Exhibit 99.1
JONES LANG LASALLE REPORTS SOLID SECOND QUARTER FINANCIAL RESULTS
CHICAGO, July 27 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and money management firm,
today reported net income of $24.8 million, or $0.74 per diluted share of common
stock for the second quarter of 2005, and net income of $16.2 million, or $0.48
per share, for year-to-date 2005. In 2004, net income for the second quarter was
$5.1 million, or $0.16 per share, with a year-to-date net loss of $1.0 million,
or $0.03 per share. Included in the prior year's second quarter figures was a
$0.26 per share expense related to the redemption of the firm's euro 165 million
9 percent Senior Notes.
All segments of the firm reported year-over-year improvements in revenue for
both the quarter and the first half of this year. For the quarter, revenues
increased 23 percent in U.S. dollars, 20 percent in local currencies, to $325.1
million from $264.0 million in 2004. Revenues increased 17 percent in U.S.
dollars, 14 percent in local currencies, to $565.3 million for the first half of
2005 compared to $484.7 million for the same period in 2004.
Second Quarter Highlights:
-- Revenues increased 23 percent in U.S. dollars and 20 percent in local
currencies
-- Operating income increased to $29.9 million from $15.3 million
-- LaSalle Investment Management completed record capital raise; nearly
$28 billion of assets under management
Growth in Asia Pacific, the result of market-share expansion and economic
improvement, and the strong quarter of LaSalle Investment Management were the
important contributors to increased revenues and operating income. Second
quarter revenues from Asia Pacific increased 32 percent year over year in U.S.
dollars, 26 percent in local currencies. Asia Pacific achieved operating income
of $8.1 million for the second quarter of 2005, representing an increase of $7.0
million over the prior year, and operating income of $4.6 million for the first
half of 2005, compared with an operating loss of $3.5 million in the prior year.
LaSalle Investment Management benefited in the quarter from significant advisory
fees accelerated by the closing of the newest fund in Asia, LaSalle Asia
Opportunity Fund II, and from significant transaction fees from both a major
asset acquisition and disposition. Revenues in this business were up 32 percent
for the quarter and 22 percent in U.S. dollars for the first half of the year
compared with the same periods in 2004, while operating income increased $5.0
million and $5.9 million for the quarter and year to date, respectively.
"We achieved solid financial results across all of our business segments
during the second quarter, driven by healthy market conditions, excellent work
for our clients and the dedication of our people," said Colin Dyer, the firm's
Chief Executive Officer. "The majority of this year's revenues and profits still
have to be earned and we are focused on delivering current performance balanced
with continued revenue investments, to drive our ambitious international growth
plans," Dyer added.
Operating expenses were $295.2 million for second quarter of 2005 and $248.7
million for the same period in 2004, an increase of 19 percent in U.S. dollars,
16 percent in local currencies. Operating expenses for the first half of the
year increased 15 percent in U.S. dollars and 12 percent in local currencies
from the prior year. The increase included continuing investments to strengthen
the firm's positions in key local and regional markets as well as extending the
global service lines of Corporate Solutions, Capital Markets and LaSalle
Investment Management. The increase also included higher accrued incentive
compensation, reflecting the accelerated timing of revenues compared with the
prior year.
Interest expense for the second quarter of 2005 was $1.4 million, compared
with $15.2 million for the same period in 2004, and $1.7 million for the first
half of 2005, compared with $19.0 million for the same period in 2004. The prior
year's interest expense included an $11.6 million expense incurred in June of
2004 related to the redemption of the 9 percent Senior Notes. As a result of
this redemption, the firm's effective interest rate decreased significantly in
the first half of 2005 compared to the same period of 2004. Net debt as of June
30, 2005 was $132 million, a $45 million reduction from the prior year. The firm
also repurchased 683,500 shares of common stock during the second quarter,
bringing year-to-date repurchases to approximately 1 million shares at a cost of
$42.9 million.
The estimated effective tax rate for the second quarter and year to date for
2005 was 25.4 percent, as compared with 28.0 percent for the same period last
year. This rate improvement was achieved through disciplined global tax planning
and is expected to be sustainable for the full year.
Business Segment Second Quarter Highlights
Investor and Occupier Services
-- The Americas region maintained its momentum into the second quarter of
2005, reporting a 16 percent year-over-year increase in total revenues
for both the quarter and the first half of the year. Management services
revenues increased 20 percent for the quarter, 19 percent year to date,
while transaction revenues grew 11 percent for both the quarter and the
first half compared with 2004. The Real Estate Occupier Services
business, marketed as Corporate Solutions, generated over 51 percent of
the region's revenues for the quarter and 52 percent for the first half
of the year. Compared with 2004, Corporate Solutions revenues grew 18
percent for the quarter and 16 percent for the first half of the year.
Within Corporate Solutions, Project and Development Services revenues
increased 31 percent for the quarter and 26 percent year to date while
Public Institutions revenues increased 35 percent for the quarter and 52
percent year to date.
During the second quarter, the U.S. Hotels business completed the
acquisition of ThompsonCalhounFair Hotel Brokerage, a leading hotel real
estate broker and advisory firm. This acquisition extends the region's
service delivery capabilities to clients operating in the select service
hotel sector.
Total operating expenses increased 18 percent for the quarter and 20
percent year to date compared with 2004. The increase reflects higher
staffing levels necessary to service new client wins, as well as
strategic hiring to expand market coverage in both leasing and Capital
Markets. Increased accrued incentive compensation also contributed to
the higher operating expenses.
Operating income of $7.7 million for the second quarter of 2005 was
stable compared to the prior year; however, operating income for the
first half of the year decreased to $2.7 million as a result of
strategic investments being made in targeted markets.
-- The European region's second-quarter revenues increased 17 percent in
U.S. dollars, 14 percent in local currencies, and 7 percent in U.S.
dollars, 3 percent in local currencies, for the first half of the year.
The strong increase in the quarter resulted in part from the closing of
transactions that slipped from the first quarter of 2005. The
fourth-quarter 2004 restructuring efforts in Germany, which included
realigning resources and hiring a new country leader, are having a
positive impact. Revenues in Germany increased 48 percent in the quarter
and almost 40 percent year to date in U.S. dollars compared with 2004.
Year to date, the English business was up 11 percent in U.S. dollars
while the French business declined compared with the prior year, which
had benefited from several large Capital Markets and Agency Leasing
transactions.
Operating expenses increased by 17 percent in U.S. dollars for the
quarter year over year and 13 percent in local currencies, while
increasing 9 percent in U.S. dollars and 6 percent in local currencies
on a year-to-date basis due to accelerated accrued incentive
compensation.
Operating income of $6.1 million for the second quarter of 2005 was up
from the prior year by $1.0 million. The operating loss of $1.9 million
for the first half of 2005 reflects a slower start in the transactional
businesses compared with the prior year.
-- Second quarter revenues for the Asia Pacific region were up 32 percent
in U.S. dollars and 26 percent in local currencies from the prior year
and, on a year-to-date basis, up 28 and 23 percent in U.S. dollars and
local currencies, respectively. Growth for the quarter and year to date
in U.S. dollars came from both transaction activity, which grew 37 and
34 percent, respectively, and management services revenues, which grew
23 and 19 percent, respectively. Revenues from growth markets, which
include China, Japan and India, increased by 64 percent year to date in
U.S. dollars over the prior year. In addition, revenues in Hong Kong,
where the firm has a leading market position, increased approximately 30
percent for both the quarter and year to date in U.S. dollars. The Asian
Hotels business also had a very strong quarter as a result of increased
transaction volume and continued to increase market share.
Total operating expenses for the Asia Pacific region for the second
quarter of 2005 increased 19 percent in U.S. dollars, 14 percent in
local currencies, over the prior year. For the first half of the year,
operating expenses were up 18 percent in U.S. dollars and 14 percent in
local currencies. The increase is primarily the result of continued
investment in people and technology in the growth markets of China,
Japan and India, as well as new offices being opened in Macau and Osaka.
Increased accrued incentive compensation also contributed to the overall
increase in operating expenses.
LaSalle Investment Management
-- Revenues for the second quarter of 2005 were up 32 percent in U.S.
dollars, 30 percent in local currencies, and, year to date, up 22
percent in U.S. dollars and 20 percent in local currencies over the
prior year. Contributing to the quarter's revenues were accelerated
annuity fees from the newest fund in Asia Pacific, together with
significant transaction fees from both an asset acquisition and
disposition which occurred earlier in the year than expected. The
business continues to emphasize growth in its annuity revenues from
advisory fees, which increased 34 percent from 2004 in U.S. dollars for
the quarter and 21 percent on a year-to-date basis. Advisory fees
accounted for nearly 70 percent of LaSalle Investment Management's
second quarter revenues. Equity earnings were down $2.2 million for the
quarter and down $4.8 million year to date, as several larger
transactions closed during the first half of 2004. The overall revenue
strength resulted in operating income improvements from 2004 of 66
percent for the quarter and 58 percent in U.S. dollars for the first
half of the year.
Continued strong response from investors to product offerings is
resulting in the business being well ahead of its expected capital-
raising activities with respect to funds planned for launch during 2005.
Acquisitions, which also exceeded expectations for the first half of the
year, have resulted in assets under management reaching $28 billion.
Outlook
The firm benefited from strong performance in the second quarter, amplified
by transactions that closed ahead of the seasonal pattern of the prior year.
While profits remain concentrated in the fourth quarter, the firm believes that
if healthy market conditions continue, the current full-year analyst consensus
expectation of $2.40 per share should be achievable.
Overall, the firm continues to emphasize growth in annuity revenues as well
as enhancement of profit margins in all product and service lines. The firm
plans to continue its announced strategic investments in 2005, balancing the
achievement of current performance with its ambitious long-term growth
objectives.
About Jones Lang LaSalle
Jones Lang LaSalle is the world 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 879 million square feet 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 $28 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 the Quarterly
Report on Form 10-Q for the quarter ended March 31, 2005 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, July 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, July 28 through
(Midnight EDT) Thursday, August 6 at the following numbers:
-- U.S. callers: +1 800 642 1687
-- International callers: +1 706 645 9291
-- Pass code: 7895673
Live web cast
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
Segment Operating Results
For the Three and Six Months Ended June 30, 2005 and 2004
(in thousands)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
INVESTOR & OCCUPIER
SERVICES -
AMERICAS
Revenue:
Implementation
services $ 41,940 $ 37,917 $ 69,039 $ 61,993
Management
services 49,405 41,305 94,388 79,296
Equity earnings 182 - 181 467
Other services 2,174 1,465 3,751 2,742
Intersegment
revenue 240 299 529 381
93,941 80,986 167,888 144,879
Operating expenses:
Compensation,
operating and
administrative 82,550 69,925 157,887 131,040
Depreciation and
amortization 3,671 3,361 7,283 7,024
Operating Income $ 7,720 $ 7,700 $ 2,718 $ 6,815
EUROPE
Revenue:
Implementation
services $ 92,969 $ 75,971 $ 151,986 $ 141,602
Management
services 24,409 24,326 47,873 46,724
Equity earnings (226) - (226) -
Other services 2,785 2,077 5,358 3,956
119,937 102,374 204,991 192,282
Operating expenses:
Compensation,
operating and
administrative 111,409 94,626 201,881 183,656
Depreciation and
amortization 2,454 2,676 5,005 5,455
Operating Income
(Loss) $ 6,074 $ 5,072 $ (1,895) $ 3,171
ASIA PACIFIC
Revenue:
Implementation
services $ 41,312 $ 30,233 $ 66,212 $ 49,406
Management
services 26,263 21,271 49,706 41,933
Other services 943 409 1,535 757
68,518 51,913 117,453 92,096
Operating expenses:
Compensation,
operating and
administrative 58,593 49,238 109,140 92,432
Depreciation and
amortization 1,863 1,589 3,668 3,145
Operating Income
(Loss) $ 8,062 $ 1,086 $ 4,645 $ (3,481)
LASALLE INVESTMENT MANAGEMENT
Revenue:
Implementation
and other services $ 8,989 $ 3,454 10,891 $ 4,918
Advisory Fees 32,518 24,325 60,768 50,021
Incentive Fees 1,381 1,243 3,757 1,311
Equity earnings 4,674 6,914 3,783 8,570
47,562 35,936 79,199 64,820
Operating expenses:
Compensation,
operating and
administrative 34,787 28,149 62,436 54,034
Depreciation and
amortization 347 317 690 621
Operating Income $ 12,428 $ 7,470 $ 16,073 $ 10,165
Total segment
revenue 329,958 271,209 569,531 494,077
Intersegment
revenue
eliminations (240) (299) (529) (381)
Equity earnings (4,630) (6,914) (3,738) (9,037)
Total revenue $ 325,088 $ 263,996 $ 565,264 $ 484,659
Total segment
operating
expenses 295,674 249,881 547,990 477,407
Intersegment
operating expense
eliminations (240) (299) (529) (381)
Total operating
expenses before
non-recurring
charges
(credits) $ 295,434 $ 249,582 $ 547,461 $ 477,026
Operating
income before
non-recurring
charges
(credits) $ 29,654 $ 14,414 $ 17,803 $ 7,633
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three and Six Months Ended June 30, 2005 and 2004
(in thousands, except share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
Revenue:
Fee based services $ 318,765 $ 259,556 $ 553,947 $ 476,596
Other income 6,323 4,438 11,317 8,061
Total revenue 325,088 263,994 565,264 484,657
Operating expenses:
Compensation and
benefits 209,639 175,385 381,765 330,450
Operating,
administrative and
other 77,460 66,254 149,051 130,331
Depreciation and
amortization 8,335 7,941 16,645 16,243
Non-recurring and
restructuring
charges:
Compensation and
benefits (250) 73 (250) (137)
Operating,
administrative and
other - (983) (1,569) (793)
Total operating
expenses 295,184 248,670 545,642 476,094
Operating income 29,904 15,324 19,622 8,563
Interest and other costs:
Interest expense, net
of interest income 1,356 3,642 1,686 7,456
Loss on extinguishment
of Euro Notes - 11,561 - 11,561
1,356 15,203 1,686 19,017
Equity in earnings from
unconsolidated ventures 4,630 6,916 3,738 9,039
Income (loss)
before provision
(benefit) for
income taxes 33,178 7,037 21,674 (1,415)
Net provision (benefit)
for income taxes 8,427 1,970 5,505 (396)
Net income
(loss) $ 24,751 $ 5,067 $ 16,169 $ (1,019)
EBITDA (1) $ 42,869 $ 18,620 $ 40,005 $ 22,284
Basic income (loss)
per common share $ 0.80 $ 0.17 $ 0.52 $ (0.03)
Basic weighted
average shares
outstanding 31,039,575 30,449,030 31,153,475 30,889,639
Diluted income (loss)
per common share $ 0.74 $ 0.16 $ 0.48 $ (0.03)
Diluted weighted
average shares
outstanding 33,512,356 32,652,871 33,624,487 30,889,639
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
June 30, 2005, December 31, 2004 and June 30, 2004
(in thousands)
(unaudited)
June 30, December 31, June 30,
2005 2004 2004
------------- ------------- -------------
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,339 $ 30,143 $ 24,462
Trade receivables, net of allowances 269,024 328,876 230,538
Notes receivable 4,708 2,911 2,814
Other receivables 9,262 11,432 8,567
Prepaid expenses 24,705 22,279 26,584
Deferred tax assets 26,282 28,427 23,428
Other assets 9,437 12,189 5,790
Total current assets 364,757 436,257 322,183
Property and equipment, at cost,
less accumulated depreciation 71,475 75,531 67,486
Goodwill, with indefinite useful
lives, at cost, less accumulated
amortization 339,352 343,314 331,837
Identified intangibles, with
definite useful lives, at cost, less
accumulated
amortization 7,055 8,350 10,760
Investments in and loans to real
estate ventures 78,752 73,570 66,437
Long-term receivables, net 14,646 16,179 10,954
Prepaid pension asset 1,915 2,253 13,229
Deferred tax assets 41,870 43,202 45,888
Debt issuance costs, net 1,367 1,704 2,110
Other assets, net 19,461 12,017 11,742
$ 940,650 $ 1,012,377 $ 882,626
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 96,277 $ 130,489 $ 83,294
Accrued compensation 127,660 244,659 106,124
Short-term borrowings 13,778 18,326 14,473
Deferred tax liabilities 643 262 2,466
Deferred income 20,814 16,106 20,800
Other liabilities 15,569 17,221 15,475
Total current liabilities 274,741 427,063 242,632
Long-term liabilities:
Credit facilities 139,194 40,585 186,990
Deferred tax liabilities - 671 4,348
Deferred compensation 14,789 8,948 9,139
Minimum pension liability 2,111 3,040 -
Other 23,817 24,090 14,143
Total liabilities 454,652 504,397 457,252
Stockholders' equity:
Common stock, $.01 par value per
share, 100,000,000 shares authorized;
34,229,868, 33,243,527 and 32,178,613
shares issued and outstanding as of
June 30, 2005, December 31, 2004 and
June 30, 2004,
respectively 341 332 322
Additional paid-in capital 599,913 575,862 532,803
Deferred stock compensation (24,672) (34,064) (21,022)
Retained earnings (deficit) 21,065 4,896 (60,364)
Stock held by subsidiary (101,754) (58,898) (33,062)
Stock held in trust (530) (530) (230)
Accumulated other comprehensive
income (8,365) 20,382 6,927
Total stockholders' equity 485,998 507,980 425,374
$ 940,650 $ 1,012,377 $ 882,626
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2005 and 2004
(in thousands)
(unaudited)
Six Months Ended June 30,
---------------------------
2005 2004
------------ ------------
Cash provided by earnings $ 47,405 $ 22,712
Cash used in working capital (104,470) (38,849)
Net cash used in operating activities (57,065) (16,137)
Cash used in investing activities (27,198) (3,858)
Cash provided by (used in) financing activities 75,459 (18,648)
Net decrease in cash and cash equivalents (8,804) (38,643)
Cash and cash equivalents, beginning of period 30,143 63,105
Cash and cash equivalents, end of period $ 21,339 $ 24,462
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 income (loss) to EBITDA (in thousands):
Six Months Ended June 30,
---------------------------
2005 2004
------------ ------------
Net income (loss) $ 16,169 $ (1,019)
Add:
Interest expense, net of interest income 1,686 7,456
Depreciation and amortization 16,645 16,243
Deduct:
Net income tax expense (benefit) 5,505 (396)
EBITDA $ 40,005 $ 22,284
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):
Six Months Ended June 30,
----------------------------
2005 2004
------------ ------------
Net cash used in operating activities $ (57,065) $ (16,137)
Add:
Interest expense, net of interest income 1,686 7,456
Change in working capital and
non-cash expenses 89,879 31,361
Less:
Net income tax expense (benefit) 5,505 (396)
EBITDA $ 40,005 $ 22,284
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
money 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 the 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 June 30,
2005, to be filed with the Securities and Exchange Commission shortly.
SOURCE Jones Lang LaSalle
-0- 07/27/2005
/CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer of
Jones Lang LaSalle, +1-312 228 2073/
/Web site: http://www.joneslanglasalle.com
http://www.joneslanglasalle.com/shareholders/index.asp /
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