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Business Segments
 3 Months Ended
Mar. 31, 2020
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.
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 on a global basis 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 March 31, 2020, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:
• Chief Executive Officer and President
• Chief Executive Officers of each of our four business segments
• Chief Financial Officer
• Chief Executive Officer of Corporate Solutions
• Chief Administrative Officer
• Chief Executive Officer of Capital Markets
 
• Co-Chief Executive Officers of JLL Technologies
Summarized financial information by business segment is as follows.
 
Three Months Ended March 31,
(in millions)
2020
2019
Americas - Real Estate Services
 
 
Leasing
$
418.9

389.8

Capital Markets
247.4

100.1

Property & Facility Management
1,458.8

1,362.0

Project & Development Services
306.4

308.7

Advisory, Consulting and Other
91.6

89.5

Revenue
2,523.1

2,250.1

Reimbursements
(1,393.5
)
(1,351.4
)
Revenue before reimbursements
1,129.6

898.7

Gross contract costs
(212.8
)
(187.7
)
Net non-cash MSR and mortgage banking derivative activity
1.6

0.1

Fee revenue
918.4

711.1

Operating expenses, excluding reimbursed expenses:


 
Compensation, operating and administrative expenses
1,010.3

810.8

Depreciation and amortization
37.4

27.3

Segment operating expenses, excluding reimbursed expenses
1,047.7

838.1

Gross contract costs
(212.8
)
(187.7
)
Fee-based segment operating expenses
834.9

650.4

Segment operating income
$
81.9

60.6

Equity earnings (losses)
12.7

(0.3
)
Segment income
$
94.6

60.3

 
 
 
EMEA - Real Estate Services
 
 
Leasing
$
48.1

52.2

Capital Markets
73.2

64.0

Property & Facility Management
375.0

369.3

Project & Development Services
203.2

180.5

Advisory, Consulting and Other
56.4

57.4

Revenue
755.9

723.4

Reimbursements
(182.8
)
(164.6
)
Revenue before reimbursements
573.1

558.8

Gross contract costs
(262.6
)
(242.7
)
Fee revenue
310.5

316.1

Operating expenses, excluding reimbursed expenses:
 
 
Compensation, operating and administrative expenses
584.4

576.9

Depreciation and amortization
9.2

11.3

Segment operating expenses, excluding reimbursed expenses
593.6

588.2

Gross contract costs
(262.6
)
(242.7
)
Fee-based segment operating expenses
331.0

345.5

Segment operating loss
$
(20.5
)
(29.4
)
Equity earnings
—

0.1

Segment loss
$
(20.5
)
(29.3
)
Continued: Summarized financial information by business segment is as follows.
 
Three Months Ended March 31,
(in millions)
2020
2019
Asia Pacific - Real Estate Services
 
 
Leasing
$
25.4

35.9

Capital Markets
21.7

29.4

Property & Facility Management
532.0

537.8

Project & Development Services
94.8

110.9

Advisory, Consulting and Other
38.2

34.7

Revenue
712.1

748.7

Reimbursements
(284.9
)
(341.1
)
Revenue before reimbursements
427.2

407.6

Gross contract costs
(249.5
)
(209.4
)
Fee revenue
177.7

198.2

Operating expenses, excluding reimbursed expenses:
 
 
Compensation, operating and administrative expenses
417.5

400.5

Depreciation and amortization
6.6

6.4

Segment operating expenses, excluding reimbursed expenses
424.1

406.9

Gross contract costs
(249.5
)
(209.4
)
Fee-based segment operating expenses
174.6

197.5

Segment operating income
$
3.1

0.7

Equity (losses) earnings
(0.7
)
0.3

Segment income
$
2.4

1.0

 
 
 
LaSalle
 
 
Advisory fees
$
85.6

77.6

Transaction fees & other
13.6

13.2

Incentive fees
5.7

7.6

Revenue
104.9

98.4

Reimbursements
(1.8
)
(1.9
)
Revenue before reimbursements
103.1

96.5

Gross contract costs
(4.5
)
(2.8
)
Fee revenue
98.6

93.7

Operating expenses, excluding reimbursed expenses:
 
 
Compensation, operating and administrative expenses
87.1

82.9

Depreciation and amortization
1.8

1.5

Segment operating expenses, excluding reimbursed expenses
88.9

84.4

Gross contract costs
(4.5
)
(2.8
)
Fee-based segment operating expenses
84.4

81.6

Segment operating income
$
14.2

12.1

Equity (losses) earnings
(40.3
)
4.9

Segment (loss) income
$
(26.1
)
17.0


 
Three Months Ended March 31,
(in millions)
2020
2019
Segment Reconciling Items
 
 
Fee revenue
$
1,505.2

1,319.1

Gross contract costs
729.4

642.6

Net non-cash MSR and mortgage banking derivative activity
(1.6
)
(0.1
)
Revenue before reimbursements
2,233.0

1,961.6

Reimbursements
1,863.0

1,859.0

Revenue
$
4,096.0

3,820.6

Total segment operating expenses, excluding reimbursed expenses & before restructuring and acquisition charges
$
2,154.3

1,917.6

Reimbursed expenses
1,863.0

1,859.0

Total segment operating expenses before restructuring and acquisition charges
$
4,017.3

3,776.6

Operating income before restructuring and acquisition charges
$
78.7

44.0

Less: Restructuring and acquisition charges
14.1

18.6

Operating income
$
64.6

25.4