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Business Segments | 6 Months Ended
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Jun. 30, 2017
Segment Reporting [Abstract] |
Business Segments |
3. | 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 and "facilities management" to represent 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, (a) gross contract costs and (b) net non-cash mortgage servicing rights ("MSR") and mortgage banking derivative activity are both excluded from revenue in determining "fee revenue". Gross contract costs are excluded from operating expenses in determining "fee-based operating expenses." Excluding these costs from revenue and expenses results in a net presentation which we believe more accurately reflects how we manage our expense base, operating margins, and performance. In addition, our measure of segment results excludes Restructuring and acquisition charges. We have reclassified certain prior year amounts to conform to the current presentation. Specifically during the first quarter of 2017, we revised our methodology for allocating overhead expenses and certain costs associated with our facilities management platform in EMEA to our reporting segments. Prior year amounts have been reclassified to conform to the current presentation. Reclassifications have not been material and have not affected reported net income or consolidated results. The Chief Operating Decision Maker of JLL measures and evaluates the segment results excluding (a) gross contract costs, (b) Net non-cash MSR and mortgage banking derivative activity, and (c) Restructuring and acquisition charges. As of June 30, 2017, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which is comprised of the following:
• | Global Chief Executive Officer
• | Global Chief Financial Officer
• | Chief Executive Officers of each of our four business segments
• | Global Chief Executive Officer of Corporate Solutions
• | Global Head of Capital Markets
• | Global Chief Human Resources Officer
Summarized financial information by business segment is as follows.
| Three Months Ended June 30, | Six Months Ended June 30,
(in millions) | 2017 | 2016 | 2017 | 2016
Real Estate Services |  |  |  |
Americas |  |  |  |
Revenue | $ | 791.8 |  | 672.9 |  | $ | 1,514.6 |  | 1,276.4 |
Gross contract costs | (43.9 | ) | (43.4 | ) | (91.0 | ) | (92.2 | )
Net non-cash MSR and mortgage banking derivative activity | (6.7 | ) | (2.7 | ) | (4.0 | ) | 0.6 |
Total fee revenue | 741.2 |  | 626.8 |  | 1,419.6 |  | 1,184.8 |
Operating expenses: |  |  |  |  |  |  |  |
Compensation, operating and administrative expenses | 693.1 |  | 604.1 |  | 1,354.9 |  | 1,156.4 |
Depreciation and amortization | 23.7 |  | 18.2 |  | 47.2 |  | 37.0 |
Total segment operating expenses | 716.8 |  | 622.3 |  | 1,402.1 |  | 1,193.4 |
Gross contract costs | (43.9 | ) | (43.4 | ) | (91.0 | ) | (92.2 | )
Total fee-based segment operating expenses | 672.9 |  | 578.9 |  | 1,311.1 |  | 1,101.2 |
Segment operating income | $ | 75.0 |  | 50.6 |  | $ | 112.5 |  | 83.0 |
Equity earnings | 0.2 |  | 0.4 |  | 0.4 |  | 0.7 |
Total segment income | $ | 75.2 |  | 51.0 |  | $ | 112.9 |  | 83.7 |
EMEA |  |  |  |
Revenue | $ | 592.4 |  | 481.3 |  | $ | 1,091.9 |  | 850.7 |
Gross contract costs | (153.3 | ) | (148.2 | ) | (293.1 | ) | (261.1 | )
Total fee revenue | 439.1 |  | 333.1 |  | 798.8 |  | 589.6 |
Operating expenses: |  |  |  |  |  |  |  |
Compensation, operating and administrative expenses | 572.3 |  | 457.5 |  | 1,090.9 |  | 835.0 |
Depreciation and amortization | 11.1 |  | 8.3 |  | 21.4 |  | 16.0 |
Total segment operating expenses | 583.4 |  | 465.8 |  | 1,112.3 |  | 851.0 |
Gross contract costs | (153.3 | ) | (148.2 | ) | (293.1 | ) | (261.1 | )
Total fee-based segment operating expenses | 430.1 |  | 317.6 |  | 819.2 |  | 589.9 |
Segment operating income (loss) | $ | 9.0 |  | 15.5 |  | $ | (20.4 | ) | (0.3 | )
Equity losses | — |  | — |  | — |  | (0.1 | )
Total segment income (loss) | $ | 9.0 |  | 15.5 |  | $ | (20.4 | ) | (0.4 | )
Continued: Summarized financial information by business segment is as follows.
| Three Months Ended June 30, | Six Months Ended June 30,
(in millions) | 2017 | 2016 | 2017 | 2016
Real Estate Services |  |  |  |
Asia Pacific |  |  |  |
Revenue | $ | 377.7 |  | 322.4 |  | $ | 682.4 |  | 585.8 |
Gross contract costs | (98.1 | ) | (66.6 | ) | (169.2 | ) | (124.2 | )
Total fee revenue | 279.6 |  | 255.8 |  | 513.2 |  | 461.6 |
Operating expenses: |  |  |  |  |  |  |  |
Compensation, operating and administrative expenses | 354.5 |  | 299.1 |  | 650.1 |  | 559.7 |
Depreciation and amortization | 5.7 |  | 4.2 |  | 10.5 |  | 8.2 |
Total segment operating expenses | 360.2 |  | 303.3 |  | 660.6 |  | 567.9 |
Gross contract costs | (98.1 | ) | (66.6 | ) | (169.2 | ) | (124.2 | )
Total fee-based segment operating expenses | 262.1 |  | 236.7 |  | 491.4 |  | 443.7 |
Segment operating income | $ | 17.5 |  | 19.1 |  | $ | 21.8 |  | 17.9 |
Equity earnings (losses) | 0.6 |  | (0.1 | ) | 1.4 |  | — |
Total segment income | $ | 18.1 |  | 19.0 |  | $ | 23.2 |  | 17.9 |
LaSalle |  |  |  |  |  |  |  |
Revenue | $ | 72.8 |  | 127.0 |  | $ | 161.0 |  | 227.5 |
Operating expenses: |  |  |  |  |  |
Compensation, operating and administrative expenses | 63.9 |  | 87.4 |  | 137.0 |  | 165.7 |
Depreciation and amortization | 0.7 |  | 0.7 |  | 1.4 |  | 1.3 |
Total segment operating expenses | 64.6 |  | 88.1 |  | 138.4 |  | 167.0 |
Segment operating income | $ | 8.2 |  | 38.9 |  | $ | 22.6 |  | 60.5 |
Equity earnings | 13.7 |  | 8.9 |  | 18.3 |  | 21.6 |
Total segment income | $ | 21.9 |  | 47.8 |  | $ | 40.9 |  | 82.1 |
Segment Reconciling Items |  |  |  |  |  |  |  |
Total fee revenue | $ | 1,532.7 |  | 1,342.7 |  | $ | 2,892.6 |  | 2,463.5 |
Gross contract costs | 295.3 |  | 258.2 |  | 553.3 |  | 477.5 |
Net non-cash MSR and mortgage banking derivative activity | 6.7 |  | 2.7 |  | 4.0 |  | (0.6 | )
Total revenue | $ | 1,834.7 |  | 1,603.6 |  | $ | 3,449.9 |  | 2,940.4 |
Total segment operating expenses before restructuring and acquisition charges | 1,725.0 |  | 1,479.4 |  | 3,313.4 |  | 2,779.2 |
Operating income before restructuring and acquisition charges | $ | 109.7 |  | 124.2 |  | $ | 136.5 |  | 161.2 |
Restructuring and acquisition charges | 5.4 |  | 10.3 |  | 9.9 |  | 17.9 |
Operating income | $ | 104.3 |  | 113.9 |  | $ | 126.6 |  | 143.3 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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