Exhibit 99.1
Jones Lang LaSalle Reports Solid Revenue Growth in First Quarter Results
CHICAGO, April 27 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and money management firm,
today reported a net loss of $8.6 million, or $0.27 per share of common stock,
for the quarter ended March 31, 2005. The loss is consistent both with the
seasonal nature of the business and the planned increases in the investments the
firm has made in people and infrastructure to support future growth. The net
loss for the same period in the prior year was $6.1 million, or $0.20 per share.
Revenues increased 9 percent in U.S. dollars, 6 percent in local
currencies, to $240.2 million for the first quarter 2005 compared to $220.7
million for the same period in 2004. Revenues for LaSalle Investment Management,
the firm's money management business, contributed a 10 percent year-over-year
increase in U.S. dollars, 7 percent in local currencies, leading to an increase
in operating income from the prior year of 35 percent in U.S. dollars and 30
percent in local currencies. Strong performance in both Corporate Property
Services ("CPS") and Project and Development Services ("PDS") across all
Investor and Occupier Services ("IOS") businesses also contributed to the
revenue improvement. The continued economic and business improvement,
principally in the Americas and Asia Pacific, has had a positive impact on the
increase in revenues.
First Quarter Highlights:
-- Revenues increased 9 percent in U.S. dollars and 6 percent in local
currencies
-- Operating income increased 35 percent for LaSalle Investment
Management
-- Net debt decreased $69 million from first quarter of 2004
"Our strong revenues in the first quarter demonstrate how our people
continue to take advantage of generally healthy market conditions to deliver
value to clients around the world," said Colin Dyer, the firm's Chief Executive
Officer. "While a first-quarter loss is typical for our business -- with most of
our profits coming later in the year -- it also reflects the operational
investments we are making to strengthen our presence in key markets, extend our
global service lines and improve our client-service delivery capabilities," Dyer
added.
Operating expenses were $250.5 million for first quarter 2005 and $227.4
million for the same period in 2004, an increase of 10 percent in U.S. dollars,
8 percent in local currencies. The increase includes added staffing to service
client and business wins, particularly in the IOS and LaSalle Investment
Management segments in Asia Pacific, as well as the impact of strategic
investments, such as the Quartararo & Associates acquisition made in the
Americas during the third quarter of 2004. Offsetting the 2005 operating
expenses is a $1.6 million pre-tax benefit from the agreed settlement of
litigation relating to the 2003 abandonment of a property management software
system in the Australian business. Through March 31, 2005, $5.9 million of the
total settlement of $7.3 million has been received and recognized.
Interest expense of $0.3 million for the quarter was significantly lower
than the $3.8 million incurred in the first quarter of 2004, reflecting the
continued pay-down of debt and the early redemption of the 9 percent Senior
Notes in June 2004. The first quarter traditionally represents the firm's peak
borrowing requirements in the year as annual bonuses are paid. During the first
quarter of 2005, approximately 340,000 shares of common stock were repurchased
for $15.2 million. Net debt as of March 31, 2005 was $121 million, a $69 million
reduction from the prior year. The estimated effective tax rate for the first
quarter of 2005 was 25.4 percent, as compared to 28.0 percent for the same
period last year. This rate improvement, based on disciplined global tax
planning, will favorably affect the full year's projected results, but when
applied to the seasonal net loss it negatively impacts the first quarter
year-over-year results by $0.3 million.
Business Segment First Quarter Highlights
Investor and Occupier Services
-- The Americas region continued the momentum of its strong 2004 finish
into the first quarter of 2005, reporting a 16 percent year-over-year
increase in revenues. Management services revenues were the main
driver of the growth, increasing 18 percent for the quarter, while the
transaction revenues grew 13 percent compared to 2004. The strategic
acquisition of Quartararo & Associates, now part of the PDS business
serving the greater New York area, contributed to the firm's
performance as demonstrated by the revenue increase of 20 percent from
that business in the Americas overall. The region also had strong
performance in Public Institutions and its facility management
business, CPS.
Total operating expenses increased 22 percent for the quarter compared
to 2004, with the increase reflecting higher staffing levels necessary
to service new client wins as well as strategic hiring to expand
market coverage in both leasing and capital markets.
-- The European region's revenues for the first quarter of 2005 declined
5 percent in U.S. dollars, 9 percent in local currencies, as a result
of delays in the closing of certain anticipated transactions into the
second quarter. Certain fourth-quarter 2004 restructuring efforts,
which included realigning resources and further consolidating the
German business, together with hiring a new leader for that country,
have started to have a positive impact in 2005. As a result, Germany
showed early signs of improvement with an increase in revenues as
compared to 2004. Overall, the European business is expected to have a
stronger second quarter and anticipates achieving results that are
above those of the prior year at second quarter end.
Operating expenses continue to be aggressively managed, with a
decrease from the prior year of 3 percent in local currencies,
representing an increase of 1 percent from the prior year in U.S.
dollars.
-- Performance for the Asia Pacific region continued to confirm the
commitment the firm has made to that region over the past few years,
with revenues increasing more than 22 percent in U.S. dollars and 20
percent in local currencies. The main growth was in transaction
activity, which increased over 30 percent in U.S. dollars from 2004.
Management services revenues increased 13 percent in U.S. dollars over
the prior year. The growth markets of China and Japan continued the
momentum from the end of 2004, with revenues increasing 58 and 33
percent, respectively, in local currencies, for the first quarter of
2005 compared to the same period in 2004. The firm's leading market
position in Hong Kong produced another strong quarter with revenues
increasing over 25 percent in local currency over the prior year. The
Asian Hotels business had another robust quarter in the core market of
Australia, where revenues more than tripled from 2004.
Total operating expenses for the first quarter of 2005 increased 17
percent in U.S. dollars, 15 percent in local currencies over the prior
year, reflecting continued investment in people and technology in the
growth markets of China, India and Japan. Additionally, new offices
were opened in Macau and Osaka.
LaSalle Investment Management
-- Revenues for first-quarter 2005 were up 10 percent in U.S. dollars, 7
percent in local currencies, over the prior year as the business
continued to emphasize growth in its annuity revenues from advisory
fees, which increased 10 percent from 2004 in U.S. dollars. First
quarter transaction fees increased 23 percent over the prior year as
capital flows into real estate remained strong. The business
recognized total first quarter incentive fees of $2.3 million, with
asset sales and portfolio performance producing strong investment
returns for the firm's clients. Impairment charges were taken against
two funds in the firm's co-investment portfolio resulting in a decline
in equity earnings from 2004. For the year, the firm is expecting
solid revenue contributions from its co-investment portfolio as
additional assets are sold. The overall revenue strength resulted in
operating income improvements of over 35 percent in U.S. dollars, 30
percent in local currencies, from 2004.
Strong response from investors to product offerings continues, and the
business is ahead of its expected capital-raising activities with
respect to funds planned for launch during 2005. In total, capital
investments exceeded expectations in the first quarter of 2005.
Specifically, capital investments in Asia Pacific funds during the
first quarter of 2005 almost matched the levels seen for all of 2004.
Outlook
Consistent with prior years, the firm is not providing full-year earnings
guidance for the remainder of 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; it is therefore premature to predict the remaining 2005
operating environment at this time. The European business is expected to have a
stronger second quarter and anticipates an increase in revenues for the first
half of the year over the prior-year period. Overall, 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 has and will continue to
increase its strategic growth investments in 2005 to areas such as China, and to
its global Corporate Solutions and global Capital Markets service offerings. 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 843 million square feet (79 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 $26 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, 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, April 28, 2005 at 9:00 a.m. EDT. 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. EDT) Thursday, April 28 through
(Midnight EDT) Thursday, May 5 at the following numbers:
-- U.S. callers: +1 800 642 1687
-- International callers: +1 706 645 9291
-- Pass code: 5484566
Live web cast (available through May 6)
Follow these steps to listen to the web cast:
1. You must have a minimum 14.4 Kbps Internet connection
2. Log on to http://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
webcastsupport@tfprn.com .
This information is also available on the company's website at
http://www.joneslanglasalle.com .
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three Months Ended March 31, 2005 and 2004
(in thousands, except share data)
(unaudited)
Three Months Ended March 31,
------------------------------
2005 2004
------------ -------------
Revenue:
Fee based services $ 235,182 $ 217,040
Other income 4,994 3,623
Total revenue 240,176 220,663
Operating expenses:
Compensation and benefits 172,126 155,064
Operating, administrative and other 71,591 64,077
Depreciation and amortization 8,310 8,302
Non-recurring and restructuring
charges/(credits):
Compensation and benefits - (210)
Operating, administrative and other (1,569) 190
Total operating expenses 250,458 227,423
Operating loss (10,282) (6,760)
Interest and other costs:
Interest expense, net of interest income 330 3,814
Equity in earnings (loss) from
unconsolidated ventures (892) 2,123
Loss before income tax benefits (11,504) (8,451)
Income tax benefits (2,922) (2,366)
Net loss $ (8,582) $ (6,085)
EBITDA (1) $ (2,864) $ 3,665
Basic loss per common share $ (0.27) $ (0.20)
Basic weighted average shares
outstanding 31,268,640 31,045,367
Diluted loss per common share $ (0.27) $ (0.20)
Diluted weighted average shares
outstanding 31,268,640 31,045,367
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three Months and Years Ended March 31, 2005 and 2004
(in thousands)
(unaudited)
Three Months Ended March 31,
------------------------------
2005 2004
------------ -------------
INVESTOR & OCCUPIER SERVICES -
AMERICAS
Revenue:
Implementation services $ 27,099 $ 24,076
Management services 44,983 37,991
Equity earnings (1) 467
Other services 1,577 1,277
Intersegment revenue 289 82
73,947 63,893
Operating expenses:
Compensation, operating and
administrative 75,337 61,115
Depreciation and
amortization 3,612 3,663
Operating loss $ (5,002) $ (885)
EUROPE
Revenue:
Implementation services $ 59,017 $ 65,631
Management services 23,464 22,398
Other services 2,573 1,879
85,054 89,908
Operating expenses:
Compensation, operating and
administrative 90,472 89,030
Depreciation and
amortization 2,551 2,779
Operating loss $ (7,969) $ (1,901)
ASIA PACIFIC
Revenue:
Implementation services $ 24,900 $ 19,173
Management services 23,443 20,662
Other services 592 348
48,935 40,183
Operating expenses:
Compensation, operating and
administrative 50,547 43,194
Depreciation and
amortization 1,805 1,556
Operating loss $ (3,417) $ (4,567)
INVESTMENT MANAGEMENT-
Revenue:
Implementation and other services $ 1,902 $ 1,464
Advisory fees 28,250 25,696
Incentive fees 2,376 68
Equity earnings (891) 1,656
31,637 28,884
Operating expenses:
Compensation, operating and
administrative 27,649 25,884
Depreciation and amortization 343 304
Operating income $ 3,645 $ 2,696
Total segment revenue $ 239,573 $ 222,868
Intersegment revenue eliminations (289) (82)
Equity loss (earnings) revenue eliminations 892 (2,123)
Total revenue $ 240,176 $ 220,663
Total segment operating expenses $ 252,316 $ 227,525
Intersegment operating expense eliminations (289) (82)
Total operating expenses before
non-recurring charges (credits) $ 252,027 $ 227,443
Operating loss before
non-recurring charges (credits) $ (11,851) $ (6,780)
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
March 31, 2005, December 31, 2004 and March 31, 2004
(in thousands)
(unaudited)
March 31, December 31, March 31,
2005 2004 2004
----------- ------------ ----------
ASSETS
Current assets:
Cash and cash equivalents $ 27,941 $ 30,143 $ 22,984
Trade receivables, net of allowances 276,255 328,876 240,570
Notes receivable 4,568 2,911 4,275
Other receivables 8,438 11,432 11,363
Prepaid expenses 21,452 22,279 17,568
Deferred tax assets 16,359 28,427 16,816
Other assets 19,933 12,189 10,040
Total current assets 374,946 436,257 323,616
Property and equipment, at cost, less
accumulated depreciation 71,758 75,531 68,400
Intangibles resulting from business
acquisitions and JLW merger,
net of accumulated amortization 348,115 351,664 348,729
Investments in and loans to real
estate ventures 74,816 73,570 67,757
Long-term receivables, net 12,936 16,179 9,785
Prepaid pension asset 2,420 2,253 12,812
Deferred tax assets 53,236 43,202 46,587
Debt issuance costs 1,502 1,704 3,825
Other assets, net 18,963 12,017 11,829
$ 958,692 $ 1,012,377 $ 893,340
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 111,190 $ 130,489 $ 89,189
Accrued compensation 109,140 244,659 96,560
Short-term borrowings 17,405 18,326 9,528
Deferred tax liabilities 2,787 262 2,199
Deferred income 22,508 16,106 19,073
Other liabilities 25,668 17,221 15,138
Total current liabilities 288,698 427,063 231,687
Long-term liabilities:
Credit facilities 131,302 40,585 -
9% Senior Euro Notes, due 2007 - - 203,214
Deferred tax liabilities 53 671 4,011
Deferred compensation 14,227 8,948 8,967
Minimum pension liability 2,989 3,040 -
Other 23,872 24,090 14,758
Total liabilities 461,141 504,397 462,637
Stockholders' equity:
Common stock, $.01 par value per
share, 100,000,000 shares
authorized; 33,933,258, 33,243,527
and 31,874,055 shares issued and
outstanding as of March 31, 2005,
December 31, 2004 and March 31, 2004,
respectively 340 332 319
Additional paid-in capital 592,831 575,862 528,055
Deferred stock compensation (28,520) (34,064) (24,941)
Retained earnings (deficit) (3,686) 4,896 (65,431)
Stock held by subsidiary (74,147) (58,898) (20,311)
Stock held in trust (530) (530) (230)
Accumulated other comprehensive
income 11,263 20,382 13,242
Total stockholders' equity 497,551 507,980 430,703
$ 958,692 $ 1,012,377 $ 893,340
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2005 and 2004
(in thousands)
(unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
----------- -----------
Cash provided by earnings $ 7,933 $ 6,704
Cash used in working capital (94,768) (47,360)
Net cash used in operating activities (86,835) (40,656)
Cash (used in) provided by investing activities (7,815) 158
Cash provided by financing activities 92,448 377
Net decrease in cash and cash equivalents (2,202) (40,121)
Cash and cash equivalents, beginning of period 30,143 63,105
Cash and cash equivalents, end of period $ 27,941 $ 22,984
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 the firm's 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, the firm's EBITDA may
not be comparable to similarly titled measures used by other
companies.
Below is a reconciliation of net loss to EBITDA (in thousands):
Three Months Ended March 31,
----------------------------
2005 2004
--------- -----------
Net loss $ (8,582) $ (6,085)
Add:
Interest expense, net of
interest income 330 3,814
Depreciation and amortization 8,310 8,302
Deduct:
Net benefit from income taxes (2,922) (2,366)
EBITDA $ (2,864) $ 3,665
Below is a reconciliation of net cash used in operating activities,
the most comparable cash flow measure on the consolidated statements
of cash flows, to EBITDA (in thousands):
Three Months Ended March 31,
----------------------------
2005 2004
--------- -----------
Net cash used in
operating activities $ (86,835) $ (40,656)
Add:
Interest expense, net of
interest income 330 3,814
Change in working capital and
non-cash expenses 86,563 42,873
Less:
Net benefit from income taxes (2,922) (2,366)
EBITDA $ (2,864) $ 3,665
2. Effective the fourth quarter of 2004, '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 the Investment Management business,
equity earnings has been included within 'Revenue' in segment
operating results 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 segment operating results, the allocation of the
non-recurring charges (credits) to segments has been determined
to not be meaningful to investors. Additionally, the performance of
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 Quarterly Report on Form 10-Q for the period
ended March 31, 2005, to be filed with the Securities and Exchange
Commission shortly.
SOURCE Jones Lang LaSalle Incorporated
-0- 04/27/2005
/CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer of
Jones Lang LaSalle Incorporated, +1-312-228-2073/
/Web site: http://www.joneslanglasalle.com /