Good day, ladies and gentlemen, and welcome to the Second Quarter Investor 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 known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form, as filed with the Canadian securities administrators, and the company's annual report on Form 40-F, as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Wednesday, August 5, 2015. At this time, for opening remarks and introductions, I'd like to turn the call over to Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thanks for joining us today for our second quarter conference call and the first for Colliers International as a stand-alone and independent public company. Today is another milestone event in the history of our organization. I'm Jay Hennick, Chairman and Chief Executive Officer. And with me today is John Friedrichsen, Chief Financial Officer. This conference call is being webcast and is also available in our Investor Relations section of our website. In addition, we provided a presentation slide deck to follow John's prepared remarks, which we - which he will deliver in a few minutes. Earlier, today, Colliers reported strong financial results for the second quarter, continuing the momentum we began during the first. These results are particularly impressive when you consider the significant currency headwinds we face as more than 65% of our revenues are generated outside the United States. Revenues were up 11% or 22% in local currency, adjusted EBITDA was up 30% and 46% in local currency, while adjusted earnings per share were also up 32% versus the prior year. Strong internal growth and significant margin expansion was achieved across-the-board, especially in our European operations. We expect the momentum from the first half of the year to continue for the balance. In addition to focusing on expanding our geographic diversification, we continue to grow our recurring revenues in our Outsourcing & Advisory segment, which represented about 40% of our overall revenues for the quarter, up 33% versus the prior year. Diversifying our business geographically and by service line strengthens our global platform and provides better predictability for the future. It's nice to see our efforts in both of these areas paying off so nicely. Colliers is a well-known and highly regarded global commercial real estate services firm with more than…

Thank you, Jay. As announced in our press release earlier this morning and covered by Jay in his opening remarks, Colliers International Group reported strong quarterly financial results in its debut reporting period as an independent publicly traded company, including solid contributions from our service professionals across our global platform. I will address our overall consolidated financial results for the quarter, our operating results by reporting region as well as our capital usage and financial position, all of which relate to continuing operations. So for our second quarter fiscal 2015, consolidated revenues increased to $410 million, up 22% in local currencies from $369 million in the second quarter of 2014 with 12% of our growth generated internally and the balance from acquisitions. Total revenue growth for the quarter in our U.S. dollar reporting currency was 11%. Adjusted EBITDA for the quarter totaled $44.6 million, up from $34.3 million reported in Q2 last year, an increase of 46% in local currencies and 30% in U.S. dollars, while our margins grew to 10.9% compared to 9.3% last year. And adjusted earnings per share came in at $0.58 compared to $0.44 per share reported for the second quarter last year, an increase of 32% in U.S. dollars. Our adjustments to GAAP EPS in arriving at adjusted EPS are outlined in our press release issued this morning and are consistent with those outlined previously. Of note, and as outlined in our press release, we reported 2 significant charges related to the spin-out of the FirstService Residential property management and property services businesses completed on January -- on June 1 of this year, including a noncash stock-based compensation charge of $35.4 million arising from the conversion of noncontrolling interests in Colliers held by a number of Colliers executives while operating as a subsidiary of old…

[Operator Instructions] And we do have a number of questions that have queued up. The first question comes from Anthony Zicha of Scotia Bank.

Jay, can you provide us some more color on the Americas? You had good organic growth at 4%. Can you give us some of your insights on the U.S. market share expansion opportunities? And some color on the competitive landscape would be helpful.

Yes, the U.S. market is very healthy. But a lot of the activity, larger transactions are taking place in major markets. Secondary markets are not enjoying the same level of success, although they're better than they were last year. So generally speaking, the U.S. market is in good shape. And in part, as I indicated in my comments, there's a lot of foreign capital flowing into the U.S. as global funds, pension plans and other investors are looking to balance their global real estate allocations and the U.S. is an ideal spot to invest. In terms of the competitive landscape, as always this business is very competitive. We are -- the industry is dealing with the potential merger of 3 companies right now: UGL, DTZ and Cushman & Wakefield. The transaction on the Cushman transaction piece of the threesome has not yet been completed, but that has caused a lot of dislocation in the marketplace and could create opportunities for us in different markets not just in the U.S. but around the world. So overall, we see a strong U.S. We see the markets continuing. We see land purchases in our pipelines increasing as a percentage versus prior year, which is usually the first sign of further development in both office and in residential in particular. So lots of movement, and we see the market continuing well beyond this year from our perspective anyway, especially in the U.S.

Okay. And then Jay you also mentioned that you still expect the momentum to be strong in the EMEA. And could you give us some outlook on the European markets and your progress in the U.K. and in Germany? And are you satisfied with your German operations in terms of performance, which some of the work habits and tools that you've picked up over there could be implemented elsewhere across-the-board?

Well, obviously, we're thrilled with our EMEA operations. Generally, as you know, Anthony, we made a bet several years ago that investing in Europe at the time was a smart move for us. We made a significant first move in the U.K. followed by Germany and then France. We now have 3 exceptional service providers in those geographic regions. You're seeing the results come through on our numbers. The German business that we have is absolutely first rate, the methods that they use to win new clients. Their relationships with existing clients are quite significant and deep, and we see great opportunities to take not only their expertise, but their client relationships beyond Germany in a much bigger way in the years to come. And to a lesser degree but also significantly, we see the same thing in France and in the U.K. U.K. had a stellar quarter. Pipelines are strong there. France also had a stellar quarter. So all good news from our perspective in Europe. And as importantly, each have great momentum and each are looking at ways to expand and diversify their business. And there are opportunities in the marketplace for us. So we're excited about it.

Excellent. And one last question. Are you still comfortable with your target of achieving a 10% EBITDA margin by 2016? And are there any new challenges in attaining that goal?

It's John here. That's still our target. Clearly, FX isn't helping us, but that remains our target at this point. That would be a goal we have for next year, and we're on target to achieving our previously stated target of high-single-digit margins for the current year.

All right. Our next question comes from Frederic Bastien of Raymond James.

You had a solid revenue growth in Outsourcing & Advisory. I apologize if you've touched on this already, but could you please split the 46% in growth that you achieved between M&A and internal growth?

We can absolutely do that. We can absolutely do that. The -- From the standpoint of outsourcing, internal growth in local currency was about 20% increased over the prior year. Total growth 46%. So sort of half and half.

Half and half. Okay, great. How would you -- I mean, what the sources of that growth on an internal basis? I mean, you -- I mean, obviously, you're gaining momentum, getting more global accounts to sign up. But any specific things that you would point to?

Yes, the multi-market client relationship part of our business is expanding considerably. I don't know that we provided any of that information in the prepared remarks. And off-hand, I would suspect that most of the growth in that area is coming from valuations, but also leveraging existing client relationships in certain markets. For example, France, as an example, won a significant account with KLM, but it covered the entire European region. So that created a number of new retainers in different geographic regions as KLM is re-looking at its real estate, trying to find ways to better manage and be more efficient internally, and that's just creating incremental opportunities for us. These multi-corporate accounts, especially in the workplace solutions area, have become very aggressive about looking at their space, the cost of their space, utilization. And that is dovetailing nicely into our push to expand the workplace solutions part of our business.

Frederic, I also indicated in my prepared remarks that we had been focused on building both project management and the valuations business in terms of recruiting and headcount over the last 1.5 years, 2 years. So that is actually benefiting us now. Obviously, there's lots of demand for that services, and we've been able to expand and get our people ramped up and highly productive and contributing on an internal growth basis to our success in that area.

Okay, it's -- that's helpful. Has your outlook in the Asia Pacific region changed dramatically or materially since we've seen the events happening in China and with the market coming off, basically back to reality?

I think that obviously, those kind of headlines will cause some activity to pause. I think that over the last 1.5 years, whether it's been imposed restrictions on tax related to transactions or other things that are taking place in that market, it's put a bit of a dampening effect, and this is all previously around trying to slow some of the growth that was going on in that market. So we've been living with this, I think, for the last 18 months or so. I don't think it has changed dramatically from where we were sitting earlier this year.

But just to add that point, the softness in -- that John's talking about over the next little while there is turning into a bit of an advantage for us because there are some opportunities that we may be able to capitalize on from an M&A standpoint that wouldn't otherwise be there. So there's nothing significant in the hopper, but there's a lot of discussion and there's also a great push, especially in Asia Pacific, for well-managed, independent organizations to become part of a global platform like Colliers. It enhances their ability to get better clients, but it also increases their opportunity to sell their services at higher rates. And from our perspective, of course there's always the leveraging opportunity of increased commercial -- traditional commercial real estate services through to those clients. So we're -- in a strange way, Frederic, we look for these imbalances in the market so that we can capitalize when the time is right.

Okay, super. Last one for me. John, I don't know if you have those numbers handy, but I was hoping to get a rough breakdown of the revenues that are coming out from Canada, Australia and the U.K. Effectively, I just want to try to better model the impact of FX on a go-forward basis. And if there are any other significant currencies that are of -- worthy of note, it'd be great to know.

Well, we -- I mean, we were -- we -- I mean, now we're reporting on a segmented basis, which would include, obviously, the Americas. And with respect to Australia, New Zealand, it's a significant part of our Asia Pac business, but we're not disclosing those separately.

All right, our next question comes from Stephen MacLeod of BMO Capital Markets.

I just wanted to dig in a little into the second half of the year. You talked about the momentum continuing in your outlook for revenues and margins. Is that breakdown similar to what it was in the first quarter, i.e., like Outsourcing & Advisory representing a higher growth rate? Or do you expect that to be more evenly balanced?

I think we had an exceptional growth in the second quarter. It'll probably moderate a little bit for the back end of the year on that particular piece. It's not -- it doesn't drive this -- doesn't have same characteristics as the brokerage side in terms of the seasonal weighting. It's a little bit more steady through the year, and we just went through a very strong quarter.

Right, okay. And can you just remind us of what the margin difference is between the higher -- the recurring revenue-type businesses versus the brokerage-type businesses?

Margins around the recurring -- more recurring stuff tend to be high single digit, whereas the brokerage activity and related more transactional tend to be more of a sort of low double digit. So you trade off basically some volatility for margin on those -- on those different segments.

Right. Right, okay. And so in the quarter, you mentioned that some AOS, I guess, sort of success fees positively impacted the quarter. So would those -- I assume those would tend to fall off in the back half of the year, is that right?

Well, it really depends on the activity related to their client base. I mean, they are continuing to do work in similar type of projects. It's -- we don't have as much visibility on how those will end up, but there certainly is an opportunity for them to deliver strong results. If it's not in the third quarter, maybe in the fourth quarter, that kind of thing.

The nature of some of their client relationships, particularly some of their larger ones, is such that they earn fees for bringing projects in at or under budget, and there's bonuses for doing that. And then frankly, in some markets, you need it because there's all kinds of external contingencies that do impact the success of a job. So it's part of what they do. It's a small part of what they do. Look, if you looked at all of their jobs across the board, I'd say 20%, maybe as much as 22%, of their jobs would be -- have a performance-based component to it, but it's just the reality of the way they do business.

Okay. I just wanted to clarify if it was something that was, like, lagging from prior periods that you just realized. But it sounds like it could be ongoing. And then finally, you mentioned the comps in the quarter were difficult in Canada and the U.S. How do the comps begin to track in the back half of the year in that market?

They should get a little bit easier as we go into Q3 and Q4.

Maybe in Q4.

Yes. Having said -- I mean, U.S. had a strong finish the last year. Canada had moderated a little bit given what was happening already in the Canadian economy. So I would say Canada probably gets a little bit easier, U.S. maybe slightly.

Right, okay. Sorry. And then just finally, if I could, you mentioned that you're still on track for your 2015 margin targets. So is that -- do we still -- shall we still understand it that it's -- you expect to see organic or underlying EBITDA margin growth offset by FX, so maybe you end up somewhere flat on a year-over-year basis?

I think that's fair; that's not a bad perspective. I think that's -- makes sense. It's fair.

Our next question comes from Anthony Jin of RBC Capital Markets.

I just really have one question regarding your comment on recruiting opportunities specifically related to what you're seeing and I guess in the context of some commentary in industry articles saying that a couple of Cushman guys are getting their pays cut.

Yes. The -- I'm reading into your question a little bit here, so I'll provide you with some color. Cushman's where all the action is right now, and it's very difficult to discern whether it is management that's pay is being cut. For sure, producers' pay is not being cut. And so I think that's what the reference is. But the interesting thing around Cushman is that -- and the biggest issue always when you merge 2 commercial real estate firms is typically, the producers are fierce rivals within a given market. They cover the same clients. They offer different ideas, but cover the same clients. They have stronger or weaker relationships with senior managers, which means that a decision has to be made as to who's going to lead, who's going to cover accounts. And when that decision gets made, there's dislocation amongst those that didn't get the nod. And so there is an opportunity notwithstanding a growing market. Typically, in a market like this, it's very hard to dislocate people that are especially big producers because they've got a lot of deals in their own pipeline. But when they have to start making decisions on client relationships and sharing and things like that, it becomes more interesting for firms like ours and others that may want to be augmenting their operations in different geographic regions. So that's the color I can provide there.

I just want to follow up in that case. Would you -- just given that the dislocation color that you provided, would you feel that you have to pay up for these producers even in this environment where one guy gets the nod and the other guy doesn't?

Well, first of all, this pay up is really a misnomer because in most key markets around the world, there's no pay. There's no recruiting fee. Sometimes, there's a cost recovery or something like that, if somebody's going to leave a piece of a deal behind or something. But it only happens in key markets or key specialties. And I would say that those recruiting fees would not be at the same level as they might be otherwise to dislocate a huge producer from an organization that they have had some history with. It's only money if they're open to a move, which they're not always open to. In this kind of circumstance, it's not about money. It's more about freedom to work, the bureaucracy, that they're going to feel the dislocation that's going to happen by bringing 3 businesses together. It's not going to be easy.

Our next question comes from David Gold of Sidoti.

So just following up on the success fee commentary in outsourcing. Presumably, the success fees come at the moment when jobs end. And so just curious if we can expect the momentum to be sustained in that business. Or do we have some projects then that maybe it might be difficult to fill out? Anything that we should know about?

Look, I think that the momentum for sure is going to continue in that business. But from time to time, there will be success fees that may make it slightly lumpy. It's all I can say. I mean, they -- the business finished strong in Q2. You will recall that Q1 was a little bit lighter. So to some extent, this is timing related. What we do know is that there are several mandates that are very, very, very good, positive mandates that we're currently completing and will expect to complete for the balance of the year. Whether we finish that in a particular quarter versus the next is not necessarily guaranteed.

Okay, perfect. And then, Jay, I think both you and John used the term most markets when you spoke about pipelines or momentum. Any insight as to markets where maybe there's some softness? Any significant ones?

Asia Pacific, as we talked about a bit, is a little soft. We generated some good results this quarter, but I think it's generally soft. Latin America continues to be soft, although it's a small part of our business, as is Eastern Europe, another area where it's particularly soft, although as Europe strengthens, there's a natural inclination to expand our operations. And Poland, as an example, continued to be very strong, but markets around Poland that are of equal significance, potentially have similar populations and GDP are ready and there's been some development in those areas. So right now those would be the soft areas: LatAm, Eastern Europe and Asia.

Perfect. And then just one last one. Given your success on the Outsourcing side presumably with the AOS, as you get back on the acquisition trail, should -- or could we expect you to do more acquisitions on the Outsourcing side?

For sure, it's a core for us.

Our next question comes from Stephanie Price of CIBC.

In terms of recurring revenue, you've definitely called out this quarter the 40% recurring revenue. Can you talk a bit about sort of the objective or the longer-term goal in terms of what recurring revenue or what percentage of revenue recurring revenue would be?

I think, Stephanie, we're just going to be progressively trying to move that bar. We haven't set out any specific goals. But given our roots and the way we think about the business, adding stability for sure is important. But that's not to take away from the opportunities in the other areas, the more transaction side of the business, which, again, whether it's Leasing, which is a little bit more certainly repeat or recurring than Sales Brokerage, both areas are -- have very, very interesting opportunities. We've talked about our focus on the U.S. But as you've seen from our expansion in the U.K. in particular, where we've driven those revenues up significantly, there's huge opportunities in that area as well.

They -- I would add that one of our peers includes lease -- leasing results as part of their recurring revenue, which we don't. But if we did, it was -- it's approximately 70% of our overall revenue, which gives you quite a balanced business, much more balanced than ever before for us, not to mention the geographic diversification I commented on earlier. So we continue to look in these areas. As John says, our history is around recurring and repeat revenue streams. We believe it's important. But it also has to be leverageable into some of the other services that we offer.

Okay, great. And then John touched on the U.K. as well. Could you maybe go into a bit more detail about what's driving the strengths in the U.K.? Obviously, both revenue and margin were strong this quarter.

The U.K. is a great success story which we should talk about and feature at some point because you'll recall when we stepped in, the U.K. was in the doldrums and we basically revitalized our business there. We bought the business from a franchise -- from a franchisee. The senior management team there led by Tony Horrell has done an incredible job at elevating the stature of the brand to clients at the highest end of the market. We have taken very calculated steps over the past 2 or 3 years with strategic acquisitions that have expanded and augmented our areas in retail, office, industrial, property management, all of which are -- all of which is creating additional momentum for new and significant impact players to join the organization. And in many ways, the business in the U.K. is more of a momentum business than in other marketplaces. The best brokers, the best producers, most astute business and real estate advisers want to be with Colliers, which is a wonderful place to be where we're still only #4 in that marketplace, maybe 5. We think that there's lots of room to grow. And so I think the overall momentum, quality of the people, level of the client relationships are all contributing.

All right, so there are no other questions at this time.

Okay. Well, thank you, everyone, for joining us, and we look forward to a successful conference call and results, obviously, in the third quarter in October. Thanks for joining us.

Ladies and gentlemen, this concludes the Second Quarter Investors Conference Call. I thank you for your participation, and have a great day.