Welcome to the FirstService Corporation’s first quarter earnings 2010 conference call. Today’s call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve risks and uncertainties. Actual results may be materially different from those contained in these forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the form 10-K and in the company’s other filings with Canada and U.S. securities commissions. As a reminder, today’s conference is being recorded, Wednesday, April 28, 2010. At this time, for opening remarks and introductions I would like to turn the call over to the founder and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, Sir.

Thank you and good morning everyone. As the operator has said I am Jay Hennick, Chief Executive Officer of the company and with me today is Scott Patterson, President and Chief Operating Officer and John Friedrichsen, Senior Vice President and Chief Financial Officer. This morning FirstService reported better than expected first quarter results with particularly strong improvement from our Colliers International commercial real estate services division. The first quarter is traditionally the weakest quarter in the commercial real estate industry and the fact that Colliers International posted a profit in the quarter for the first time since 2007 is a clear sign that real estate markets are beginning to regain their confidence. With improving market conditions in commercial real estate, the steps taken over the last year to strengthen our ownership of Colliers and the continued strength of our residential property management and property services divisions FirstService is in a better position today than at any time in our history to create value for our shareholders. For the quarter, revenues were up 11%. EBITDA was up 62% and adjusted earnings per share was up 88%; all versus the prior-year, an excellent performance to say the least. John will provide more details on our financial results in a few minutes. Aside from Colliers, our ever-resilient residential property management business posted solid operating results once again and our property services segment also grew nicely versus the prior year. Scott will provide more details on all of this in his operational report in just a few minutes. Over the past few months we have been very busy particularly in our commercial real estate services division. In October the global shareholders of Colliers overwhelmingly agreed to transition the company from a decentralized network of affiliate owners to one Colliers; to one centrally owned business…

Thank you Jay. In a press release issued earlier today FirstService reported significantly improved results from our operations from our first quarter ended March 31, 2010. The most significant contributor was our Collier International commercial real estate operations which delivered strong improvement over the results generated in the first quarter of 2009, a period many believed to have been the bottom of the cycle. We also continue to benefit from our diversification with both our residential property management and property services divisions generating solid revenues and EBITDA in the quarter. Scott will have more to say on each of our segments in a few minutes. I will now address our overall consolidated results for the quarter and then provide some comments on our capital usage and balance sheet. For the first quarter of fiscal 2010 consolidated revenues increased to $402.4 million, up 11% from $361 million in the January to March quarter of 2009. Just over 4% of the growth was due to favorable impact of foreign exchange while 1% of our revenue growth came from acquisitions. EBITDA was $20.1 million, up 62% compared to the $12.4 million reported in the same quarter last year. Adjusted earnings per share came in at $0.15 versus $0.08 last year. Our adjustments to GAAP EPS in arriving at the adjusted EPS are fully disclosed in our press release we issued this morning and include adjustments we have outlined in the past. Two items are worthy of comment. Firstly, we continue to be required to report a tax valuation allowance with regard to the value of the tax loss carry forwards relating to our North American commercial real estate operations which equated to $0.12 per share but down considerably from the $0.39 per share reported in Q1 of last year. Secondly, we have deducted…

Thank you John. Let me start my divisional review with commercial real estate where revenues for the quarter were $154.1 million, up 30% from the weak first quarter of 2009. Adjusting for the impact of FX fluctuation revenues were up 18%. Continuing the trend from late 2009 we experienced strong gains in Asia, Australia and the U.S. offset in part by modest year-over-year declines in Canada and Central and Eastern Europe and tempered by flat results in Latin America. Globally, the increase was driven primarily by a 30% global currency rise in investment sales transactions although each of our major service lines; leasing, appraisal, property management and project management also showed double digit year-over-year increases. All of our regions are showing increased levels of activity and as we stated in our year-end conference call comments we believe we are through the bottom of the recessionary cycle across all regions and are currently at various stages of recovery. Let me now spend a minute focusing on each of our major regions. In the Americas revenues were up 16% driven by strong 25% growth in the U.S., offset by a 10% year-over-year decline in Canada and flat results in Latin America. The U.S. performance was driven by increases in both investment sales and leasing activity particularly in New York City, Boston and Phoenix. The year-over-year decline in Canada is a bit misleading and more reflective of a few large deals closing in the prior year quarter than a downward trend. All of our pipeline metrics point to much higher activity levels than a year ago and we should see evidence of this over the next few quarters. We generated a low single digit margin in the Americas compared to a $2.8 million negative EBITDA reported in the prior year. Looking forward in…

(Operator Instructions) The first question comes from the line of Sara O’Brien – RBC Capital Markets. Sara O’Brien – RBC Capital Markets: On your comments on commercial real estate I don’t know if I missed it but I just wonder if you could give any kind of EBITDA outlook? Given Q1 was positive do you expect for the year like a 4-5% margin is kind of a slam dunk at this level or what would hold you back from giving some kind of a guidance?

I will let John contribute also. We are expecting to be profitable in each quarter but I am not sure we are in a position to be very specific about what our margin expectations are.

I would just say we well over a year ago stopped providing specific guidance but what I would say is the results in the first quarter were good. I think it is too early to determine whether or not it would alter our view for the entire year. I think we may have a better sense for that after the next quarter. Sara O’Brien – RBC Capital Markets: Given your comments you feel even in Canada that everything has kind of bottomed and you have seen the worse and it is ticking up from here, what would make us not believe your margins are going to expand from here?

I think margin should expand. I guess it is a question as to what the velocity will be or the pace. Sara O’Brien – RBC Capital Markets: Property services we are hearing a lot about the consumer being back and consumer confidence is up. Do you think you could see a real boost in your franchise businesses like Cal Closets and the painting businesses and what kind of operating leverage could you see if that does come back in a big way? Call it in Q2 or Q3?

We are certainly seeing, as I said in my comments, increases in activity but it is not significant. These businesses are all profitable so we certainly see some leverage with increased volumes particularly the seasonal businesses in the next two quarters but I wouldn’t expect the margins to be significantly higher than we posted in Q2 and Q3 last year. Sara O’Brien – RBC Capital Markets: Maybe just on the minority interest, kind of an accounting question, but very high as a percentage of earnings before minority interest in this quarter and I know you have to mark-to-market it now but again I am going to have to ask for some kind of guidance for the rest of the year on this now that you have the Chicago operations in there. Where do you see it coming out for us to model it going forward? How do you guys model it?

Minority interest should be in the 20-25% range. That is where we are going to head. A bit of an anomaly and a few odd things impacting it in the first quarter. That should not be indicative of where we would expect it for the rest of the year. So moving it to 20-25% in that range is a good number for minority interest. Sara O’Brien – RBC Capital Markets: Would that be for the year or per quarter we could look at it that way?

That would be where we would end up for the year.

The next question comes from the line of Stephanie Price – CIBC World Markets. Stephanie Price – CIBC World Markets: Several affiliate firms have joined Colliers International in the last couple of weeks. Can you talk a bit about why the affiliates are choosing to join Colliers and whether you are seeing any revenue streams from them?

I can’t hear the question. Could you give that to me again? Stephanie Price – CIBC World Markets: I am asking about the affiliate firms that have joined Colliers recently and just wanted to get a bit of color on why they are choosing to join Colliers and also in terms of any revenue streams you are going to see from them?

Most of the affiliates were the former Colliers affiliates that now have become our licensees. There have been others from other organizations like Grubb and Ellis and NAI. We have selected market leaders in each of the geographic regions that we do not have company owned operations so we are quite excited about having these new partners part of our global platform. In terms of the revenue generated from them it is traditional licensing fees. We don’t think we are going to make very much money if anything on them because they are going to become part of our global platform. Where we expect to see some big pickup is in corporate services, global corporate accounts that one or the other might refer to our corporate services group, property valuations, commercial property management; all of those additional opportunities enhance the flow of our business and therefore should translate over time into incremental revenues and profits for us. But the actual fees they generate will be more than used up by the expenses in supporting their individual operations. Stephanie Price – CIBC World Markets: In terms of the cross-selling that is going on right now between Colliers offices do you have a way to give any sort of revenue percentage of that or where you expect it to go in the future?

Again, I am having trouble hearing you. Give me that question again? Stephanie Price – CIBC World Markets: In terms of cross-selling between Colliers offices at present is there any way to give a revenue percentage to that or where you expect it to go in the future?

Cross selling of services is something we monitor but I don’t think we have it to the extent we need to have it frankly. It is happening significantly. The commercial real estate business is by nature a referral business but I don’t think we have that information available here today. I do know it is in the Colliers results and we could probably get you some color on that over the next couple of days. Stephanie Price – CIBC World Markets: One final question, are there any other areas in the U.S. that you are looking to apply a stake in? Are there any holes that need filling at this point?

We now believe we have a full platform across the U.S. The areas that the markets in which we have license partners we are very comfortable with those operators. We do have hopefully closer relationships with them over time so they could create acquisition opportunities for us. I think over the next 12 months our strategy will be continue to enhance our strength in key financial markets; New York, now Chicago, Boston, Los Angeles, many other markets on the west coast, Phoenix and Dallas. Those are markets we are focusing a lot of energy on and that might be in additional recruits in those markets. It also might be in adding additional real estate services in those branches. Specifically, markets where and services where we think we can add to our client experience.

The next question comes from the line of David Gold – Sidoti & Company. David Gold – Sidoti & Company : A couple of more questions really on Colliers and how things are sort of changing. I guess a day hasn’t gone by in presumably the last week or last couple of weeks where we haven’t seen a release or two about either affiliates or I guess the Chicago acquisition. Just more broadly I wanted to get a sense there for as we go forward do we continue to ramp that up? Is that something we will see a lot more of over the next couple of months? Two, in your opinion, particularly you Jay, how do you think about whether to bring on affiliates or just buy a share? To basically acquire affiliates given the acquisitions give you more control presumably than the affiliates do?

The answer to the first question is this; we have 80-90% of them in the house now. There may be some additional markets. Our phones are flooded. Our management team is carefully looking at new additions in sort of secondary and tertiary markets but all of the other principle markets are covered. So you may see some additional press releases in the next quarter or so but by and large that is behind us. Secondly, we have company owned markets in the U.S. which are basically the key, principle markets. We do have opportunities to do additional consolidation of some of the affiliates and believe over the next 12-18 months you may see some in some markets where we think a particular affiliate has lots more to offer or the management team or some members of the management team want to retire and some of the younger guys want to step up their positions. The beauty of our situation right now is we have all of those options available to us. I think you will see some consolidation in the U.S. You will also see some consolidation potentially in some of our global markets where we think we can continue to build the strength of the brand in those markets. David Gold – Sidoti & Company : Again on the same business, Colliers Commercial Real Estate, how should we think about hiring plans for this year?

Sorry? David Gold – Sidoti & Company : How do you think about hiring plans? Are there spots where for awhile you were pretty aggressively picking up folks particularly on the transaction side. Just curious if that is something that is still underway or would the affiliates and the acquisitions does that cover some of the growth you wanted there?

We continue to be actively recruiting. We are actively recruiting everywhere right now. We are quite bullish on the changes that we are seeing in the U.S. market notwithstanding some of the comments both Scott and John made earlier. There is some light we are seeing. I don’t know whether it is going to stick but there is a lot of things happening in terms of mortgages coming up for maturity that could create some activity in the market. Interest rate changes could create some activity in the market. There is a lot of things happening and so we are looking at augmenting our teams. The other thing we are seeing and it is quite encouraging actually is corporate services potential opportunities are accelerating. Up until now there has been very few options for large corporations that wanted to have global mandates on their real estate services. We believe the new Colliers has a real opportunity to have a significant seat at the table and win incremental business. We have lots of momentum and that is getting translated into opportunities. Those opportunities need great people to help us fulfill them. So I think we will continue to recruit and build all of our both brokerage corporate services and ancillary service lines principally in the U.S. I think over the next 12 months. David Gold – Sidoti & Company : On field asset your comment was continued strength but not growth I think. Is that to say flat or down would be your expectation at this point for the year?

It is really unclear. I think we continue to see steady volumes and until we have not seen an uptick over the levels we have seen in the last two quarters. So our expectations are that we will but it is not clear when.

The next question comes from the line of Will [Marks] – JMP Securities. Will [Marks] – JMP Securities: I just have a question on specific breakdown of sales and leasing trends and whether you can comment on the quarter, what the growth was in each of those areas within Colliers or even if it is just some qualitative comments that would be helpful.

In my prepared comments I indicated the investment sales were up 30% globally. Our leasing activity was up about half of that globally. There were certain differences from mark-to-market in the Americas. Both were strong. But generally both were up around the world. Will [Marks] – JMP Securities: Sorry, I got on the call late. Taking that a step further in terms of the outlook, do you expect anything different throughout the year? I don’t think we are seeing much of a pickup in investment sales and could that be sort of icing on the cake in the future?

I think we are expecting investment sales activity relative to prior year certainly to be up in all of our regions.

The next question comes from the line of Brandan Dobell – William Blair & Co. Brandan Dobell – William Blair & Co. : Within residential property management I know the past couple of quarters you [saw] a deterioration in the number of services or breadth of services or deferment of things being done. Have you seen those trends reverse or is it still pretty cautious among those communities where you are involved?

We are not seeing it reverse. This quarter there were a few different things that impacted the ancillary services; principally weather in Florida and the Northeast. We will see some of that come back in future quarters particularly around pool construction and maintenance. We expect to get that back in the next few quarters. But generally our communities are cash constrained and are looking for ways to further defer expenses and we are feeling some of that. Brandan Dobell – William Blair & Co. : Turning to FAS for a second, how would you characterize the mood of your clients right now? Are they more willing to continue to defer stuff with moratoriums on? Are they starting to get the impression that is delaying the inevitable and they would rather just get some business and start to put these foreclosures in the process?

Our customers are advising us and they have been that they believe the shadow inventory will ultimately transition into foreclosure. They have been expecting it. We have been expecting it for some months but there is continued pressure to look for ways to keep people in their homes and to delay the process. So I think the belief is ultimately a high percentage of these delinquent mortgages will move into foreclosure. Again, as I said earlier the timing is uncertain. Brandan Dobell – William Blair & Co. : Within Colliers, a couple of questions here. First, how should we think about the use of capital for potential transactions within Colliers this year? [inaudible] you have talked about an acquisition pipeline broadly across the enterprise but with this opportunity being a little bit different is this expected to be a big use of the firm’s operating cash flow this year or should we keep our expectations pretty low?

I think for the most part we are not comfortable, we are actually thrilled with our current situation in the U.S. right now. Now we have a uniform, streamlined business I think we are going to continue to rebrand. There is some of the affiliates that were not rebranded that came over from Grubb and Ellis or NAI and some of our other service lines are not fully rebranded. We are actively doing that right now. It is a gargantuan task and I think that for the most part we are going to focus our efforts on those for the balance of the year. I don’t see capital being spent on acquisitions in commercial real estate in the next two quarters or so. Famous last words. There may be an opportunity or something that develops in the U.S. There may be something outside of the U.S. in commercial real estate. We are always looking at adding additional service lines to our Colliers platform. There are one or two that we are looking at that could make great additions to the business over time. But near-term I think we are just going to continue to ride things here for a little bit and get done what we need to get done. Brandan Dobell – William Blair & Co. : Within the activity you see in the affiliates and those kinds of opportunities should we assume that continues to bulk up brokerage transaction business with not that much impact in terms of property management or do you see opportunities or are there affiliates out there where they [do get] a few of those bigger property management [inaudible]?

You are going to have to try that again. You went in and out. Brandan Dobell – William Blair & Co. : The question was, within the affiliate or the opportunities you see outside of it, how much of an impact are those going to have on the size of your property management business? It feels like so far it has been mostly brokerage but obviously in the past you have talked about trying to broaden the property management opportunity you have. Are the Colliers affiliates big property managers? Do you see that being a focus or is it really just augmenting what you already have in sales and leasing?

Property management is a huge focus, not a small focus. It is a huge focus. One of the major qualifications for any of the new affiliate partners we brought on is a capability and an existing infrastructure in property management. Some have it more than others. Part of the national platform is that property management services would be delivered in the same way using our existing platform. They may be delivered regionally in some of the secondary markets that are the affiliate markets but they would all be done in a consistent format. We have a key executive by the name of Mike Kent who has been leading this initiative for the past two years. So for example in the Colliers, Bennett & Kahnweiler business they have a significant portfolio of about 50 million square feet of property management. That would be delivered in a manner consistent with our property management services on the east coast or the west coast. So property management is an important element of the overall strategy. Of course, as you know, it leads to so many other opportunities in the commercial real estate space valuing properties, leasing properties, ultimately selling properties, asset managing properties. All of those opportunities get created by having a wide base of property management clients. Brandan Dobell – William Blair & Co. : SG&A pretty decent number compared with what it has been in the past couple of quarters. Should we think of the cadence on the SG&A line this year to be similar to what we have seen in years past or is there some ramp in SG&A spend we should build into how we think about the profitability this year?

No, we are going to be carefully monitoring SG&A. We are very focused on maintaining our costs around premises. In terms of the other big component would be people. As Jay indicated earlier we are recruiting and selectively adding people primarily on the revenue production side and some of that may appear in SG&A. Overall, we expect to control this line very carefully this year.

The next question comes from the line of Sara O’Brien – RBC Capital Markets. Sara O’Brien – RBC Capital Markets: On that last question, if you are hiring now and you are starting to see commercial real estate jump up 18% year-over-year is this something that could pressure margins? I know you just commented they have to be revenue generating but is there any kind of push back on the margin front you could see from that over the next year?

No. We wouldn’t expect to. The management team at Colliers along with us are very focused on the margins and we are going to manage that closely. Sara O’Brien – RBC Capital Markets: On the explanation of how property management is a huge focus and CRE, when you have the affiliates coming in with that if they are only paying you a fee how do you capitalize on that property management business? Is it a learning transfer going to FirstService or is it you take over the property management ultimately?

It is going to vary but for the most part they are going to come onto our systems and process at additional cost. They are going to have all of their property management as services that are delivered outside of their geographic region being delivered by our company owned operations or other affiliates depending upon the markets and they now have the capability of going back to the same clients that may own real estate in their geographic region and be able to offer their services on a national basis which they have never been able to do before. There is a combination of benefits in bringing them all together. For those on the inside of FirstService and watching what has transpired over the past six months it has been quite exceptional because truly market leaders in these regions that have been on their own or associated with Colliers or associated with other name brand firms have left those name brand firms to join us because of the capability. So not only can they offer property management services on a national basis they can offer brokerage services on a national or international basis or valuation services on a national or international basis. My explanation earlier, the referral component creating the flow of business is so critically important in commercial real estate. It is not just the fees you might generate as a licensee. It is creating that collaborative flow of business across the U.S. and globally. So it is quite exciting and with a little bit of luck and markets moving in the right direction we should see some nice uptick in our U.S. business over the next period of time. Sara O’Brien – RBC Capital Markets: Would you expect that kind of organic growth from referrals will be the primary revenue growth generator or do you see yourselves going out and buying property management firms to complement that or even oversee all of that?

I think there is a little of both. We are always keen and have always been keen on commercial property management or residential property management. They are actually very similar disciplines. So wherever we can augment an existing platform with commercial real estate management firms we are going to do that but I think that one and one could make three in terms of referrals. Creating this collaboration across all of our different operations will create flow and flow will create transactions and transactions will create additional revenue and internal growth for us. That is one of the reasons why we want to slow down our acquisition growth in the U.S. and let things take hold and focus internally on our existing operations and the way in which we refer and build our business channels and pipelines. Sara O’Brien – RBC Capital Markets: On residential property management on the ancillary services, I know you talked about weather and deferral services but are you seeing some of these communities going more to the mom and pops who are kind of under bidding on the cost of the service and that is what is bringing this down? Or is it just they are actually saying no we don’t need these services right now.

We don’t think we are losing this revenue. We think that it is either being cut or deferred. We don’t think we are losing it. In fact…

What is interesting is the property management fee revenue was up so it is the ancillary that is down. Sara O’Brien – RBC Capital Markets: So it is not a pricing competitive basis it is just deferred or eliminated altogether?

Right.

Sir there are no further questions. Please continue.

Thank you everyone for joining us for this first quarter conference call. We look forward to visiting with you again at the second quarter. Thank you.

Ladies and gentlemen this concludes the conference call for today. We thank you for your participation. You may now disconnect your lines and have a great day.