CHICAGO, October 28, 2008 – Jones Lang LaSalle Incorporated (NYSE: JLL), the leading integrated financial and professional services firm specializing in real estate, today reported net income on a U.S. GAAP basis of $15 million, or $0.43 per diluted share of common stock, for the quarter ended September 30, 2008, compared with net income of $47 million, or $1.38 per share, for the third quarter of 2007. On a year-to-date basis, 2008 net income was $42 million, or $1.25 per share, compared with net income of $152 million, or $4.50 per share in 2007. Included in the firm’s year-to-date 2007 results was a significant second-quarter transaction advisory fee earned in the Asia Pacific Hotels business. Operating income for the third quarter of 2008 was $33 million, compared with $65 million for the prior year, and on a year-to-date basis, operating income was $80 million in 2008 and $202 million in 2007. The firm’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the 2008 third quarter and year to date were $62 million and $139 million, respectively.

Third Quarter 2008 Highlights:

• Americas revenue grew 35 percent driven by Staubach merger, corporate outsourcing activity and organic leasing growth
• LaSalle Investment Management’s advisory fees increased 12 percent
• EBITDA of $62 million, up from $55 million in the second quarter of 2008
• Semi-annual dividend declared

Revenue increased in the third quarter of 2008 by 8 percent compared with 2007, to $677 million, despite significant revenue decreases in Capital Markets and Hotels for the period. Transaction Services revenue growth was driven by Leasing, which increased 45 percent to $192 million. The strong growth in Leasing resulted from the addition of The Staubach Company in the third quarter, as well as organic growth; all regions reported Leasing revenue growth compared with a year ago. Excluding Capital Markets and Hotels, Transaction Services revenue increased by 28 percent over 2007, to $276 million, for the third quarter. Management Services revenue increased 23 percent to $226 million for the third quarter, with all operating regions achieving revenue growth. LaSalle Investment Management’s Advisory fees increased 12 percent over the prior year to $71 million while Incentive fees increased 5 percent to $6 million.   

For the first nine months of 2008, revenue increased to $1.9 billion, 6 percent over the prior year, despite a year-over-year revenue decrease in Capital Markets and Hotels of $154 million and the additional effect of the 2007 Asia Pacific Hotels advisory fee. Factors driving year-to-date performance were similar to those experienced in the third quarter. The current revenue contribution from acquisitions completed in the last 12 months was $85 million and $155 million for the 2008 third quarter and year to date, respectively.

“Strong performance in the Americas region and LaSalle Investment Management, together with the success of our recent Staubach and Kemper’s acquisitions, combined to mitigate the effects of the ongoing crisis in worldwide capital markets,” said Colin Dyer, Chief Executive Officer of Jones Lang LaSalle. “Our acquisition integrations are proceeding well, and our merged teams have begun to win new business together,” Dyer continued.

Operating expenses increased 15 percent for the quarter and year to date, to $644 million and $1.8 billion, respectively. Operating costs in the first nine months increased across all segments, principally due to costs of acquisitions closed in the last 12 months. Specifically, Kemper’s and The Staubach Company, which closed in quarters two and three, respectively, added to the firm’s cost structure. Year-to-date 2008 operating expenses, including integration and intangible amortization, from the 16 acquisitions completed in the last 12 months were $96 million for the third quarter and $162 million year to date, which were not reflected in the firm’s 2007 results.

Restructuring Charges of $10 million for the quarter ended September 30, 2008, include $8 million of severance across the business but principally in EMEA, to adjust the size of the firm’s platform for current and expected market conditions, and $2 million of integration costs incurred in migrating Kemper’s and The Staubach Company into Jones Lang LaSalle.  These costs are excluded from segment operating results, however, are included for consolidated reporting.

Dividend and Balance Sheet
The firm announced that its Board of Directors declared a semi-annual dividend of $0.25 per share of its common stock.  This represents a 50 percent reduction from the dividend previously paid.  The new dividend level reflects the firm’s desire to prudently manage its balance sheet given the overall uncertainty in the global markets.  The dividend payment will be made on Monday, December 15, 2008, to holders of record at the close of business on Friday, November 14, 2008.  A dividend-equivalent will also be paid on unvested shares of restricted stock units.

During the third quarter, the firm increased its bank credit facilities from $575 million to $875 million in connection with the Staubach merger.   The credit facilities have a maturity of June 2012.   The firm’s outstanding debt on these credit facilities at September 30, 2008, was $543 million.   The maximum Leverage Ratio, as defined in the firm’s credit agreements with its bank group, is 3.25X, and the firm’s ratio at September 30, 2008, was significantly below this threshold.   Included in debt for the calculation of the Leverage Ratio is the present value of deferred business acquisition obligations and included in Adjusted EBITDA (as defined in the credit agreements) are an add back for stock compensation expense and the EBITDA of acquired companies, including Staubach, earned prior to acquisition.

Business Segment Third Quarter Performance Highlights
Investor and Occupier Services
In the Americas region, revenue for the third quarter of 2008 was $254 million, an increase of 35 percent over the same period last year. For the first nine months of 2008, revenue was $618 million, an increase of 20 percent. Excluding the impact of lower revenue from Capital Markets and Hotels, which decreased from 2007 by $8 million or 28 percent for the quarter, and by $31 million or 42 percent year to date, as well as the Staubach acquisition, Americas third-quarter and year-to-date revenues were $187 million and $528 million, representing increases of 17 percent and 20 percent over the prior year, respectively. 

Management Services revenue increased 27 percent over the prior year third quarter to $111 million, and 21 percent year to date to $294 million. Transaction Services revenue increased 44 percent for the quarter to $134 million, and 20 percent year to date to $302 million. Transaction Services revenue excluding Capital Markets and Hotels increased 75 percent in the third quarter, primarily from the impact of Staubach, and for the first nine months of 2008 grew 46 percent primarily as a result of increased leasing activity developed organically and through the Staubach acquisition. The region’s total Leasing revenue in the third quarter, including both Tenant Representation and Agency Leasing, increased 80 percent, to $98 million, up from $54 million in the same period last year. On a year-to-date basis, Leasing revenue increased 46 percent to $215 million, compared with 2007. Excluding Staubach’s contribution, Leasing revenue increased 10 percent and 21 percent in the quarter and year to date, respectively, from the comparable periods last year. Additionally, the firm’s Mexico and South America businesses contributed strong revenue increases in the quarter.

The Corporate Solutions business in the Americas, which provides comprehensive outsourcing services including transactions, project development and integrated facility management, grew 26 percent in the quarter and 30 percent year to date as compared with the same periods in 2007. The trend toward corporate outsourcing of real estate services continues to build as clients assess their operating costs and look for potential savings.

Operating expenses were $237 million for the third quarter of 2008, an increase of 41 percent, and $590 million year to date, an increase of 26 percent over the prior year. Excluding the impact of Staubach, operating expenses increased 8 percent for the quarter and 14 percent year to date. The region’s EBITDA for the 2008 third quarter and year to date was $34 million and $59 million, respectively. Second-quarter 2008 EBITDA was $18 million.

EMEA’s third-quarter revenue was $209 million, a decrease of 7 percent from the prior year, while year-to-date revenue was $628 million, an increase of 5 percent over 2007. Excluding the impact of Capital Markets and Hotels, third-quarter revenue grew 18 percent and year-to-date revenue increased 34 percent compared with 2007. The current revenue contribution from seven acquisitions closed in the last 12 months was $28 million and $63 million for the 2008 third quarter and year to date, respectively.

Management Services revenue grew 42 percent for the third quarter and 53 percent for the first nine months of 2008. The acquisition of a French project development services firm in the fourth quarter of 2007 largely contributed to this increase. Transaction Services revenue excluding Capital Markets and Hotels increased 5 percent for the third quarter and 26 percent for the first nine months of 2008. Leasing revenue increased over the prior year for both the third quarter and year to date by 26 and 25 percent, respectively. Advisory Services revenue, which is included in Transaction Services, decreased 10 percent for the third quarter yet remains up 22 percent year to date over the prior year.

Operating expenses for the third quarter decreased 4 percent to $203 million, and increased 13 percent to $627 million for the first nine months of 2008 compared with 2007, primarily due to the impact of acquisitions. The seven acquisitions completed in the last 12 months added $30 million of incremental operating expenses, including integration and amortization, in the third-quarter results, and $64 million year to date. The region’s EBITDA for the 2008 third quarter and year to date was $14 million and $22 million, respectively. Second-quarter 2008 EBITDA was $9 million.

Revenue for the Asia Pacific region was $133 million for the third quarter of 2008, compared with $134 million in 2007, and $392 million for the first nine months of 2008, compared with $432 million in 2007. Included in the region’s year-to-date 2007 results was the significant transaction advisory fee earned in the Hotels business. The current revenue contribution from five acquisitions closed in the last 12 months was $6 million and $14 million for the 2008 third quarter and year to date, respectively.

Management Services revenue in the region was $62 million for the third quarter, an increase of 6 percent, and $180 million for the first nine months of 2008, an increase of 20 percent over the prior year. Transaction Services revenue was $70 million for the third quarter, a decrease of 5 percent from the prior year, and $207 million year to date, a decrease of 25 percent. Capital Markets and Hotels revenue, excluding the 2007 Hotels advisory fee, decreased for the first nine months of 2008 by $28 million or 43 percent. Leasing revenue increased by 11 percent for the third quarter and 26 percent for the first nine months of 2008, compared with 2007. 
Geographically, the region’s most significant third-quarter revenue increases came from Hong Kong, which increased 19 percent, and China, which was up 39 percent. On a year-to-date basis, the growth markets of India and China were the strongest contributors to revenue increases. India increased 41 percent as a result of local market growth and the acquisition that closed in the third quarter of 2007. China increased 37 percent over last year and the core market of Hong Kong grew 15 percent. 

Operating expenses for the region were $133 million for the third quarter of 2008 and $395 million for the first nine months of 2008. With an aggressive focus on costs, operating expenses increased only 4 percent year over year for the quarter in the face of higher occupancy costs from business expansion in growth markets, as well as additional amortization on intangibles from businesses purchased in the last 12 months. The impact of the five acquisitions included in 2008 operating expenses added $6 million to the third quarter and $14 million to the first nine months of 2008.

The region’s EBITDA for the 2008 third quarter and year to date was $4 million and $7 million, respectively. Second-quarter 2008 EBITDA was $8 million.

LaSalle Investment Management
LaSalle Investment Management’s 2008 third-quarter revenue was $81 million, compared with $82 million in 2007, and 2008 year-to-date revenue was $261 million, compared with $256 million in 2007. Core revenue growth has continued into the third quarter, marked by a 12 percent increase in Advisory fees to $71 million which largely offset declines in transaction services and equity earnings. Year-to-date Advisory fees increased 25 percent for the first nine months of 2008. This growth in LaSalle Investment Management’s annuity business was principally due to a 12 percent increase in assets under management over the prior year, to $52.7 billion, together with Advisory fees generated from committed capital, principally raised in the third and fourth quarters of 2007. 

During the third quarter of 2008, Incentive fees reached $6 million, increasing 5 percent over the same period in 2007. Year-to-date Incentive fees were down 44 percent as compared with the first nine months of 2007, reflecting varied timing of asset sales in prior periods. Incentive fees vary significantly from period to period due to asset sales, the performance of the underlying investments and the contractual timing of the measurement periods for different clients. Currently, asset sales are being impacted by the limited availability of financing.

LaSalle Investment Management raised $1.1 billion of equity year to date, nearly all completed in the first half of the year, compared with $7.9 billion for the first nine months of 2007. Investments made on behalf of clients in the first nine months of 2008 were $3.6 billion, compared with $7.3 billion in 2007. 

Summary
Organic growth and the successful integration of acquisitions continue to drive the firm's core businesses and globally diverse platform and compensate for ongoing weakness in capital markets. LaSalle Investment Management’s financial results reflect its significant annuity-like revenue base, as well as its track record and research-based approach for delivering value for clients. The firm’s corporate outsourcing and management services offerings continue to grow as clients seek quality assistance with their real estate services needs. The recent Staubach merger is contributing to strong Americas performance. In the midst of economic uncertainty, the firm is aggressively managing its cost base, including selective staff reductions, while remaining committed to its clients and leadership position across service lines, including Capital Markets and Hotels.