CBRE Group Inc

Welcome to CDRE's third quarter 2019 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Brad Burke. Please go ahead.

Thank you and welcome to CBRE's third quarter 2019 earnings conference call. Earlier today, we issued a press release announcing our financial results, and it is posted on the investor relations page of our website, CBRE.com, along with a presentation slide deck that you can use to follow along with our prepared remarks, as well as an Excel file that contains additional supplemental materials. Our agenda for this morning's call will be as follows. First, I'll provide an overview of our financial results for the quarter. Next, Bob Selentik, our President and CEO, and Leah Cerns, our CFO, will discuss our third quarter results in more detail. After these comments, we'll open up the call for your questions. Before I begin, I'll remind you that this presentation contains forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding CBRE's future growth momentum, operations, market share, business outlook, capital deployment, acquisition, integration, and financial performance, including our 2019 outlook, and any other statements regarding matters that are not historical facts. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only, and certain factors may affect us in the future that could cause actual results to differ materially from those expressed in these forward-looking statements. For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this morning's earnings press release, and our most recent annual and quarterly reports filed on Form 10-K and Form 10-Q, respectively. We have provided reconciliations of adjusted EPS, adjusted EBITDA, and fee revenue, and certain other non-GAAP financial measures included in our remarks to the most directly comparable GAAP measures, together with explanations of these measures in the appendix of the presentation slide deck. Now, please turn to slide four of our presentation, which highlights our financial results for the third quarter of 2019. Third quarter adjusted earnings per share was flat at 79 cents. Strong top and bottom line growth within our two services segments, advisory services and global workplace solutions, was offset by a decline in adjusted EBITDA in our real estate investment segment. The $85 million of adjusted EBITDA realized in real estate investments in last year's third quarter represented an all-time record for the segment. On a combined basis, our two services segments generated fee revenue growth and adjusted EBITDA growth of over 11% and 16%, respectively. In addition, the combined adjusted EBITDA margin for our advisory and global workplace solutions segments expanded approximately 70 basis points. Finally, our consolidated results also reflect negative foreign exchange translation impacts of 2% and 1% to fee revenue and adjusted EBITDA growth, respectively. Now, for an update on our business fundamentals, I will turn the call over to Bob.

Thank you, Brad, and good morning, everyone. As you've seen, we reported another strong quarter in our services business, driven by double-digit revenue growth in global occupier outsourcing, U.S. advisory property sales, and commercial mortgage origination. We continue to benefit from strong organic growth in operating leverage in our combined services businesses. In early October, we completed the acquisition of Telford Homes, expanding our development capabilities into the UK, where the multifamily rental market is poised for long-term secular growth. We were able to acquire Telford at an attractive valuation, reflecting market concerns due to Brexit, without materially altering our capital structure or engaging in a lengthy integration process. We believe the very successful Telford team will be able to accomplish more on CBRE's platform than they could on their own. Strategic M&A is core to our strategy, and Telford represents the type of acquisition you should expect from CBRE. Sourcing, underwriting, and integrating acquisitions is a competitive advantage for our company. Both our M&A and our senior business leadership teams are deeply experienced at targeting, underwriting, closing, and integrating acquisition opportunities Since 2014, we have deployed nearly $2.6 billion for acquisitions that have bolstered our growth, our ability to serve our clients, and our strategic position in the marketplace. Leah will discuss our approach to M&A and capital allocation after she reviews the quarter in more detail. Leah?