200
East Randolph Drive, Chicago, IL
|
60601
|
|||
(Address
of principal executive offices)
|
(Zip
Code)
|
Part
I
|
Financial
Information
|
||
Item
1.
|
3
|
||
3
|
|||
4
|
|||
5
|
|
||
|
|||
6
|
|||
|
|||
7
|
|||
|
|||
Item
2.
|
19
|
||
|
|||
Item
3.
|
34
|
||
|
|||
Item
4.
|
35
|
||
|
|||
Part
II
|
Other
Information
|
|
|
|
|||
Item
1.
|
36
|
||
|
|||
Item
2.
|
36
|
||
|
|||
Item
5.
|
37
|
||
|
|||
Item
6.
|
40
|
Financial
Information
|
Financial
Statements
|
September
30, 2005
|
December
31,
|
||||||
Assets
|
(unaudited)
|
2004
|
|||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
26,029
|
30,143
|
||||
Trade
receivables, net of allowances of $6,579 and $6,660 in 2005 and
2004,
respectively
|
283,763
|
328,876
|
|||||
Notes
receivable
|
3,039
|
2,911
|
|||||
Other
receivables
|
12,507
|
11,432
|
|||||
Prepaid
expenses
|
23,578
|
22,279
|
|||||
Deferred
tax assets
|
27,376
|
28,427
|
|||||
Other
assets
|
9,793
|
12,189
|
|||||
Total
current assets
|
386,085
|
436,257
|
|||||
|
|||||||
Property
and equipment, at cost, less accumulated depreciation of $163,108
and
$163,667 in 2005 and 2004, respectively
|
72,988
|
75,531
|
|||||
Goodwill,
with indefinite useful lives, at cost, less accumulated amortization
of
$37,667
and
$38,390 in 2005 and 2004, respectively
|
338,570
|
343,314
|
|||||
Identified
intangibles, with finite useful lives, at cost, less accumulated
amortization of $44,383 and $41,242 in 2005 and 2004,
respectively
|
5,840
|
8,350
|
|||||
Investments
in and loans to real estate ventures
|
83,817
|
73,570
|
|||||
Long-term
receivables, net
|
19,206
|
16,179
|
|||||
Prepaid
pension asset
|
1,855
|
2,253
|
|||||
Deferred
tax assets
|
40,317
|
43,202
|
|||||
Debt
issuance costs, net
|
1,161
|
1,704
|
|||||
Other
assets, net
|
19,013
|
12,017
|
|||||
|
$
|
968,852
|
1,012,377
|
||||
|
|||||||
Liabilities
and Stockholders’ Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued liabilities
|
$
|
99,873
|
130,489
|
||||
Accrued
compensation
|
174,648
|
244,659
|
|||||
Short-term
borrowings
|
16,469
|
18,326
|
|||||
Deferred
tax liabilities
|
819
|
262
|
|||||
Deferred
income
|
24,137
|
16,106
|
|||||
Other
liabilities
|
22,064
|
17,221
|
|||||
Total
current liabilities
|
338,010
|
427,063
|
|||||
|
|||||||
Long-term
liabilities:
|
|||||||
Credit
facilities
|
80,213
|
40,585
|
|||||
Deferred
tax liabilities
|
348
|
671
|
|||||
Deferred
compensation
|
15,560
|
8,948
|
|||||
Minimum
pension liability
|
1,703
|
3,040
|
|||||
Other
|
30,371
|
24,090
|
|||||
Total
liabilities
|
466,205
|
504,397
|
|||||
|
|||||||
Commitments
and contingencies (Note 7)
|
|||||||
|
|||||||
Stockholders’
equity:
|
|||||||
Common
stock, $.01 par value per share, 100,000,000 shares authorized;
35,012,299
and 33,243,527 shares issued and outstanding as of September 30,
2005 and
December 31, 2004, respectively
|
350
|
332
|
|||||
Additional
paid-in capital
|
613,479
|
575,862
|
|||||
Deferred
stock compensation
|
(29,576
|
)
|
(34,064
|
)
|
|||
Retained
earnings
|
32,423
|
4,896
|
|||||
Stock
held by subsidiary
|
(101,924
|
)
|
(58,898
|
)
|
|||
Stock
held in trust
|
(808
|
)
|
(530
|
)
|
|||
Accumulated
other comprehensive (loss) income
|
(11,297
|
)
|
20,382
|
||||
Total
stockholders’ equity
|
502,647
|
507,980
|
|||||
|
$
|
968,852
|
1,012,377
|
Three
Months Ended September 30,
2005
|
Three
Months Ended September 30,
2004
|
Nine
Months Ended September 30,
2005
|
Nine
Months Ended September
30, 2004
|
||||||||||
Revenue:
|
|||||||||||||
Fee
based services
|
$
|
320,607
|
263,949
|
874,554
|
740,545
|
||||||||
Other
income
|
5,777
|
5,968
|
17,094
|
14,031
|
|||||||||
Total
revenue
|
326,384
|
269,917
|
891,648
|
754,576
|
|||||||||
Operating
expenses:
|
|||||||||||||
Compensation
and benefits
|
211,035
|
175,018
|
592,800
|
505,544
|
|||||||||
Operating,
administrative and other
|
79,702
|
62,782
|
227,184
|
193,466
|
|||||||||
Depreciation
and amortization
|
8,322
|
8,435
|
24,967
|
24,678
|
|||||||||
Restructuring
charges
|
721
|
2,442
|
471
|
1,083
|
|||||||||
Total
operating expenses
|
299,780
|
248,677
|
845,422
|
724,771
|
|||||||||
Operating
income
|
26,604
|
21,240
|
46,226
|
29,805
|
|||||||||
Interest
expense, net of interest income
|
1,333
|
1,016
|
3,019
|
8,472
|
|||||||||
Loss
on extinguishment of Senior Notes
|
—
|
—
|
—
|
11,561
|
|||||||||
Equity
in earnings from unconsolidated ventures
|
2,366
|
1,034
|
6,104
|
10,071
|
|||||||||
Income
before provision for income taxes
|
27,637
|
21,258
|
49,311
|
19,843
|
|||||||||
Net
provision for income taxes
|
7,020
|
5,953
|
12,525
|
5,557
|
|||||||||
Net
income
|
$
|
20,617
|
15,305
|
36,786
|
14,286
|
||||||||
Net
income available to common shareholders (Note 1)
|
$
|
20,231
|
15,305
|
36,400
|
14,286
|
||||||||
Basic
income per common share
|
$
|
0.64
|
0.49
|
1.16
|
0.46
|
||||||||
Basic
weighted average shares outstanding
|
31,576,006
|
30,936,792
|
31,296,057
|
30,912,002
|
|||||||||
Diluted
income per common share
|
$
|
0.61
|
0.47
|
1.10
|
0.43
|
||||||||
Diluted
weighted average shares outstanding
|
33,425,883
|
32,894,416
|
32,990,066
|
32,850,218
|
Common
Stock
|
|
Additional
Paid-In
|
|
Deferred
Stock
|
|
Retained
|
|
Stock
Held by
|
|
Shares
Held in Trust and
|
|
Accumulated
Other Comprehensive
|
|
|
|
|||||||||||||
|
|
Shares
(1)
|
|
Amount
|
|
Capital
|
|
Compensation
|
|
Earnings
|
|
Subsidiary
|
|
Other
|
|
Income
(Loss)
|
|
Total
|
||||||||||
Balances at | ||||||||||||||||||||||||||||
December
31, 2004
|
33,243,527
|
$
|
332
|
575,862
|
(34,064
|
)
|
4,896
|
(58,898
|
)
|
(530
|
)
|
20,382
|
$
|
507,980
|
||||||||||||||
Net
income
|
—
|
—
|
—
|
—
|
36,786
|
—
|
—
|
—
|
36,786
|
|||||||||||||||||||
Shares
issued in connection with stock option plan
|
916,761
|
9
|
22,086
|
—
|
—
|
—
|
—
|
—
|
22,095
|
|||||||||||||||||||
Tax
benefit of option exercises
|
—
|
—
|
6,611
|
—
|
—
|
—
|
—
|
—
|
6,611
|
|||||||||||||||||||
Restricted
stock:
|
||||||||||||||||||||||||||||
Shares
granted
|
—
|
—
|
12,556
|
(12,556
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Amortization
of granted shares
|
—
|
—
|
—
|
5,598
|
—
|
—
|
—
|
—
|
5,598
|
|||||||||||||||||||
Reduction
in grants outstanding
|
—
|
—
|
(1,690
|
)
|
1,690
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Shares
issued
|
380,749
|
4
|
94
|
—
|
—
|
—
|
—
|
—
|
98
|
|||||||||||||||||||
Shares
repurchased for payment of taxes
|
(96,483
|
)
|
(1
|
)
|
(2,383
|
)
|
—
|
—
|
—
|
—
|
—
|
(2,384
|
)
|
|||||||||||||||
Tax
benefit of vestings
|
—
|
—
|
2,503
|
—
|
—
|
—
|
—
|
—
|
2,503
|
|||||||||||||||||||
Stock
compensation programs:
|
||||||||||||||||||||||||||||
Shares
granted
|
—
|
—
|
(875
|
)
|
875
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Amortization
of granted shares
|
—
|
—
|
—
|
7,282
|
—
|
—
|
—
|
—
|
7,282
|
|||||||||||||||||||
Reduction
in grants outstanding
|
—
|
—
|
(1,599
|
)
|
1,599
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Shares
issued (vestings)
|
593,776
|
6
|
(20
|
)
|
—
|
—
|
—
|
—
|
—
|
(14
|
)
|
|||||||||||||||||
Shares
repurchased for payment of taxes
|
(157,871
|
)
|
(2
|
)
|
(7,096
|
)
|
—
|
—
|
—
|
—
|
—
|
(7,098
|
)
|
|||||||||||||||
Tax
benefit of vestings
|
—
|
—
|
4,149
|
—
|
—
|
—
|
—
|
—
|
4,149
|
|||||||||||||||||||
Stock
purchase programs:
|
||||||||||||||||||||||||||||
Shares
issued
|
131,840
|
2
|
3,281
|
—
|
—
|
—
|
—
|
—
|
3,283
|
|||||||||||||||||||
Shares
held by subsidiary (1)
|
—
|
—
|
—
|
—
|
—
|
(43,026
|
)
|
(278
|
)
|
—
|
(43,304
|
)
|
||||||||||||||||
Dividends
declared
|
—
|
—
|
—
|
—
|
(9,259
|
)
|
—
|
—
|
—
|
(9,259
|
)
|
|||||||||||||||||
Cumulative
effect of foreign currency translation adjustments
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(31,679
|
)
|
(31,679
|
)
|
|||||||||||||||||
Balances
at September 30, 2005
|
35,012,299
|
$
|
350
|
613,479
|
(29,576
|
)
|
32,423
|
(101,924
|
)
|
(808
|
)
|
(11,297
|
)
|
$
|
502,647
|
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
||||||
Cash
flows from operating activities:
|
|||||||
Cash
flows from earnings:
|
|||||||
Net
income
|
$
|
36,786
|
14,286
|
||||
Reconciliation
of net income to net cash provided by earnings:
|
|||||||
Depreciation
and amortization
|
24,967
|
24,678
|
|||||
Equity
in earnings from unconsolidated ventures
|
(6,104
|
)
|
(10,071
|
)
|
|||
Operating
distributions from real estate ventures
|
5,568
|
7,487
|
|||||
Provision
for loss on receivables and other assets
|
2,194
|
2,378
|
|||||
Amortization
of deferred compensation
|
15,332
|
10,642
|
|||||
Amortization
of debt issuance costs
|
543
|
2,244
|
|||||
Net
cash provided by earnings
|
79,286
|
51,644
|
|||||
Cash
flows from changes in working capital:
|
|||||||
Receivables
|
38,689
|
15,404
|
|||||
Prepaid
expenses and other assets
|
(2,025
|
)
|
(14,010
|
)
|
|||
Deferred
tax assets
|
4,170
|
(586
|
)
|
||||
Accounts
payable, accrued liabilities and accrued compensation
|
(108,874
|
)
|
(15,996
|
)
|
|||
Net
cash flow uses from changes in working capital
|
(68,040
|
)
|
(15,188
|
)
|
|||
Net
cash provided by operating activities
|
11,246
|
36,456
|
|||||
Cash
flows from investing activities:
|
|||||||
Net
capital additions—property and equipment
|
(21,908
|
)
|
(15,582
|
)
|
|||
Other
acquisitions and investments
|
(4,885
|
)
|
(509
|
)
|
|||
Investments
in real estate ventures:
|
|||||||
Capital
contributions and advances to real estate ventures
|
(19,850
|
)
|
(32,284
|
)
|
|||
Distributions,
repayments of advances and sale of investments
|
7,572
|
12,984
|
|||||
Net
cash used in investing activities
|
(39,071
|
)
|
(35,391
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from borrowings under credit facilities
|
444,957
|
420,013
|
|||||
Repayments
of borrowings under credit facilities
|
(407,187
|
)
|
(235,575
|
)
|
|||
Redemption
of Senior Notes, net of costs
|
—
|
(203,209
|
)
|
||||
Shares
repurchased for payment of taxes on stock awards
|
(9,481
|
)
|
(4,210
|
)
|
|||
Shares
repurchased under share repurchase program
|
(43,304
|
)
|
(35,837
|
)
|
|||
Common
stock issued under stock option plan and stock purchase
programs
|
38,726
|
16,276
|
|||||
Net
cash provided by (used in) financing activities
|
23,711
|
(42,542
|
)
|
||||
Net
decrease in cash and cash equivalents
|
(4,114
|
)
|
(41,477
|
)
|
|||
Cash
and cash equivalents, January 1
|
30,143
|
63,105
|
|||||
Cash
and cash equivalents, September 30
|
$
|
26,029
|
21,628
|
||||
Supplemental
disclosure of cash flow information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
3,218
|
9,037
|
||||
Income
taxes, net of refunds
|
14,447
|
7,977
|
|||||
Non-cash
financing activities:
|
|||||||
Cash
dividends declared but not paid
|
9,259
|
—
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended September 30, 2004
|
||||||
Total
revenue, as originally reported
|
$
|
270,951
|
$
|
764,647
|
|||
Reclassification:
Equity in earnings from unconsolidated ventures
|
(1,034
|
)
|
(10,071
|
)
|
|||
Total
revenue, as reclassified
|
269,917
|
754,576
|
|||||
Operating
income, as originally reported
|
22,274
|
39,876
|
|||||
Operating
income, as reclassified
|
$
|
21,240
|
$
|
29,805
|
·
|
FASB
Interpretation No. 46 (revised 2003), “Consolidation of Variable Interest
Entities, an interpretation of ARB No. 51” (“FIN
46-R”)
|
·
|
AICPA
Statement of Position 78-9, “Accounting for Investments in Real Estate
Ventures” (“SOP 78-9”)
|
·
|
Accounting
Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting
for Investments in Common Stock” (“APB 18”)
|
·
|
EITF
Topic No. D-46, “Accounting for Limited Partnership Investments” (“EITF
D-46”)
|
•
|
A
fixed management fee, and
|
•
|
A
separate component which allows for scheduled reimbursable personnel
or
other expenses to be billed directly to the
client.
|
(i)
|
The
property owner, with ultimate approval rights relating to the employment
and compensation of onsite personnel, and bearing all of the economic
costs of such personnel, is determined to be the primary obligor
in the
arrangement;
|
(ii)
|
Reimbursement
to Jones Lang LaSalle is generally completed simultaneously with
payment
of payroll or soon thereafter;
|
(iii)
|
Because
the property owner is contractually obligated to fund all operating
costs
of the property from existing cash flow or direct funding to its
building
operating account, Jones Lang LaSalle bears little or no credit
risk under
the terms of the management contract; and
|
(iv)
|
Jones
Lang LaSalle generally earns no margin in the reimbursement aspect
of the
arrangement, obtaining reimbursement only for actual costs incurred.
|
Three
Months Ended September 30,
2005
|
Three
Months Ended September 30,
2004
|
Nine
Months Ended
September
30,
2005
|
Nine
Months Ended September
30, 2004
|
||||||||||
Net
income available to common shareholders, as reported
|
$
|
20,231
|
15,305
|
36,400
|
14,286
|
||||||||
Add:
Stock-based employee compensation expense included in reported
net income,
net of related tax benefits
|
6,324
|
3,505
|
15,156
|
9,662
|
|||||||||
Deduct:
Total stock-based employee compensation expense determined under
fair-value-based method for all awards, net of related tax
benefits
|
(7,149
|
)
|
(1,914
|
)
|
(17,274
|
)
|
(9,124
|
)
|
|||||
Pro
forma net income available to common shareholders
|
$
|
19,406
|
16,896
|
34,282
|
14,824
|
||||||||
Net
income per share:
|
|||||||||||||
Basic
- as reported
|
$
|
0.64
|
0.49
|
1.16
|
0.46
|
||||||||
Basic
- pro forma
|
$
|
0.61
|
0.55
|
1.10
|
0.48
|
||||||||
Diluted
- as reported
|
$
|
0.61
|
0.47
|
1.10
|
0.43
|
||||||||
Diluted
- pro forma
|
$
|
0.58
|
0.51
|
1.04
|
0.45
|
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended
September
30, 2005
|
Nine
Months Ended September 30, 2004
|
||||||||||
Net
income
|
$
|
20,617
|
15,305
|
36,786
|
14,286
|
||||||||
Other
comprehensive income (loss):
|
|||||||||||||
Foreign
currency translation adjustments
|
(2,932
|
)
|
1,972
|
(31,679
|
)
|
3,363
|
|||||||
Comprehensive
income
|
$
|
17,685
|
17,277
|
5,107
|
17,649
|
(i)
|
Investment
Management, which offers money management services on a global
basis, and
|
(ii)
|
Americas,
|
(iii)
|
Europe
and
|
(iv)
|
Asia
Pacific.
|
Investor
and Occupier Services
|
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
|||||||||
Americas
|
|||||||||||||
Revenue:
|
|||||||||||||
Implementation
services
|
$
|
44,825
|
36,763
|
113,864
|
98,757
|
||||||||
Management
services
|
55,831
|
44,774
|
150,220
|
124,070
|
|||||||||
Equity
earnings
|
198
|
—
|
381
|
467
|
|||||||||
Other
services
|
2,291
|
1,871
|
6,040
|
4,613
|
|||||||||
Intersegment
revenue
|
169
|
234
|
698
|
615
|
|||||||||
103,314
|
83,642
|
271,203
|
228,522
|
||||||||||
Operating
expenses:
|
|||||||||||||
Compensation,
operating and administrative services
|
87,065
|
70,386
|
245,477
|
201,426
|
|||||||||
Depreciation
and amortization
|
3,797
|
3,494
|
11,080
|
10,519
|
|||||||||
Operating
income
|
$
|
12,452
|
9,762
|
14,646
|
16,577
|
||||||||
Europe
|
|||||||||||||
Revenue:
|
|||||||||||||
Implementation
services
|
$
|
84,734
|
72,788
|
236,720
|
214,389
|
||||||||
Management
services
|
22,179
|
23,486
|
70,051
|
70,211
|
|||||||||
Equity
losses
|
—
|
—
|
(226
|
)
|
—
|
||||||||
Other
services
|
3,740
|
3,235
|
9,099
|
7,191
|
|||||||||
110,653
|
99,509
|
315,644
|
291,791
|
||||||||||
Operating
expenses:
|
|||||||||||||
Compensation,
operating and administrative services
|
105,164
|
94,044
|
307,621
|
277,701
|
|||||||||
Depreciation
and amortization
|
2,435
|
2,544
|
7,439
|
7,998
|
|||||||||
Operating
income
|
$
|
3,054
|
2,921
|
584
|
6,092
|
||||||||
Asia
Pacific
|
|||||||||||||
Revenue:
|
|||||||||||||
Implementation
services
|
$
|
35,461
|
33,083
|
101,674
|
82,471
|
||||||||
Management
services
|
28,604
|
22,683
|
78,310
|
64,632
|
|||||||||
Other
services
|
(756
|
)
|
468
|
777
|
1,226
|
||||||||
63,309
|
56,234
|
180,761
|
148,329
|
||||||||||
Operating
expenses:
|
|||||||||||||
Compensation,
operating and administrative services
|
60,741
|
48,554
|
167,037
|
141,414
|
|||||||||
Depreciation
and amortization
|
1,745
|
2,104
|
5,414
|
5,247
|
|||||||||
Operating
income
|
$
|
823
|
5,576
|
8,310
|
1,668
|
||||||||
Investment
Management
|
|||||||||||||
Revenue:
|
|||||||||||||
Implementation
and other services
|
$
|
3,722
|
3,092
|
14,613
|
8,011
|
||||||||
Advisory
fees
|
32,601
|
24,616
|
93,369
|
74,636
|
|||||||||
Incentive
fees
|
13,154
|
3,058
|
16,911
|
4,369
|
|||||||||
Equity
earnings
|
2,166
|
1,034
|
5,949
|
9,604
|
|||||||||
51,643
|
31,800
|
130,842
|
96,620
|
||||||||||
Operating
expenses:
|
|||||||||||||
Compensation,
operating and administrative services
|
37,937
|
25,049
|
100,547
|
79,083
|
|||||||||
Depreciation
and amortization
|
344
|
294
|
1,034
|
915
|
|||||||||
Operating
income
|
$
|
13,362
|
6,457
|
29,261
|
16,622
|
||||||||
Segment
Reconciling Items:
|
|||||||||||||
Total
segment revenue
|
$
|
328,919
|
271,185
|
898,450
|
765,262
|
||||||||
Intersegment
revenue eliminations
|
(169
|
)
|
(234
|
)
|
(698
|
)
|
(615
|
)
|
|||||
Equity
earnings reclassified
|
(2,366
|
)
|
(1,034
|
)
|
(6,104
|
)
|
(10,071
|
)
|
|||||
Total
revenue
|
326,384
|
269,917
|
891,648
|
754,576
|
|||||||||
Total
segment operating expenses
|
299,228
|
246,469
|
845,649
|
724,303
|
|||||||||
Intersegment
operating expense eliminations
|
(169
|
)
|
(234
|
)
|
(698
|
)
|
(615
|
)
|
|||||
Total
operating expenses before restructuring charges (credits)
|
299,059
|
246,235
|
844,951
|
723,688
|
|||||||||
Operating
income before restructuring charges
|
$
|
27,325
|
23,682
|
46,697
|
30,888
|
Restructuring
Charges (Credits)
|
Three
Months Ended
September 30,
2005
|
Three
Months Ended
September 30,
2004
|
Nine
Months Ended September 30,
2005
|
Nine
Months Ended September 30,
2004
|
|||||||||
Land
Investment and Development Group
|
$
|
(0.4
|
)
|
1.9
|
(0.4
|
)
|
0.6
|
||||||
2002
Restructuring:
|
|||||||||||||
Compensation
and benefits
|
—
|
—
|
(0.2
|
)
|
(0.2
|
)
|
|||||||
Operating,
administrative and other
|
—
|
0.5
|
—
|
0.7
|
|||||||||
2005
Restructuring:
|
|||||||||||||
Compensation
and benefits
|
1.1
|
—
|
1.1
|
—
|
|||||||||
Net
Restructuring Charges
|
$
|
0.7
|
2.4
|
0.5
|
1.1
|
Restructuring
Charges (Credits)
|
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
|||||||||
Investor
and Occupier Services:
|
|||||||||||||
Americas
|
$
|
—
|
—
|
—
|
—
|
||||||||
Europe
|
1.1
|
0.5
|
0.9
|
0.5
|
|||||||||
Asia
Pacific
|
—
|
—
|
—
|
—
|
|||||||||
Investment
Management
|
(0.4
|
)
|
1.9
|
(0.4
|
)
|
0.6
|
|||||||
Corporate
|
—
|
—
|
—
|
—
|
|||||||||
Net
Restructuring Charges
|
$
|
0.7
|
2.4
|
0.5
|
1.1
|
Type
of Interest
|
Percent
Ownership of Real Estate Limited Partnership Venture
|
Accounting
Method
|
Carrying
Value
|
|
|
|
|
General
partner
|
0%
to 1%
|
Equity
|
$
0.3
|
Limited
partner with advisory agreements
|
<1%
to 47.85%
|
Equity
|
83.0
|
Equity
method
|
|
|
$
83.3
|
Limited
partner without advisory agreements
|
<1%
to 5%
|
Cost
|
0.5
|
Total
|
|
|
$
83.8
|
Investor
and Occupier Services
|
||||||||||||||||
|
|
|
|
Asia
|
|
Investment
|
|
|
|
|||||||
|
|
Americas
|
|
Europe
|
|
Pacific
|
|
Management
|
|
Consolidated
|
||||||
Gross
Carrying Amount
|
||||||||||||||||
Balance
as of January 1, 2005
|
$
|
181,530
|
69,259
|
94,883
|
36,032
|
381,704
|
||||||||||
Additions
|
3,722
|
—
|
—
|
—
|
3,722
|
|||||||||||
Reclassifications
|
—
|
5,583
|
—
|
(5,583
|
)
|
—
|
||||||||||
Impact
of exchange rate movements
|
—
|
(6,241
|
)
|
(933
|
)
|
(2,015
|
)
|
(9,189
|
)
|
|||||||
Balance
as of September 30, 2005
|
185,252
|
68,601
|
93,950
|
28,434
|
376,237
|
|||||||||||
Accumulated
Amortization
|
||||||||||||||||
Balance
as of January 1, 2005
|
$
|
(15,458
|
)
|
(5,127
|
)
|
(6,733
|
)
|
(11,072
|
)
|
(38,390
|
)
|
|||||
Reclassifications
|
—
|
(1,270
|
)
|
—
|
1,270
|
—
|
||||||||||
Impact
of exchange rate movements
|
1
|
520
|
(124
|
)
|
326
|
723
|
||||||||||
Balance
as of September 30, 2005
|
(15,457
|
)
|
(5,877
|
)
|
(6,857
|
)
|
(9,476
|
)
|
(37,667
|
)
|
||||||
Net
book value as of September 30, 2005
|
$
|
169,795
|
62,724
|
87,093
|
18,958
|
338,570
|
Investor
and Occupier Services
|
|
|
||||||||||||||
|
Americas
|
Europe
|
Asia
Pacific
|
Investment
Management
|
Consolidated
|
|||||||||||
Gross
Carrying Amount
|
||||||||||||||||
Balance
as of January 1, 2005
|
$
|
39,925
|
783
|
3,172
|
5,712
|
49,592
|
||||||||||
Additions
|
1,163
|
—
|
—
|
—
|
1,163
|
|||||||||||
Impact
of exchange rate movements
|
63
|
(63
|
)
|
(74
|
)
|
(458
|
)
|
(532
|
)
|
|||||||
Balance
as of September 30, 2005
|
41,151
|
720
|
3,098
|
5,254
|
50,223
|
|||||||||||
Accumulated
Amortization
|
||||||||||||||||
Balance
as of January 1, 2005
|
$
|
(32,440
|
)
|
(612
|
)
|
(2,478
|
)
|
(5,712
|
)
|
(41,242
|
)
|
|||||
Amortization
expense
|
(3,586
|
)
|
—
|
(293
|
)
|
—
|
(3,879
|
)
|
||||||||
Impact
of exchange rate movements
|
(1
|
)
|
27
|
254
|
458
|
738
|
||||||||||
Balance
as of September 30, 2005
|
(36,027
|
)
|
(585
|
)
|
(2,517
|
)
|
(5,254
|
)
|
(44,383
|
)
|
||||||
Net
book value as of September 30, 2005
|
$
|
5,124
|
135
|
581
|
—
|
5,840
|
Remaining
2005 amortization
|
$1.4
million
|
For
year ended December 31, 2006
|
$4.1
million
|
For
year ended December 31, 2007
|
$0.3
million
|
2005
|
2004
|
||||||
Employer
service cost - benefits earned during the year
|
$
|
2,371
|
2,097
|
||||
Interest
cost on projected benefit obligation
|
5,919
|
5,363
|
|||||
Expected
return on plan assets
|
(6,891
|
)
|
(6,587
|
)
|
|||
Net
amortization/deferrals
|
283
|
26
|
|||||
Recognized
actual loss
|
129
|
—
|
|||||
Net
periodic pension cost
|
$
|
1,811
|
899
|
•
|
The
clients we serve,
|
•
|
The
people we employ, and
|
•
|
The
shareholders who invest in our
Company.
|
•
|
Significantly
pay down our debt, resulting in significantly reduced interest
expense;
|
•
|
Purchase
shares under our share repurchase
programs;
|
•
|
Invest
for growth in important markets throughout the
world;
|
•
|
Co-invest
in LaSalle Investment Management sponsored and managed funds;
and
|
•
|
Declare
in the third quarter of 2005 an anticipated semi-annual dividend
on our
common stock.
|
•
|
Local
Market Services,
|
•
|
Occupier
Services,
|
•
|
Capital
Markets, and
|
•
|
Money
Management.
|
•
|
A
fixed management fee, and
|
•
|
A
separate component which allows for scheduled reimbursable personnel
or
other expenses to be billed directly to the
client.
|
(i)
|
The
property owner, with ultimate approval rights relating to the employment
and compensation of onsite personnel, and bearing all of the economic
costs of such personnel, is determined to be the primary obligor
in the
arrangement;
|
(ii)
|
Reimbursement
to Jones Lang LaSalle is generally completed simultaneously with
payment
of payroll or soon thereafter;
|
(iii)
|
Because
the property owner is contractually obligated to fund all operating
costs
of the property from existing cash flow or direct funding to its
building
operating account, Jones Lang LaSalle bears little or no credit
risk under
the terms of the management contract; and
|
(iv)
|
Jones
Lang LaSalle generally earns no margin in the reimbursement aspect
of the
arrangement, obtaining reimbursement only for actual costs incurred.
|
(i)
|
Differences
between the financial statement carrying amounts of existing assets
and
liabilities and their respective tax bases, and
|
(ii)
|
Operating
loss and tax credit carryforwards measured using enacted tax rates
expected to apply in the years in which those temporary differences
are
expected to be settled or realized.
|
December
31, 2004
|
December
31, 2003
|
||||||
Deferral
of compensation, net of related amortization expense
|
$
|
10.6
|
6.7
|
||||
Decrease
to deferred compensation in the first quarter of the following
year
|
(0.9
|
)
|
(0.4
|
)
|
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
||||||||||
Current
compensation expense amortization for prior year programs
|
$
|
2.1
|
1.7
|
7.9
|
5.9
|
||||||||
Current
deferral net of related amortization
|
(5.7
|
)
|
(1.9
|
)
|
(10.2
|
)
|
(5.4
|
)
|
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Nine
Months Ended September 30, 2005
|
Nine Months
Ended September 30, 2004
|
||||||||||
Expense
to Company
|
$
|
2.7
|
2.3
|
7.9
|
6.7
|
||||||||
Employee
contributions
|
0.7
|
0.4
|
1.9
|
1.4
|
|||||||||
Adjustment
to prior year reserve
|
—
|
—
|
(0.5
|
)
|
—
|
||||||||
Total
program cost
|
$
|
3.4
|
2.7
|
9.3
|
8.1
|
Pounds
Sterling
|
|
Euro
|
|
Australian
Dollar
|
|
US
Dollar
|
|
Other
|
|
Total
|
|||||||||
Revenues
|
|||||||||||||||||||
Q1,
2005
|
$
|
52.1
|
37.4
|
19.9
|
81.9
|
48.9
|
240.2
|
||||||||||||
Q2,
2005
|
66.4
|
52.1
|
28.0
|
105.6
|
73.0
|
325.1
|
|||||||||||||
Q3,
2005
|
67.8
|
45.1
|
26.1
|
122.5
|
64.8
|
326.3
|
|||||||||||||
186.3
|
134.6
|
74.0
|
310.0
|
186.7
|
891.6
|
||||||||||||||
Q1,
2004
|
$
|
50.5
|
43.1
|
17.6
|
76.2
|
33.3
|
220.7
|
||||||||||||
Q2,
2004
|
56.4
|
49.0
|
23.4
|
82.7
|
52.5
|
264.0
|
|||||||||||||
Q3,
2004
|
59.6
|
41.7
|
23.9
|
92.1
|
52.6
|
269.9
|
|||||||||||||
166.5
|
133.8
|
64.9
|
251.0
|
138.4
|
754.6
|
||||||||||||||
Operating
Income (Loss)
|
|||||||||||||||||||
Q1,
2005
|
$
|
0.4
|
(3.3
|
)
|
(0.7
|
)
|
(8.9
|
)
|
2.2
|
(10.3
|
)
|
||||||||
Q2,
2005
|
1.6
|
3.6
|
5.4
|
4.4
|
14.9
|
29.9
|
|||||||||||||
Q3,
2005
|
6.4
|
(5.6
|
)
|
1.3
|
16.8
|
7.7
|
26.6
|
||||||||||||
8.4
|
(5.3
|
)
|
6.0
|
12.3
|
24.8
|
46.2
|
|||||||||||||
Q1,
2004
|
$
|
(2.5
|
)
|
4.4
|
(1.5
|
)
|
(5.1
|
)
|
(2.0
|
)
|
(6.7
|
)
|
|||||||
Q2,
2004
|
1.8
|
4.8
|
1.9
|
2.5
|
4.3
|
15.3
|
|||||||||||||
Q3,
2004
|
4.5
|
(0.2
|
)
|
7.3
|
7.5
|
2.1
|
21.2
|
||||||||||||
3.8
|
9.0
|
7.7
|
4.9
|
4.4
|
29.8
|
||||||||||||||
Average
Exchange Rates (U.S. dollar equivalent of one foreign currency
unit)
|
|||||||||||||||||||
Q1,
2005
|
1.890
|
1.311
|
0.777
|
1.000
|
n.m.
|
n.m.
|
|||||||||||||
Q2,
2005
|
1.856
|
1.259
|
0.769
|
1.000
|
n.m.
|
n.m.
|
|||||||||||||
Q3,
2005
|
1.784
|
1.220
|
0.760
|
1.000
|
n.m.
|
n.m.
|
|||||||||||||
Q1,
2004
|
1.842
|
1.246
|
0.764
|
1.000
|
n.m.
|
n.m.
|
|||||||||||||
Q2,
2004
|
1.811
|
1.206
|
0.710
|
1.000
|
n.m.
|
n.m.
|
|||||||||||||
Q3,
2004
|
1.817
|
1.223
|
0.710
|
1.000
|
n.m.
|
n.m.
|
Three
Months
Ended
September
30,
2005
|
Three
Months
Ended
September
30,
2004
|
Increase
(Decrease)
in
U.S. Dollars
|
%
Change in Local Currency
|
|||||||||||||
Total
revenue
|
$
|
326.4
|
$
|
269.9
|
$
|
56.5
|
21
|
%
|
21
|
%
|
||||||
Compensation
& benefits
|
211.1
|
175.1
|
36.0
|
21
|
%
|
21
|
%
|
|||||||||
Operating,
administrative & other
|
79.7
|
62.8
|
16.9
|
27
|
%
|
27
|
%
|
|||||||||
Depreciation
& amortization
|
8.3
|
8.4
|
(0.1
|
)
|
(1
|
%)
|
(2
|
%)
|
||||||||
Restructuring
|
0.7
|
2.4
|
(1.7
|
)
|
n.m.
|
n.m.
|
||||||||||
Total
operating expenses
|
299.8
|
248.7
|
51.1
|
21
|
%
|
20
|
%
|
|||||||||
Operating
income
|
$
|
26.6
|
$
|
21.2
|
$
|
5.4
|
25
|
%
|
21
|
%
|
Nine
Months
Ended
September
30,
2005
|
Nine
Months
Ended
September
30,
2004
|
Increase
(Decrease)
in
U.S. Dollars
|
%
Change in Local Currency
|
|||||||||||||
Total
revenue
|
$
|
891.6
|
$
|
754.6
|
$
|
137.0
|
18
|
%
|
16
|
%
|
||||||
Compensation
& benefits
|
592.8
|
505.5
|
87.3
|
17
|
%
|
15
|
%
|
|||||||||
Operating,
administrative & other
|
227.1
|
193.5
|
33.6
|
17
|
%
|
15
|
%
|
|||||||||
Depreciation
& amortization
|
25.0
|
24.7
|
0.3
|
1
|
%
|
0
|
%
|
|||||||||
Restructuring
|
0.5
|
1.1
|
(0.6
|
)
|
n.m.
|
n.m.
|
||||||||||
Total
operating expenses
|
845.4
|
724.8
|
120.6
|
17
|
%
|
15
|
%
|
|||||||||
Operating
income
|
$
|
46.2
|
$
|
29.8
|
$
|
16.4
|
55
|
%
|
51
|
%
|
(i)
|
Investment
Management, which offers money management services on a global
basis, and
|
(ii)
|
Americas,
|
(iii)
|
Europe
and
|
(iv)
|
Asia
Pacific.
|
Three
Months Ended September 30, 2005
|
|
Three
Months Ended September 30, 2004
|
|
Increase
(Decrease)
|
|
%
change
|
|||||||
Revenue
|
$
|
103.3
|
$
|
83.6
|
$
|
19.7
|
24
|
%
|
|||||
Operating
expense
|
90.8
|
73.8
|
17.0
|
23
|
%
|
||||||||
Operating
income
|
$
|
12.5
|
$
|
9.8
|
$
|
2.7
|
28
|
%
|
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
Increase
(Decrease)
|
|
%
change
|
|||||||||
Revenue
|
$
|
271.2
|
$
|
228.5
|
$
|
42.7
|
19
|
%
|
|||||
Operating
expense
|
256.6
|
211.9
|
44.7
|
21
|
%
|
||||||||
Operating
income
|
$
|
14.6
|
$
|
16.6
|
$
|
(2.0
|
)
|
(12
|
%)
|
Three
Months Ended September 30, 2005
|
|
Three
Months Ended September 30, 2004
|
|
Increase
(Decrease)
in
U.S. dollars
|
|
%
Change in Local Currency
|
||||||||||
Revenue
|
$
|
110.7
|
$
|
99.5
|
$
|
11.2
|
11
|
%
|
12
|
%
|
||||||
Operating
expense
|
107.6
|
96.6
|
11.0
|
11
|
%
|
13
|
%
|
|||||||||
Operating
income
|
$
|
3.1
|
$
|
2.9
|
$
|
0.2
|
7
|
%
|
8
|
%
|
||||||
Nine
Months Ended September 30, 2005
|
|
Nine
Months Ended September 30, 2004
|
|
Increase
(Decrease)
in
U.S. dollars
|
%
Change in
Local Currency
|
|||||||||||
Revenue
|
$
|
315.6
|
$
|
291.8
|
$
|
23.8
|
8
|
%
|
6
|
%
|
||||||
Operating
expense
|
315.0
|
285.7
|
29.3
|
10
|
%
|
8
|
%
|
|||||||||
Operating
income
|
$
|
0.6
|
$
|
6.1
|
$
|
(5.5
|
)
|
(90
|
%)
|
(90 | %) |
Three
Months Ended September 30, 2005
|
Three
Months Ended September 30, 2004
|
Increase
(Decrease)
in
U.S. dollars
|
%
Change in Local Currency
|
|||||||||||||
Revenue
|
$
|
63.3
|
$
|
56.2
|
$
|
7.1
|
13
|
%
|
9
|
%
|
||||||
Operating
expense
|
62.5
|
50.7
|
11.8
|
23
|
%
|
19
|
%
|
|||||||||
Operating
income
|
$
|
0.8
|
$
|
5.5
|
$
|
(4.7
|
)
|
(85
|
%)
|
(85 | %) | |||||
Nine
Months Ended September 30, 2005
|
Nine
Months Ended September 30, 2004
|
Increase
(Decrease)
in
U.S. dollars
|
%
Change in
Local Currency
|
|||||||||||||
Revenue
|
$
|
180.8
|
$
|
148.3
|
$
|
32.5
|
22
|
%
|
18
|
%
|
||||||
Operating
expense
|
172.5
|
146.7
|
25.8
|
18
|
%
|
15
|
%
|
|||||||||
Operating
income
|
$
|
8.3
|
$
|
1.6
|
$
|
6.7
|
n.m.
|
n.m.
|
||||||||
(n.m.
- not meaningful)
|
Three
Months
Ended
September
30,
2005
|
Three
Months
Ended
September
30,
2004
|
Increase
(Decrease)
in
U.S. dollars
|
%
Change in Local Currency
|
|||||||||||||
Revenue
|
$
|
49.5
|
$
|
30.8
|
$
|
18.7
|
61
|
%
|
62
|
%
|
||||||
Equity
earnings
|
2.2
|
1.0
|
1.2
|
n.m.
|
n.m.
|
|||||||||||
Total
revenue
|
51.7
|
31.8
|
19.9
|
63
|
%
|
63
|
%
|
|||||||||
Operating
expense
|
38.3
|
25.3
|
13.0
|
51
|
%
|
52
|
%
|
|||||||||
Operating
income
|
$
|
13.4
|
$
|
6.5
|
$
|
6.9
|
n.m.
|
n.m.
|
||||||||
(n.m.
- not meaningful)
|
Nine
Months
Ended
September
30,
2005
|
Nine
Months
Ended
September
30,
2004
|
Increase
(Decrease)
in
U.S. dollars
|
%
Change in Local Currency
|
|||||||||||||
Revenue
|
$
|
124.9
|
$
|
87.0
|
$
|
37.9
|
44
|
%
|
42
|
%
|
||||||
Equity
earnings
|
5.9
|
9.6
|
(3.7
|
)
|
(39
|
%)
|
(38
|
%)
|
||||||||
Total
revenue
|
130.8
|
96.6
|
34.2
|
35
|
%
|
34
|
%
|
|||||||||
Operating
expense
|
101.6
|
80.0
|
21.6
|
27
|
%
|
25
|
%
|
|||||||||
Operating
income
|
$
|
29.2
|
$
|
16.6
|
$
|
12.6
|
76
|
%
|
73
|
%
|
•
|
Interest
rates on our multi-currency credit facility;
and
|
•
|
Foreign
exchange risks
|
Total
number of shares purchased
|
Average
price paid per share
|
Cumulative
number of shares purchased as part of publicly announced
plan
|
Shares
remaining to be purchased under plan (1)
|
||||||||||
January
1, 2005 -
|
|||||||||||||
January
31, 2005
|
-
|
-
|
100,000
|
1,400,000
|
|||||||||
February
1, 2005 -
|
|||||||||||||
February
28, 2005
|
77,000
|
$
|
42.55
|
177,000
|
1,323,000
|
||||||||
March
1, 2005 -
|
|||||||||||||
March
31, 2005
|
263,200
|
$
|
45.49
|
440,200
|
1,059,800
|
||||||||
April
1, 2005 -
|
|||||||||||||
April
30, 2005
|
-
|
-
|
440,200
|
1,059,800
|
|||||||||
May
1, 2005 -
|
|||||||||||||
May
31, 2005
|
683,500
|
$
|
40.39
|
1,123,700
|
376,300
|
||||||||
June
1, 2005 -
|
|||||||||||||
June
30, 2005
|
-
|
-
|
1,123,700
|
376,300
|
|||||||||
July
1, 2005 -
|
|||||||||||||
July
31, 2005
|
-
|
-
|
1,123,700
|
376,300
|
|||||||||
August
1, 2005 -
|
|||||||||||||
August
31, 2005
|
-
|
-
|
1,123,700
|
376,300
|
|||||||||
September
1, 2005 -
|
|||||||||||||
September
30, 2005
|
4,851
|
45.43
|
1,128,551
|
371,449
|
|||||||||
Total
year-to-date 2005
|
1,028,551
|
$
|
41.88
|
Repurchase
Plan Approval Date
|
Shares
Approved for Repurchase
|
Shares
Repurchased through September 30, 2005
|
|||||
October
30, 2002
|
1,000,000
|
700,000
|
|||||
February
27, 2004
|
1,500,000
|
1,500,000
|
|||||
November
29, 2004
|
1,500,000
|
1,128,551
|
|||||
September
15, 2005
|
2,000,000
|
-
|
|||||
3,328,551
|
•
|
The
effect of political, economic and market conditions and geopolitical
events;
|
•
|
The
logistical and other challenges inherent in operating in numerous
different countries;
|
•
|
The
actions and initiatives of current and potential
competitors;
|
•
|
The
level and volatility of real estate prices, interest rates, currency
values and other market indices;
|
•
|
The
outcome of pending litigation; and
|
•
|
The
impact of current, pending and future legislation and
regulation.
|
JONES
LANG LASALLE INCORPORATED
|
|
/s/
Lauralee E. Martin
|
|
By:
Lauralee
E. Martin
|
|
Executive
Vice President and
|
|
Chief
Operating and Financial Officer
|
|
(Authorized
Officer and Principal
Financial Officer)
|
Exhibit
|
|
Number
|
Description
|
Second
Amendment to Amended and Restated Multicurrency Credit Agreement,
dated as
of September 15, 2005
|
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|