Exhibit 99.1
JONES LANG LASALLE REPORTS STRONG FIRST QUARTER
NET INCOME OF $4.6 MILLION, $0.14 PER SHARE
CHICAGO, April 25 /PRNewswire-FirstCall/ -- Jones Lang LaSalle Incorporated
(NYSE: JLL), the leading global real estate services and money management firm,
today reported net income of $4.6 million, or $0.14 per diluted share of common
stock, for the quarter ended March 31, 2006, compared with a net loss of $8.6
million or $0.27 per share for the first quarter of 2005. Operating income
improved by $19.0 million from a year ago to $8.7 million for the first quarter
of 2006 compared with an operating loss of $10.3 million for the same period in
2005. Due to the seasonal nature of the business, the firm has historically
reported an operating loss in the first quarter; however, in 2006, the firm
benefited from improved results in all segments, the acquisition of Spaulding &
Slye and particularly strong results in the firm's money management business,
LaSalle Investment Management.
All operating segments achieved strong increases in revenue in the first
quarter of 2006 compared with the same period of the prior year. Revenue for the
first quarter of 2006 was $337 million, an increase of $97 million, or 40
percent in U.S. dollars and 46 percent in local currencies. Spaulding & Slye
contributed approximately eight percent to the year-over-year increase.
First Quarter 2006 Highlights:
-- Revenue increased 40 percent with significant growth in all business
segments
-- Operating income improved by $19.0 million to $8.7 million
-- LaSalle Investment Management closed the $3.4 billion CenterPoint
acquisition
"Clearly, we are pleased by our first-quarter performance," said Colin
Dyer, Chief Executive Officer of Jones Lang LaSalle. "Our results are the
product of investments throughout our business and improved execution
capabilities across our organization. With the continuing strength of global
real estate markets, we remain confident about our firm's prospects and
performance for the remainder of the year," Dyer added.
Operating expenses were $328 million for the first quarter of 2006 compared
with $250 million for the same period in 2005, an increase of 31 percent in U.S.
dollars and 37 percent in local currencies. The increase was driven in part by
the acquisition of Spaulding & Slye that was completed on January 3, 2006, as
well as increased compensation costs related to revenue-generation activities.
Interest expense of $3.2 million for the first quarter of 2006 was
significantly higher than the $0.3 million incurred for the same period in 2005
due to a higher debt balance related to the Spaulding & Slye acquisition as well
as higher interest rates compared with a year ago.
Included in the 2006 first-quarter results was a $1.2 million, or $0.04
earnings per share, benefit from a cumulative effect adjustment for a change in
accounting for stock-based compensation, which was triggered by the adoption of
the Financial Accounting Standards Board's SFAS No. 123R, "Share-Based Payment,"
effective January 1, 2006. The adjustment represents the after-tax difference
between compensation cost recognized to date using actual forfeitures and the
cost that would have been recognized using estimated forfeitures as required
pursuant to SFAS No. 123R.
Business Segment First Quarter Performance Highlights
Investor and Occupier Services
-- In the Americas, revenue for the first quarter of 2006 was $113
million, an increase of 53 percent over the same period in 2005. The
growth is the result of the acquisition of Spaulding & Slye, and
effective execution within an improving market. Revenue excluding the
Spaulding & Slye acquisition was up 29 percent.
In the fourth quarter of 2005, the region reorganized part of its
operations to focus on "Markets" and "Accounts." The goal of the
Markets organization is to maximize the firm's local competitive
position in its targeted markets. The Accounts organization focus is
on service delivery and strategic advice to multi-geographic corporate
clients. Capital Markets, Public Institutions, Retail and Regional
Operations (Canada and Latin America) remain separate Americas product
lines.
Revenue was strong in both the Markets and Accounts organizations,
which include Spaulding & Slye, and in aggregate increased 53 percent
in the first quarter of 2006 compared with the prior year. Transaction
revenue was up 78 percent due to a significant number of large
transactions that closed in the first quarter as compared with the
prior year, while Management services revenue was up 38 percent due to
the growth of Project and Development Management services. Regional
Operations also had a strong first quarter in 2006 compared with the
prior year, where revenue increased 50 percent in total primarily
driven by Latin America.
Capital Markets, recorded as Transaction Services revenue, continued
its strong performance compared with the prior year, as 2006
first-quarter revenue increased 42 percent over 2005. Revenue in the
Americas Hotels business more than doubled, resulting from several
large transactions closed in the quarter and the impact of the
acquisition of a select service hotel real estate broker and advisory
firm completed in the second quarter of 2005.
Total operating expenses increased 44 percent over the prior year as
the result of the Spaulding & Slye acquisition and higher compensation
costs associated with revenue-generating activities.
-- Europe's revenue for the first quarter of 2006 was $103 million, an
increase of 22 percent in U.S. dollars and 32 percent in local
currencies over the same period in 2005. Transaction Services revenue
was up 34 percent over the prior year, driven by Capital Markets,
Agency Leasing and Advisory services.
Geographic contributions to this revenue growth were primarily from
Germany, France and the United Kingdom. Germany's real estate
investment market continued to improve with an increase in
international capital flowing into the country. Revenue in Germany for
the first quarter of 2006 grew 43 percent in U.S. dollars and 55
percent in local currencies compared with the same period of the prior
year. The French business was up significantly as revenue increased
more than 100 percent in both U.S. dollars and local currencies. The
English business continued its momentum, with revenue up 14 percent in
U.S. dollars and 24 percent in local currencies.
Operating expenses increased by 16 percent in U.S. dollars for the
first quarter year over year and 26 percent in local currencies. The
increase was primarily due to higher incentive compensation resulting
from improved revenue performance.
-- Revenue for the Asia Pacific region was $58 million for the first
quarter of 2006, an increase of 18 percent in U.S. dollars and 22
percent in local currencies over the prior year. The growth in revenue
in U.S. dollars came from both Transaction Services revenue, which
grew 15 percent, and from Management Services revenue, which grew 19
percent due to the expansion of property and facility management
services. The growth markets of China, Japan, Korea and India
experienced healthy increases in revenue in the first quarter of 2006
compared with the prior year. Revenue in total for these markets
increased 38 percent in local currencies, and 33 percent in U.S.
dollars, led by China. The core markets of Hong Kong and Australia
continued their momentum from 2005 with strong performance across all
business lines, with first-quarter 2006 revenue increasing 21 percent
in U.S. dollars and 24 percent in local currencies over the prior
year.
Year-over-year operating expenses for the Asia Pacific region for the
first quarter of 2006 increased 15 percent in U.S. dollars, 19 percent
in local currencies, primarily as a result of the firm's investment in
people and technology infrastructure in the region. Market expansion
with the opening of new offices across the region also contributed to
the increase in operating expenses.
Operating income in the first quarter on a comparable basis improved
by $2.7 million from the prior year, as 2005 included the benefit of a
credit of $1.6 million received from a litigation settlement.
LaSalle Investment Management
-- LaSalle Investment Management's first-quarter revenue in 2006 was $62
million, an increase of 95 percent over the 2005 first quarter. During
the first quarter of 2006, the firm completed the acquisition of
CenterPoint Properties Trust on behalf of a joint venture with a key
client in which LaSalle Investment Management has a minority interest.
The acquisition resulted in both a large one-time fee recorded as
Transaction revenue, as well as on-going Advisory Fees.
Advisory Fees, which provide annuity revenue, were $38 million for the
first quarter of 2006, compared with $28 million in 2005, an increase
of 35 percent over the prior year. The growth in Advisory Fees is
driven by the continued strong growth in assets under management.
For the first quarter of 2006, incentive fees were $13.5 million, an
increase of $11.2 million over the prior year. These fees were earned
on the final disposition of assets, completing the liquidation of two
funds. Incentive fees vary significantly from period to period and are
determined by both the performance of the underlying funds'
investments and the contractual timing of the measurement period with
clients. In the second quarter of 2006, the firm is contractually due
a significant gross incentive fee of approximately $60 million from a
single client, which will contribute a net operating margin, after the
deduction of all related expenses including compensation, of
approximately 40 percent. The fee is larger than usual due to the
eight-year contractual measurement period, as well as outstanding
performance execution by the firm. The actual amount of the fee will
not be finalized until after the end of the second quarter and may
increase or decrease based on required external valuations.
LaSalle Investment Management's assets under management grew to $34
billion at the end of the first quarter of 2006 including the
CenterPoint acquisition. Total investments made during the first
quarter of 2006 on behalf of clients, including the CenterPoint
acquisition, were $4.9 billion.
Summary
The firm experienced strong growth across all segments in the first
quarter, the result of effective execution, favorable market conditions and
performance resulting from the firm's strategic initiatives. These initiatives
include the completion of acquisitions in the Americas and LaSalle Investment
Management, the organizational change in the Americas and strategic investments
made in 2005. As the firm also continues to benefit from its globally diverse
business platform and the continued strength of the real estate markets, it is
well-positioned for the remainder of the year.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL), the only real estate money management and
services firm named to Forbes magazine's Platinum 400, has more than 100 offices
worldwide and operates in more than 430 cities in 50 countries. With 2005
revenue of approximately $1.4 billion, the company provides comprehensive
integrated real estate and investment management expertise on a local, regional
and global level to owner, occupier and investor clients. Jones Lang LaSalle is
an industry leader in property and corporate facility management services, with
a portfolio of 927 million square feet worldwide. In 2005, the firm completed
capital markets sales and acquisitions, debt financings, and equity placements
on assets and portfolios valued at $43 billion. 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 $34 billion
of assets under management. For further information, please visit
http://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, 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 Wednesday, April 26, 2006 at 10:00 a.m. EDT.
To participate in the teleconference, please dial into one of the following
phone numbers five to 10 minutes before the start time:
-- U.S. callers: +1 877 809 9540
-- International callers: +1 706 679 7364
-- Pass code: 8000976
Replay Information Available: (12:00 p.m. EDT) Wednesday, April 26 through
Midnight EDT May 3 at the following numbers:
-- U.S. callers: +1 800 642 1687
-- International callers: +1 706 645 9291
-- Pass code: 8000976
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.videonewswire.com/event.asp?id=33354 and follow
instructions
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
http://www.joneslanglasalle.com.
If you have any questions, call Yvonne Peterson of Jones Lang LaSalle's
Investor Relations department at +1 312 228 2919.
JONES LANG LASALLE INCORPORATED
Consolidated Statements of Earnings
For the Three Months Ended March 31, 2006 and 2005
(in thousands, except share data)
(Unaudited)
Three Months Ended
March 31,
----------------------------
2006 2005
------------ ------------
Revenue $ 337,098 $ 240,176
Operating expenses:
Compensation and benefits 231,246 172,126
Operating, administrative and other 87,663 70,022
Depreciation and amortization 9,976 8,310
Restructuring credits (501) -
Total operating expenses 328,384 250,458
Operating income (loss) 8,714 (10,282)
Interest expense, net of interest income 3,209 330
Equity in loss from unconsolidated ventures (944) (892)
Income (loss) before provision for income taxes 4,561 (11,504)
Provision (benefit) for income taxes 1,181 (2,922)
Net income (loss) before cumulative effect of
accounting change 3,380 (8,582)
Cumulative effect of change in
accounting principle 1,180 -
Net income (loss) $ 4,560 $ (8,582)
EBITDA $ 18,926 $ (2,864)
Basic earnings (loss) before cumulative effect
of change in accounting principle $ 0.10 $ (0.27)
Cumulative effect of change in
accounting principle 0.04 -
Basic income (loss) per common share $ 0.14 $ (0.27)
Basic weighted average shares outstanding 31,511,880 31,268,640
Diluted earnings (loss) before cumulative
effect of change in accounting principle $ 0.10 $ (0.27)
Cumulative effect of change in
accounting principle 0.04 -
Diluted income (loss) per common share $ 0.14 $ (0.27)
Diluted weighted average shares outstanding 33,681,263 31,268,640
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Segment Operating Results
For the Three Months Ended March 31, 2006 and 2005
(in thousands)
(Unaudited)
Three Months Ended
March 31,
----------------------------
2006 2005
------------ ------------
INVESTOR & OCCUPIER SERVICES - AMERICAS
Revenue:
Transaction services $ 48,212 $ 27,099
Management services 62,261 44,983
Equity earnings 149 (1)
Other services 2,542 1,577
Intersegment revenue 165 289
113,329 73,947
Operating expenses:
Compensation, operating and administrative 108,770 75,337
Depreciation and amortization 5,302 3,612
Operating loss $ (743) $ (5,002)
EUROPE
Revenue:
Transaction services $ 79,375 $ 59,017
Management services 21,221 23,464
Equity earnings (loss) (220) -
Other services 2,969 2,573
103,345 85,054
Operating expenses:
Compensation, operating and administrative 105,719 90,472
Depreciation and amortization 2,508 2,551
Operating loss $ (4,882) $ (7,969)
ASIA PACIFIC
Revenue:
Transaction services $ 28,648 $ 24,900
Management services 27,840 23,443
Equity earnings 217 -
Other services 1,197 592
57,902 48,935
Operating expenses:
Compensation, operating and administrative 56,773 48,978
Depreciation and amortization 1,822 1,805
Operating loss $ (693) $ (1,848)
LASALLE INVESTMENT MANAGEMENT
Revenue:
Transaction and other services $ 11,020 $ 1,902
Advisory fees 38,269 28,250
Incentive fees 13,544 2,376
Equity earnings (loss) (1,090) (891)
61,743 31,637
Operating expenses:
Compensation, operating and administrative 47,812 27,649
Depreciation and amortization 344 343
Operating Income $ 13,587 $ 3,645
Total segment revenue $ 336,319 $ 239,573
Intersegment revenue eliminations (165) (289)
Reclassification of equity earnings (loss) 944 892
Total revenue $ 337,098 $ 240,176
Total segment operating expenses $ 329,050 $ 250,747
Intersegment operating expense eliminations (165) (289)
Total operating expenses before
restructuring charges (credits) $ 328,885 $ 250,458
Operating income (loss) before
restructuring charges (credits) $ 8,213 $ (10,282)
Please reference attached financial statement notes. Implementation
Services has been renamed Transaction Services.
JONES LANG LASALLE INCORPORATED
Consolidated Balance Sheets
March 31, 2006, December 31, 2005 and March 31, 2005
(in thousands)
March 31, December 31, March 31,
2006 2005 2005
------------ ------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 30,503 $ 28,658 $ 27,941
Trade receivables, net of allowances 370,435 415,087 276,255
Notes and other receivables 20,152 15,231 13,006
Prepaid expenses 21,141 22,442 21,452
Deferred tax assets 23,679 35,816 16,359
Other assets 12,240 13,864 19,933
Total current assets 478,150 531,098 374,946
Property and equipment,
at cost, less accumulated depreciation 83,834 82,186 71,758
Goodwill, with indefinite
useful lives, at cost, less
accumulated amortization 481,699 335,731 341,061
Identified intangibles, with
definite useful lives,
at cost, less accumulated amortization 41,972 4,391 7,054
Investments in and loans to
real estate ventures 86,545 88,710 74,816
Long-term receivables, net 22,304 20,931 12,936
Deferred tax assets 70,130 59,262 53,236
Other assets, net 28,978 22,460 22,885
$ 1,293,612 $ 1,144,769 $ 958,692
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 123,491 $ 155,741 $ 111,190
Accrued compensation 162,264 300,847 109,140
Short-term borrowings 14,627 18,011 17,405
Deferred tax liabilities 3,296 400 2,787
Deferred income 29,479 20,823 22,508
Other liabilities 19,507 26,813 25,668
Total current liabilities 352,664 522,635 288,698
Long-term liabilities:
Credit facilities 267,532 26,697 131,302
Deferred tax liabilities 3,099 3,079 53
Deferred compensation 25,171 15,988 14,227
Minimum pension liability 17,024 16,753 2,989
Deferred business acquisition obligations 31,518 - -
Other 34,474 23,614 23,872
Total liabilities 731,482 608,766 461,141
Stockholders' equity:
Common stock, $.01 par value per share,
100,000,000 shares authorized; 35,756,923,
35,199,744 and 33,993,258 shares issued
and outstanding as of March 31, 2006 and
December 31, 2005 and
March 31, 2005, respectively 358 352 340
Additional paid-in capital 631,921 606,001 564,311
Retained earnings 104,700 100,141 (3,686)
Stock held by subsidiary (141,343) (132,791) (74,147)
Stock held in trust (996) (808) (530)
Accumulated other
comprehensive income (loss) (32,510) (36,892) 11,263
Total stockholders' equity 562,130 536,003 497,551
$ 1,293,612 $ 1,144,769 $ 958,692
Please reference attached financial statement notes.
JONES LANG LASALLE INCORPORATED
Summarized Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2006 and 2005
(in thousands)
(Unaudited)
Three Months Ended
March 31,
----------------------------
2006 2005
------------ ------------
Cash provided by earnings $ 24,719 $ 7,933
Cash used in working capital (111,705) (94,768)
Cash used in operating activities (86,986) (86,835)
Cash used in investing activities (159,341) (7,815)
Cash provided by financing activities 248,172 92,448
Net increase(decrease) in cash and
cash equivalents 1,845 (2,202)
Cash and cash equivalents, beginning of period 28,658 30,143
Cash and cash equivalents, end of period $ 30,503 $ 27,941
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 to EBITDA (in thousands):
Three Months Ended
March 31,
------------ ------------
2006 2005
------------ ------------
Net income (loss) $ 4,560 $ (8,582)
Add:
Interest expense, net of interest income 3,209 330
Depreciation and amortization 9,976 8,310
Provision for income taxes 1,181 -
Deduct:
Benefit from income taxes - (2,922)
EBITDA $ 18,926 $ (2,864)
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):
Three Months Ended
March 31,
---------------------------
2006 2005
------------ ------------
Net cash used in operating activities $ (86,986) $ (86,835)
Add:
Interest expense, net of interest income 3,209 330
Change in working capital and
non-cash expenses 101,522 86,563
Provision (benefit) for income taxes 1,181 (2,922)
EBITDA $ 18,926 $ (2,864)
2. Net debt represents the aggregate of 'Short-term borrowings' and
'Credit facilities,' less 'Cash and cash equivalents.'
3. For purposes of segment operating results, the allocation of
restructuring charges (credits) to our segments has been determined to
not be meaningful to investors. Additionally, the performance of
segment results has been evaluated without these charges (credits)
being allocated.
4. 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 quarter ended
March 31, 2006, to be filed with the Securities and Exchange
Commission shortly.
5. Beginning in 2006, we have renamed 'Implementation Services' to
'Transaction Services.'
SOURCE Jones Lang LaSalle Incorporated
-0- 04/25/2006
/CONTACT: Lauralee E. Martin, Chief Operating and Financial Officer of
Jones Lang LaSalle Incorporated, +1-312-228-2073/
/First Call Analyst: /
/FCMN Contact: joe.romenesko@am.joneslanglasalle.com /
/Web site: http://www.joneslanglasalle.com /