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Business Segments
 6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
Business Segments
4.
BUSINESS SEGMENTS
We manage and report our operations as four business segments:
The three geographic regions of RES including:
(1) Americas,
(2) Europe, Middle East and Africa ("EMEA"), and
(3) Asia Pacific;
and
(4) LaSalle, which offers investment management services on a global basis.
Each geographic region offers our full range of Real Estate Services, including agency leasing and tenant representation, capital markets and hotels, property management, facilities management, project and development management, energy management and sustainability, construction management, and advisory, consulting and valuation services. We define "property management" to mean services we provide to non-occupying property investors, "facilities management" means services we provide to owner-occupiers. LaSalle provides investment management services to institutional investors and high-net-worth individuals.
Operating income represents total revenue less direct and allocated indirect expenses. We allocate all indirect expenses to our segments, other than interest and income taxes, as nearly all expenses incurred benefit one or more of the segments. Allocated expenses primarily consist of corporate global overhead, which we allocate to the business segments based on the budgeted operating expenses of each segment.
For segment reporting, we present revenue net of gross contract costs in our RES segments. Excluding these costs from revenue and expenses results in a "net" presentation of "fee revenue" and "fee-based operating expenses" that we believe more accurately reflects how we manage our expense base and operating margins. See Note 3 for additional information on our gross and net accounting policies. For segment reporting, we present Equity earnings from real estate ventures within total segment revenue, since the related activity is an integral part of LaSalle. Finally, our measure of segment results excludes Restructuring and acquisition charges.
The Chief Operating Decision Maker of JLL measures the segment results net of gross contract costs, inclusive of Equity earnings from real estate ventures, and excluding Restructuring and acquisition charges. We define the Chief Operating Decision Maker collectively as our Global Executive Board, which is comprised of our Global Chief Executive Officer, Global Chief Financial Officer, the Chief Executive Officers of each of our four business segments, and the Chair of the Global Corporate Solutions Board.
Summarized financial information by business segment is as follows.
 
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2016
2015
2016
2015
Real Estate Services
 
 
 
 
Americas
 
 
 
 
Revenue
$
672.9

597.5

$
1,276.4

1,151.7

Equity earnings
0.4

0.5

0.7

0.9

Total segment revenue
673.3

598.0

1,277.1

1,152.6

Gross contract costs
(43.4
)
(52.9
)
(92.2
)
(105.9
)
Total segment fee revenue
629.9

545.1

1,184.9

1,046.7

Operating expenses:
 

 

 

 

Compensation, operating and administrative expenses
607.4

536.7

1,162.0

1,040.3

Depreciation and amortization
18.4

15.3

37.3

30.9

Total segment operating expenses
625.8

552.0

1,199.3

1,071.2

Gross contract costs
(43.4
)
(52.9
)
(92.2
)
(105.9
)
Total fee-based segment operating expenses
582.4

499.1

1,107.1

965.3

Operating income
$
47.5

46.0

$
77.8

81.4

 
 
 
 
 
EMEA
 
 
 
 
Revenue
$
481.3

416.3

$
850.7

742.0

Equity earnings (losses)
—

1.1

(0.1
)
0.8

Total segment revenue
481.3

417.4

850.6

742.8

Gross contract costs
(148.2
)
(90.1
)
(261.1
)
(161.9
)
Total segment fee revenue
333.1

327.3

589.5

580.9

Operating expenses:
 

 

 

 

Compensation, operating and administrative expenses
453.1

379.1

826.8

702.2

Depreciation and amortization
8.2

6.1

15.8

11.3

Total segment operating expenses
461.3

385.2

842.6

713.5

Gross contract costs
(148.2
)
(90.1
)
(261.1
)
(161.9
)
Total fee-based segment operating expenses
313.1

295.1

581.5

551.6

Operating income
$
20.0

32.2

$
8.0

29.3

Continued: Summarized financial information by business segment is as follows.
 
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2016
2015
2016
2015
Real Estate Services
 
 
 
 
Asia Pacific
 
 
 
 
Revenue
$
322.4

279.6

$
585.8

517.3

Equity (losses) earnings
(0.1
)
0.1

—

—

Total segment revenue
322.3

279.7

585.8

517.3

Gross contract costs
(66.6
)
(48.7
)
(124.2
)
(98.3
)
Total segment fee revenue
255.7

231.0

461.6

419.0

Operating expenses:
 

 

 

 

Compensation, operating and administrative expenses
299.9

259.9

561.4

489.5

Depreciation and amortization
4.1

3.6

8.2

7.2

Total segment operating expenses
304.0

263.5

569.6

496.7

Gross contract costs
(66.6
)
(48.7
)
(124.2
)
(98.3
)
Total fee-based segment operating expenses
237.4

214.8

445.4

398.4

Operating income
$
18.3

16.2

$
16.2

20.6

 
 
 
 
 
LaSalle
 

 

 

 

Revenue
$
127.0

80.1

$
227.5

166.0

Equity earnings
8.9

25.4

21.6

36.8

Total segment revenue
135.9

105.5

249.1

202.8

Operating expenses:
 

 





Compensation, operating and administrative expenses
87.6

67.5

166.4

136.4

Depreciation and amortization
0.7

0.5

1.3

1.0

Total segment operating expenses
88.3

68.0

167.7

137.4

Operating income
$
47.6

37.5

$
81.4

65.4

 
 
 
 
 
Segment Reconciling Items
 

 

 

 

Total segment revenue
$
1,612.8

1,400.6

$
2,962.6

2,615.5

Reclassification of equity earnings
9.2

27.1

22.2

38.5

Total revenue
1,603.6

1,373.5

2,940.4

2,577.0

Total segment operating expenses before restructuring and acquisition charges
1,479.4

1,268.7

2,779.2

2,418.8

Operating income before restructuring and acquisition charges
124.2

104.8

161.2

158.2

Restructuring and acquisition charges
10.3

1.8

17.9

2.6

Operating income
$
113.9

103.0

$
143.3

155.6