
Solutions, which generates over 51 percent of the Americas revenue,
continued its strength into 2004 by posting revenue gains of 9 percent
for both the quarter and full year, compared to the prior year. The
non-U.S. businesses in the region, namely Canada, Mexico, and South
America, had increased revenue in excess of 85 percent for both the
quarter and full year, compared to the prior year. The Americas Hotels
business, benefiting from a strong worldwide trading market in the hotel
asset class, continued its strong performance, ending the quarter and
full year with revenues more than doubled for both of these periods.
Total operating expenses, excluding non-recurring and restructuring
charges, increased 17 and 15 percent for the quarter and full year,
respectively, compared to 2003. Increases were mainly due to an increase
in incentive compensation expense as a result of the improved revenue
and profit performance. Operating income for the year was $53.5 million
compared to $37.8 million in 2003.
-- The European region continued the positive revenue momentum started in
mid-2004. In local currencies, revenue in the quarter and full year
increased 19 and 14 percent, respectively. In U.S. dollars, revenue in
fourth quarter 2004 and full year increased 30 and 26 percent,
respectively. The main increase in revenue was seen in transaction
activities reported as implementation services, which increased 34 and
33 percent for the quarter and full year, respectively, in U.S. dollars.
Increasing activity in the leasing markets in France and England,
together with strong capital markets performance, contributed to this
growth. The growth markets of Russia, Italy, Spain and Central Europe,
locations where significant additional resources have been invested in
the last two years, continued to see strong growth.
Total operating expenses, excluding non-recurring and restructuring
charges, increased 19 and 14 percent for the quarter and full year in
local currency, respectively, compared to 2003. In U.S. dollars, total
operating expenses, excluding non-recurring and restructuring charges,
increased 30 and 26 percent for the quarter and full year, respectively.
The most significant component of the increase consisted of incentive
compensation, which resulted from the improved revenue and profit
performance. Operating income of $18.2 million for the year grew from
$13.0 million in 2003.
-- Performance for the Asia Pacific region confirmed the commitment the
firm has made to that region over the past five years, with revenue
increasing more than 29 and 28 percent in U.S. dollars for both the 2004
fourth quarter and full year, respectively. In local currencies, revenue
increased 24 and 21 percent for the quarter and full year, respectively,
compared to the prior year. The primary growth was again seen in
transaction activity, reported as implementation services, which
increased by 34 and 36 percent in U.S. dollars, for the quarter and full
year, respectively. The growth markets of Japan, China and India
finished the year strongly with increases in revenue, in aggregate, of
approximately 67 and 74 percent in local currencies for the quarter and
full year, respectively. The core market of Hong Kong also had strong
revenue growth, reflecting improved sentiment in the local economy
overall and resulting in increased transaction activity levels maximized
by the firm's leading market position. The Asian Hotels business had
robust performance, particularly in the core market of Australia, where
revenues increased over 73 percent in local currency for the year,
compared to 2003.
Total operating expenses for the quarter, excluding non-recurring and
restructuring charges, increased 23 percent in U.S. dollars, 19 percent
in local currencies. For the full year, operating expenses increased 23
percent in U.S. dollars and 15 percent in local currencies. The
increases were driven by accrued incentive compensation expense,
reflecting the solid revenue and profit performance as well as continued
investment in people and technology in the growth markets of China,
India and Japan. With a very strong fourth quarter and operating income
of $7.8 million, operating income for the full year was $6.0 million, a
significant improvement over the prior year's operating loss of $2.7
million.
Investment Management
-- Revenues for fourth quarter 2004 were up 38 percent in U.S. dollars and
33 percent in local currencies, respectively, over the prior year, while
revenues increased 33 percent in U.S. dollars and 26 percent in local
currencies for the full year. The business continued to emphasize growth
in its annuity revenues from advisory fees, which increased 12 percent
for the quarter and 9 percent for the full year, in U.S. dollars.
Enhancing the profit potential of the business, and driving the revenue
increases for the quarter and full year, are incentive fees from
investment performance and equity earnings from firm co-investments made
alongside our clients demonstrating support to our investment advice
(equity earnings are an integral part of this business, and therefore
included in revenue for purposes of this discussion only). During the
fourth quarter, the sale of an asset from our Income & Growth II fund
triggered a large increase in incentive fees as the fund had exceeded
its base return level to investors. The favorable impact of this sale,
together with the strength of the real estate capital markets which in
turn has led to higher than originally targeted investment returns in
other clients' accounts, increased incentive fees to $20.0 million for
2004 as compared to the prior year of $4.7 million. This level of
incentive fees is above the ordinary levels as this fund is currently
expected to significantly outperform the fund's return targets. Strong
asset sale performance throughout the year has resulted in equity gains
for 2004 of $17.0 million as compared to $8.0 million in 2003. This
strong investment performance has resulted in both incentive fees and
equity gains above normal levels.
Total operating expenses have increased 25 percent in U.S. dollars, 19
percent in local currencies, for the 2004 full year, while increasing 38
and 34 percent in local currencies for the fourth quarter. Compensation
and benefits is a significant driver of the increase, reflecting both
team-share bonuses from incentive performance as well as the strong
profit performance of the overall business. Another contributing factor
is the increased acquisition staff to deploy the increased capital
commitments from investors.
2005 Outlook
Consistent with prior years, the firm is not giving full year earnings
guidance for 2005 due to both the transactional nature of a large part of the
firm's service offerings as well as the seasonal nature of the business. This
seasonality back-ends the majority of the firm's profits into the fourth
quarter, and makes it premature to predict the 2005 operating environment at
this time. Caution is recommended against assuming that sales of assets from our
Investment Management business in 2005 will result in equity earnings and
incentives fees at the levels seen in 2004.
The firm continues to emphasize growth in its annuity revenues as well as
enhancement of the profit margins in all its product and service lines. The firm
also plans to increase its strategic growth investments in 2005 to areas such as
China, and to its global Corporate Solutions and global Capital Markets
businesses. The current economic environment appears stable globally for real
estate services, with continued strong growth expected in the Asia Pacific
Region.
About Jones Lang LaSalle
Jones Lang LaSalle is the world's leading real estate services and money
management firm, operating across more than 100 markets around the globe. The
company provides comprehensive integrated expertise, including management
services, implementation services and investment management services on a local,
regional and global level to owners, occupiers and investors. Jones Lang LaSalle
is also the industry leader in property and corporate facility management
services, with a portfolio of over 835 million square feet (78 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 money management firms, with approximately $24 billion of assets
under management.
Statements in this press release regarding, among other things, future
financial results and performance, achievements, plans and objectives may be
considered forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors which may cause actual results,
performance, achievements, plans and objectives of Jones Lang LaSalle to be
materially different from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially include
those discussed under "Business," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Quantitative and Qualitative
Disclosures about Market Risk," and elsewhere in Jones Lang LaSalle's Annual
Report on Form 10-K for the year ended December 31, 2003, 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 Reports on Form 10-Q for the quarters ended March
31, 2004, June 30, 2004 and September 30, 2004 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 Thursday, February 3, 2005 at 9:00 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:
-- U.S. callers: +1 877 809 9540
-- International callers: +1 706 679 7364
Replay Information Available: (12:00 p.m. EST) Thursday, February 3
through (Midnight EST) Thursday, February 10 at the following numbers:
-- U.S. callers: +1 800 642 1687
-- International callers: +1 706 645 9291
-- Pass code: 3521313
Live web cast (available through February 10) Follow these steps to listen
to the web cast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to www.joneslanglasalle.com/shareholders/index.asp and follow
instructions
3. Download free Windows Media Player software: (link located under
registration form)
If you experience problems listening, send an e-mail
to webcast.info@tfn.com
This information is also available on the company's website
at www.joneslanglasalle.com
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three Months and Years Ended December 31, 2004 and 2003
(in thousands, except share data)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Revenue:
Fee based services $ 404,911 $ 316,559 $ 1,145,456 $ 924,694
Other income 7,471 5,509 21,502 17,200
Total revenue 412,382 322,068 1,166,958 941,894
Operating expenses:
Compensation and
benefits 255,955 205,300 761,425 612,354
Operating,
administrative and
other 83,033 64,155 279,994 234,000
Depreciation and
amortization 8,703 8,886 33,381 36,944
Non-recurring and
restructuring
charges/(credits):
Compensation and
benefits 5,016 (2,570) 4,874 (4,633)
Operating,
administrative and
other (41) 4,229 (2,237) 8,994
Total operating
expenses 352,666 280,000 1,077,437 887,659
Operating income 59,716 42,068 89,521 54,235
Interest and other costs:
Interest expense,
net of interest
income 820 4,135 9,292 17,861
Loss on extinguishment
of Euro Notes -- -- 11,561 --
Total interest and
other costs 820 4,135 20,853 17,861
Equity in earnings
from unconsolidated
ventures (2) 7,376 8,233 17,447 7,951
Income before provision
for income taxes 66,272 46,166 86,115 44,325
Provision for income
taxes 16,316 8,850 21,873 8,260
Net income $ 49,956 $ 37,316 $ 64,242 $ 36,065
EBITDA (1) $ 75,795 $ 59,187 $ 128,788 $ 99,130
Basic income per
common share $ 1.62 $ 1.20 $ 2.08 $ 1.17
Basic weighted average
shares outstanding 30,815,657 31,178,266 30,887,868 30,951,563
Diluted income per
common share $ 1.52 $ 1.14 $ 1.96 $ 1.12
Diluted weighted
average shares
outstanding 32,962,695 32,600,973 32,845,281 32,226,306
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three Months and Years Ended December 31, 2004 and 2003
(in thousands)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
INVESTOR & OCCUPIER
SERVICES -- AMERICAS
Revenue:
Implementation
services $ 82,649 $ 66,372 $ 181,405 $ 137,254
Management
services 57,708 50,739 181,778 170,448
Equity earnings -- -- 467 --
Other services 1,758 1,561 6,371 5,056
Intersegment
revenue 572 328 1,187 760
142,687 119,000 371,208 313,518
Operating expenses:
Compensation,
operating and
administrative 102,109 86,002 303,534 257,824
Depreciation and
amortization 3,642 4,134 14,161 17,851
Operating
income (4) $ 36,936 $ 28,864 $ 53,513 $ 37,843
EUROPE
Revenue:
Implementation
services $ 119,876 $ 89,367 $ 334,586 $ 252,109
Management
services 26,781 23,553 96,671 89,147
Other services 4,170 3,014 11,361 9,876
150,827 115,934 442,618 351,132
Operating expenses:
Compensation,
operating and
administrative 135,885 103,601 413,587 326,946
Depreciation and
amortization 2,794 2,837 10,792 11,168
Operating
income (4) $ 12,148 $ 9,496 $ 18,239 $ 13,018
ASIA PACIFIC
Revenue:
Implementation
services $ 47,843 $ 35,615 $ 130,400 $ 95,998
Management
services 24,279 20,451 88,825 74,894
Other services 906 652 2,132 1,762
73,028 56,718 221,357 172,654
Operating expenses:
Compensation,
operating and
administrative 63,318 52,482 208,153 168,661
Depreciation and
amortization 1,920 1,636 7,167 6,734
Operating
income (loss)
(4) $ 7,790 $ 2,600 $ 6,037 $ (2,741)
INVESTMENT MANAGEMENT-
Revenue:
Implementation and
other services $ 4,015 $ 4,092 $ 12,027 $ 7,416
Advisory fees 26,746 23,846 101,382 93,194
Incentive fees 15,651 2,806 20,020 4,740
Equity earnings 7,376 8,233 16,980 7,951
53,788 38,977 150,409 113,301
Operating expenses:
Compensation,
operating and
administrative 38,249 27,698 117,332 93,683
Depreciation and
amortization 346 279 1,261 1,191
Operating
income (4) $ 15,193 $ 11,000 $ 31,816 $ 18,427
Total segment revenue $ 420,330 $ 330,629 $ 1,185,592 $ 950,605
Intersegment revenue
eliminations (572) (328) (1,187) (760)
Equity earnings revenue
eliminations (7,376) (8,233) (17,447) (7,951)
Total revenue $ 412,382 $ 322,068 $ 1,166,958 $ 941,894
Total segment operating
expenses $ 348,263 $ 278,669 $ 1,075,987 $ 884,058
Intersegment operating
expense eliminations (572) (328) (1,187) (760)
Total operating
expenses before non-
recurring and
restructuring
charges $ 347,691 $ 278,341 $ 1,074,800 $ 883,298
Operating income
before non-recurring
and
restructuring
charges (4) $ 64,691 $ 43,727 $ 92,158 $ 58,596
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
as of December 31, 2004 and 2003
(in thousands)
(unaudited)
December 31,
----------------------------
2004 2003
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 30,143 $ 63,105
Trade receivables, net of allowances 328,876 253,126
Notes receivable 2,911 3,698
Other receivables 11,432 8,317
Prepaid expenses 22,279 18,866
Deferred tax assets 17,463 18,097
Other assets 12,189 7,731
Total current assets 425,293 372,940
Property and equipment, at cost,
less accumulated depreciation 75,531 71,621
Intangibles resulting from business
acquisitions and JLW merger,
net of accumulated amortization 351,664 347,608
Investments in and loans to real
estate ventures 73,570 71,335
Long-term receivables, net 16,179 13,007
Prepaid pension asset 2,253 11,920
Deferred tax assets 54,584 43,252
Debt issuance costs 1,704 4,113
Other assets, net 12,017 7,144
$ 1,012,795 $ 942,940
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 128,295 $ 96,466
Accrued compensation 237,486 154,317
Short-term borrowings 18,326 3,592
Deferred tax liabilities 2,748 2,623
Other liabilities 40,500 28,414
Total current liabilities 427,355 285,412
Long-term liabilities:
Credit facilities 40,585 --
9% Senior Euro Notes, due 2007 -- 207,816
Deferred tax liabilities 797 761
Minimum pension liability 3,040 --
Other 33,038 17,960
Total liabilities 504,815 511,949
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value per
share, 100,000,000 shares
authorized;
33,243,527 and 31,762,077 shares
issued and outstanding as of
December 31, 2004 and December 31,
2003, respectively 332 318
Additional paid-in capital 575,862 519,438
Deferred stock compensation (34,064) (21,649)
Retained earnings (deficit) 4,896 (59,346)
Stock held by subsidiary (58,898) (12,846)
Stock held in trust (530) (460)
Accumulated other comprehensive
income 20,382 5,536
Total stockholders' equity 507,980 430,991
$ 1,012,795 $ 942,940
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Years Ended December 31, 2004 and 2003
(in thousands)
(unaudited)
Years Ended December 31,
--------------------------
2004 (5) 2003 (5)
--------- ---------
Cash provided by earnings $ 120,038 $ 100,027
Cash provided by working capital 41,440 10,018
Cash used in investing activities (27,565) (15,282)
Cash used in financing activities (166,875) (45,312)
Net increase (decrease) in cash
and cash equivalents (32,962) 49,451
Cash and cash equivalents, beginning
of year 63,105 13,654
Cash and cash equivalents, end of
year $ 30,143 $ 63,105
JONES LANG LASALLE INCORPORATED
Schedule of Non-Recurring and Restructuring Charges
For the Three Months and Years Ended December 31, 2004 and 2003
(in thousands, except share data)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
------------------------- -------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Non-Recurring &
Restructuring Charges
Land Investment &
Development Group
Impairment Charges (108) -- 465 --
Insolvent Insurance
Providers 100 -- 100 (606)
Abandonment of Property
Management Accounting
System
- - Compensation & Benefits 518 -- 592 113
- - Operating,
Administrative & Other 147 43 (3,348) 4,962
Merger Related Stock
Compensation -- (2,481) -- (2,481)
2001 Global Restructuring
Program
- - Compensation & Benefits (13) (261) (54) (164)
- - Operating,
Administrative & Other 23 -- 24 --
2002 Global Restructuring
Program
- - Compensation & Benefits -- 172 (175) (2,101)
- - Operating,
Administrative & Other (204) 4,186 521 4,638
2004 Restructuring Program
- - Compensation & Benefits 4,512 -- 4,512 --
- - Operating,
Administrative & Other -- -- -- --
Total Non-Recurring &
Restructuring Charges
(Credits) 4,975 1,659 2,637 4,361
Net benefit for Income
Taxes on
Non-Recurring and
Restructuring
Charges/(Credits) (1,264) (1,361) (670) (2,226)
Additional Tax Benefit on
2001 Restructuring
Actions -- (3,000) -- (3,000)
Non-Recurring and
Restructuring Charges
(Credits) After Tax 3,711 (2,702) 1,967 (865)
Diluted Weighted Average
Shares Outstanding 32,962,695 32,600,973 32,845,281 32,226,306
Per Share Impact of Non-
Recurring and
Restructuring Charges
(Credits) 0.11 (0.08) 0.06 (0.03)
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
CURRENCY ANALYSIS OF REVENUES AND OPERATING INCOME (LOSS)
(in millions)
(unaudited)
Pound US
Sterling Australian Dollar
(6) Euro Dollar (6) Other TOTAL
$ $ $ $ $ $
---------- ---------- ---------- ---------- ---------- ----------
REVENUE (6)
Q1, 2004 50.5 43.1 17.6 76.2 33.3 220.7
Q2, 2004 56.2 48.7 23.4 86.9 48.8 264.0
Q3, 2004 59.6 40.7 23.9 101.1 44.5 269.8
Q4, 2004 93.3 58.9 30.0 157.3 72.8 412.3
Total 259.6 191.4 94.9 421.5 199.4 1,166.8
Q1, 2003 37.7 37.3 13.7 69.9 29.3 187.9
Q2, 2003 43.9 37.3 18.7 75.4 38.6 213.9
Q3, 2003 50.7 36.0 19.6 84.8 27.1 218.2
Q4, 2003 64.2 53.8 25.8 130.2 47.9 321.9
Total 196.5 164.4 77.8 360.3 142.9 941.9
OPERATING INCOME (LOSS) (6)
Q1, 2004 -2.5 4.4 -1.5 -5.1 -2.0 -6.7
Q2, 2004 1.6 5.4 2.2 1.8 4.3 15.3
Q3, 2004 4.5 -0.5 6.2 7.5 3.5 21.2
Q4, 2004 12.8 2.9 0.0 31.5 12.5 59.7
Total 16.4 12.2 6.9 35.7 18.3 89.5
Q1, 2003 -2.6 3.0 -1.4 -2.5 -3.4 -6.9
Q2, 2003 -0.4 0.9 -4.1 1.4 5.3 3.1
Q3, 2003 4.8 1.2 0.7 8.2 1.2 16.1
Q4, 2003 7.1 3.9 2.4 22.8 5.8 42.0
Total 8.9 9.0 -2.4 29.9 8.9 54.3
AVERAGE EXCHANGE RATES
Q1, 2004 1.842 1.246 0.764 N/A N/A N/A
Q2, 2004 1.811 1.206 0.710 N/A N/A N/A
Q3, 2004 1.817 1.223 0.710 N/A N/A N/A
Q4, 2004 1.891 1.325 0.761 N/A N/A N/A
Q1, 2003 1.600 1.075 0.595 N/A N/A N/A
Q2, 2003 1.624 1.140 0.644 N/A N/A N/A
Q3, 2003 1.617 1.130 0.656 N/A N/A N/A
Q4, 2003 1.718 1.202 0.718 N/A N/A N/A
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Financial Statement Notes
1. EBITDA represents earnings before interest expense, net of interest income,
income taxes, depreciation and amortization. Although EBITDA is a non-GAAP
financial measure, it is used extensively by management and is useful to
investors as one of the primary metrics for evaluating operating
performance and liquidity. The firm believes that an increase in EBITDA is
an indicator of improved ability to service existing debt, to sustain
potential future increases in debt and to satisfy capital requirements.
EBITDA is also used in the calculations of certain covenants related to our
revolving credit facility. However, EBITDA should not be considered as an
alternative either to net income or net cash provided by operating
activities, both of which are determined in accordance with GAAP. Because
EBITDA is not calculated under GAAP, our EBITDA may not be comparable to
similarly titled measures used by other companies.
Below is a reconciliation of Net income to EBITDA (in thousands):
Year Ended
-----------------------
2004 2003
---------- ----------
Net income $ 64,242 $ 36,065
Add:
Interest expense, net of interest income 9,292 17,861
Net provision for income taxes 21,873 8,260
Depreciation and amortization 33,381 36,944
EBITDA $ 128,788 $ 99,130
Below is a reconciliation of Net cash provided by operating activities, the most
comparable cash flow measure on the consolidated statements of cash flows, to
EBITDA (in thousands):
Year Ended
-----------------------
2004 2003
---------- ----------
Net cash provided by operating activities $ 161,478 $ 110,045
Add:
Interest expense, net of interest income 9,292 17,861
Net provision for income taxes 21,873 8,260
Less:
Change in working capital and non-cash
expenses (63,855) (37,036)
EBITDA $ 128,788 $ 99,130
2. Effective this quarter, 'Equity in earnings from unconsolidated ventures'
has been reclassified, for all periods presented on the Consolidated
Statement of Earnings, from 'Revenue' to be presented as a separate line
item between 'Total interest and other costs' and 'Income before provision
for income taxes', in accordance with Rule 5-03 of Regulation S-X. As a
result, 'Operating income' has been adjusted for the comparative year.
Since equity earnings are an integral part of our Investment Management
business, equity earnings has been included within 'Revenue' for discussion
purposes only.
3. Net debt represents the aggregate of 'Short-term borrowings,' 'Credit
facilities,' and '9% Senior Euro Notes' less 'Cash and cash equivalents'.
4. For purposes of this analysis, the allocation of the non-recurring charges
to our segments has been determined to not be meaningful to investors.
Additionally, the performance of our segment results has been evaluated
without these charges being allocated.
5. The consolidated statements of cash flows are presented in summarized form.
For complete consolidated statements of cash flows, please refer to the
firm's Annual Report on Form 10-K for the year ended December 31, 2004, to
be filed with the Securities and Exchange Commission shortly.
6. The objective of this presentation is to provide guidance as to the key
currencies in which the company does business and their significance to
reported revenue and operating income. The operating income sourced in
pound sterling and U.S. dollars understates the profitability of the
businesses in the United Kingdom and U.S., because it includes the locally
incurred expenses of corporate offices in London and Chicago, respectively,
as well as the European regional office in London. The revenue and
operating income of the global investment management business are allocated
to their underlying currency, which means that this analysis may not be
consistent with the performance of the geographic IOS segments. In
particular, as incentive fees are earned by this business, there may be
significant shifts in the geographic mix of revenue and operating income.
SOURCE Jones Lang LaSalle Incorporated
-0- 02/02/2005
/CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer of
Jones Lang LaSalle Incorporated, +1-312-228-2073/
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