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JLL delivered overall excellent performance for 2014. The Company’s full year 2014 fee revenue reached a record $4.7 billion, an 18% increase over 2013. It reduced total net debt to $163 million from $437 million last year. This is the third consecutive year that the Company has reduced debt by more than $100 million while it continued to invest in the business and also increased its dividend. The Company reported GAAP net income of $386 million for the year, compared to $269 million in 2013, a 44% increase. Adjusting for the effect of restructuring and acquisition charges primarily associated with the King Sturge acquisition, its adjusted net income of $393 million was 37% higher than its adjusted net income in 2013 and 60% higher than 2012.
Each of the three Real Estate Services operating segments contributed to the results by increasing both its revenue and its operating income over the prior year.
LaSalle, our investment management business that constitutes our fourth operating segment, posted total revenue for 2014 of $415 million, up 46% in local currency from 2013. Advisory fees were $236 million for 2014, a 5% local currency increase from 2013. The movement in advisory fees was the result of adding new mandates and real estate funds, partially offset by portfolio sales. Equity earnings for the year ended December 31, 2014 were $47 million, a 51% increase in local currency as compared with the year ended December 31, 2013, driven by gains from disposition activity and from increases in asset values. Operating income was $132 million for the year ended December 31, 2014, resulting in an operating income margin of 31.8%, compared with $67.9 million and an operating income margin of 23.7% for the year ended December 31, 2013. In 2014, LaSalle’s capital raising momentum continued with $8.9 billion in equity commitments obtained during the year. Assets under management were $53.6 billion as of December 31, 2014, compared with $47.6 billion at December 31, 2013.
During 2014, JLL continued to win numerous awards that reflected the quality of the services it provides to our clients, the integrity of its people and its desirability as a place to work, including awards recognizing its (1) superior service to clients, (2) ethics program, (3) outsourcing capabilities, (4) consultancy capabilities, (5) “best place to work” environment and (6) environmental and energy management work for clients.
The following table illustrates the three year relationship between company performance and the compensation of our President and Chief Executive Officer. As indicated by the year over year percentage increase, CEO compensation has grown more slowly than the overall growth of the business as represented by basic earnings per share and adjusted net income. We selected earnings per share and adjusted net income because of their high correlation with creating shareholder value.
1) To determine the compensation of Named Executive Officers, the Committee has established a process that uses a variation of disclosed adjusted net income (as indicated above) that adjusts for significant restructuring charges only.
(2) Represents total direct compensation earned for year indicated, which will be different from the Summary Compensation Table for certain timing reasons indicated in the notes to the Table.
Return to shareholders
Total shareholder return for 2014, including the reinvestment of dividends, was 47%. JLL has consistently delivered value to shareholders over the past 5 years, with an annualized return of 24% versus an S&P 500 return of 16%, both with the reinvestment of dividends. A $1,000 investment in JLL’s common stock on December 31, 2009 would have grown more than a similar investment in the S&P 500 index, in each case with the reinvestment of dividends.
Highlights of compensation committee actions
The Summary Compensation Table indicates the specific amounts we paid to the Named Executive Officers in respect of their 2014 performance. Highlights from the decisions the Committee made with respect to their 2014 compensation include the following: