Good day, and thank you for standing by. Welcome to the Jones Lang LaSalle Incorporated Third 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 third 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 statements. 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 third quarter and first nine months of 2018. I'm also pleased to welcome Trish Maxson our Chief Administration Officer, whereas more recently added the role of Interim CFO to her responsibilities. As you know Christie Kelly left JLL in September. We wish her well and thank Christie for all the significant contributions she made during five successful years as our CFO. On today's call following my opening remarks, Trish will share details of our performance. Later Trish, Grace and I will take your questions. In summary, we had a record that quarter at JLL, building on a strong first half of 2018. For the quarter, revenue increased 15% in local currency to just under $4 billion. Fee revenue was up 14% to $1.6 billion. For the first nine months, revenue increased 12% to $11.4 billion and fee revenue for the same period totaled $4.4 billion, 11% higher than a year ago. Our growth through this quarter and year-to-date represent healthy organic expansion across the business. Adjusted net income totaled $139 million in the quarter, up 37%, and $287 million year-to-date, up 32%. Adjusted diluted earnings per share totaled $3.02 cents for the quarter, up from $2.21 in the third quarter of 2017. For the first nine months, adjusted diluted earnings per share reached $6.25, increasing from $4.76 during the same period a year ago. We realized strong margin expansion in the quarter helped by excellent results in the Americas, exceptional LaSalle incentive fees, and improving performance in our EMEA business. For the quarter, adjusted EBITDA margins calculated on a fee revenue basis was 14.7% in both U.S. dollars and local currency, up from 13.2% in 2017. Recognizing our performance and momentum, our board of directors have…

Thank you, Trish. To show how we achieved these results, slide 19 lists a few recent wins across service lines and geographies. Year-to-date in our Corporate Solutions business, we have won 138 new assignments, expanded existing relationships with another 68 clients, and renewed 24 contracts. These 230 wins total 426 million square feet across all regions. One example is our 4.5 million square foot Facilities Management assignment from HCL Technologies, a leading multinational technology company headquartered in India. In Capital Markets, we represented the seller and the $600 million disposition of New York's Iconic Plaza Hotel, and in Spain, we advise Blackstone on the sale of a 215,000 square foot development site. The property is planned for use as a 750 room student housing development, which will be Spain's largest. The quarter's leasing assignment include being retained as the primary leasing adviser for the 2.2 million square foot China Life building in Qingdao's new Shinan Central Business District. We also represented Serviceplan, Germany's largest advertising agency group and the relocation of its Munich headquarters to 431,000 square feet of space in the city's new back subtle (00:22:49) District. This was Munich's largest leasing transaction since 2006. In another third quarter highlight, LaSalle on behalf of its client, The National Pension Service of Korea, signed an agreement to acquire Goldman Sachs' new European headquarters at Plumtree Court in London. The transaction was structured as a sale and leaseback and the price for the 826,000 square foot building was $1.5 billion. Finally, late last week, LaSalle entered into an agreement to make a majority acquisition of the U.S. real estate debt investment management business of Latitude Management Real Estate Investors, which has $1.2 billion in assets under management. The transaction is expected to close in the first quarter of 2019. Now, let's…

Certainly. Your first question comes from the line of Stephen Sheldon from William Blair. Please go ahead. Your line is open. Stephen Hardy Sheldon - William Blair & Co. LLC: Good morning. Thanks. I guess just first in the Leasing business, you've obviously produced really strong growth there over the last few years and I think it's pretty similar to your competitors. But just thinking about over the next year, how are you thinking about trends in that business? I think it's probably benefited in the U.S. from strong employment growth and increasing competition for skilled talent. But now I think you could argue that the U.S. has been potentially getting close to full employment, so that the tailwind could be abating at least a little, and you'll be facing some continued tough comparison. So I guess just generally, how are you thinking about the potential growth in Leasing and looking out over the next year at this point?

Stephen, it's Christian. We are very confident about the Leasing business also going forward. First of all, it obviously correlates very much with the global GDP and the outlook for 2019 is still very healthy. Secondly, we have that strong trend that companies have to go where the talent is. That means they have to move their facilities into the big cities of the world. That's where we do the majority of our business. And thirdly, with the lack of available talent, companies have to upgrade their office space very significantly and that causes them to move into more modern buildings, into new developments, and again, that favors our business. So for the time being, I think we have enough reason to believe that 2019 will continue to be a very strong year for our leasing business. Stephen Hardy Sheldon - William Blair & Co. LLC: Got it. That's very helpful. And then on margins in EMEA, great to see improving trends there this quarter. I think you noted that there has been some improvement on the cost side of the Integral as it's been integrated. So two things that I wanted to ask. One, has revenue growth in Integral's continued to improve? And then two, how are you thinking about profitability in that business heading into 2019? And specifically, what's your level of optimism that it should be profitable, I guess, next year?

Well, the Integral business is going through a major restructuring. We implemented complete new technology in the second quarter of this year; and so third quarter was the first quarter with that new technology. We're expecting to see major benefits coming from that over the course of 2019. So the efficiency of running that business will continue to improve. For the time being, our focus wasn't so much on revenue growth, it was much more on driving productivity in that business and getting back on the business plan where we are still running behind. Overall, EMEA has done a great job in 2018 to really take steps to become more productive and drive margins going forward. So, again, for 2019, we will expect further improvement in our EMEA business. Stephen Hardy Sheldon - William Blair & Co. LLC: Great. Thank you.

Your next question comes from the line of Jade Rahmani from KBW. Please go ahead. Your line is open. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Thanks very much. I apologize if I missed it. But did you give any update on the search for a replacement CFO?

You didn't miss it. We haven't given any updates. But as you can imagine, we are very focused on that point. And so we are constantly interviewing new candidates. But we have a great CFO in place. So, for the time being, we will not compromise on the quality of candidate which we want to bring in. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Is the target something by year end or lengthier than that?

We don't have a target. We are looking for a real great candidate, who will drive our finance function for the next 10 years. And so when we have identified that person and it is a mutual fit, then we have achieved our ambitions. And if that takes another six weeks or another three months, doesn't really concern us. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Okay. On the Capital Markets side, what can you say about the outlook for next year? Do you think that additional interest rate increases by the Federal Reserve is likely to impact volumes?

Well, as I have said before, as long interest rate increases are in line with market expectations, we don't expect any negative impact on volumes going forward when we are thinking about the overall interest rate levels we are still playing in. There is still a very advantageous positive gap between real estate deals and interest rate levels. And as long as that continues to be the case, people will be attracted to invest into real estate. And so going forward for 2019, we expect another reasonably strong year in 2019 around the globe in Capital Markets. That may mean that it can be slightly less volumes than we have seen in 2018. But in the longer run of the comparison of years, it will be a strong year. We have used 2018 to invest heavily in our Capital Markets business, and so for JLL, we are very confident for 2019. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: In terms of the recent debt investment management platform that you – that LaSalle is investing in, what drove that decision, that fund space seems pretty saturated right now.

Yeah, we believe that playing along the whole capital stack is not only important for us in our services business, but also in our investment management business, and we have looked at that space for several years. And we have been very disciplined on M&A opportunities in the past. This one was one we thought is a real great fit, where we can complement the company with skill sets we have within LaSalle, so that we will drive it to the next level going forward. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Can you comment on what drove the decline in APAC Capital Markets volumes?

Yes, we had some specific challenges in two of our APAC countries around that which we have solved in the third quarter. And so going forward in 2019, we see those countries back on track. And overall, we have a strong reason to believe to see a very strong fourth quarter in APAC in Capital Markets. And then you always have to keep in mind that Capital Markets is, in itself, a bit of a volatile business. So year-on-year comparisons on quarters can sometimes be quite misleading. We had last year a very, very strong third quarter. And so it creates a bit of a tough comparison. Jade Rahmani - Keefe, Bruyette & Woods, Inc.: Thanks for taking the questions.

Sure.

Your next question comes from the line of David Ridley-Lane from Bank of America Merrill Lynch. Please go ahead. Your line is open.

Sure. Good morning. Wanted to sort of get your broader thoughts on the possibility of hard Brexit, what that would mean for your business, and if you have been making any preparations for that outcome?

Sure. I mean that is obviously a very difficult question to answer. I think everybody is really struggling to see the longer-term implications of a hard Brexit. Short-term, we expect that there will be a bit of a pause in transactions and then it depends how quickly people will get their head around the situation when the market is coming back. When you look at the very surprising vote in June 2016, we saw a bit of that. I don't know whether that kind of sets an example, but it took about five months until kind of end of October beginning of November when the market was coming back, and then obviously we had a very, very strong rebound in the following year 2017. We obviously have all those contingency plans in place. It's part of our normal management routine that we look at downward scenario. So our UK leadership has been working intensively to prepare for it, not that we are looking forward to a hard Brexit, by no means, but overall, the implications on our total global profitability will be limited.

Understood. And then I wanted to just check in on LaSalle. In the past, you've given sort of some guide rules for what to expect in a normalized environment that being around $40 million to $50 million in incentive fees and around $20 million or so in equity earnings. Are those still appropriate guidelines going forward as we look out to next year or beyond?

So, David, this is Trish. So I mentioned that for fourth quarter, we look at a range of $30 million to $50 million, and then we look at beyond into 2019, we definitely are going to see a year that's more like a normalized year versus 2018 which was exceptional.

Okay. And those older guidelines still roughly hold in terms of what normal year looks like?

Yeah, just with the proviso, of course, that we don't provide guidance.

Right. Understood. Okay. Thank you very much.

Your next question comes from the line Mitch Germain from JMP Securities. Please go ahead. Your line is open.

Thanks for taking my question. Christian, just curious about hiring and the competitive backdrop, has anything really changed in terms of what you've been seeing over the course of last 12 to 18 months.

Hi, Mitch. I think it is kind of a very intense labor market, and so with every market participant really fighting for talent, you'll have to have a real convincing story to bring new talent in and that goes far beyond just the compensation package. We feel that we are well-positioned for that. But it is something where you constantly have to be very focused on. And once in a while, we have great successes in bringing talent in and sometimes we are also a target for competitors and we sometimes lose some people. So I think it's kind of a normal environment, but it's getting increasingly kind of tight on talent.

Got you. I'm curious about how you measure your technology spend. I know you've been -- I know I think I believe it was Trish who mentioned it, a couple of technology investments that were more, I think it was accounting and back office focused, but I know that there's also a customer-centered technology spend. So I'm curious about how you guys -- how you look at measuring the return on the capital that's invested?

Well, as you may have heard before, we have kind of three major work streams. One is around platform technology, which we have been running for a couple of years and which will be finished by the end of next year. There, the measuring is relatively easy because we have a significant increase in productivity. We have our global platforms running on the same technology. So we have clear guidelines around payback, what we see from those investments. Besides that, even if those investments wouldn't have been positive, we still had to make them because you need to update your technology because it will not be supported anymore, but that is ongoing and it will be finished by the end of 2019. The other work stream is that we are trying to bring many of our service lines on the same platform. That is an ongoing undertaking and it will be constantly something we do. Again, we have made great progress, especially in our Capital Markets business and we have different kind of metrics as to analyze the success of that. And it has been so far very promising and we are starting now to look into other service lines. The third piece, which is the most difficult piece, is client-facing technology, where we are, as you know, staying very close to the startup community, analyzing business models. We have analyzed since the 1st of June more than 300 business models in PropTech startups. And those are the areas where we see kind of hope to identify those technologies which are really bringing benefit to our clients and make our clients more productive or increase the employee experience. There's no general rule around that topic how we see return on investments there, because many of those activities are very much driven how we can provide our clients with best-in-class technology first. And so the return is coming from different ways of measuring it.

Got you. And then, last one from me, I think you said that there was a positive organic contribution to EBITDA. I mean, how should – I might have missed this, I apologize, but what was the – the revenue growth almost entirely organic, is that the way to think about it?

Yeah, that's right. It was almost completely organic. The level of acquisitions that we've had over the past couple of years meant that that growth, which was 170 basis points of margin expansion, was really almost completely organic.

Great. Thank you.

Your next question comes from the line of Anthony Paolone from JPMorgan. Please go ahead. Your line is open.

Thank you. My first question is on the balance sheet with leverage under a turn and seemingly going a bit lower. How are you thinking about acquisitions versus returning capital to shareholders?

Well, we have obviously a close eye to our balance sheet and to our leverage situation. As you have seen, we have done a couple of small acquisitions lately and just announced a further one earlier this week. We expect that the M&A market will become very active over the next 18 months, because with people having more visibility around the economy going forward, I think many people will – who are considering an exit from their interest in the company will see 2019 as a great opportunity to do so. So we will continue to be analyzing what's coming to the market. Another area for us to use our capital is strategic hires. You may have followed that. We did something like that in our New York Capital Markets team very successfully a couple of weeks ago. And then, we will continue to use the very positive market environment for us to increase our spend into technology. And then, looking at the dilution, which we have created to our shareholders around the part of the compensation of our senior folks with shares, we are obviously also analyzing the opportunity for share repurchasing as well as continuing our dividend policy.

Okay. Thanks. And my other question is related to outsourcing. If we look at the annuity-based business versus things like Tetris and project management, how should we think about the growth rates for those going forward? Do we – does annuity growth in the traditional annuity-based outsourcing kind of drop and project management goes up or just trying to think through the interaction of the various buckets. Because I think when you all disclosed that, you kind of have outsourcing across those few buckets versus some of your peers, I kind of lumped it all into one.

Well, as we have said before, what we call the Corporate Solutions business, which is obviously consisting of a large chunk of our annuity business, the Facility Management business is growing very, very strongly. We had a quarter-to-date growth in our Corporate Solutions business of 15% and a year-to-date growth of 18%. And so this is something which we are seeing continuing over the next couple of years because there's a very strong trend in that industry and we have an excellent healthy pipeline going forward. If you ask about how the annuity businesses are interacting compared to other parts of our business, as I said, this trend in Corporate Solutions is a very strong fundamental, what we would call a macro trend, and this is going to continue whereas other parts of our business are obviously more impacted by more short-term economic development. There is one specific trend which we see especially in those markets, which are very tight on new developments and resources in the construction industry. So you see that very much in Europe where because of the tightness in the construction industry, there's a lot of upgrading of existing buildings because that is easier to be done than building a completely new one. So you have a bit of additional run on project management and our Tetris business and we have made note about that in our commentary that our Tetris business has very, very strong growth rate in 2018. And again, we expect that to continue in 2019.

Okay. So we think that – to think Tetris is in your Project & Development Services and that's grown substantially. If you think about just the Properties & Facilities Management component and line item, though you do think that that business continues to grow double-digits in the next year?

The Facility Management business definitely, the Property Management business which is also part of that is running a slightly different dynamic. That is a business which is highly competed in parts of the world, and therefore, it shows a very different dynamic than our Facility Management business.

Okay. Understand. Thank you.

There are no further questions at this time. I will now turn the call over to management for closing comments.

Well, with no further questions, we will end today's call. Thank you for joining Trish, Grace, and me and for your continued interest in JLL. We look forward to speaking with you following the fourth quarter.

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