CHICAGO and LONDON, July 30 /PRNewswire/ -- Jones Lang LaSalle (NYSE: JLL) today announced an adjusted proforma net loss of $4.7 million, or $0.15 per share, for its second quarter ended June 30, 1999, on adjusted proforma revenues of $179.1 million. When combined with the adjusted proforma net loss for the first quarter of $13.3 million, the Company is reporting an adjusted proforma net loss for the six months of $18.0 million, or $0.59 per share. These adjusted proforma results include the operations of the Jones Lang Wootton companies from the beginning of the year through the closing date of the merger, and exclude the non-recurring transition and integration costs and non-cash compensation expenses associated with the Jones Lang Wootton merger and the acquisition of COMPASS Management and Leasing and the U.S. retail businesses of Lend Lease Corporation Limited.

The Company reported an actual net loss for the quarter of $37.7 million, or $1.62 per diluted share, compared with earnings of $7.3 million, or $0.45 per diluted share from the prior year period. The actual second quarter 1999 loss includes $21.2 million of non-cash compensation expenses associated with the issuance of shares pursuant to the recent merger between LaSalle Partners and the Jones Lang Wootton companies, and $14.3 million of non-recurring transition and integration costs associated with the merger and the October 1998 acquisition of COMPASS.

Management had always assumed that results for the first six months of 1999 would fall below the comparable year-earlier period as a result of exceptional performance fees generated in the first half of 1998. However, the Company reported that its results for the first half of 1999 were $0.35 per share below management's expectation as a result of factors discussed below as affecting the company's expectations for full-year performance.

Said Stuart L. Scott, Chairman and Chief Executive Officer of Jones Lang LaSalle: "Since our July 8 earnings warning, we have completed the analysis of our weaker than expected performance. It is clear to us that although most of our businesses around the world are performing well, our expectations for some of our U.S. businesses (leasing and management, facility, retail and development services) were too optimistic, particularly given the inevitable distractions of our two major mergers since October 1998. As a result of these distractions, we did not achieve the new business activity levels we anticipated, nor did we capture the synergies and cost efficiencies of the COMPASS acquisition and the rollout of our J.D. Edwards information technology system as quickly as we had expected. "

He continued, "While disappointing, the net loss should not detract from the significant progress we have made in establishing a tremendous platform for growth. On the strength of our combined organization, we have succeeded in expanding several significant client relationships while securing a number of global strategic alliance relationships and increasing our business pipeline. For the full year, we expect adjusted proforma earnings of at least $1.00 per share with some upside possible. For next year, the combination of cost synergies and a record business pipeline in the Americas gives us confidence that we can expect major gains in both revenues and earnings."

Mr. Scott outlined two initiatives that are already underway to improve performance, including:

• To achieve the estimated $10 million in cost synergies from streamlining North American operations, the Company has given direct accountability to two of its key senior executives: Peyton H. Owen, Jr., who recently was named chief operating officer of the Americas, and William T. Krouch, who recently was named chief operating officer of the Leasing and Management Group.
• To strengthen management reporting capabilities and identify areas for process efficiencies and cost containment, Vivian I. Mumaw, currently senior vice president and global controller, will be taking the role of chief financial officer of the Americas, and Jeremy Snoad, former chief financial officer of the German operation, has been appointed vice president of global management assurance. Mr. Snoad will be assisted by PricewaterhouseCoopers.

Chris Peacock, President and Chief Operating Officer, said: "The entire Jones Lang LaSalle senior management team is committed to maximizing our platform for growth and profitability, and to restoring credibility with our shareholders, including the Jones Lang LaSalle employees who own nearly 65 percent of the outstanding shares. The fundamentals of our business are sound, and the majority of our operations are performing well and are in line with our expectations. We definitely have an unparalleled ability to provide the highest level of service to our clients around the world."

    Highlights of Performance By Business Segment

Owner & Occupier Services
Jones Lang LaSalle's Owner and Occupier Services segment, which is managed on a regional basis, includes property management, facility services, leasing, retail, investment banking and other transaction services. Revenues for the second quarter in the Americas were $54.5 million, up from adjusted proforma revenues of $47.8 million in the first quarter. As noted, this segment's performance was impacted principally by management's distraction following two major mergers since October 1998. The operating loss of $10.9 million in the second quarter compared with an adjusted proforma operating loss of $21.8 million in the first quarter.

In Europe, Owner and Occupier Services generated $68 million in revenue, up from adjusted proforma revenues of $65.0 million in the first quarter. The Company's strong performance in this region, which was better than expected, was offset by the effects of a strong U.S. dollar versus European currencies. As a result, operating profits declined modestly to $5.5 million in the second quarter from an adjusted proforma operating profit of $5.8 million in the first quarter.

Operations in Australasia are benefiting from several positive trends, including outsourcing of property management. Revenues for this segment were $17.6 million in the second quarter, up from adjusted proforma revenues of $10.9 million in the first quarter. Operating income also improved, with profits of $2.7 million compared with an adjusted proforma operating loss of $3.7 million in the first three months.

In Asia, Owner and Occupier Services secured a number of significant contracts in the period. Revenues were $15.8 million, up from adjusted proforma revenues of $13.8 million in the first quarter. To take advantage of future growth opportunities in Asia, the Company created a region-wide Capital Markets Group, expanding its debt raising and capital placement capabilities. The segment's operating loss in the period was essentially unchanged at approximately of $1.0 million in both quarters.

Hotel Services
For global Hotel Services, revenues were $3.2 million in the quarter, up from adjusted proforma revenues of $2.3 million in the first quarter. The segment's performance was affected by the strength of the U.S. dollar versus the Euro, continued subdued activity in Asia and a delay in the closing of a significant hotel transaction in the United States. As a result, the segment reported an operating loss of $488,000 as compared with an adjusted proforma operating loss of $339,000 in the first three months.

Investment Management
LaSalle Investment Management revenues were $20.0 million in the quarter, basically even with adjusted proforma revenues of $20.1 million the prior quarter. This business generated operating income of $1.3 million in the second quarter, versus adjusted proforma operating income of $2.3 million in the first quarter, reflecting increased expenses due to underwriting and transaction costs related to new investments.

Jones Lang LaSalle is the world's leading real estate services and investment management firm, operating across 98 key markets in 34 countries on five continents. The company provides comprehensive and wide-ranging integrated expertise on a local, regional and global level to owners, occupiers and investors. It operates through six business segments: Hotel Services, Investment Management and four geographic regions of Owner and Occupier Services. The company's investment management business, LaSalle Investment Management, is one of the world's largest and most diverse real estate investment management firms, with $20.8 billion (12.8 billion pounds) of assets under management. Jones Lang LaSalle is also the industry leader in real estate management services with a portfolio of 680 million square feet of property 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 LaSalle Partners' Annual Report on Form 10-K for the year ended December 31, 1998, under "Risk Factors," "The Transactions," "The Purchase Agreements," "JLW Management's Discussion and Analysis of Financial Condition and Results of Operations of the JLW Companies," and elsewhere in LaSalle Partners' Proxy Statement dated February 4, 1999, under "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 Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, 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.

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