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Jones Lang LaSalle reports strong revenue growth for second quarter
Revenue rises 24 percent to $845 million; adjusted EPS of $1.12 compared with $0.83 in Q2 2010
 
CHICAGO, July 26, 2011 – Jones Lang LaSalle Incorporated (NYSE: JLL) today reported net income of $44 million on a U.S. GAAP basis, or $0.99 per share, for the quarter ended June 30, 2011, compared with net income of $32 million on a U.S. GAAP basis, or $0.72 per share, for the quarter ended June 30, 2010. Adjusting for Restructuring and acquisition charges and certain other impacts of purchase accounting, net income would have been $50 million or $1.12 per share for the second quarter of 2011, compared with adjusted net income of $37 million or $0.83 per share in 2010. The firm’s adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) were $94 million for the second quarter of 2011 compared with adjusted EBITDA of $78 million for the same period in 2010. Revenue for the second quarter of 2011 was $845 million, an increase of 24 percent in U.S. dollars, 17 percent in local currency, compared with the second quarter of 2010. 
 
On a year-to-date basis net income was $45 million, or $1.02 per share, compared with net income of $32 million, or $0.73 per share, for the first six months of 2010.  Adjusting for Restructuring and acquisition charges and certain other impacts of purchase accounting, net income would have been $51 million or $1.15 per share for the first half of 2011, compared with adjusted net income of $43 million for the same period of 2010. Adjusted EBITDA on a year-to-date basis was $122 million compared with adjusted EBITDA of $115 million in 2010.  Revenue for the first six months of 2011 was $1.5 billion, compared with $1.3 billion in 2010, an increase of 22 percent, 17 percent in local currency.
 
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Second-Quarter 2011 Highlights:
  • Solid transactional revenue growth continues

  • Outstanding performance in Asia Pacific, led by Greater China, India and Australia

  • Successful completion of King Sturge acquisition increases strength and depth in EMEA

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Second-quarter results included $6 million of Restructuring and acquisition charges and $2 million of intangible amortization related to the King Sturge acquisition completed in EMEA. Restructuring and acquisition charges are excluded from segment operating results although they are included for consolidated reporting.  Intangible amortization is included in Depreciation and amortization in the firm’s consolidated results as well as in EMEA’s segment results.
 
“We are pleased to report another quarter of solid revenue growth," said Colin Dyer, President and Chief Executive Officer of Jones Lang LaSalle.  "While the cyclical recovery in global real estate markets continues, business confidence is being tested internationally by concerns over government finances.  We expect to continue to grow our market share worldwide and remain positive on our prospects for the seasonally stronger second half," Dyer added.
 
 
Consolidated Revenue
 
Operating expenses excluding Restructuring and acquisition charges were $774 million for the second quarter, an increase of 19 percent in local currency, compared with operating expenses of $619 million for the same period in 2010. Similar to the first quarter of 2011, the year-over-year increase was principally driven by variable costs to support revenue growth and build the firm’s pipeline for the second half of the year. The firm maintained its 64.4 percent total compensation to revenue ratio in the second quarter.
 
Year-to-date operating expenses excluding Restructuring and acquisition charges were $1.4 billion, an increase of 18 percent in local currency compared with the first half of 2010.
 
Balance Sheet
 
The firm’s net debt position, which includes deferred acquisition obligations, increased by $184 million compared with June 30, 2010, to $¬832 million, primarily due to funding the King Sturge acquisition in EMEA during the second quarter of 2011.  Outstanding debt on the firm’s long-term credit facility was $444 million at quarter end.

During the second quarter, the firm announced that it had amended its $1.1 billion long-term credit facility.  Among other items, the amendment reset pricing with initial pricing of LIBOR + 1.625 percent, extended the maturity to June 2016 and provided for add-backs to EBITDA for acquisition-related expenses.  The firm anticipates making the second deferred payment related to the Staubach acquisition of $150 million in the third quarter of 2011.

Business Segment Second-Quarter and Year-to-Date Performance Highlights

Americas Real Estate Services
 
Second-quarter revenue in the Americas region was $348 million, an increase of $53 million, or 17 percent in local currency, over the prior year, led by Leasing and by Capital Markets & Hotels, which more than doubled to $32 million. Year-to-date revenue in the region was $636 million in 2011 compared with $524 million in 2010, an increase of 21 percent.
 
Americas Highlights
 
Operating expenses were $316 million in the second quarter, 20 percent higher than a year ago, 19 percent in local currency.  Year-to-date operating expenses were $595 million, compared with $482 million for the same period in 2010, an increase of 23 percent in U.S. dollars and local currency. Included in operating expenses were costs related to new business generation, such as travel and marketing, which will contribute to seasonal revenue growth in the second half of the year, as well as higher costs for service level requirements of several recent business wins. Operating income margin in the region decreased by 1.7 percent year over year in the second quarter of 2011.

EBITDA for the second quarter was $42 million, compared with $41 million for the same period last year. Year-to-date EBITDA for 2011 was $61 million, compared with $59 million for the first six months of 2010.
 
EMEA Real Estate Services
 
EMEA’s revenue in the second quarter of 2011 was $218 million compared with $171 million in 2010, an increase of 28 percent, 15 percent in local currency. The most significant component of the revenue increase was in Project & Development Services (“PDS”), which includes the region’s fit-out business where gross contracts include subcontractor costs. PDS revenue increased 49 percent in local currency compared with the second quarter of 2010.  Year-to-date revenue in the region was $386 million in 2011, compared with $322 million in 2010, an increase of 20 percent, 13 percent in local currency.
 
EMEA Highlighights
 
Operating expenses, including $2 million of King Sturge intangibles amortization, were $212 million in the second quarter, an increase of 28 percent from the prior year, 19 percent in local currency.  Subcontractor costs related to the PDS business line increased by more than $10 million compared with the prior year. Year-to-date operating expenses were $393 million, an increase of 21 percent, 15 percent in local currency.

On May 31, 2011, the firm completed the merger with international property consultancy King Sturge. The merger greatly enhances the firm’s strength and depth of service capabilities for clients across the EMEA region.

EBITDA for the second quarter was $12 million, compared with $10 million for the same period last year. Year-to-date EBITDA for 2011 was $4 million, compared with $5 million for the first six months of 2010.
 
Asia Pacific Real Estate Services
 
Revenue in Asia Pacific was $215 million for the second quarter of 2011, compared with $155 million for the same period in 2010, an increase of 39 percent, 26 percent in local currency.  The year-over-year increase was largely driven by growth in Greater China, India and Australia. Year-to-date revenue in the region was $380 million in 2011, an increase of 31 percent compared with the same period in 2010, 21 percent in local currency.
 
Asia Pacific Highlights
 
Operating expenses for the region were $193 million for the quarter, an increase of 34 percent, 22 percent in local currency on a year-over-year basis.  The increase was principally due to staff and vendor costs that related to a higher volume of PDS work as well as other corporate client activities.  Operating expenses were $353 million for the first half of 2011, compared with $274 million in 2010, an increase of 29 percent, 19 percent in local currency.

The region’s EBITDA for the second quarter of 2011 was $25 million, compared with $14 million for the second quarter of 2010. Year-to-date EBITDA for 2011 was $33 million compared with $23 million for the first six months of 2010.
 
LaSalle Investment Management
 
LaSalle Investment Management’s second-quarter Advisory fees were $65 million, 16 percent higher than a year ago, 8 percent in local currency, driven primarily by a higher level of assets under management in the public securities business. Year-to-date Advisory fees were $126 million, compared with $114 million through the first six months of 2010, an increase of 10 percent, 5 percent in local currency. The business recognized $1 million of Transaction fees from asset purchases and $2 million of equity earnings during the quarter.
 
LIM Highlights
 
During the quarter, LaSalle Investment Management raised $2.3 billion of net equity, primarily in the public securities business.  Assets under management were $45.3 billion, up from $43.0 billion in the first quarter of 2011.  EBITDA was $16 million, compared with $10 million in the second quarter of 2010. Year-to-date EBITDA was $26 million for 2011, compared with $19 million for the first six months of 2010.
 
Summary

The firm generated solid revenue and profit growth in the second quarter.  The successful completion of the King Sturge acquisition during the quarter demonstrates the firm’s focus on enhancing its service capabilities in key markets.  Despite caution in a number of geographies due to slower economic growth and concern over government finances, the cyclical recovery in real estate continues and the firm expects to grow market positions and expand share during the remainder of 2011.

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 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from 1,000 locations worldwide, including more than 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 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 $45.3 billion of assets under management.  For further information, please visit the company’s website, www.joneslanglasalle.com.

Statements in this press release regarding, among other things, future financial results and performance, achievements, and 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, 2010, and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, 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.
Contacts:

Lauralee Martin
Chief Operating and Financial Officer
+1 312 228 2073
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