UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 22, 1999
LASALLE PARTNERS INCORPORATED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-13145 36-4150422
- ------------------------ ------------------------ ---------------
(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation Identification
or organization) No.)
200 East Randolph Drive, Chicago, IL 60601
------------------------------------ ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (312) 782-5800
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On February 22, 1999, LaSalle Partners Incorporated ("LaSalle
Partners") issued a press release containing 1998 financial information for
LaSalle Partners and the Jones Lang Wootton Companies. A copy of the press
release is filed as an exhibit to this Current Report on Form 8-K and is
incorporated herein by reference.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
Certain statements in this filing and elsewhere (such as in reports,
other filings with the Securities and Exchange Commission, press releases,
presentations and communications by LaSalle Partners or its management and
written and oral statements) may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, achievements, plans and objectives of LaSalle Partners to be
materially different from any future results, performance, achievements,
plans and objectives expressed or implied by such forward-looking
statements. Such factors are discussed in (i) LaSalle Partners'
Registration Statement (No. 333-25741) under the caption "Risk Factors" and
elsewhere, (ii) LaSalle Partners' Annual Report on Form 10-K, for the year
ended December 31, 1997 in Item 1. "Business," Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and elsewhere, (iii) LaSalle Partners' Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and
elsewhere, (iv) LaSalle Partners' Quarterly Report on form 10-Q for the
quarter ended June 30, 1998 under the caption "Management's Discussions and
Analysis of Financial Condition and Results of Operations" and elsewhere,
(v) LaSalle Partners' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, (vi) LaSalle Partners' Current Report on Form 8-K,
dated August 31, 1998, (vii) LaSalle Partners' Current Report on Form 8-K,
dated October 1, 1998, (viii) LaSalle Partners' Current Report on Form 8-K,
dated October 22, 1998 (filed October 22, 1998), (ix) LaSalle Partners'
Current Report on Form 8-K, dated October 22, 1998 (filed December 9,
1998), under the captions "The Transactions," "The Purchase Agreements,"
"JLW Management's Discussion and Analysis of Financial Condition and
Results of Operations of the JLW Companies" and elsewhere, (x) LaSalle
Partners' Proxy Statement dated February 4, 1999 under the captions "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 and (xi) other reports filed by LaSalle
Partners with the United States Securities and Exchange Commission.
LaSalle Partners expressly disclaims any obligation or undertaking to
update or revise any forward-looking statements to reflect any changes in
events or circumstances or in LaSalle Partners' expectations or results.
Statements regarding parties other than LaSalle Partners are based upon
representations of such other parties.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
A list of exhibits is set forth in the Exhibit Index immediately
preceding the exhibits and is incorporated by reference herein.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
LASALLE PARTNERS INCORPORATED
Date: February 24, 1999 By: /s/ WILLIAM E. SULLIVAN
------------------------------
William E. Sullivan
Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
99 Press release dated February 22, 1999 issued by LaSalle
Partners Incorporated
EXHIBIT 99
- ----------
FOR IMMEDIATE RELEASE CONTACT: Bill Sullivan
Chief Financial Officer
312/228-2685
LA SALLE PARTNERS ANNOUNCES STRONG 1998 RESULTS
Adjusted Net Earnings Up 28 Percent
CHICAGO, FEBRUARY 22, 1999 -- LaSalle Partners Incorporated (NYSE: LAP)
today announced that adjusted net earnings for the year ended December 31,
1998 rose 28 percent to $26.6 million, or $1.62 per diluted share, up from
$20.7 million, or $1.27 per diluted share in 1997 on a pro forma basis.
The 1998 adjusted net earnings exclude the transition and integration
costs related to the previously announced COMPASS acquisition and the Jones
Lang Wootton merger, which totaled $6.1 million, or $.37 per diluted share
on an after tax basis. LaSalle's 1997 pro forma results reflect the
acquisition of Galbreath, conversion to corporate form, the initial public
offering, and the application of offering proceeds to repay long-term notes
payable, as if they had occurred on January 1, 1996.
Revenues for the year totaled $304.5 million versus $233.0 million on
a pro forma basis in the prior year. Operating expenses, exclusive of the
merger related transition and integration costs, were $256.6 million,
resulting in a 38 percent increase in operating income and EBITDA versus
pro forma 1997.
Actual earnings, inclusive of the merger related non-recurring
charges, totaled $20.5 million, or $1.25 per diluted share, compared with
actual net earnings of $25.8 million, or $1.49 per diluted share in the
prior year.
"1998 was a pivotal year in the progression of LaSalle Partners'
business strategy. Not only was it extremely successful from a financial
perspective, but 1998 also represented an important cornerstone for our
future," said Stuart L. Scott, Chairman and Chief Executive Officer of
LaSalle Partners. Scott noted that during 1998, LaSalle achieved the
following major milestones in support of its growth strategies:
. In January, LaSalle acquired the project management business of the
Satulah Group, which significantly enhanced the Company's leadership
position in this area.
. In the area of co-investment, LaSalle completed an initial public
offering in April of LaSalle Hotel Properties (LHO), a $400 million
hotel real estate investment trust that owns 12 luxury properties.
As of December 31, 1998, LaSalle's ownership interest in LHO was
approximately 6.4 percent.
-- more --
<PAGE>
LA SALLE ANNOUNCES STRONG 1998 RESULTS - Add One
. Furthering the Company's industry consolidation initiative, LaSalle
purchased COMPASS Management and Leasing and the U.S. retail property
management business of Lend Lease in October, positioning its
Management Services business as the largest real estate management
services company in the U.S., with over 400 million square feet
under management.
. Demonstrating the firm's commitment to long-term client
relationships, LaSalle's Tenant Representation group established
seven new strategic alliances. In addition, the Facility Services
group added nine new client relationships.
. Finally, in October, LaSalle reached a definitive agreement to merge
operations with Jones Lang Wootton, one of the world's leading real
estate services companies. (Pro forma adjusted net earnings for
the Jones Lang Wootton Companies for the years ended December 31, 1998
and 1997 are summarized in the attached schedule.)
Scott added that, "Upon closing of the Jones Lang Wootton merger, we
will adopt a new company name - Jones Lang LaSalle. Together, the combined
company will manage approximately 650 million square feet of property,
provide investment management services for $20.3 billion of assets, and
operate a business with more than 6,000 employees across 79 key markets in
34 countries on five continents."
The company noted that the completion of the Jones Lang Wootton merger
is conditional upon the satisfaction of various closing conditions,
including the approval of LaSalle stockholders. A proxy statement
soliciting approval has been mailed to stockholders, and a special meeting
has been scheduled for March 10, 1999. If LaSalle stockholder approval is
received and the other closing conditions are met, the transaction is
expected to close shortly after the meeting.
1998 SEGMENT HIGHLIGHTS
- -----------------------
In 1998, the Corporate and Financial Services segment reported revenue
of $82.4 million and operating income of $19.9 million, a 25 percent
increase over the prior year. The gains were driven primarily by strong
transaction volume across each of the three business groups within this
segment, despite the turbulence in the capital and institutional investment
markets, which began in September.
Revenues for Investment Management grew 15 percent to $88.3 million
while operating income increased 65 percent to $18.6 million in 1998.
While impressive, these results were primarily driven by incentive fees
generated by the initial public offering of LaSalle Hotel Properties.
-- more --
<PAGE>
LA SALLE ANNOUNCES STRONG 1998 RESULTS - Add Two
Management Services reported 1998 operating income of $9.4 million,
compared with $7.9 million in 1997, primarily attributable to strong
leasing volume and new business activities. The segment reported full-year
revenue growth of 57 percent to $136.1 million from $86.6 million in the
prior year, principally related to the recent acquisitions of Galbreath,
Satulah and COMPASS.
FOURTH QUARTER RESULTS
- ----------------------
Adjusted net earnings for the fourth quarter ended December 31, 1998
totaled $17.9 million, or $1.10 per share, compared with pro forma adjusted
net earnings of $14.2 million, or $.87 per share in the 1997 fourth
quarter. Actual net earnings for the fourth quarter 1998, including merger
related, non-recurring charges, totaled $11.8 million, or $.72 per fully
diluted share.
Revenue for the quarter totaled $114.4 million, up 37 percent from
$83.3 million in the comparable prior-year period. Fourth quarter
operating expenses, exclusive of the merger related, non-recurring costs,
increased 36 percent to $81.6 million from $60.1 million a year ago, and
operating income before merger related non-recurring charges advanced 41
percent to $32.8 million from $23.2 million in the 1997 fourth quarter.
JONES LANG WOOTTON PRO FORMA RESULTS
- ------------------------------------
The 1998 pro forma adjusted net earnings exclude the legal, accounting
and other transaction costs associated with the integration of the Jones
Lang Wootton Companies and the pending merger with LaSalle Partners. These
costs totaled $22.6 million on both a pre-tax and after-tax basis for the
year. Jones Lang Wootton's pro forma results reflect the adjustments for
market compensation, taxes and other costs associated with the integration
of the companies, as described in the LaSalle Partners' proxy dated
February 4, 1999.
The Jones Lang Wootton Companies' pro forma adjusted net earnings for
the year ended December 31, 1998 rose 23 percent to $27.7 million, up from
$22.5 million in 1997. Revenues for the year totaled $482.5 million versus
$436.0 million in the prior year. Operating expenses, exclusive of the
merger related non-recurring charges, were $437.5 million in 1998,
resulting in a 22 percent increase in adjusted operating earnings and an 18
percent increase in adjusted EBITDA versus 1997.
-- more --
<PAGE>
LA SALLE ANNOUNCES STRONG 1998 RESULTS - Add Three
LaSalle Partners Incorporated, founded in 1968 and headquartered in
Chicago, is a leading, vertically integrated global real estate services
firm providing management services, corporate and financial services and
investment management services for public and private institutions and
other real estate owners and investors worldwide.
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 LASALLE
PARTNERS 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 "RISK FACTORS" AND
ELSEWHERE IN LASALLE PARTNERS' PROSPECTUS FILED AS PART OF ITS REGISTRATION
STATEMENT (333-25741); UNDER "BUSINESS," "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," AND ELSEWHERE
IN LASALLE PARTNERS' ANNUAL REPORT OR FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1997; UNDER "RISK FACTORS," "THE TRANSACTIONS," "THE PURCHASE
AGREEMENTS," "JLW MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONAL RESULTS OF OPERATIONS OF THE JLW COMPANIES" AND ELSEWHERE IN
LASALLE PARTNERS' PROXY STATEMENT DATED FEBRUARY 4, 1999; AND IN OTHER
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. STATEMENTS
SPEAK ONLY AS OF THE DATE OF THIS RELEASE. LASALLE PARTNERS EXPRESSLY
DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO UPDATE OR REVISE ANY FORWARD-
LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN LASALLE
PARTNERS' EXPECTATIONS OR RESULTS, OR ANY CHANGE IN EVENTS. STATEMENTS IN
THIS PRESS RELEASE REGARDING PARTIES OTHER THAN LASALLE PARTNERS ARE BASED
UPON REPRESENTATIONS OF SUCH OTHER PARTIES.
# # #
<PAGE>
<TABLE>
LA SALLE PARTNERS INCORPORATED
Consolidated and Combined Statements of Earnings
1998 Adjusted Actual (1) 1997 and 1996 Pro Forma (2)
($ in thousands, except share data)
(Unaudited)
<CAPTION>
Three Months Ended
December 31, Year Ended December 31,
---------------------- -----------------------------------
Adjusted Pro Adjusted Pro Forma
Actual Forma Actual ----------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenue:
Fee based services . . . . . . . . . . . . . . $ 112,229 81,214 298,296 227,762 183,349
Equity in earnings from
unconsolidated ventures. . . . . . . . . . . 1,571 1,390 3,911 3,311 3,792
Other income . . . . . . . . . . . . . . . . . 555 687 2,257 1,911 2,257
---------- ---------- ---------- ---------- ----------
Total revenue. . . . . . . . . . . . . . . . 114,355 83,291 304,464 232,984 189,398
Operating expenses:
Compensation and benefits. . . . . . . . . . . 56,207 37,169 172,982 128,365 105,387
Operating, administrative and other. . . . . . 20,107 20,292 70,164 60,212 46,387
Depreciation and amortization. . . . . . . . . 5,278 2,598 13,455 9,756 7,447
---------- ---------- ---------- ---------- ----------
Total operating expenses before merger
related non-recurring charges. . . . . . . 81,592 60,059 256,601 198,333 159,221
---------- ---------- ---------- ---------- ----------
Operating income before merger related
non-recurring charges. . . . . . . . . . . 32,763 23,232 47,863 34,651 30,177
Merger related non-recurring charges (1) . . . 10,021 -- 10,021 -- --
---------- ---------- ---------- ---------- ----------
Operating income . . . . . . . . . . . . . . 22,742 23,232 37,842 34,651 30,177
Interest expense . . . . . . . . . . . . . . . . 3,161 136 4,153 1,000 1,075
---------- ---------- ---------- ---------- ----------
Earnings before provision for
income taxes . . . . . . . . . . . . . . . 19,581 23,096 33,689 33,651 29,102
Net provision for income taxes . . . . . . . . . 7,792 8,893 13,224 12,956 11,204
---------- ---------- ---------- ---------- ----------
Net earnings . . . . . . . . . . . . . . . . 11,789 14,203 20,465 20,695 17,898
<PAGE>
LA SALLE PARTNERS INCORPORATED
Consolidated and Combined Statements of Earnings - Continued
Three Months Ended
December 31, Year Ended December 31,
---------------------- -----------------------------------
Adjusted Pro Adjusted Pro Forma
Actual Forma Actual ----------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Adjustments (1):
Merger related non-recurring charges . . . . . 10,021 -- 10,021 -- --
Tax benefit associated with
merger related non-recurring charges . . . . (3,933) -- (3,933) -- --
---------- ---------- ---------- ---------- ----------
Adjusted net earnings. . . . . . . . . . . $ 17,877 14,203 26,553 20,695 17,898
========== ========== ========== ========== ==========
Adjusted EBITDA (3). . . . . . . . . . . . . . . $ 38,041 $ 25,830 $ 61,318 $ 44,407 $ 37,624
========== ========== ========== ========== ==========
Adjusted earnings per common share . . . . . . . $ 1.10 $ 0.88 $ 1.64 $ 1.28 $ 1.10
========== ========== ========== ========== ==========
Weighted average shares outstanding. . . . . . . 16,230,726 16,200,000 16,215,478 16,200,000 16,200,000
========== ========== ========== ========== ==========
Adjusted diluted earnings per common share . . . $ 1.10 $ 0.87 $ 1.62 $ 1.27 $ 1.10
========== ========== ========== ========== ==========
Diluted weighted average shares
outstanding. . . . . . . . . . . . . . . . . . 16,322,327 16,345,408 16,387,721 16,329,555 16,329,555
========== ========== ========== ========== ==========
<FN>
(1) Adjusted 1998 Actual represents actual historical earnings of LaSalle Partners Incorporated, including the
operating results for Compass since its acquisition, adjusted for merger related non-recurring charges which
consist of integration and transition costs related to the Compass acquisition and non-capitalizable merger
related expenses associated with the pending merger with Jones Lang Wootton.
(2) Pro forma results give effect to (i) the merger of Galbreath with the Company on April 22, 1997, as adjusted
for the tenant representation and investment banking units which were not acquired, as if such merger had occurred
on January 1, 1996, (ii) the provision for income taxes as though the Company and Galbreath were taxable entities
as of January 1, 1996 at an effective tax rate of 38.5%, and (iii) estimated incremental general and
administrative costs associated with operations as a public company and the repayment of the Company's long-term
debt out of the proceeds of the initial public offering as if the offering had occurred on January 1, 1996.
(3) Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation and amortization and
excludes merger related non-recurring expenses resulting from integration and transition costs related to the
Compass acquisition and non-capitalizable merger related expenses associated with the pending merger with Jones
Lang Wootton.
</TABLE>
<PAGE>
<TABLE>
LA SALLE PARTNERS INCORPORATED
Consolidated Combined Statement of Earnings
($ in thousands, except share data)
(Unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- -----------------------------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenue:
Fee based services . . . . . . $ 112,229 81,214 298,296 219,911 155,466
Equity in earnings from
unconsolidated ventures. . . 1,571 1,390 3,911 3,238 3,220
Other income . . . . . . . . . 555 687 2,257 1,624 767
---------- ---------- ---------- ---------- ----------
Total revenue. . . . . . . . 114,355 83,291 304,464 224,773 159,453
Operating expenses:
Compensation and benefits. . . 56,207 37,169 172,982 123,281 89,252
Operating, administrative
and other. . . . . . . . . . 20,107 20,292 70,164 57,285 37,884
Depreciation and
amortization . . . . . . . . 5,278 2,598 13,455 9,093 5,416
---------- ---------- ---------- ---------- ----------
Total operating expenses
before merger related
non-recurring charges. . . 81,592 60,059 256,601 189,659 132,552
---------- ---------- ---------- ---------- ----------
Operating income before
merger related
non-recurring charges. . . 32,763 23,232 47,863 35,114 26,901
Merger related non-recurring
charges (1). . . . . . . . . 10,021 -- 10,201 -- --
---------- ---------- ---------- ---------- ----------
Operating income . . . . . . 22,742 23,232 37,842 35,114 26,901
Interest expense . . . . . . . . 3,161 136 4,153 3,995 5,730
---------- ---------- ---------- ---------- ----------
Earnings before provision
for income taxes . . . . . 19,581 23,096 33,689 31,119 21,171
Net provision for income
taxes. . . . . . . . . . . 7,792 7,087 13,224 5,279 1,207
---------- ---------- ---------- ---------- ----------
Net earnings . . . . . . . . $ 11,789 16,009 20,465 25,840 19,964
========== ========== ========== ========== ==========
<PAGE>
LA SALLE PARTNERS INCORPORATED
Consolidated Combined Statement of Earnings - Continued
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- -----------------------------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Earnings per common share (2). . $ 0.73 0.99 1.26 1.50
========== ========== ========== ==========
Weighted average shares
outstanding. . . . . . . . . . 16,230,726 16,200,000 16,215,478 16,200,000
========== ========== ========== ==========
Diluted earnings per
common share (2). . . . . . . $ 0.72 0.98 1.25 1.49
========== ========== ========== ==========
Diluted weighted average shares
outstanding. . . . . . . . . . 16,322,327 16,345,408 16,387,721 16,329,613
========== ========== ========== ==========
<FN>
(1) Merger related non-recurring charges include integration and transition costs related to the Compass
acquisition and non-capitalizable merger related expenses associated with the pending merger with
Jones Lang Wootton.
(2) Earnings per share for 1997 is calculated based on earnings for the period from conversion to corporate form,
July 22, 1997, through December 31,1997.
</TABLE>
<PAGE>
<TABLE>
LA SALLE PARTNERS INCORPORATED
Segment Results
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- -----------------------------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
MANAGEMENT SERVICES:
Revenue:
Property and facility
management fees. . . . . . $ 28,438 15,200 62,317 43,547 32,143
Leasing fees . . . . . . . . 23,109 11,981 43,099 25,159 14,819
Development management . . . 4,443 3,963 11,229 8,853 5,825
Project management . . . . . 5,118 3,010 17,479 7,994 6,297
Intersegment revenue . . . . 647 120 1,046 195 200
Equity in earnings from
unconsolidated ventures. . 47 340 47 340 --
Other income . . . . . . . . 207 178 880 464 281
---------- ---------- ---------- ---------- ----------
62,009 34,792 136,097 86,552 59,565
Operating expenses:
Compensation, operating and
administrative expenses. . 40,455 21,949 119,079 75,039 46,794
Depreciation and amortization 3,740 1,203 7,620 3,605 1,651
---------- ---------- ---------- ---------- ----------
Operating income . . . . . $ 17,814 11,640 9,398 7,908 11,120
========== ========== ========== ========== ==========
CORPORATE & FINANCIAL SERVICES:
Revenue:
Tenant representation. . . . $ 21,593 15,399 42,558 33,485 28,793
Investment banking . . . . . 6,226 9,811 27,058 19,401 6,664
Land fees. . . . . . . . . . 4,287 3,016 9,591 5,955 4,536
Construction operations. . . 450 465 1,257 1,100 1,271
Equity in earnings from
unconsolidated ventures. . 375 45 322 476 1,380
Intersegment revenue . . . . 778 1,072 1,307 1,464 1,000
Other income . . . . . . . . 100 239 342 422 253
---------- ---------- ---------- ---------- ----------
33,809 30,047 82,435 62,303 43,897
Operating expenses:
Compensation, operating and
administrative expenses. . 19,874 17,907 61,231 45,240 32,410
Depreciation and amortization 395 327 1,321 1,197 1,055
---------- ---------- ---------- ---------- ----------
Operating income . . . . . $ 13,540 11,813 19,883 15,866 10,432
========== ========== ========== ========== ==========
<PAGE>
LA SALLE PARTNERS INCORPORATED
Segment Results - Continued
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- -----------------------------------------
1998 1997 1998 1997 1996
---------- ---------- ---------- ---------- ----------
INVESTMENT MANAGEMENT:
Revenue:
Advisory fees. . . . . . . . $ 15,686 16,671 77,306 70,817 52,217
Acquisition fees . . . . . . 2,878 1,698 6,402 3,600 2,939
Equity in earnings from
unconsolidated ventures. . 1,149 1,005 3,542 2,422 1,840
Other income . . . . . . . . 249 270 1,035 738 195
---------- ---------- ---------- ---------- ----------
19,962 19,644 88,285 77,577 57,191
Operating Expenses:
Compensation, operating and
administrative expenses. . 17,410 18,797 65,189 61,946 49,132
Depreciation and amortization 1,143 1,068 4,514 4,291 2,710
---------- ---------- ---------- ---------- ----------
Operating income . . . . . . $ 1,409 (221) 18,582 11,340 5,349
========== ========== ========== ========== ==========
Total segment revenue. . . . . . $ 115,780 84,483 306,817 226,432 160,653
Intersegment revenue
eliminations . . . . . . . . . (1,425) (1,192) (2,353) (1,659) (1,200)
Total revenue. . . . . . . . 114,355 83,291 304,464 224,773 159,453
========== ========== ========== ========== ==========
Total segment operating
expenses . . . . . . . . . . . $ 83,017 61,251 258,954 191,318 133,752
Intersegment operating
expense eliminations . . . . . (1,425) (1,192) (2,353) (1,659) (1,200)
---------- ---------- ---------- ---------- ----------
Total operating expenses
before merger related
non-recurring charges. . . . $ 81,592 60,059 256,601 189,659 132,552
========== ========== ========== ========== ==========
Operating income before
merger related non-recurring
charges. . . . . . . . . . . $ 32,763 23,232 47,863 35,114 26,901
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
LA SALLE PARTNERS INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
($ in thousands, except share data)
(Unaudited)
1998 1997
---------- ----------
ASSETS
- ------
Current assets:
Cash and cash equivalents. . . . . . . . . . $ 16,941 30,660
Trade receivables, net . . . . . . . . . . . 116,965 80,565
Notes receivable and advances to
real estate ventures . . . . . . . . . . . 17,042 6,995
Other receivables. . . . . . . . . . . . . . 3,385 2,400
Prepaid expenses . . . . . . . . . . . . . . 2,185 2,055
Deferred tax benefit . . . . . . . . . . . . 9,926 5,104
---------- ----------
Total current assets . . . . . . . . . . . 166,444 127,779
Property and equipment, at cost, less
accumulated depreciation of $40,039
and $28,993 in 1998 and 1997,
respectively . . . . . . . . . . . . . . . . 28,773 16,098
Intangibles resulting from business
acquisitions, net of accumulated
amortization of $11,961 and
$5,698 in 1998 and 1997, respectively. . . . 229,437 50,366
Investments in real estate ventures. . . . . . 52,976 18,080
Long-term receivables, net . . . . . . . . . . 10,950 6,607
Other assets, net. . . . . . . . . . . . . . . 2,341 957
---------- ----------
$ 490,921 219,887
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- -----------------------------------
Current liabilities:
Accounts payable and accrued
liabilities. . . . . . . . . . . . . . . . $ 51,101 25,781
Accrued compensation . . . . . . . . . . . . 58,398 40,163
Other liabilities. . . . . . . . . . . . . . 8,324 6,100
---------- ----------
Total current liabilities. . . . . . . . . 117,823 72,044
Long-term liabilities:
Credit facilities. . . . . . . . . . . . . . 202,923 --
Other. . . . . . . . . . . . . . . . . . . . 603 946
Commitments and contingencies
---------- ----------
Total liabilities. . . . . . . . . . . . . 321,349 72,990
Stockholders' equity:
Common stock, $.01 par value per
share, 100,000,000 shares authorized;
16,264,176 shares issued and
outstanding. . . . . . . . . . . . . . . . 163 162
Additional paid-in capital . . . . . . . . . 123,543 121,778
Retained earnings. . . . . . . . . . . . . . 44,792 24,327
Accumulated other comprehensive income . . . 1,074 630
---------- ----------
Total stockholders' equity . . . . . . . . 169,572 146,897
---------- ----------
$ 490,921 219,887
========== ==========
<PAGE>
PRO FORMA JLW COMPANIES
COMBINED STATEMENTS OF PRO FORMA EARNINGS
1998 Pro Forma Adjusted Actual (1) and 1997 Pro Forma (2)
($ in thousands)
(Unaudited)
Pro Forma Year
Ended December 31,
-----------------------
Adjusted
Actual
1998 1997
---------- ----------
Revenue:
Fee based services . . . . . . . . . . . . . $ 471,961 428,769
Equity in earnings from unconsolidated
ventures . . . . . . . . . . . . . . . . . -- 2,502
Other income . . . . . . . . . . . . . . . . 10,515 4,740
---------- ----------
Total revenue. . . . . . . . . . . . . . . 482,476 436,011
Operating expenses:
Compensation and benefits. . . . . . . . . . 262,998 231,598
Operating, administrative and other. . . . . 161,238 155,197
Depreciation and amortization. . . . . . . . 13,228 12,297
---------- ----------
Total operating expenses before
merger related non-recurring charges . . 437,464 399,092
---------- ----------
Operating income before merger
related non-recurring charges. . . . . . . 45,012 36,919
Merger related non-recurring charges (1) . . 22,553 --
---------- ----------
Operating income . . . . . . . . . . . . . 22,459 36,919
Interest expense . . . . . . . . . . . . . . . 1,446 1,436
---------- ----------
Earnings before provision for
income taxes . . . . . . . . . . . . . . 21,013 35,483
Net provision for income taxes . . . . . . . . 15,248 12,419
Minority interest. . . . . . . . . . . . . . . 658 549
---------- ----------
Net earnings . . . . . . . . . . . . . . . 5,107 22,515
Adjustments (1):
Merger related non-recurring charges . . . . 22,553 --
Tax benefit associated with merger
related non-recurring charges. . . . . . . -- --
---------- ----------
Adjusted net earnings. . . . . . . . . . . $ 27,660 22,515
========== ==========
Adjusted EBITDA (3). . . . . . . . . . . . . . $ 57,582 48,667
========== ==========
<PAGE>
(1) Pro Forma Adjusted Actual 1998 represents actual historical earnings
of each of the JLW Companies giving effect to combination and integration
adjustments and new market based compensation packages for the year ended
December 31, 1998. Net earnings is adjusted for non-capitalizable merger
related expenses, which primarily consist of professional fees and
transition costs, associated with the integration of the JLW Companies and
the pending merger with LaSalle Partners.
(2) Pro Forma 1997 represents actual historical earnings of each of the
JLW Companies giving effect to combination and integration adjustments and
new market based compensation packages for the year ended December 31,
1997.
(3) Adjusted EBITDA represents earnings before interest expense, income
taxes, depreciation and amortization, minority interest, and excludes
merger related non-recurring charges, which primarily consist of
professional fees and transition costs, associated with the integration of
the JLW Companies and the pending merger with LaSalle Partners.
