Jones Lang LaSalle Incorporated

Good morning. At this time, I would like to welcome everyone to the Jones Lang LaSalle Incorporated Third Quarter Earnings Conference Call. For your information, this conference call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pounds key. Thank you. I would now like to turn the conference over to Chris Dent, Executive Managing Director of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our third quarter 2020 conference call, Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, which is available on the Investor Relations section of our website, along with the slide presentation intended to supplement our prepared remarks. please visit ir.jll.com. During the call, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of our non-GAAP financial measures to GAAP in our earnings release and presentation. As a reminder, today's call is being webcast live and recorded. A transcript of this conference call will also be posted on our website. Any statements made about future results and performance, plans, expectations, and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in the annual report on Form 10-K of the fiscal year ended December 31, 2019, and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Chris. Good morning and welcome to our fifth quarter call. In what continues to be a challenging and volatile year, I remain impressed by the resilience of our employees across the world. Their dedication and success in providing unparalleled service to our clients has been nothing short of remarkable, and I am extremely proud and grateful for all that they have done. As cases begin to rise and impact the reentry process to various degrees across the world, We continue to monitor the situation carefully and strictly adhere to the guidance of local and global health authorities to help manage the spread of the virus. The health and well-being of our people, clients, and communities remain our first priority. Turning to the market environment. Global economic activity recovered some ground in the third quarter, despite the pandemic's continuing impact on both global and regional real estate fundamentals. Improving economic indicators remain vulnerable to a potential resurgence of the virus, with cases and hospitalizations rising in many countries around the world. Near-term uncertainty continues to dampen forecasts into the severity and longevity of the effects of the pandemic as the world awaits the broad-based distribution of an effective vaccine before we can begin to regain some semblance of normality. COVID-19 has accelerated many workplace trends that were prevalent in the commercial real estate industry prior to the pandemic. These include experiential workspaces, outsourced real estate functions, and increased focus on employee well-being. As a result of the changes the pandemic has had on how people work, C-suites and boards have increased their focus on real estate decisions to ensure their office spaces will suit their future needs. Turning specifically to the global office leasing market, Gerlach Research reported that activity in the third quarter was down 46% from a year earlier, deflecting an improvement from Q2, but a continuation of statute be marked. Asia-Pacific recorded a decrease in activity of only 5% relative to last year, while EMEA and the United States were down 52% and 55% respectively. Vacancy rates moved up across all regions in Q3, with a global vacancy rate now recorded at 12.1%, reflecting a 90 basis point increase. Declines in investment sales decelerated in the third quarter, with global volumes down 44% compared to the same period last year. Despite the headwinds associated with the pandemic, I am pleased that our diversified and scaled platform generated solid results for the third quarter. Overall, third quarter results were at the upper end of our expectations due to in part to stable one-time items that are not expected to benefit future quarters to the same extent. Consolidated revenue fell 12% to $4 billion and fee revenue declined 23% to $1.4 billion in local currencies. Adjusted EBITDA of $244 million represented a decline of 19% from the prior year, although adjusted EBITDA margin increased 90 basis points to 17.4% in local currency. Driven by cost mitigation initiatives as well as government relief programs. Adjusted net income totalled $156 million for the quarter and adjusted diluted earnings per share totalled $2.99. Corporate solutions again demonstrated its ability to withstand challenging market conditions, posting a modest P-revenue decline of 3% for the quarter. Strength in facility management was slightly offset by declines in EMEA mobile engineering, which continues to face pandemic-related hazards. Current pipelines for corporate solutions are stronger than last year, though the pandemic continues to create delays on real estate decisions affecting the closure rate. As expected, our transaction-based service lines, capital markets, and leasing recorded notable declines for the quarter as activity remains depressed due to the uncertainty caused by the pandemic. Despite the overall decline, we are encouraged by our performance in some of the less impacted subsectors, such as industrial and logistics, which have shown significant resiliency throughout this year. Furthermore, we have seen a strong rebuilding of our transactions pipeline since Q2. These improving pipeline figures offer encouraging indicators for future performance, though near-term uncertainty continues to linger. Clients increasingly turn to JLL for our insights on operating their real estate and preparing for a post-pandemic world. Our conversations focus first on helping them evaluate their workplace challenges and objectives. Then we develop long-term solutions that will enable successful transitions while preserving their ability to be agile, adaptable, and resilient, as well as productive and profitable. We have crafted a framework for reimagining the workplace to assist in this transition, which is focused on four strategic pillars, business, people, workplace, and commercial real estate. Our consultancy expertise is in significant demand because JLL is uniquely capable of providing our clients advisory and execution services as a result of our global reach and full service platform. Further investments in our technology platform have proven to be a strong differentiator when conveying our capabilities in dialogue with our clients as the pandemic has accelerated technological disruption in the commercial real estate industry. We continue to expand our collaborations across business lines to respond to clients' evolving needs. For instance, we were able to expand an existing engagement with a major regional American bank to a five-year mandate. The multiple services in this assignment are facility management, transaction management, and brokerage, project and development services, occupancy planning, and the management and administration of all leases. Bank identified several benefits of consolidating these services into JLL, including our single provider technology platform, our shared services centers, the ability to consolidate services, and the opportunity to provide a sustainable career roadmap for the internal staff transferring to JLL. This is just one successful outcome of acting as one JLL, which reflects our ability to deliver the full value of JLL across business lines in every client engagement. In this quarter, we took further action as part of our disciplined cost mitigation program while simultaneously preserving our ability to maintain prudent investments across our business. The actions taken better align our cost structure with current demand. Karen will discuss this in more detail, but let me assure you that we are positioning the company to drive strong growth and play a leading role in the recovery. I'm confident that JLL will gain market share over the medium and longer term as clients increasingly seek an advisor with global full-service capabilities that has the expertise and resources to help them reimagine their workplaces. Strong earnings and cash flow management led to another standout quarter for cash generation, as evidenced by $320 million of net debt reduction, resulting in our leverage now below pre-HSS transaction levels. Our capital allocation policies anchored in maintaining a strong investment-grade balance sheet and ample liquidity to support seasonality and economic cycles, organic and inorganic investments to drive growth and long-term value. In addition, we remain committed to returning cash to our shareholders. In the third quarter, we repurchased $25 million worth of shares, bringing our year-to-date cash return to shareholders to $50 million. This is slightly ahead of the amount returned in previous years by a dividend. For at least the foreseeable future, we do not expect to resume paying a dividend and instead will return cash to shareholders via share repurchases. As we move through the fourth quarter in 2021, we will continue to evaluate business and market conditions to determine the appropriate mechanism to return value to shareholders in alignment with our long-term strategy. I will now turn the call over to Karen, who will provide further details on the third quarter results.