JLL delivered diversified revenue increases for 2016. The Company’s full-year 2016 consolidated revenue performance of $6.8 billion and consolidated fee revenue of $5.8 billion for the year represented double-digit percentage increases over a robust 2015. Revenue growth occurred across all geographic segments and LaSalle, fueled by recent acquisitions that contributed over $470 million of incremental fee revenue in 2016. Annuity businesses led revenue growth while transactional businesses also grew against a global decline in market volumes, which was notably impactful in the UK.
Each of JLL’s three Real Estate Services operating segments contributed to the results:
LaSalle, our investment management business that constitutes our fourth operating segment, posted an increase in total revenue for the year up 3 percent from last year, and included $260.8 million of advisory fees, $95.9 million of incentive fees, and $51.1 million of transaction fees. Equity earnings for the year were $31.5 million, as compared with $70.1 million in the prior year. While activity in both periods reflected net valuation increases of assets within the co-investment portfolio, gains recognized in 2015 from the disposition of legacy investments that did not recur in 2016 contributed substantially to the year-over-year decline. Operating income for the year was $82.9 million, a decrease from $87.5 million in 2015. In 2016, LaSalle’s capital raising momentum continued with $5.1 billion for the year. Assets under management reached a record high of $60.1 billion as of December 31, 2016, up from $56.4 billion as of December 31, 2015.
In 2016, the Company completed 28 new acquisitions that expanded its capabilities in key regional markets. The Company maintained a balance sheet for growth, reflecting the Company’s strong cash generation. It also maintained its investment grade credit rating of BBB+ with S&P and Baa2 with Moody’s.
Also during 2016, 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 and corporate governance, (3) outsourcing capabilities, (4) consultancy capabilities, (5) ‘‘best place to work’’ environment, and (6) environmental and energy management work for clients.
See Annex A for a reconciliation of non-GAAP financial measures to our results as reported under accounting principles accepted in the United States.
The following table illustrates the three-year relationship between Company performance and the compensation of our Named Executive Officers. The overall growth of the business as represented by basic earnings per share and adjusted net income has exceeded Named Executive Officer total direct compensation on a relative basis. We selected earnings per share and adjusted net income because of their high correlation with creating shareholder value and selected our Named Executive Officers because of our 2016 Chief Executive Officer transition.
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(1) As defined by the Compensation Committee, adjusted net income represents net income attributable to common shareholders excluding certain significant restructuring and acquisition charges. See Annex A for a reconciliation of adjusted net income to our results as reported under accounting principles accepted in the United States.
(2) This table includes only the Named Executive Officers and excludes Mr. Dyer, who retired during 2016. It represents total direct compensation earned for the year indicated. The compensation reflected above may differ from the Summary Compensation Table (the Table) due to certain timing reasons indicated in the notes to the Table.
Return to shareholders
The following graph compares the cumulative 5-year total return to shareholders of JLL’s common stock relative to the cumulative total returns of the S&P 500 Index. The graph below assumes that the value of the investment in JLL’s common stock and the S&P 500 Index (including reinvestment of dividends) was $1,000 on December 31, 2011.
Highlights of compensation committee actions
The Summary Compensation Table indicates the specific amounts we paid to the Named Executive Officers in respect of their 2015 performance. Highlights from the decisions the Committee made include the following: