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News Release

Chicago

Jones Lang LaSalle Reports First-Quarter 2010 Net Income

Adjusted EPS of $0.14 excluding Restructuring and Certain Non-Cash Items


 
CHICAGO, April 27, 2010 – Jones Lang LaSalle Incorporated (NYSE: JLL), the leading integrated financial and professional services firm specializing in real estate, today reported net income of $0.2 million on a U.S. GAAP basis, or $0.01 per share, for the quarter ended March 31, 2010, compared with a net loss of $61 million on a U.S. GAAP basis, or $1.78 per share, for the quarter ended March 31, 2009.   Adjusting for Restructuring and certain non-cash co-investment charges in the first quarter of 2010, net income would have been $6 million, or $0.14 per share, compared with an adjusted net loss of $22 million, or $0.65 per share in 2009.  Net income in the first quarter benefited from continued momentum from the fourth quarter of 2009 and the transition to a more variable compensation structure in a number of the firm’s transactional businesses.  The firm’s adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) was $37 million for the first quarter of 2010 compared with adjusted EBITDA of $11 million for the same period in 2009.  Revenue for the first quarter of 2010 was $581 million, an increase of 18 percent in U.S. dollars, 12 percent in local currency, compared with the first quarter of 2009.
_________________________________________________________________________________
 
First-Quarter 2010 Highlights:
  • Revenue up 12 percent in local currency driven by increased activity across all operating segments

  • Transactional revenue recovering

  • Continued solid growth in corporate outsourcing business

  • Significant new client mandates in LaSalle Investment Management

_________________________________________________________________________________

First-quarter results included $1 million of Restructuring charges as well as $6 million of non-cash co-investment impairment charges.  Restructuring charges are excluded from segment operating results although they are included for consolidated reporting.  Non-cash co-investment impairments are included in Equity losses at the consolidated and segment reporting levels.
 
“We are encouraged by our solid first-quarter results, which were broadly based across geographies and service lines,” said Colin Dyer, Chief Executive Officer of Jones Lang LaSalle. “Business prospects for the year are improving and we are moving forward with confidence, but with a close watch on market dynamics.”
 

 Consolidated Business Line Revenue Comparison (in millions)

 

 

Three Months Ended March  31,

 

Percentage Change

 

2010

 

2009

% in USD

% in LC

 

 

Investor and Occupier Services

 

 

 

 

 

 

Leasing

$    170.9      

 

$    136.9      

25%

21%

 

Capital Markets and Hotels

52.3

 

28.3

85%

68%

 

Property & Facility Management

160.5

 

134.3

20%

13%

 

Project & Development Services

68.2

 

71.1

(4%)

(8%)

 

Advisory, Consulting and Other

63.4

 

57.4

10%

4%

 

Total IOS revenue

$    515.3

 

$    428.0

20%

15%

 

 

 

 

 

 

 

 

LaSalle Investment Management

 

 

 

 

 

 

Advisory fees

$      58.5

 

$      59.8

(2%)

(7%)

 

Transaction and Incentive fees

6.9

 

6.4

8%

0%

 

Total LaSalle Investment Management

$      65.4

 

$      66.2

(1%)

(7%)

 

 

 

 

 

 

 

 

Total firm revenue

$    580.7

 

$    494.2

18%

12%

 

 
 
Operating expenses excluding Restructuring charges were $562 million for the first quarter, compared with $505 million in 2009.  On a local currency basis, operating expenses excluding restructuring charges increased only 6 percent despite increased incentive compensation related to higher transaction activity and incremental costs related to new corporate outsourcing mandates compared with a year ago. 
 
Balance Sheet and Dividend
 
The firm’s outstanding debt on its long-term credit facilities was $335 million at March 31, 2010, compared with $496 million at March 31, 2009.  The credit facilities balance was significantly lower at March 31, 2010, despite paying nearly all 2009 incentive compensation by March 31, 2010, compared with 2009 when the majority of incentive compensation was paid in the second quarter.
 
The firm announced that its Board of Directors declared a semi-annual dividend of $0.10 per share, consistent with dividend payments made in December 2009.  The dividend payment will be made on June 15, 2010, to holders of record at the close of business on May 14, 2010. 
 
Business Segment First-Quarter Performance Highlights
Investor and Occupier Services
  • First-quarter revenue in the Americas region was $228 million, an increase of 14 percent over the prior year, reflecting an improved transactional environment offset by continued lower levels of client capital expenditures that negatively impacted the Project & Development Services business. 

 

Three Months Ended March  31,

Percentage Change

 

Americas IOS

2010

 

2009

% in USD

 

 

 

 

 

 

Leasing

$      106.8      

 

$      89.7      

19%

Capital Markets and Hotels

9.5

 

7.6

25%

Property & Facility Management

58.2

 

43.5

34%

Project & Development Services

31.5

 

38.6

(18%)

Advisory, Consulting and Other

22.2

 

21.6

3%

Operating revenue

$    228.2

 

$    201.0

14%

 

 

 

 

 

Equity earnings (losses)

0.2

 

(1.4)

n/m

Total segment revenue

$    228.4

 

$    199.6

14%

n/m – not meaningful

Operating expenses were $219 million in the first quarter, 7 percent higher than a year ago, driven by higher incentive compensation expense related to increased transaction revenue as well as the cost of serving more outsourcing clients.

The region’s EBITDA for the first quarter of 2010 was $18 million, compared with $11 million for the same period last year.

  • EMEA’s first-quarter 2010 revenue was $151 million compared with $121 million in 2009, an increase of 25 percent, 17 percent in local currency.   Revenue in England and Germany increased over the prior year by 47 percent and 14 percent, respectively, and Russia’s performance stabilized as revenue increased 59 percent in the first quarter of 2010 from very low levels in 2009.

 

Three Months Ended March  31,

 

Percentage Change

EMEA IOS

2010

 

2009

% in USD

% in LC

 

 

 

 

 

 

 

 

 

Leasing

$      38.8      

 

$      29.6      

31%

23%

 

Capital Markets and Hotels

26.2

 

15.7

67%

55%

 

Property & Facility Management

34.5

 

29.9

15%

7%

 

Project & Development Services

26.0

 

21.5

21%

13%

 

Advisory, Consulting and Other

25.9

 

24.5

6%

0%

 

Operating revenue

$    151.4

 

$    121.2

25%

17%

 

 

 

 

 

 

 

 

Equity losses

-

 

(0.4)

n/m

n/m

 

Total segment revenue

$    151.4

 

$    120.8

25%

17%

 

n/m – not meaningful

Operating expenses were $161 million in the first quarter, an increase of 13 percent from the prior year, 6 percent in local currency, primarily due to increased variable compensation expense related to increased transactional activity levels across the region. 

The region’s EBITDA for the first quarter of 2010 was a loss of $5 million, compared with a $16 million loss for the same period last year.

  • Revenue in the Asia Pacific region was $136 million for the first quarter of 2010, compared with $105 million for the same period in 2009, an increase of 29 percent, 15 percent in local currency.  The year-over-year increase was driven by transactional revenue improvement compared with a year ago.

 

Three Months Ended March  31,

 

Percentage Change

Asia Pacific IOS

2010

 

2009

% in USD

% in LC

 

 

 

 

 

 

 

 

 

Leasing

$      25.3      

 

$      17.6      

44%

31%

 

Capital Markets and Hotels

16.6

 

5.0

n/m

n/m

 

Property & Facility Management

67.8

 

60.9

11%

0%

 

Project & Development Services

10.7

 

11.0

(3%)

(11%)

 

Advisory, Consulting and Other

15.3

 

11.3

35%

21%

 

Operating revenue

$    135.7

 

$    105.8

28%

14%

 

 

 

 

 

 

 

 

Equity losses

-

 

(1.0)

n/m

n/m

 

Total segment revenue

$    135.7

 

$    104.8

29%

15%

 

n/m – not meaningful

Operating expenses for the region were $130 million for the quarter, an increase of only 7 percent year over year in local currency, despite incremental costs related to serving more corporate outsourcing clients and higher variable compensation associated with increased transactional revenue.

The region’s EBITDA for the first quarter of 2010 was $9 million, compared with a $1 million loss for the same period last year.

LaSalle Investment Management

LaSalle Investment Management’s first-quarter Advisory fees were $59 million, comparable with $60 million in the first quarter of 2009, though down 7 percent in local currency. The business recognized $6 million of Incentive fees in the first quarter of 2010 after reaching specified performance objectives against established benchmarks.  Asset purchases, a key driver of Transaction fees, were limited by the low levels of attractive assets available.

 

LaSalle

Three Months Ended March  31,

 

Percentage Change

Investment Management

2010

 

2009

% in USD

% in LC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory fees

$      58.5

 

$      59.8

(2%)

(7%)

 

Transaction and Incentive fees

6.9

 

6.4

8%

0%

 

Operating revenue

$      65.4

 

$      66.2

(1%)

(7%)

 

 

 

 

 

 

 

 

Equity losses

(6.3)

 

(29.2)

78%

78%

 

Total revenue

$      59.1

 

$      37.0

60%

50%

 

During the quarter, LaSalle Investment Management secured new separate account mandates and portfolio takeovers of over $3 billion and raised nearly $400 million of net equity for its funds and public securities business.  The significant number of new commitments and portfolio takeovers reflects LaSalle’s strong performance track record and reputation in the market.  Assets under management were $39.9 billion, flat compared with December 31, 2009.

Summary

The firm’s solid start to 2010 resulted from improved revenue from transactional businesses, the growing annuity revenue base and ongoing expense management.  The transition to a more variable compensation structure also contributed to improved profitability in the typically loss-making first quarter.  The firm is encouraged by a solid first-quarter performance and will continue to focus on providing superior service to clients to grow market share.


 
Statements in this press release regarding, among other things, future financial results and performance, achievements, plans and objectives, dividend payments and share repurchases 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, 2009, and in other reports filed with the Securities and Exchange Commission.  There can be no assurance that future dividends will be declared since the actual declaration of future dividends, and the establishment of record and payment dates, remains subject to final determination by the Company’s Board of Directors.  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.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2009 global revenue of $2.5 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.6 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with approximately $40 billion of assets under management. For further information, please visit our Web site, www.joneslanglasalle.com.