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Business Segments | 12 Months Ended
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Dec. 31, 2018
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) 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, property and facility management, project and development management, energy management and sustainability, construction management, and advisory, consulting and valuation services. 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. Refer to Results of Operations, included in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, for a full description of gross contract costs. In addition, our measure of segment results excludes Restructuring and acquisition charges. Effective January 1, 2018, management expanded the types of costs we include within gross contract costs. Most notably, this refinement includes the compensation and benefits associated with client-dedicated employees. Comparative periods were recast for consistency. This change in gross contract costs resulted in a decrease to fee revenue and was prompted by (i) the increase in compensation and benefits associated with client-dedicated personnel presented on a gross basis as a result of the adoption of ASC Topic 606 and (ii) the continued changes in our business mix, reflecting expansion of businesses that most commonly incorporate client-dedicated employees in the delivery of services. The most significant impacts are within Property & Facility Management and Project & Development Services. 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 December 31, 2018, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:
• Global Chief Executive Officer |
• Global Chief Financial Officer |
• Chief Executive Officers of each of our four business segments |
• Global Chief Administrative Officer |
• Global Chief Executive Officer of Corporate Solutions |
• Global Head of Capital Markets |
Summarized financial information by business segment is as follows.
| Year Ended December 31,
($ in millions) | 2018 | 2017 | 2016
Americas - Real Estate Services |  |  |
Leasing | $ | 1,754.1 |  | 1,510.1 |  | 1,311.5 |
Capital Markets | 500.3 |  | 473.0 |  | 428.0 |
Property & Facility Management | 5,142.2 |  | 4,503.5 |  | 4,475.0 |
Project & Development Services | 1,301.7 |  | 1,242.8 |  | 1,104.4 |
Advisory, Consulting and Other | 342.7 |  | 285.7 |  | 197.9 |
Revenue | 9,041.0 |  | 8,015.1 |  | 7,516.8 |
Reimbursements | (5,164.7 | ) | (4,648.5 | ) | (4,460.1 | )
Revenue before reimbursements | 3,876.3 |  | 3,366.6 |  | 3,056.7 |
Gross contract costs | (652.9 | ) | (521.0 | ) | (554.0 | )
Net non-cash MSR and mortgage banking derivative activity | (8.3 | ) | (15.7 | ) | (23.5 | )
Fee revenue | 3,215.1 |  | 2,829.9 |  | 2,479.2 |
Operating expenses, excluding reimbursed expenses: |  |  |
Compensation, operating and administrative expenses | 3,345.3 |  | 2,918.6 |  | 2,686.4 |
Depreciation and amortization | 109.1 |  | 97.5 |  | 84.3 |
Segment operating expenses, excluding reimbursed expenses | 3,454.4 |  | 3,016.1 |  | 2,770.7 |
Gross contract costs | (652.9 | ) | (521.0 | ) | (554.0 | )
Fee-based segment operating expenses | 2,801.5 |  | 2,495.1 |  | 2,216.7 |
Segment operating income | $ | 421.9 |  | 350.5 |  | 286.0 |
Equity earnings (losses) | 0.8 |  | (0.2 | ) | 1.3 |
Segment income | $ | 422.7 |  | 350.3 |  | 287.3 |
EMEA - Real Estate Services |  |  |
Leasing | $ | 333.0 |  | 303.6 |  | 270.0 |
Capital Markets | 464.1 |  | 465.1 |  | 390.0 |
Property & Facility Management | 1,482.2 |  | 1,342.7 |  | 881.1 |
Project & Development Services | 920.3 |  | 691.1 |  | 659.7 |
Advisory, Consulting and Other | 295.4 |  | 272.5 |  | 246.8 |
Revenue | 3,495.0 |  | 3,075.0 |  | 2,447.6 |
Reimbursements | (677.5 | ) | (471.9 | ) | (352.0 | )
Revenue before reimbursements | 2,817.5 |  | 2,603.1 |  | 2,095.6 |
Gross contract costs | (1,108.0 | ) | (1,038.7 | ) | (757.7 | )
Fee revenue | 1,709.5 |  | 1,564.4 |  | 1,337.9 |
Operating expenses, excluding reimbursed expenses: |  |  |
Compensation, operating and administrative expenses | 2,689.7 |  | 2,507.9 |  | 1,992.5 |
Depreciation and amortization | 50.8 |  | 44.6 |  | 37.4 |
Segment operating expenses, excluding reimbursed expenses | 2,740.5 |  | 2,552.5 |  | 2,029.9 |
Gross contract costs | (1,108.0 | ) | (1,038.7 | ) | (757.7 | )
Fee-based segment operating expenses | 1,632.5 |  | 1,513.8 |  | 1,272.2 |
Segment operating income | $ | 77.0 |  | 50.6 |  | 65.7 |
Equity earnings (losses) | — |  | 0.3 |  | (0.1 | )
Segment income | $ | 77.0 |  | 50.9 |  | 65.6 |
Continued: Summarized financial information by business segment is as follows.
| Year Ended December 31,
($ in millions) | 2018 | 2017 | 2016
Asia Pacific - Real Estate Services |  |  |
Leasing | $ | 285.0 |  | 238.2 |  | 216.9 |
Capital Markets | 181.0 |  | 211.3 |  | 162.1 |
Property & Facility Management | 2,158.4 |  | 1,975.1 |  | 1,780.4 |
Project & Development Services | 447.0 |  | 410.6 |  | 306.2 |
Advisory, Consulting and Other | 177.1 |  | 172.1 |  | 153.1 |
Revenue | 3,248.5 |  | 3,007.3 |  | 2,618.7 |
Reimbursements | (1,369.2 | ) | (1,347.9 | ) | (1,248.3 | )
Revenue before reimbursements | 1,879.3 |  | 1,659.4 |  | 1,370.4 |
Gross contract costs | (829.6 | ) | (650.7 | ) | (495.7 | )
Fee revenue | 1,049.7 |  | 1,008.7 |  | 874.7 |
Operating expenses, excluding reimbursed expenses: |  |  |
Compensation, operating and administrative expenses | 1,743.0 |  | 1,520.1 |  | 1,264.2 |
Depreciation and amortization | 23.2 |  | 22.1 |  | 17.3 |
Segment operating expenses, excluding reimbursed expenses | 1,766.2 |  | 1,542.2 |  | 1,281.5 |
Gross contract costs | (829.6 | ) | (650.7 | ) | (495.7 | )
Fee-based segment operating expenses | 936.6 |  | 891.5 |  | 785.8 |
Segment operating income | $ | 113.1 |  | 117.2 |  | 88.9 |
Equity earnings | 2.0 |  | 3.2 |  | 1.1 |
Segment income | $ | 115.1 |  | 120.4 |  | 90.0 |
LaSalle |  |  |
Advisory fees | $ | 276.7 |  | 265.5 |  | 260.4 |
Transaction fees & other | 41.4 |  | 33.4 |  | 51.8 |
Incentive fees | 215.8 |  | 56.9 |  | 95.9 |
Revenue | 533.9 |  | 355.8 |  | 408.1 |
Reimbursements | (17.5 | ) | (17.5 | ) | (20.2 | )
Revenue before reimbursements | 516.4 |  | 338.3 |  | 387.9 |
Gross contract costs | (4.5 | ) | (5.1 | ) | (5.4 | )
Fee revenue | 511.9 |  | 333.2 |  | 382.5 |
Operating expenses, excluding reimbursed expenses: |  |  |
Compensation, operating and administrative expenses | 379.7 |  | 277.0 |  | 301.5 |
Depreciation and amortization | 3.0 |  | 3.0 |  | 2.8 |
Segment operating expenses, excluding reimbursed expenses | 382.7 |  | 280.0 |  | 304.3 |
Gross contract costs | (4.5 | ) | (5.1 | ) | (5.4 | )
Fee-based segment operating expenses | 378.2 |  | 274.9 |  | 298.9 |
Segment operating income | $ | 133.7 |  | 58.3 |  | 83.6 |
Equity earnings | 30.0 |  | 41.1 |  | 31.5 |
Segment income | $ | 163.7 |  | 99.4 |  | 115.1 |
| Year Ended December 31,
(in millions) | 2018 | 2017 | 2016
Segment Reconciling Items |  |  |
Fee revenue | $ | 6,486.2 |  | 5,736.2 |  | 5,074.3 |
Gross contract costs | 2,595.0 |  | 2,215.5 |  | 1,812.8 |
Net non-cash MSR and mortgage banking derivative activity | 8.3 |  | 15.7 |  | 23.5 |
Revenue before reimbursements | 9,089.5 |  | 7,967.4 |  | 6,910.6 |
Reimbursements | 7,228.9 |  | 6,485.8 |  | 6,080.6 |
Revenue | $ | 16,318.4 |  | 14,453.2 |  | 12,991.2 |
Total segment operating expenses, excluding reimbursed expenses & before restructuring and acquisition charges | $ | 8,343.8 |  | 7,390.8 |  | 6,386.4 |
Reimbursed expenses | 7,228.9 |  | 6,485.8 |  | 6,080.6 |
Total segment operating expenses before restructuring and acquisition charges | $ | 15,572.7 |  | 13,876.6 |  | 12,467.0 |
Operating income before restructuring and acquisition charges | $ | 745.7 |  | 576.6 |  | 524.2 |
Restructuring and acquisition charges | 38.8 |  | 30.7 |  | 68.5 |
Operating income | $ | 706.9 |  | 545.9 |  | 455.7 |
Identifiable assets by segment are those assets used by, or result from, each segment's business. Corporate assets are principally cash and cash equivalents, software, and computer hardware. The following table reconciles segment identifiable assets and investments in real estate ventures to consolidated amounts.
| 12/31/2018 |  | 12/31/2017
($ in millions) | IDENTIFIABLE ASSETS | INVESTMENTS IN REAL ESTATE VENTURES |  | IDENTIFIABLE ASSETS | INVESTMENTS IN REAL ESTATE VENTURES
Real Estate Services: |  |  |  |  |
Americas | $ | 5,288.9 |  | 17.0 |  |  | $ | 4,745.4 |  | 14.5 |
EMEA | 2,325.4 |  | 3.5 |  |  | 2,367.5 |  | 3.5 |
Asia Pacific | 1,437.3 |  | 11.9 |  |  | 1,305.0 |  | 9.6 |
LaSalle | 666.8 |  | 305.8 |  |  | 548.6 |  | 346.9 |
Corporate | 307.1 |  | 18.7 |  |  | 287.9 |  | 1.7 |
Consolidated | $ | 10,025.5 |  | 356.9 |  |  | $ | 9,254.4 |  | 376.2 |
The table below reconciles segment property and equipment expenditures to consolidated expenditures.
| Year Ended December 31,
($ in millions) | 2018 | 2017 | 2016
Real Estate Services: |  |  |
Americas | $ | 109.1 |  | 62.6 |  | 141.6 |
EMEA | 39.0 |  | 44.5 |  | 54.2 |
Asia Pacific | 25.4 |  | 20.3 |  | 16.1 |
LaSalle | 3.0 |  | 1.2 |  | 67.9 |
Corporate | 32.5 |  | 25.1 |  | 36.2 |
Total capital expenditures (1) | $ | 209.0 |  | 153.7 |  | 316.0 |
(1) Included in total capital expenditures for the years ended December 31, 2018, 2017 and 2016, were $47.1 million, $2.3 million, and $99.8 million, respectively, related to acquisition of investment properties by less than wholly-owned consolidated VIEs. The following table sets forth the revenue and assets from our most significant currencies.
| TOTAL REVENUE |  | TOTAL ASSETS
| Year Ended December 31, |  | December 31,
($ in millions) | 2018 | 2017 | 2016 |  | 2018 | 2017
United States dollar | $ | 8,523.8 |  | 7,572.1 |  | 7,235.8 |  |  | $ | 5,866.4 |  | 5,363.6 |
Euro | 1,527.1 |  | 1,244.8 |  | 1,020.0 |  |  | 932.2 |  | 810.5 |
British pound | 1,526.3 |  | 1,447.3 |  | 1,124.6 |  |  | 1,187.3 |  | 1,228.1 |
Australian dollar | 916.7 |  | 909.7 |  | 820.0 |  |  | 291.6 |  | 331.8 |
Indian rupee | 580.4 |  | 516.2 |  | 434.9 |  |  | 317.5 |  | 260.5 |
Chinese yuan | 505.5 |  | 439.7 |  | 358.1 |  |  | 190.4 |  | 163.1 |
Hong Kong dollar | 487.2 |  | 450.0 |  | 420.1 |  |  | 187.1 |  | 189.9 |
Singapore dollar | 458.7 |  | 268.0 |  | 218.3 |  |  | 236.5 |  | 160.3 |
Canadian dollar | 390.5 |  | 333.4 |  | 300.4 |  |  | 172.0 |  | 127.4 |
Japanese yen | 285.2 |  | 238.2 |  | 235.5 |  |  | 96.4 |  | 85.4 |
Other currencies | 1,117.0 |  | 1,033.8 |  | 823.5 |  |  | 548.1 |  | 533.8 |
| $ | 16,318.4 |  | 14,453.2 |  | 12,991.2 |  |  | $ | 10,025.5 |  | 9,254.4 |
We face restrictions in certain countries that limit or prevent the transfer of funds to other countries or the exchange of the local currency to other currencies, however, we generally face no such restrictions with regard to the use or application of funds for ordinary course business activities within such countries. The assets of these countries represented approximately 6% of our total assets as of both December 31, 2018, and 2017.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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