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Business Segments
 6 Months Ended
Jun. 30, 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 June 30, 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
• Chief Human Resources Officer
• Co-Chief Executive Officers of JLL Technologies
Summarized financial information by business segment is as follows.
 
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2020
2019
2020
2019
Americas - Real Estate Services
 
 
 
 
Leasing
$
278.1

491.8

$
697.0

881.6

Capital Markets
140.8

129.8

388.2

229.9

Property & Facility Management
1,439.5

1,370.9

2,898.3

2,732.9

Project & Development Services
275.3

376.8

581.7

685.5

Advisory, Consulting and Other
95.3

94.3

186.9

183.8

Revenue
2,229.0

2,463.6

4,752.1

4,713.7

Reimbursements
(1,345.0
)
(1,403.1
)
(2,738.5
)
(2,754.5
)
Revenue before reimbursements
884.0

1,060.5

2,013.6

1,959.2

Gross contract costs
(192.3
)
(191.8
)
(405.1
)
(379.5
)
Net non-cash MSR and mortgage banking derivative activity
(8.6
)
(4.8
)
(7.0
)
(4.7
)
Fee revenue
683.1

863.9

1,601.5

1,575.0

Operating expenses, excluding reimbursed expenses:
 

 



 
Compensation, operating and administrative expenses
805.3

913.7

1,815.6

1,724.5

Depreciation and amortization
39.1

26.3

76.5

53.6

Segment operating expenses, excluding reimbursed expenses
844.4

940.0

1,892.1

1,778.1

Gross contract costs
(192.3
)
(191.8
)
(405.1
)
(379.5
)
Fee-based segment operating expenses
652.1

748.2

1,487.0

1,398.6

Segment operating income
$
39.6

120.5

$
121.5

181.1

Equity earnings
2.9

0.4

15.6

0.1

Segment income
$
42.5

120.9

$
137.1

181.2

 
 
 
 
 
EMEA - Real Estate Services
 
 
 
 
Leasing
$
46.7

65.9

$
94.8

118.1

Capital Markets
50.0

78.5

123.2

142.5

Property & Facility Management
320.5

380.6

695.5

749.9

Project & Development Services
164.3

219.2

367.5

399.7

Advisory, Consulting and Other
44.7

74.1

101.1

131.5

Revenue
626.2

818.3

1,382.1

1,541.7

Reimbursements
(168.8
)
(153.7
)
(351.6
)
(318.3
)
Revenue before reimbursements
457.4

664.6

1,030.5

1,223.4

Gross contract costs
(189.4
)
(284.7
)
(452.0
)
(527.4
)
Fee revenue
268.0

379.9

578.5

696.0

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
481.8

654.6

1,066.2

1,231.5

Depreciation and amortization
9.0

11.3

18.2

22.6

Segment operating expenses, excluding reimbursed expenses
490.8

665.9

1,084.4

1,254.1

Gross contract costs
(189.4
)
(284.7
)
(452.0
)
(527.4
)
Fee-based segment operating expenses
301.4

381.2

632.4

726.7

Segment operating loss
$
(33.4
)
(1.3
)
$
(53.9
)
(30.7
)
Equity losses
—

(1.1
)
—

(1.0
)
Segment loss
$
(33.4
)
(2.4
)
$
(53.9
)
(31.7
)
Continued: Summarized financial information by business segment is as follows.
 
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2020
2019
2020
2019
Asia Pacific - Real Estate Services
 
 
 
 
Leasing
$
33.8

66.2

$
59.2

102.1

Capital Markets
24.0

48.2

45.7

77.6

Property & Facility Management
515.2

553.4

1,047.2

1,091.2

Project & Development Services
97.2

137.3

192.0

248.2

Advisory, Consulting and Other
45.1

50.1

83.3

84.8

Revenue
715.3

855.2

1,427.4

1,603.9

Reimbursements
(327.0
)
(359.6
)
(611.9
)
(700.7
)
Revenue before reimbursements
388.3

495.6

815.5

903.2

Gross contract costs
(189.5
)
(232.7
)
(439.0
)
(442.1
)
Fee revenue
198.8

262.9

376.5

461.1

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
362.6

462.6

780.1

863.1

Depreciation and amortization
7.0

6.4

13.6

12.8

Segment operating expenses, excluding reimbursed expenses
369.6

469.0

793.7

875.9

Gross contract costs
(189.5
)
(232.7
)
(439.0
)
(442.1
)
Fee-based segment operating expenses
180.1

236.3

354.7

433.8

Segment operating income
$
18.7

26.6

$
21.8

27.3

Equity earnings (losses)
0.5

0.4

(0.2
)
0.7

Segment income
$
19.2

27.0

$
21.6

28.0

 
 
 
 
 
LaSalle
 

 

 
 
Advisory fees
$
80.9

79.5

$
166.5

157.1

Transaction fees & other
4.8

16.3

18.4

29.5

Incentive fees
14.2

33.6

19.9

41.2

Revenue
99.9

129.4

204.8

227.8

Reimbursements
(1.1
)
(1.9
)
(2.9
)
(3.8
)
Revenue before reimbursements
98.8

127.5

201.9

224.0

Gross contract costs
(3.8
)
(4.2
)
(8.3
)
(7.0
)
Fee revenue
95.0

123.3

193.6

217.0

Operating expenses, excluding reimbursed expenses:
 

 

 
 
Compensation, operating and administrative expenses
82.9

96.0

170.0

178.9

Depreciation and amortization
1.8

1.5

3.6

3.0

Segment operating expenses, excluding reimbursed expenses
84.7

97.5

173.6

181.9

Gross contract costs
(3.8
)
(4.2
)
(8.3
)
(7.0
)
Fee-based segment operating expenses
80.9

93.3

165.3

174.9

Segment operating income
$
14.1

30.0

$
28.3

42.1

Equity earnings (losses)
11.3

10.5

(29.0
)
15.4

Segment income (loss)
$
25.4

40.5

$
(0.7
)
57.5


 
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2020
2019
2020
2019
Segment Reconciling Items
 
 
 
 
Fee revenue
$
1,244.9

1,630.0

$
2,750.1

2,949.1

Gross contract costs
575.0

713.4

1,304.4

1,356.0

Net non-cash MSR and mortgage banking derivative activity
8.6

4.8

7.0

4.7

Revenue before reimbursements
1,828.5

2,348.2

4,061.5

4,309.8

Reimbursements
1,841.9

1,918.3

3,704.9

3,777.3

Revenue
$
3,670.4

4,266.5

$
7,766.4

8,087.1

Total segment operating expenses, excluding reimbursed expenses & before restructuring and acquisition charges
$
1,789.5

2,172.4

$
3,943.8

4,090.0

Reimbursed expenses
1,841.9

1,918.3

3,704.9

3,777.3

Total segment operating expenses before restructuring and acquisition charges
$
3,631.4

4,090.7

$
7,648.7

7,867.3

Operating income before restructuring and acquisition charges
$
39.0

175.8

$
117.7

219.8

Less: Restructuring and acquisition charges
28.2

25.7

42.3

44.3

Operating income
$
10.8

150.1

$
75.4

175.5