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Business Segments
 9 Months Ended
Sep. 30, 2019
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, 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 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.
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 September 30, 2019, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:
• Global Chief Executive Officer
• Chief Executive Officers of each of our four business segments
• Global Chief Financial Officer
• Global Chief Executive Officer of Corporate Solutions
• Global Chief Administrative Officer
• Global Chief Executive Officer of Capital Markets
Summarized financial information by business segment is as follows.
 
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)
2019
2018
2019
2018
Americas - Real Estate Services
 
 
 
 
Leasing
$
472.7

424.0

$
1,354.3

1,151.4

Capital Markets
323.2

115.6

553.1

344.4

Property & Facility Management
1,386.3

1,271.5

4,119.2

3,713.4

Project & Development Services
406.0

304.7

1,091.5

848.8

Advisory, Consulting and Other
99.4

85.8

283.2

237.1

Revenue
2,687.6

2,201.6

7,401.3

6,295.1

Reimbursements
(1,430.3
)
(1,251.5
)
(4,184.8
)
(3,659.6
)
Revenue before reimbursements
1,257.3

950.1

3,216.5

2,635.5

Gross contract costs
(200.8
)
(170.7
)
(580.3
)
(460.4
)
Net non-cash MSR and mortgage banking derivative activity
(12.7
)
(5.3
)
(17.4
)
(9.3
)
Fee revenue
1,043.8

774.1

2,618.8

2,165.8

Operating expenses, excluding reimbursed expenses:
 

 



 
Compensation, operating and administrative expenses
1,045.6

821.2

2,770.1

2,306.8

Depreciation and amortization
35.3

24.5

88.9

77.1

Segment operating expenses, excluding reimbursed expenses
1,080.9

845.7

2,859.0

2,383.9

Gross contract costs
(200.8
)
(170.7
)
(580.3
)
(460.4
)
Fee-based segment operating expenses
880.1

675.0

2,278.7

1,923.5

Segment operating income
$
176.4

104.4

$
357.5

251.6

Equity earnings
1.5

0.1

1.6

0.6

Segment income
$
177.9

104.5

$
359.1

252.2

 
 
 
 
 
EMEA - Real Estate Services
 
 
 
 
Leasing
$
72.2

80.1

$
190.3

211.9

Capital Markets
106.2

108.9

248.7

288.1

Property & Facility Management
387.1

336.3

1,137.0

1,078.9

Project & Development Services
234.2

220.1

633.9

663.5

Advisory, Consulting and Other
62.9

60.2

194.4

193.4

Revenue
862.6

805.6

2,404.3

2,435.8

Reimbursements
(174.1
)
(171.0
)
(492.4
)
(480.0
)
Revenue before reimbursements
688.5

634.6

1,911.9

1,955.8

Gross contract costs
(287.5
)
(237.9
)
(814.9
)
(820.4
)
Fee revenue
401.0

396.7

1,097.0

1,135.4

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
664.6

611.7

1,896.1

1,931.4

Depreciation and amortization
10.1

11.8

32.7

34.7

Segment operating expenses, excluding reimbursed expenses
674.7

623.5

1,928.8

1,966.1

Gross contract costs
(287.5
)
(237.9
)
(814.9
)
(820.4
)
Fee-based segment operating expenses
387.2

385.6

1,113.9

1,145.7

Segment operating income (loss)
$
13.8

11.1

$
(16.9
)
(10.3
)
Equity losses
—

—

(1.0
)
—

Segment income (loss)
$
13.8

11.1

$
(17.9
)
(10.3
)
Continued: Summarized financial information by business segment is as follows.
 
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)
2019
2018
2019
2018
Asia Pacific - Real Estate Services
 
 
 
 
Leasing
$
59.4

69.3

$
161.5

165.2

Capital Markets
50.6

39.5

128.2

122.2

Property & Facility Management
539.4

529.2

1,630.6

1,590.6

Project & Development Services
145.7

108.7

393.9

309.8

Advisory, Consulting and Other
38.7

43.3

123.5

126.4

Revenue
833.8

790.0

2,437.7

2,314.2

Reimbursements
(343.6
)
(330.0
)
(1,044.3
)
(1,007.8
)
Revenue before reimbursements
490.2

460.0

1,393.4

1,306.4

Gross contract costs
(225.3
)
(207.7
)
(667.4
)
(608.4
)
Fee revenue
264.9

252.3

726.0

698.0

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
452.9

432.6

1,316.0

1,245.1

Depreciation and amortization
6.5

5.6

19.3

17.0

Segment operating expenses, excluding reimbursed expenses
459.4

438.2

1,335.3

1,262.1

Gross contract costs
(225.3
)
(207.7
)
(667.4
)
(608.4
)
Fee-based segment operating expenses
234.1

230.5

667.9

653.7

Segment operating income
$
30.8

21.8

$
58.1

44.3

Equity earnings
0.7

1.0

1.4

2.0

Segment income
$
31.5

22.8

$
59.5

46.3

 
 
 
 
 
LaSalle
 

 

 
 
Advisory fees
$
79.9

68.0

$
237.0

205.0

Transaction fees & other
14.2

9.8

43.7

33.2

Incentive fees
17.5

94.8

58.7

145.4

Revenue
111.6

172.6

339.4

383.6

Reimbursements
(1.8
)
(3.6
)
(5.6
)
(13.2
)
Revenue before reimbursements
109.8

169.0

333.8

370.4

Gross contract costs
(4.1
)
(0.7
)
(11.1
)
(3.2
)
Fee revenue
105.7

168.3

322.7

367.2

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
87.5

110.9

266.4

265.9

Depreciation and amortization
1.7

0.8

4.7

2.3

Segment operating expenses, excluding reimbursed expenses
89.2

111.7

271.1

268.2

Gross contract costs
(4.1
)
(0.7
)
(11.1
)
(3.2
)
Fee-based segment operating expenses
85.1

111.0

260.0

265.0

Segment operating income
$
20.6

57.3

$
62.7

102.2

Equity earnings
14.9

2.3

30.3

24.6

Segment income
$
35.5

59.6

$
93.0

126.8


 
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)
2019
2018
2019
2018
Segment Reconciling Items
 
 
 
 
Fee revenue
$
1,815.4

1,591.4

$
4,764.5

4,366.4

Gross contract costs
717.7

617.0

2,073.7

1,892.4

Net non-cash MSR and mortgage banking derivative activity
12.7

5.3

17.4

9.3

Revenue before reimbursements
2,545.8

2,213.7

6,855.6

6,268.1

Reimbursements
1,949.8

1,756.1

5,727.1

5,160.6

Revenue
$
4,495.6

3,969.8

$
12,582.7

11,428.7

Total segment operating expenses, excluding reimbursed expenses & before restructuring and acquisition charges
$
2,304.2

2,019.1

$
6,394.2

5,880.3

Reimbursed expenses
1,949.8

1,756.1

5,727.1

5,160.6

Total segment operating expenses before restructuring and acquisition charges
$
4,254.0

3,775.2

$
12,121.3

11,040.9

Operating income before restructuring and acquisition charges
$
241.6

194.6

$
461.4

387.8

Restructuring and acquisition charges (credits)
70.0

3.7

114.3

(6.7
)
Operating income
$
171.6

190.9

$
347.1

394.5