Jones Lang LaSalle Incorporated

Good morning. At this time, I would like to welcome everybody to the Jones Lang LaSalle Incorporated fourth 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, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the conference call over to Chris Dent, Executive Managing Director of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our fourth quarter 2021 conference call for 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 a 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 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, 2020, 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. Hello, and thank you all for joining our fourth quarter earnings call. This morning, JLL reported impressive fourth quarter and full year financial results. The recovery we have seen over the past year continues to accelerate, led by strength in our leasing and capital markets businesses. Our closely integrated OneJLL philosophy and market leading products and services are resonating with clients. I would like to express my gratitude to all JLL employees for the outstanding service they provided to our clients in 2021. This dedication to serve our clients has led us to transform JLL into a more efficient global enterprise. Three years ago, we embarked upon an ambitious multi-year transformation to enhance the seamless global integration of our services and expertise. During this time, we made several organizational design changes orientating around business lines instead of geographies. These realignments will enable JLL to reduce structural complexities and leverage best practices while accelerating growth. Today, we are announcing the final phase of this transformation process, which will align our external reporting with how we internally manage our business. Effective with our first quarter 2022 earnings release, we will begin reporting under five key business line segments instead of our current geographic-based structure. This new reporting structure will make JLL easier for investors to understand and will provide enhanced transparency of our business lines. Karen will discuss the reporting change in more detail shortly. Turning to the current market environment, conditions continue to improve, but still significantly vary by geography. In the global office leasing market, the emergence and rapid spread of the Omicron variant has brought additional uncertainty to the return to office timeline. Despite this uncertainty, we have not noticed a discernible impact in our leasing numbers as companies continue to take a longer-term view of their future office needs. LL's research indicates that in the fourth quarter, all three global regions registered positive net absorption in the office market for the first time since the onset of the pandemic, creating a solid foundation for the ongoing recovery. Asia-Pacific office leasing volumes have already recovered to 2019 levels, while Europe and the U.S. remain slightly below 2019 levels but continue to show improvement. In the U.S. specifically, fourth quarter office leasing volumes were down 23% compared to pre-pandemic levels. As a reminder, U.S. office leasing volumes were down 44% just two quarters ago. Overall, we continue to believe office demand will recover to pre-pandemic levels and that the office will remain the center of the work ecosystem. Shifting to other sectors. Activity in the industrial and multifamily markets remain robust in the fourth quarter. High demand and tight supply continue to define the industrial space, leading to rent increases and record low vacancy rates. The scarcity of land near ports and other key logistical areas is driving a supply-demand imbalance and additional supply will be needed to meet growing demand in these industrial markets. Global capital markets transactions volume reached an all-time high in 2021. Investment activities surged 54% to 1.3 trillion, supported by an improving global economy and high levels of liquidity. Cross-border capital flows, which were at depressed levels in 2020, accelerated throughout 2021 and closed the year at record high levels. The combination of accelerating cross-border capital flows and significant levels of dry powder bode well for sustaining recent growth rates within capital markets. Similar to the trends in leasing, strong performance in the industrial logistics and multifamily sectors benefited capital markets volume in 2021. The office and retail sectors improved as the year went on, although their share of transaction volume remains below pre-pandemic levels. Fundamentals in the multifamily market remain strong and show no signs of cooling off. Urban markets are recovering while rent increases in suburban markets persist. Global investor interest in multifamily assets remained high in the first quarter. This is evidenced by two of the sector's largest ever deals being completed in Germany during the quarter. Institutional investors remain active in Asia-Pacific, particularly in Japan and Australia. Let's now shift our attention to JLF's performance. As I mentioned at the beginning, fourth quarter and full-year financial results were very strong and broad-based. Fourth quarter consolidated revenue rose 23% to 5.9 billion and fee revenue increased 42% to 2.8 billion in local currency. Fee revenue benefited from strong performance in our leasing capital markets businesses, which recorded growth of 68% and 62% respectively. Adjusted EBITDA of $622 million represented an increase of 50% from the prior year, with adjusted EBITDA margin expanding from 21.3% to 22.4% in local currency. Adjusted net income totaled $447 million for the quarter, and adjusted diluted earnings per share was $8.66. Our adjusted EBITDA results in the fourth quarter benefited from 103 million of equity earnings, primarily a result of an increase in the market value of our strategic technology investments. Technology is the key differentiator for JLL, and our focus continues to be to bring the best technology to our clients and raise the productivity of our brokers and account managers. For the full year, consolidated revenue rose 15% to 19.4 billion and fee revenue increased 31% to 8.1 billion in local currency. Trusted EBITDA for the year rose 73% to 1.5 billion, reflecting a margin of 18.6%. Our full year adjusted EBITDA margin was towards the upper end of our 16% to 19% target range, driven by the strong gains in our higher margin transactional businesses, investment gains in JLLT and LaSalle, and disciplined cost management. We continued to repurchase shares in the fourth quarter, returning over $150 million to shareholders. This brings our full-year return of capital to over $340 million, up significantly from $100 million in 2020 and $43 million in 2019. In addition, I'm pleased to announce that the Board has authorized a new $1.5 billion share repurchase program. We remain committed to investing in the business to drive future growth while also returning capital to shareholders. I will now turn the call over to Karen Brennan, who will provide further detail on the results for the quarter and fiscal year.