Good day, and thank you for standing by. Welcome to Jones Lang LaSalle Incorporated Second Quarter 2018 Earnings Conference Call. For your information, this conference call is being recorded. I would now like to turn the conference over to Grace Chang, Managing Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning and welcome to our second quarter 2018 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, ir.jll.com, along with a slide presentation intended to supplement our prepared remarks. 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 where appropriate to GAAP in our earnings release and supplemental slides. 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 or about 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 for the fiscal year ended December 31, 2017 and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statement. And with that, I would like to turn the call over to Christian Ulbrich, our Chief Executive Officer, for opening remarks.

Thank you, Grace, and welcome, everyone, to this review of our results for the second quarter and first half of 2018. Our CFO, Christie Kelly, joins us as usual, and she will provide details about our performance in a few minutes. To summarize, we had a very strong second quarter and first half. Revenue increased 12% to $3.9 billion for the quarter and fee revenue increased to $1.5 billion, a 13% increase. For the first half, revenue totaled $7.5 billion, up 13% from the previous year, while fee revenue reached $2.8 billion, also a 13% increase. Second quarter growth reflected organic revenue expansion across all our business segments. Highlights included growth in our Americas transactional businesses and Corporate Solutions' continued increases in annuity-based revenue. In addition, of LaSalle's $60 billion in assets under management at the end of the quarter, private equity capital accounted for a record $52.3 billion. Adjusted net income reached $104 million for the quarter and $148 million for the first half. Adjusted diluted earnings per share totaled $2.26 for the quarter, up from $2.17 for the same period a year ago. For the first half, adjusted diluted earnings per share reached $3.23 compared with $2.55 for the first six months of 2017. Even as global economic uncertainty persisted during the second quarter, world economic conditions remained positive. Annual GDP growth is expected to reach 3.8% for the full year, up from 3.7% a year ago. For more details, see slide 2 in the supplemental information document posted in the Investor Relations section of jll.com. Slide 6 summarizes activity in global Capital Markets and Leasing. Second quarter Capital Markets transaction volumes rose to $173 billion, a 10% year-on-year increase. First half activity reached $341 billion, 13% higher than last year and the strongest performance since 2007. Income growth continued to fuel capital appreciation, which grew by 5.7% year-on-year for prime office assets in 30 major markets. Strong leasing conditions continued through the quarter, reaching 121.6 million square feet across 96 global markets. This represents a 15% increase from a year ago, and the second highest leasing level since 2007 when we began to track global leasing activity. With continued occupier demand, the global office vacancy rate was pushed down to 11.5%, 20 basis points below the first quarter rate. Rental growth for prime offices across 30 major markets remained steady at 3.6% with annual rental growth keeping within the 3% to 4% range seen since the beginning of 2017. Several office markets registered double-digit rental growth during the quarter, including Singapore, Berlin, Sydney, Milan and Madrid. So, taken together, we have seen a very good second quarter and first half for commercial real estate and for JLL. Now, let's turn to Christie for more detailed comments on our performance in this market environment.

Thank you, Christian, and welcome to everyone on our call. Christian provided the headline summary of our results for the current quarter and first half. So, I will move directly to the details of our performance. All references to prior year are represented on a recast basis. Revenue growth occurred across all segments driven by strong organic gains in both annuity and transactional businesses. On a local currency basis, both consolidated GAAP revenue and fee revenue grew 11% compared to second quarter 2017 and reflected 10% growth for the first half of 2018. Fee revenue growth was broad based across service lines and segments for both the quarter and first half, with exceptional results in Leasing, Project & Development Services and Property & Facility Management. All consolidated fee revenue growth for the first half of the year was organic. Turning to service line and segment results, where we report percentage changes in local currency except for Capital Markets, which aligns with the U.S. dollar-denominated research data, consolidated Leasing fee revenue grew 8% for the quarter and 6% for the first half, led by the Americas, which represented 60% of the year-to-date Leasing growth. For both the quarter and first half, growth was particularly impressive when compared with the prior year's double-digit growth. Consolidated Capital Markets fee revenue grew 8% for the quarter and 13% for the first half. Growth was led by the Americas for the first quarter and by both EMEA and the Americas for the first half. For both the quarter and first half, non-transactional Real Estate Services businesses, such as Property & Facility Management, Project & Development Services, Advisory & Consulting drove nearly 60% of the fee revenue growth. For the quarter, our Property & Facility Management fee revenue grew by 8%, Project & Development Services grew…

Thank you, Christie. As examples of how we generated these results, slide 19 shows a few recent wins across service lines and geographies. In our Corporate Solutions business, we won 64 new assignments during the first half of 2018, expanded existing relationships with another 38 clients and renewed 17 contracts. These 119 wins totaled 245 million square feet of space across all regions. One example is the new business we won from the Rush University Medical Center to provide integrated facilities management services across 5.5 million square feet of space in the Greater Chicago area. And in India, we were chosen by HCL Technologies for facilities management services at nine sites totaling 5.7 million square feet. Representative wins in Capital Markets include 5 Bryant Park in New York, where we secured $463 million in acquisition funding and completed a $640 million sale of this iconic office tower. We also advised Stockmann Plc on the €109 million sale of the Book House property in Helsinki, a landmark retail and office building. The quarter's new leasing and management assignments included being retained by TMG, a leading developer in Egypt, to lease and then manage their 926,000 square foot Mall of Madinaty, part of a planned community, near Cairo. In China, we were selected to lease Taiping Financial Centre, a 920,000 square foot office property in Beijing. And in April, LaSalle was awarded a $1.1 billion separate account portfolio takeover for the Pennsylvania State Employees' Retirement System. Now, let's look to the near-term future and turn again to slide 6, which summarizes our market outlook for the full year. In global Capital Markets, investor demand remains strong, with a growing number of investors increasing their real estate allocations, attracted by steady income streams and relative performance compared with the other asset classes. For…

Bridget, do we have any questions on the phone line?

We do. Our first question is from Mitch Germain with JMP Securities. Your line is open.

Hey there, Mitch.

If your phone is on mute, please unmute.

Hello?

Hey, Mitch. We can hear you now. How are you?

Okay. Sorry about that. How are you? I wanted to look at the M&A – thanks. I wanted to look at the M&A environment. Obviously, you for the most part have taken a pause and gotten your balance sheet in order, you've got plenty of capacity here. So, I'm curious if the pricing environment has gotten to be a bit more rational, A? And then maybe, B, if you can just maybe talk a little bit about the pipeline and what you're seeing out there?

Hi, Mitch. It's Christian.

Hey, Christian.

Well, I don't want to really comment whether the pricing is more rational now. It's rational for us if it creates value for our shareholders and for our business. And so, we are very critical in analyzing targets. There's a lot out there. A lot is being offered to us. And as you have read, we are active on the LaSalle side at the moment. And so, it's not that we are not identifying potential targets, but it has to really create value for our shareholders. And that's where we are at the moment. We are not as successful in identifying targets as we were in 2015.

That's helpful. Thanks. And I was curious about the incentives in LaSalle. I know in the first half of the year, they seemed to have been driven from some dispositions in Asia. Where is the next bucket of incentives being delivered from?

Hey there, Mitch. We're still seeing a very strong performance throughout the Asia-Pacific region, and we've got additional performance coming through in EMEA and the Americas. And so, expect primarily, though, Asia Pacific in terms of the drive in incentive fees.

Got you. Just on to technology investments, it's obviously – one of Christian's priorities, when he took leadership of the firm, was really to enhance and make JLL more innovative. And I'm curious, do you believe these investments in technology are just going to be a multiyear continuation project? Or do you get some relief maybe on the ERP side or some employee type, and then the investment becomes more client-facing? I'm just curious how you think the playbook looks over the course of the next several years.

Mitch, I would say that any company has to be very focused on technology. We call it every company has to become a technology company, to some degree. You're right that you would expect that, on the ERP side, it will not continue on the same level of investment as we are currently investing. It's a three-year program where we are heavily investing to renew our ERP platform. But even on that side, the average spend will be higher than it was 5 to 10 years ago on the platform side, because we have to offset the pressures we have on the employee side with wage inflation and the war for great talent, which is everywhere in the world, by using always the optimal technology within our organization to drive productivity. On the client-facing side, it will never go away. It will be a continuous investment into the best possible client-facing technology, which we can identify. And that is one of the reasons why we are so strongly pushing on the JLL Spark side with our new venture capital fund to be really early and on the front-footing, identifying new technology, which will drive value to our clients.

Great. Last one from me is with regards to JLL Spark, I guess you, Christian, had mentioned a couple investments that were made. Is there any sort of theme in terms of what types of investments you're making or underwriting?

Yeah. Sure. I mean, we screened since the announcement more than 200 companies. At roughly 20 we took a closer look. And as we stated, three will become an investment out of these more than 200. And these three are in different areas of technology, which will enhance value for our clients. One is in the area of deal tracking, pipeline tracking of deals. The other one is in the aggregator space. And the third one is something which is in the AI space. We will announce that as quickly as we can. But all of them are really, really exciting and it's amazing how quickly that whole proptech scene is gearing up and is becoming super professional.

Thanks. Have a great rest of the summer.

Thanks, Mitch. You, too.

Thank you. You too.

Our next question comes from the line of Stephen Sheldon with William Blair. Your line is open. Stephen Hardy Sheldon - William Blair & Co. LLC: Hi. Good morning.

Good morning, Stephen. Stephen Hardy Sheldon - William Blair & Co. LLC: So, you upgraded your view for global investment volumes to being flat this year, and I think given better trends to start the year, and it looks like projections moved up every (37:02) region. So, I guess, what do you qualitatively attribute the outperformance to so far relative to your initial expectations? And has your outlook for the second half changed at all compared to what you would have thought coming into the year?

I'd start with the second part of the question, Stephen. The outlook hasn't really changed for the second half. It was the first half, which was coming in stronger than we expected and that created (37:31) now that we overall updated our outlook for the year. It is across the board. We were too cautious. I mean, the overall political environment is not that easy. And so, our researchers were a bit too cautious how that would impact market. So far, that hasn't been the case, and that's great. And we are very happy that this will continue that strong interest into real estate as an asset class. Stephen Hardy Sheldon - William Blair & Co. LLC: Okay. Helpful. And then, looking in the Property & Facility Management business, can you talk about trends in Asia-Pacific? Sounds like contract starts may have been pushed out, and you noted too, I think, contract expense overruns. So, can you maybe provide some more detail on those items and how the pipeline there looks right now?

Sure, Stephen. So, a couple of things. First of all, the pipeline looks strong. We had outsized performance over the past couple of years on significant new wins. So, the teams are really in the process of executing. And as it relates to the contract overruns, we had – as sometimes we do with new contracts, new clients, we went into a couple of those transactions with not the most accurate baseline data. So, the teams are working hard with the clients to rectify that and we'll be off to a better start during the second half of the year. Stephen Hardy Sheldon - William Blair & Co. LLC: Got it. And then just last one, with the ERP rollout in EMEA and Asia-Pacific, will some of those investments start to hit this years, or will that be predominantly felt more in 2019?

Hi there, Stephen. Some of those investments are hitting this year as it relates to specific efforts around the EMEA go-live. And then we'll see, in 2019, the investments associated with ERP system hit for 2019 related to the Asia-Pacific go-live. So, more to come. Everybody is working hard. Stephen Hardy Sheldon - William Blair & Co. LLC: Got it. Thank you.

Thanks, Stephen.

Our next question comes from the line of Jade Rahmani with KBW. Your line is open. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Thanks very much. The commercial real estate brokerage business on the Leasing side and Capital Markets side historically has been very people-intensive. Are there proptech technologies you think that could potentially be transformational? And do you view those as complementary or disruptive to the overall brokerage landscape?

Well, Jade, that's a question which cannot be answered in kind of for the whole world the same way, because markets tend to be quite different. I don't think that we have seen so far any technology, which will be completely transformational. It's more complementary at the moment. You will see technology, which will – and our NXT technology is a great example in the leasing environment, which is a process which will significantly speed up the whole process of identifying new space for a tenant. And that makes it much more efficient from a client perspective, but it also makes it much more efficient from our perspective. So, the broker who is using NXT as its key tool will be able to be significantly more productive than a broker who doesn't use that technology. And this is kind of the theme you see across the board. Most of these new technologies are supporting the brokers in their work and make them more productive. And so, the revenue per head is going up. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: And in terms of your clients, where do you think they are most excited about technology? Is it the ability to see properties virtually without having to travel, or is it using Google Earth and mapping technologies, data analytics to give them a better picture of information flows in the submarket (42:08) that they're in? Where would clients be most excited?

Well, they are very excited if the whole process becomes for them more efficient. So, that is a big piece of it. And obviously, any kind of technology, which allows them to be better informed, it doesn't mean that they want to cut out the advice which we are providing, but it's a much better situation in communicating with your client when the client has a good knowledge base of what's going on. It drives the efficiency of the overall process when you talk to an educated client rather to a client who doesn't have a clue what's going on in the market. And that's what clients really enjoy. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Could you give the operating cash flow for the second quarter? And do you have any full-year expectations you could share?

Sure. Sure, Jade. For the quarter, we had cash flow from operations that was down a little bit, primarily as a result of the ERP go-live in the Americas and the fact that we had some significantly larger-sized transactions that came through in the Americas late in the quarter. Overall, when you take a look at the receivables performance, though, we've had over $200 million reduction in receivables, $225 million since the end of last year and some really nice pickup in days sales outstanding. And as we look towards the remainder of the year, we are well on track to drive our cash flow targeted objectives as a percentage of fee revenue at 8% or above. And when you take a look at cash flow performance versus last year, some very nice improvement on a trailing 12-month basis. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Turning to adjusted EBITDA margins, where did you see the most improvement by business line?

From an adjusted EBITDA margin perspective, the Americas business saw substantial improvement in EBITDA margins, recast for ASC 606, well over 140 basis points for the business. And specifically, we're seeing not only leverage on the platform technology investments that are paying off from a productivity and cycle time perspective, as Christian gave examples of in terms of increasing revenue per head, but also we're seeing very nice cost controls associated with the business that we've been working on for well over a couple of years, including supply chain management that's really starting to drive to the bottom line thanks to some great team effort. So overall, outstanding results in the Americas and we also saw some very nice performance in Asia Pacific from both a mix perspective as well as cost control. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: In terms of Capital Markets, you mentioned growing the footprint and I believe that there's a lot of growth opportunity in the Americas for JLL. Would you look at M&A at this point in the cycle or is there too much risk of a decline in volumes? And so, potentially, you would focus on recruiting and then, in some kind of a softer environment, maybe be opportunistic on the M&A side in Capital Markets?

Well, the idea to strengthen our... Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Is it a reasonable way to think about it?

I'm sorry, Jade.

Yeah. Well, the idea to strengthen our Capital Markets business in the Americas has been on our plate for couple of years. And so far, we have been very hesitant to do major M&A around Capital Markets in the U.S., because we always saw the risk/reward profile not favorable enough to propose that to our shareholders. But we will continue to analyze the opportunities and see whether that is changing. For the time being, we are very focused on growing it organically. We are making real fantastic progress. When you see the revenue growth in our Capital Markets business in the U.S., it's absolutely stunning and it will continue to be the case over the foreseeable future. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Thanks very much for taking the questions.

Thanks, Jade.

Our next question comes from the line of David Ridley-Lane with Bank of America Merrill Lynch. Your line is open.

Hi, David.

Good morning. So, last quarter, there was some talk about being more focused on the bottom line versus the top line within your Property & Facilities Management business. Obviously, you had a couple of contracts in Asia-Pac with overruns. But that – it does follow-on some of the issues you've had in EMEA, where I understand there's growth-oriented investments as well as kind of a client-specific bankruptcy that are sort of nonrecurring issues. But I guess, one thing that would be helpful for investors to sort of better understand this is, what percentage of your Property/Facility's contracts earned their targeted or above-target profitability versus the percentage of these contracts that fall below?

I think, David, we can we can take a look at that. We don't have those statistics, specifically, on hand. So give us the opportunity to take that away. But one of the things that I just want to impress upon you is that it's a big business, and with hundreds and hundreds of key client relationships. And we make good money in that business. And they're occasionally out of the significant wins in the Corporate Solutions space, the hundreds of millions of square feet that we have under management there, there are occasionally a few blips in the road. So, for the Asia-Pacific situation, like I said, there was some fumbling on baseline data. It happens from time to time, and we're working with our clients to rectify that. And so, we'll get that well in order, as we always do. And then, as it relates to, for example, the challenge that you mentioned as it relates to the UK, there was just a fallout in the contractor construction business in the UK as a result of Brexit. And we're a big player in the space and we had some challenges there. But I will say, again, that we recouped that bad debt. So while we might have a few stumbles here and there, our team is very focused on operational excellence and superior client service, and at the end of the day, driving returns for our shareholders.

And just to follow on, on that question, could you give sort of maybe not quantitative, but qualitative view of sort of key metrics that you're tracking that renewal rates still trending up. Are you still being selective in terms of the percentage of deals that you'd, ultimately, bid on? Are your win rates holding up? That sort of thing. Thank you.

Yeah. Absolutely, David. So we track, from an overall business perspective, a number of pursuits. We track win rates. We track deals that we've decided not to pursue. We look at renewals, expansions. We look at overall margins in terms of bids that are made. And then we also look at client satisfaction. I mean, the team is very measured on clients set and how that comes in. And then, further things, we look at certification, the talent and training of our engineers and people around the globe who are delivering these services for our clients. And then, finally, we always have an eye towards sustainability.

And if I could sneak one more in, could you share any financial details on the Aviva acquisitions? And should we expect the acquired funds to have similar dynamics, similar economics to LaSalle's existing offerings? Thank you.

We are not in a position to share any details on that yet. Once the deal is finalized we will give a little bit more detail around that. But as you can take from my earlier comments, analytically, we assess M&A opportunities. It will be a business which is very complementary to our very strong UK LaSalle business. And once that transaction is closed, it will be adding value to the LaSalle margins overall.

Thank you very much.

Thanks, David.

Our next question is from Marc Riddick with Sidoti. Your line is open.

Hi, Marc. Marc Riddick - Sidoti & Co. LLC: Hi. Good morning.

Morning. Marc Riddick - Sidoti & Co. LLC: I wanted to just get some general thoughts on where you feel you are with cross-selling efforts and having the opportunity of providing multiple services with clients. How clients are – what level of receptivity that you're seeing there and whether or not that is different by geographic region? Thank you.

Well, generally speaking, Marc, our clients are very receptive. We have, I can say, a global trend that clients want to reduce the numbers of their providers. And so, that concentration process is also happening in our industry. And with that back wind, we usually are very successful year-by-year to increase the cross-selling and the numbers of services we are selling to one client. And obviously, it's always getting more complicated when it goes cross-regional. But that is exactly one of our big strengths, that our organization is incredibly well-connected and that we are leading in servicing clients in more than one region and in several countries. So, that is something which drives a lot of our optimism going forward with regards to the growth perspective of JLL. Marc Riddick - Sidoti & Co. LLC: Is that something that you would see having greater insight into and greater detail around as the worldwide rollout with the ERP system is executed over the next couple of years?

Sure. I mean, that is a very important aspect that if you bring in an established organization, like JLL, which goes back to 1760, we have hundreds of different systems. In our current program, we are significantly reducing the systems we are using, in that we are agreeing on one ERP system around the world that allows us to tie into that information much more easy, and to share that information much more efficiently. So, that is one of the reasons why we are investing so much money into that platform. Marc Riddick - Sidoti & Co. LLC: Okay. Great. Thank you very much.

Thanks, Marc.

Thank you. And our next question is from Patrick O'Shaughnessy with Raymond James. Your line is open. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Hey. Good morning.

Hi, Patrick. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: So, Christian, you – hey, good morning. So, Christian, you spoke to maybe some of the challenges that you're seeing on the talent retention angle and you spoke to wage inflation. Are you seeing pressure in terms of the payouts that top talent is demanding or is that manifesting itself in other ways?

No. No, we don't see much pressure on what top talent is expecting, because it's very important to a top talent that they're in an absolute superior platform and that they have the best technology at hand because that makes them more productive. Doesn't help you if you have a slightly higher payout, but you don't have any technology supporting you. You are making much more revenue as a broker when you have the best technology at your hand. What I was mentioning is more the general wage inflation in the wider arena of our employee base, which you have across the board very much so in Asia-Pacific, in China and India, where we have large numbers of employees, and there is strong wage inflation. And what you can see across the board wherever you go in the world, well-educated people are scarce resource. And many years ago, it was really easy for us, as an international top brand, to get the best talent into our organization. Today, we also have to work hard to get them all in, because everybody tries to hunt the same people. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Great. Thank you very much.

Thanks, Patrick.

Thank you. And I'm not showing any further questions. I'll now turn the call back over to management for closing remarks.

Okay. With no further questions, we will end today's call. Thank you for joining Christie and me, once again, and for your continued interest in JLL. We look forward to talking with you again following the third quarter. So, thanks.

Ladies and gentlemen, this does conclude the program. You may now disconnect. Everyone, have a wonderful day.