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SEC Filings

S-1/A
JONES LANG LASALLE INC filed this Form S-1/A on 07/03/1997
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the impact in 1995 of the $1.9 million provision for the estimated
uncollectible portion of a receivable from Diverse Real Estate Holdings
Limited Partnership ("Diverse"). See "Certain Relationships and Related
Transactions."
 
  Operating Income. Based on the factors noted above, the Company's operating
income increased $6.8 million, or 33.7%, to $26.9 million in 1996 from $20.1
million in 1995. As a percentage of total revenue, operating income increased
to 15.3% in 1996 from 13.2% in 1995.
 
  Interest Expense. Interest expense increased $1.9 million, or 50.6%, to $5.7
million in 1996 from $3.8 million in 1995, principally as a result of
increased borrowings under the Long-Term Facility to fund the CIN Property
Management acquisition, technology and infrastructure investments and co-
investments.
 
  Provision for Income Taxes. Provision for income taxes increased $.7
million, or 139%, to $1.2 million in 1996 from $.5 million in 1995, due to an
increased volume of transactions performed in jurisdictions with higher state
taxes and increased foreign taxes paid in connection with international
operations.
 
  Net Earnings. Net earnings increased $4.2 million, or 26.3%, to $20.0
million in 1996 from $15.8 million in 1995. Net earnings in 1996 represented
11.3% of total revenue, compared with 10.4% in the previous year.
 
  SEGMENT OPERATING RESULTS
  Management Services. The Management Services segment's revenue, which
represented approximately 40.7% of the Company's total revenue in 1996,
increased $8.7 million, or 13.8%, to $71.9 million in 1996 from $63.2 million
in 1995. This increase was primarily due to a $4.3 million increase in
property management and leasing fees and a $3.2 million increase in facility
management revenue. Property management and leasing fees increased as a result
of the net addition of approximately six million square feet of new property
management and leasing assignments in 1996 and, to a lesser extent, rising
rental rates for office buildings generally. The increase in facility
management fees was principally due to the initiation of a major new facility
management assignment and increased incentive-based fees related to cost
savings achieved for facility management accounts added in prior years. The
Company's property management and leasing revenue was impacted by a $.6
million decline in revenue related to the sale of certain commingled fund
properties. Total revenue from property management and leasing services
provided to commingled fund properties in 1996 was $11.9 million compared to
$12.5 million in 1995.
 
  Operating expenses increased $9.1 million, or 17.4%, to $61.1 million in
1996 from $52.1 million in 1995 as a result of increased staffing levels to
meet the demands associated with an expansion of square feet under management.
In addition, the segment incurred approximately $2.0 million of incremental
expenses associated with an increased commitment of senior personnel to the
national leasing effort. This effort included an expansion in selected
regional markets resulting in approximately $1.0 million of relocation and
recruiting costs. The segment also incurred approximately $.7 million in
consulting fees to enhance client service and information reporting for
property management assignments and in training costs expended on new
technology implemented in 1996 regarding tenant request and other systems.
Operating income decreased by $.4 million, or 3.2%, to $10.7 million in 1996
from $11.1 million in 1995. The Management Services segment's operating income
represented 39.9% of the Company's total operating income in 1996. As a
percentage of segment revenue, operating income decreased to 14.9% in 1996
from 17.6% in 1995.
 
  Corporate and Financial Services. The Corporate and Financial Services
segment's revenue, which represented about 26.5% of the Company's total
revenue in 1996, increased $9.4 million, or 25.2%, to $46.7 million in 1996
from $37.3 million in 1995. This record revenue resulted primarily from an
$8.2 million increase in revenue from the Company's tenant representation
business. A number of significant tenant representation transactions and a
series of transactions generated from a new facility management client
accounted for the majority of the increased tenant representation revenue. The
tenant representation business completed 256 transactions totaling over 6.7
million square feet in 1996 compared to 132 transactions and 3.6 million
square feet in 1995. General improvements in real estate market fundamentals,
including declining vacancies in Class A buildings and increases in office
rents, have prompted several of the Company's clients to complete large
 
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