CBRE Group Inc

Greetings and welcome to the CBRE's third quarter 2021 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce Kristen Fairmont, Senior Vice President of Investor Relations and Strategic Finance Thank you. You may begin.

Good morning, everyone, and welcome to CBRE's third quarter 2021 earnings conference call. Earlier today, we issued a press release announcing our financial results, which 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. Please note we have added some new detail to our real estate investment segment tab. Before we kick off today's call, 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 prospects multiyear growth framework, operations, market share, capital deployment strategy, and share repurchases, M&A and investment activity, financial performance, including profitability, expenses, margins, adjusted EPS, and the effect of both cost savings initiatives in the COVID pandemic, the integration and performance of acquisitions and other transactions, and any other statements regarding matters that are not historical fact. 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 and 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 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, net 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. Our agenda for this morning's call will be as follows. First, I'll provide an overview of our quarterly financial results. Next, Bob Cilentic, our president and CEO, will discuss our recent strategic investments and how they support our four-dimension diversification strategy. Then, Emma Giammartino, our Chief Financial and Investment Officer, will discuss the quarter in detail, along with our revised qualitative outlook for 2021, our capital deployment activities, and balance sheet strengths. Then we'll open up the call for questions. Now, please turn to slide four, which highlights our third quarter 2021 results. Total revenue grew approximately 20% to a new third quarter record of about $6.8 billion, while net revenue grew over 28% to nearly $4.2 billion. Notably, all our advisory service business lines, including leasing, generated more revenue than they did in Q3 2019. The quarter also benefited from the work we completed last year on our cost structure, as well as our continued financial discipline. Overall, GAAP EPS rose nearly 135% to $1.28, while adjusted EPS grew about 92% to $1.39. Compared with Q3 2019, these metrics were up approximately 71% and 76% respectively. Now for deeper insights, please turn to slide six for Bob's remarks. Bob? Thank you, Kristen, and good morning, everyone.

The diversification of our business across four dimensions, asset types, business lines, clients, and geographic markets has been a key focus of our past few earnings calls. The benefits of this diversification were clearly evident in our third quarter performance with adjusted EBITDA more than 60% above the Q3 2019 peak. record Q3 margins, and strong top line growth across all global regions. Our leaders around the world have been adept at identifying and securing compelling opportunities to grow our business across the four dimensions of diversification. We have committed approximately $2 billion of capital already this year to secularly favored areas, including green energy and infrastructure project management with our Turner and Townsend investment, flex office solutions with our industrious investment, and logistics and multifamily assets in our real estate investment segment. These investments position us well to make additional capital and organic investments that will drive earnings growth for years to come. We're also making substantial investments to grow our business organically. These include deeper asset type specialization in both our brokerage and real estate investment management businesses, and client sector specialization in our GWS business. And we're expanding our real estate development business into new international markets. With our strong balance sheet and cash flow generation, as well as the work we've done to streamline costs and capture the benefits of scale, We are positioned to continue growth initiatives like these well into the future. At the same time, we are committed to returning cash to our shareholders and are evaluating all potential avenues for such returns. I will close by noting that we will update our multi-year growth framework when we report Q4 results in February. Now I'll hand the call over to Emma.