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.