JONES LANG LASALLE REPORTS IMPROVED SECOND QUARTER RESULTS

Chicago and London, July 31, 2002 – Jones Lang LaSalle Incorporated (NYSE: JLL), the leading global real estate services and investment management firm, today reported net income for the second quarter of $3.5 million, or $0.11 per share, in line with expectations and one cent ahead of the First Call consensus estimates. Results compare favorably with the prior year's second quarter adjusted net loss of $0.3 million, or $0.01 per share, and GAAP net loss of $1.9 million, or $0.06 per share.

Reflecting the generally slow economic conditions worldwide, revenues in the quarter declined to $190.9 million, down 5 percent from the prior year period. Offsetting the lower revenues, operating expenses declined 8 percent to $178.4 million. The expense reductions were primarily due to the benefits of management actions last year to bring the organization in line with the expected 2002 business environment together with continued tight expense controls.

Second Quarter Results Highlights

Second quarter net income of $3.5 million versus prior year loss
Operating expenses down 8 percent from 2001
Debt reduction of $37 million from prior year

EBITDA in the quarter increased to $20.1 million, up $2.6 million from the prior year adjusted EBITDA of $17.5 million. Reflecting the continued strong business cash flows and aggressive focus on receiveables management, debt was reduced from the prior year period by $37 million, despite a $23 million increase in the book value of the company's Eurobonds due to the weakening U.S. dollar. Lower debt balances in the quarter resulted in a $1.3 million reduction in interest expense year over year.

“We are pleased to report results for the quarter in line with our targets. The revenue declines, resulting from continued economic weakness and lack of business confidence, underscore the importance of our quick management actions in late 2001 to reduce costs throughout our business. Our people have done an excellent job of managing the variables in our control, including both new client and assignment wins and tight cost controls,” said Chris Peacock, President and Chief Executive Officer of Jones Lang LaSalle.

Year to date, the company reported a loss of $1.4 million, or $0.05 per share, which compared favorably with the adjusted net loss of $3.2 million, or $0.11 per share, in the first half of 2001. Revenues year to date of $352.7 million and expenses of $344.3 million were both down 12 percent. Year-to-date expense reductions of $49 million include $11 million related to bonus accrual timing that is temporary. EBITDA for the six months totalled $25.4 million.

The second quarter and first half results include the benefit of $2.4 million and $4.8 million respectively, from adoption of the SFAS 142 accounting standard. No impairment charges were necessary with the adoption of this standard. The adjusted results for second quarter of 2001 exclude non-operational, non-recurring charges of $1.5 million for global business restructuring and $1.1 million of e-commerce investment writedowns. For the first half adjusted results of 2001, there was an additional $1.1 million non-operational, non-recurring charge for the writedown of a broadband investment. The GAAP net loss for the first half of 2001 was $5.5 million, or $0.18 per share.

Business Segment Performance Highlights

Owner & Occupier Services

AMERICAS
Operating income in the second quarter was $3.0 million versus $3.6 million for the prior year period. Year-to-date operating income of $0.9 million compared strongly to a loss in the prior year of $7.2 million. Results were driven by cost savings, with expenses down $17 million or 23 percent for the quarter and $34 million or 24 percent year to date. Included in the expense reductions are lower bonus accruals of $3.3 million and $6.1 million, respectively, that are booked relative to performance and will be recaptured later in the year. Revenues in the second quarter of $58.3 million were down 23 percent, principally due to Investor Services leasing transaction declines. Converting the firmÕs strong leasing mandates into completed transactions is expected to remain a challenge for the balance of the year.
EUROPE
Operating income in the second quarter of $6.0 million improved 5 percent over the prior year period. Year-to-date operating income was down 56 percent. Second quarter performance was driven by revenues of $79.2 million which showed a solid recovery from the weakness in the first quarter of 2002. Strong performance in the Netherlands and a $3.5 million incentive fee in the Swedish joint venture offset continued weakness in England and Germany and a slippage in the timing of the completion of transactions in France and Belgium. The strengthening European currencies increased reported revenues and expenses in the quarter by $3 million when compared to the prior year period. Underlying cost savings were masked by the impact of the strengthening European currencies increasing reported expenses and an increased bonus accrual of $3.2 million in the quarter reflecting the stronger revenue performance. Year-to-date expenses were down $12 million or 8 percent, including a lower bonus accrual of $4.8 million.
ASIA PACIFIC
Operating income in the quarter improved to $1.3 million versus a loss of $2.4 million in the second quarter of 2001, bringing the first half improvement year over year to $3.1 million. Revenues of $32.0 million, up 11 percent, were driven by strong performances from Australia, Hong Kong, Korea and Japan, which offset the continued slowdown in Singapore. The strengthening Australian dollar increased reported revenues and expenses by $1.0 million when compared to the prior year.

Investment Management

LaSalle Investment Management's second quarter operating income of $2.3 million compared favorably against the prior period operating loss of $0.5 million. Revenues of $21.6 million were up 10 percent with expenses relatively flat due to tight cost controls while continuing to invest in people required for new fund growth. Net co-investment fundings in the quarter increased $8.2 million with the second close of Income and Growth III and its acquisition of three properties. Year-to-date growth in net co-investment fundings is $12.1 million.

Outlook for Remainder of 2002

“Our business is strong and we are winning major new assignments in line with our global strategy, however, the current world economic outlook continues to negatively affect real estate activities worldwide,” said Mr. Peacock. “We continue to be cautious about the balance of the year as economic messages around the world are mixed and the timing of recoveries remains uncertain. However, taking into account our aggressive focus on costs, continued debt reduction and interest expense savings, and an expected improvement in our effective tax rate, we are not at this point changing our target range. For the third quarter we expect earnings to be in the range of $0.35-$0.45 and for the full year $1.65-$1.70 per fully diluted share, although the likely outcome will be around the lower end of the range."

About Jones Lang LaSalle

Jones Lang LaSalle is the world’s leading real estate services and investment management firm, operating across more than 100 markets on five continents. The company provides comprehensive integrated expertise, including management services, implementation services and investment management services on a local, regional and global level to owners, occupiers and investors. Jones Lang LaSalle is also the industry leader in property and corporate facility management services, with a portfolio of approximately 725 million square feet (67 million square meters) under management worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse real estate investment management firms, with in excess of $22 billion of assets under management.

Download Second Quarter 2002 - Financials (.pdf format)

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, 2001, 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, 2002, in Jones Lang LaSalle’s Proxy Statement dated April 4, 2002, 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.

Note to Editors:

Media contacts may listen only to the Jones Lang LaSalle second quarter results discussion at 9 a.m. EDT on Aug 1 with investors and market analysts by dialing +1 719 457 2693.
A web cast of the conference call is available at http://www.firstcallevents.com/service/ajwz363584876gf12.html
A replay of the call may be accessed by dialing +1 719 457 0820 outside the United States and +1 888 203 1112 in the United States from noon EDT on Aug. 1, 2002, through 5:00 p.m. (EDT) on Aug. 15, 2002. The replay passcode is 233719.

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