Thank you, Valerie, and good morning. With me to discuss CGI's third quarter fiscal 2014 results are Michael Roach, our President and CEO; and David Anderson, Executive Vice President and CFO. This call is being broadcast on cgi.com and recorded live at 9.00 am on Wednesday, July 30, 2014. Supplemental slides as well as the press release we issued earlier this morning are available for download, along with our Q3 MD&A, financial statements and accompanying notes, all of which are being filed with both SEDAR and EDGAR. Please note that some statements made on the call maybe forward looking. Actual events or results may differ materially from those expressed or implied, and CGI disclaims any intent or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. The complete Safe Harbor statement is available in both our MD&A and press release, as well as on cgi.com. We encourage our investors to read it in its entirety. We are reporting our financial results in accordance with International Financial Reporting Standards or IFRS. As before, we will also discuss non-GAAP performance measures, which should be viewed as supplemental. The MD&A contains definitions of each one used in our reporting. All of the dollar figures expressed in this call are Canadian, unless otherwise noted. So David will first review our Q3 financials, and then Mike will comment on strategic and operational highlight. So with that, let us get started David?

Thank you, Lorne and good morning. I'm pleased to share the financial details of another good quarter. Third quarter revenue was C$2.7 billion, up 4% from C$2.6 billion in the year ago period. Foreign exchange fluctuations favorably impacted revenue by C$201 million or 8% compared with the same period last year. Sequentially currency negatively impacted our topline by C$22 million. While the third and fourth quarters are impacted by holidays and vacation periods, for example, France had three fewer billable days in Q3 than Q2 due to statutory holidays, which negatively impacted the top and bottom lines by approximately C$15 million, and I will remind you that vacations negatively impacted Q4 revenue last year by C$146 million sequentially. Adjusted EBIT was C$342 million in Q3, up 18% versus last year, while EBIT margin, up 12.8% increased by 150 basis points. Net earnings were C$225 million or C$0.71 per diluted share compared with C$178 million or C$0.56 in the year ago period, representing an improvement of 26%. To provide better visibility into our operating performance, we have disclosed two specific items impacting our Q3 net earnings. First integration expenses of C$14.5 million, and partially offsetting this was a benefit in the amount of C$8 million related to the resolution of acquisition related provision. Excluding these items, net earnings were C$230 million or C$0.72 per diluted share. This compares with C$200 million or C$0.63 in Q3 last year, representing an earnings improvement of 15%. Relative to the Logica integration, we are on track to book the remainder of our C$525 million constant currency investment in Q4, with annualized cost synergies that meet or exceed the C$375 million target. More details can be found in the MD&A. Cash generated by operating activities were C$346 million, up C$213 million year-over-year and our DSO remained…

Thank you David and good morning everyone. We delivered very solid performance in the quarter as we continue to execute to our plan, including the capture and realization of the business and financial benefits related to our merger with Logica. During the quarter, the company booked C$2.5 billion in contract awards and C$10.6 billion over the last 12 months for a book-to-bill of 101%. In Europe, book-to-bill was 108% and is running at 113% on a trailing 12 month basis, demonstrating our increased focus on business development and validating the gradual uplift we see in some of the European markets. Our strategic focus remains on achieving operational stability and sustainable profit growth in each of our operating entities by adding high-quality recurring revenue and in doing so continue building our long-term backlog. In North America, the most notable booking strength was in the US commercial and local government segments, which earned a book-to-bill of 113% in the quarter, and over the last 12 months. However, like all players operating in the federal government market, CGI Federal awards continue to be impacted by ongoing delays in procurement decisions. Excluding these delays, our US book-to-bill remained stable. In fact, when excluding CGI federal book-to-bill in North America was 100% on a trailing 12 month basis and 107% globally versus the 101% I mentioned earlier. Global revenue of C$2.7 million in the quarter was up 4% year-over-year and stable sequentially. Adjusted EBIT grew 18% year-over-year to C$342 million, representing a strong 12.8% margin. EPS improved by 27% or 14% ex-items, and our operations generated C$350 million in cash and closer to C$400 million when you exclude integration related disbursements. At 14% of revenue or 11% on a trailing 12 month basis, this puts CGI back into a leading position amongst the peers. Over…

Thank you. Just a remainder that a replay of the call will be available either via our website or by dialing 1-800-408-3053 and using the pass code 542-2197 and that is good until August 8. As well, a podcast of this call will be available for download within a few hours, and any follow up questions as usual can be directed to me at 514-841-3355. So Valerie if we could poll for questions please.

(Operator instructions) Our first question is from Kris Thompson with National Bank. Please go ahead.

Great, thanks. Mike and Dave on the cash flow from operations, very, very robust, almost C$350 million. Should we be thinking about C$300 million as kind of the low watermark going forward?

I think Chris on that as I mentioned in my remarks, I think you should now assume that we are back to a more normalized level of cash generation. And as I mentioned the timing of this and the level is very much in line with our past experiences with integrations, and also I would tell you it is in line with our original integration model that we built around Logica. So again I think you should look at our more normalized level and certainly as we roll off the remaining investments we had to make into restructuring programs, I think the cash will continue to be strong, and on a trailing 12 months basis, I think you will actually find the number will rise over time. The first quarter in 2013 we had a very low cash generation of C$66 million. That dropped in a quarter or two, and I think again you will see that the trailing 12 months are very strong.

Okay, that's great to hear, and just my last question on the US margins at 14.6%, that is very, very robust, I mean, it really surprised me how high it was, and that's a record over a number of years, is that sustainable, are there some unusual items in there that we should think about versus, going forward, maybe utilization rates or something related to the healthcare?

Well, I think as I mentioned on the last call that we had attempted to box in any impact relating to the state HIX, program’s health exchange as to the first half of the year, and said that the back half would return to a more, what I call, normalized level in terms of top and bottom line, and again we saw that in the quarter, and we expect the US operations to be continue to be strong in the back end of the year. I think the only downward pressure is around Federal business, but I would tell you that again in comparison our federal team is operating at a very efficient level, attempting to generate more topline through task orders, in the meanwhile reducing costs and protecting our bottom line. So, I am feeling better about the US. I think the team is as we close off these HIX exchanges, are able to put more attention on the rest of the business going forward.

Well fantastic gentlemen, thanks again and congratulations on a very strong quarter.

Thanks Kris.

Thanks Kris.

Thank you. Our next question is from Justin Kew with Cantor Fitzgerald. Please go ahead.

Good morning. Hi Michael and David. So just a question on -- so Mike you talked about the UK being the first out, in terms of be restructured and the first to show growth and then kind of increasing profitability. So when should we see the other European regions kind of following that trend, is it a couple of quarters, or kind of well into 2015? How should we think about how the other regions are following suit?

Thank you for your question. Again I think the point I’m trying to make is if you look at the UK operations, the team there restructured very quickly relative to speaking to some other countries for France as an example or Sweden, where the local regulations required a much more consulting period with the workers’ councils and other stakeholders there, so that the impact and the bottoming out there will actually take longer than the UK. We will get better beat of that. As I said our sense is that it will be in 2015. We are starting our budgeting process over the next number of weeks. We will be reviewing in detail those plans, but clearly the objective that we set is to start to bottom out there as these projects run off. As you can see in some of the jurisdictions we are still running off revenue and you can see it in the top line. On the other hand, we are also seeing the benefits of the EBIT. So we are doing that country by country and business by business, but again when we build our 2015 plan, we expect to see the bottoming out there and gradual increase in growth throughout the back end probably of ’15.

Okay, great. And then just in terms of, with very strong cash flow you're able to apply that to paying down debt, how does the debt repayment from your perspective look over the next couple of quarters?

Well, again, I think just to give a little more context, we are carrying about C$480 million on long-term debt. When we look at the interest rate curve, our sense is this is a very good time to lock down some more long-term money. So we’re actively looking at that to increase the amount of long-term debt at very favorable interest rates. The balance of debt we would have would be on the line of credit, and our sense is we will continue to work down that debt, while we continue to look at the other accretive uses of cash, of course, to continue to invest in our business. We think, our – the IP that we have we need to continue to invest in that because it pays very high return over time, and also to look at accretive acquisitions and buy back our stock. I mean, I want to be clear, clearly when I look at some of the valuation methods that are applied, there is still a significant gap here between our valuation and some of the peer groups, and our intent over time as the results continue to strengthen here to decrease that gap, which will possibly impact the stock price. So we think that it is still a good buy here, and we are certainly seriously looking at buying up our stock as we have done in other years.

Okay, great. And just last question for David, just in terms of the tax rates or your tax rate, it is kind of has been bouncing around between, kind of 20%, 25%, should we think of it as a little higher in the next couple of quarters, or do you think it stays where we've seen it in the last couple of quarters?

It is going to be pretty close to where we have seen it in the last couple of quarters. The – we are a little bit at the high end of the range that we provided in the MD&A in the previous quarter, but we’re still looking at that range, and we didn’t change that range. So I don’t really see anything coming forward that is going to change it.

Okay, great. Thank you very much.

Thanks Justin.

Thank you. Our next question is from Scott Penner from TD Securities. Please go ahead.

Thanks. Just maybe Mike, first of all on the Federal business, if you could just comment on what your people are telling you about the timing, and your comfort in the timing of some of these – the bids that you have out there, relative to what you were saying last quarter. I think this quarter was expected to be pretty weak, but how do you feel about the next couple of quarters now?

Again, I think Scott, unfortunately we are – all the players here are being impacted by business moving right – to the right and it is hard to know when that will turn around. We still believe it will. It is also interesting around the year of the US fiscal year sometimes there is a move to spend allocated but unused funds, which in previous years has actually been a trigger to release some of these – these bids. In the meanwhile, I think it is important that we continue to renew our business in there, and I think we are much more advantaged than a lot of the players because we have a high recurring level of revenue in there, and we are also very diversified between the various entities in there, and we are also very active in the areas where the spend is actually the greatest amongst the various departments. So, our sense in the meanwhile is to protect the top line. Where we can we are accelerating the number of task orders that we are answering and the simple concept we did a number of years ago, you go to bid more to win more. And it is very difficult here in the current environment to take share because what is happening is they are rolling over the extension years. I think you saw one that was out the other day, C$100 million option year on one of our contracts in the Army and that is happening also to our peer group. So, the best we can do is to focus on any renewals that come up to ensure that we are very competitive there and actually bid more under these vehicles, such as the EAGLE II, which again I think demonstrates that, we are on…

In the IP business overall, I noticed a CGI solution was highlighted on stage by Microsoft, and you mentioned that in your script. I know that there has been some changes in the management of your global IP. Maybe just if you could spend a minute here, and just talk about your go-to-market on your IP, and really how you make all of your BU's available, have access to some of the solutions that you have?

Yes. I think again, we are running about 16% post-acquisition 16% of our revenue come from IP. We are – in reviewing our 3 to 5-year outlook, and again our sense is that we can push that up to 30%, which is a significant number given the size of the revenue base. We have been building up pipelines in the new geographies of IP that is available to travel. We have continued to invest in IP both refreshing and in some cases expanding the capability so that it will travel more globally, and we have made an organizational change, where in the corporate group we have split out the focus on IP from the broader marketing organization and will have people that are focused specifically on driving and assisting the line operations and moving that IP penetration up from 16% of revenue to 30%. So I think all of those things bode well. It is part of the overall strategy as I said and every time we acquire, it does take more time to work that through, for obvious reasons, you need to make an investment, you need to educate the people on how to sell that and how to position that, but that is certainly embedded in our strategy for ’15 and beyond.

Great. Thank you.

Thanks Scott.

Thank you. Our next question is from Richard Tse with Cormark Securities. Please go ahead.

Yes, thank you. Mike, now that you're well through the integration of Logica, can you maybe talk about how you are looking at M&A? Are you guys in a position to move on something right now, or how you are kind of looking at that today?

Yes, now I think it is very timely question. Obviously, as I mentioned on previous calls we are constantly looking because as opportunities arise, if you are not looking at them they will end up being closed and moved on. So we continue to look and obviously with the cash generation now returning to our more traditional levels, we are in good shape financially to execute another transaction, and our move to take on some more longer-term debt actually give us much more visibility and stability in terms of our ability to take on an acquisition and to do it at a very accretive interest rate with that type of strategy. So we continue to look and there are opportunities out there, and we will not hesitate to pull the trigger if we found the right acquisition here at the right time and the right price.

And I guess related to Scott's question on IP, you're targeting 30%, is that sort of something you are going to consider building to on your own, or is that going to be a sort of an acquisition approach to get to that number here?

It will be a combination Richard of that. I think some of it we can definitely do organically, but again 30% of C$10 billion is C$3 billion, again it will really be a timing consideration. Over enough time I think we could get there organically, but if an opportunity came that would accelerate that, as I mentioned previously we are very interested in companies that have IP, especially those that could be turned into a SAS or utility model, and that is certainly embedded in our drive to increase a portion of our revenue and margins and cash that are coming from IP-based services and solutions.

And just one last question on the state of the Canadian market, can you really talk about that, are there really opportunities for growth in Canada, the market as a whole, not just you specifically, it seems like it's been a quite muted over the past few years, how do you see that going forward?

I still believe there are opportunities in Canada. I think in our case as you can see what we have been doing really over the last three quarters has been locking down and extending really the large foundation on tracks that we have in Canada, which is protecting our backlog, protecting our recurring revenue, and allowing us to deliver some very healthy margins in cash generation. On the other side, we have opportunities and are closing opportunities. The issue in Canada is very lumpy and to your point, certainly not seeing the same level of growth opportunity in Canada from an economics standpoint, but when I look at various markets again I look at the oil patch, I look at the Toronto market, these are still areas where we are unrepresented, we’re underrepresented and again, they remain a focus for us in terms of generating growth.

That's great. Thank you, Mike.

Thanks Richard.

Thank you. Our next question is from Steven Li with Raymond James. Please go ahead. Steven Li - Raymond James & Associates: Yes. Thank you. Mike, just a quick one from me, can you comment a little bit on summer seasonality in Europe, how strong is the impact usually, so should we expect a margin pause for Europe next quarter, or just continued improvement? Thanks.

I’ll make some comments, and then first thing, as we mentioned in France, you had three what I call statutory holidays. Just to be clear, what happens in that obviously we are not booking topline. It falls right to the bottom line because we do not take accruals on statutory holidays. So unlike vacation time, where we take accruals throughout the year, when you have high vacations it will impact your topline significantly. And I think Dave gave some guidance there that last year our revenue was impacted to the tune of about C$146 million, and one should expect that again into the fourth quarter. On the other hand, we do accrue for vacation periods, so you wouldn’t see that C$146 million drop off the bottom line. There is no doubt about it that there is a very high seasonality impact, much higher in the Europe and the Nordics than what we see in North America. And again from an operational perspective we are still working through that and what that means now one can mitigate some of the more negative impacts of that. It is not only that we are taking vacations, our clients are taking vacations. So in some cases, you will have more extended periods between rolling over one engagement to the other and therefore creating a short-term utilization problem. We saw some of that in France. And then business frankly restarts, things pick up as the customers and our people return. So we’re still working through that. I think the second thing is on again if I look at some of the European areas, they have very low recurring revenue. I mean they are primarily in the T&M business, time and materials, SI&C and therefore they are much more subject to fluctuations in utilization rates and ultimately revenue and margin. We saw the same thing with AMS because again they were primarily an SI&C shop, and again as we go through the various budget approvals, we look at strategies to increase the recurring revenue, which tends to bring over time more stability in the financial performance and that is why I mentioned in my remarks it is something that we have done in other acquisitions, and it is something that we are focused on in various geographies across Europe is to constantly workup that recurring revenue to provide more stability, so that we don’t get the swings in some of the performance items quarter-to-quarter. That will take some time, but it is clearly doable, and something that we have embedded in our overall post-acquisition strategy. Steven Li - Raymond James & Associates: Great. Thanks.

Thanks Steve.

Thank you. Our next question is from Paul Treiber with RBC Capital Markets. Please go ahead.

Thanks very much. I just wanted to clarify just on the US margins, and I do understand that there was a positive impact from the milestones that were achieved. But just in regards to any sort of unusuals in terms of provisions, I think the last quarter there was some provisions that were taken, were any of those reversed this quarter?

There was a portion of it reversed. In order to be clear, I think there is some confusion out there, especially around Massachusetts, the settlement we got there we did not provision that whole amount. Essentially that settlement was really bringing on the cash associated with the work we had done up to that period. Going forward in Massachusetts, we are on time and material around the transitioning out. So I think again some folks may have thought that, we have a C$35 million lift from quarter-to-quarter. That is not the case. I would say that the kind of provision we had there is certainly not material at a company level, and even in the US space, while it obviously hurt us a little bit last quarter and helped us a little bit this quarter, it is not the underlying reason why the US margins have increased there. I think it is more around us being able to really remove ourselves here over time from milestones and changing performance in a lot of these sections with a lot of pressure on our expenses, and we are migrating out of that and as we do, we are able to get back to a much better alignment between our revenue, our costs and our cash in the US.

Okay, that's really good to understand. Moving on to Europe, your bookings in Europe have been quite strong, what's the typical -- I understand that the typical lag between the signings and the commencements of revenue, but at a high level like are you seeing the bookings in Europe at a longer duration than maybe what was historically I have done at Logica, and I mean just of that building of the backlog, is that – do you believe that that's a sustainable growth in the bookings in the business in Europe?

Well, first on the bookings in Europe, again I am very pleased with the bookings in Europe, and again I think if you look at some of the peer groups are also starting to report higher bookings across Europe, which I think for the most part is linked to some of the economies coming off of the floor there. I think what you have to understand though when you compare us to Logica, remember Logica was very focused on topline growth and as a result was less focused in our view on generating bottom-line margins and cash. So what you are seeing here is both a headwind and a tailwind. The stronger bookings are certainly contributing to revenue growth. On the other hand they are being offset by the run-offs that we have undertaken there. And the run-offs are fairly significant in some areas. I think if you look at the UK, I think it is about 10% of the revenue we have run off year-over-year. So that is what is happening there, and I think you – this is why I say when you look into ’15 and we try and identify where the bottom on the revenue is on some of the jurisdictions, we will bottom out and move on. But it will take – it will take some time, but that is why you don’t see the general increase in revenue aligning to the bookings number. It is being offset by the run offs, and on that front we have certainly made significant improvement in Europe on the number of projects that are read. They have come down, but in a number of these cases, as we have resolved them, it means that the contract has run off or we are not going to renew it, which continues to put pressure on the top line. On the other hand, it is improving EBIT margins and cash.

Thanks for clarifying that. I will pass the line.

Thanks Paul.

Thank you. Our next question is from Maher Yaghi with Desjardins. Please go ahead.

Yes, thank you. Just to be clear Mike, when you are talking about these runoffs, these are mainly the reasons why your backlog seems to be lighter than it should be given where your bookings were, and your sales were in the quarter?

The backlog is also impacted by FX and as Dave mentioned, quarter-over-quarter the FX, which was a tailwind, actually became a headwind. So it will fluctuate in some part, obviously due to currency on a quarterly basis, and currency this quarter as I said was a headwind, not a tailwind.

Okay. But there are no cancellations of any size that impacted that number. Okay, and just to switch gears on cloud computing and cloud servicing, and we saw some transaction in the space recently, can you maybe detail your strategy, what are, some successes you've been able to achieve lately on cloud and do they require any kind of IP that you currently not have, maybe you need to go out and buy to be able to become more competitive in this space, and is there a way to break out some of the revenues you have right now to give us a sense of how much cloud is helping the company right now?

Well, certainly, we are very active in the cloud space. I don’t believe we need to acquire any assets there in the sense that we have a very broad and deep datacenter capability or footprint. On top of that, as I mentioned earlier, our initial entry in the cloud was very much focused on the government, the US government. We have now as we announced I think six months ago, we qualified on three of the four vehicles in the UK and as we have since won a number of cloud contracts in the UK. The same thing is happening up in the Nordics and Sweden and in Finland. So I think, we are making progress there and again while there is opportunities relative to the data center revenue, frankly for us the bigger opportunity is actually doing the systems integration work required to take some of these applications in their current form to being cloud ready. It is – on the size of our company, it is not a large amount, but it is a growing amount in terms of revenue, but again I always want to position that, I don’t believe this is a silver bullet. There is other things in terms of mobility, large data analytics and transformation of the customer experience to digitization of that and as was mentioned by one of the earlier questionnaire and won and have been recognized for a lot of innovation around that type of thing, and in some of those cases there is an element of cloud. So that is kind of how we see it. We are certainly investing in it, in terms of setting up these environments. But we tend to do it with existing technology partners that have the components to construct this as opposed to feel that we need to go out and buy companies to do that. Our strategy has been to work with partners, establish partners, brand-name partners, who have these components that we need to set up in our data centers.

Okay. Thank you.

You are welcome.

Thanks Maher.

Thank you. Our next question is from Jason Kupferberg with Jefferies. Please go ahead. Jason Kupferberg - Jefferies & Co.: Thanks, guys. Just wanted to come back on the top-line and make sure that I'm kind of hearing the message accurately here. It sounds like some of the European geographies may not bottom out until second half of next fiscal year. So should we be prepared for your overall constant currency year-over-year revenue growth to continue to decelerate a little bit more between now and then? Or is there enough of a positive offset in places like the US and the UK, such that, perhaps we've seen the bottom in terms of overall corporate constant currency year-over-year growth?

Yes, I think that is – Jason, that is summarized pretty well the perspective here. You know, clearly in some of the jurisdictions we haven’t hit the bottom. Clearly there is an expected offset to that in the US as we move and try to capture and realize the revenue associated with the strong bookings that we are seeing in the business in the United States, excluding the Federal business. One of the swing factors there though will be is whether the Federal business starts back up because we are also absorbing a lot of pressure on the top line in the Federal space. So that is a bit of a wildcard there Jason, and we have got to kind of get another quarter or so to see which way that is going to go. So we’re taking the expected run-off in the acquired operations and we are dealing with a pressure in the federal business and our Federal business is fairly significant especially in the US, it is being offset by very strong bookings in the rest of our US business, and as I say, we are continuing to look at opportunities once we finish our renewals in Canada, or as we finish the renewals in Canada to pick up some growth in Canada. So we are just trying to balance all those and work through the timing. As I said, as we start to go through the budget reviews, as our fiscal starts 1st of October, so we are off to Europe over the next few weeks to walk through each budget for next year. This is the kind of balancing we will be determining as we go through there, but I think Jason you described it pretty well. I mean those are the headwinds and tailwinds that we are dealing with. Jason Kupferberg - Jefferies & Co.: So what's your guide over the next couple of quarters, might we slow down overall a little bit more, or is it just very hard to tell?

I think clearly, our sense is that we are much closer to the bottom here. Jason Kupferberg - Jefferies & Co.: Okay

I’m watching the UK very careful. I have got some other countries that, are – seem to be bottoming out, but again, as you know in this business one quarter doesn’t make a trend? Jason Kupferberg - Jefferies & Co.: Right, right. And just on the free cash flow, it looked pretty clean overall to us, there is always some moving parts in working capital. But was there anything that you guys would kind of consider to be one-timeish or timing related items that we should be factoring into our thinking of how Q4 cash flow may play out?

No. I think the only thing is I mentioned is, you know, we are still disbursing cash for the integration. Jason Kupferberg - Jefferies & Co.: Yes, of course.

You know, beyond that Jason, as I said our sense is, we are back to more normalized view as post acquisition I think we were converting our cash at the rate of about 15% of revenue, and we will continue to move that number up as we roll off some of the earlier quarters, where clearly we had a much bigger impact of the integration. So, now I think the operations are working very hard to collect the cash and as we clear up in fact some of the red projects as well that is also taking some of the pressure off the cash, and we didn’t have anything unique in the quarter that would make it an outlier. Jason Kupferberg - Jefferies & Co.: Okay, and just last question for me, picking up on your comments on share buyback, Mike, I think you guys have only done, maybe a little under C$3 million of the C$22 million or so that was authorized for this year. You did seem to be pretty bullish on your stock's valuation here. I mean should we interpret that more as sort of a, a near-term comment, as opposed to a longer-term comment in terms of the appetite to buyback stock?

I think it is an ongoing comment Jason, but I think in the short run what I think what I would like to do is get more stability around the debt. So that is the immediate focus and I think you will see something coming out very soon, where we have been able to really look at our capital structure in a much more predictable fashion. As you know, this company for years never took on any long-term debt, and when we look at the – as we look of the interest rate curve, we think this is a good time to take on some more and then, we will look at what is left on the line of credit and we will find the right balance there. But in the short haul, my sense absence an acquisition, we will continue to chisel down on the debt, and remain very opportunistic around buying opportunities to the stock because again, we clearly believe as I mentioned even if you look at the valuation on a cash EPS basis, we think there is significant upside here. Jason Kupferberg - Jefferies & Co.: Understood. Thank you.

Thanks Jason.

Thank you. Our next question is from Sanos Muscuspulos with BMO Capital Markets. Please go ahead.

Hi, good morning. Mike, you alluded to the fact that you're seeing some gradual improvement in the European backdrop, and so can you elaborate a bit in terms of how the environment looking relative to maybe six months ago? And how that's varying from a geographic perspective within the region?

I am sorry. I didn’t get you, the margins?

No, sorry the spending environment in Europe.

Oh, the spending environment. Yes, again everything is relevant and as I said many times before, we tend to speak of Europe as one entity and when you really dissect it, it is a series of countries and there is clearly difference in those economies, but again we were I think very fortunate in the sense that Logica was much more heavily embedded in the northern economies. So if we look at it, the Nordics continue to afford us an opportunity for growth. We still got some bottoming out to do in a number of those economies up there. But that is more to do with the kind of contracts we inherited there than the economies themselves. The UK is coming along nicely as you can see. Germany continues to have very strong economy. Even the Netherlands, where, Logica and a lot of the peers have been struggling both in topline and bottom-line I think we have been able to stabilize the margins in there. We are certainly significantly more profitable in the Netherlands and we are working hard on the top line. Shell is a big impact there and we have done a lot of work around that. It is a very large client. We have made a lot of significant changes around the account management structure as we are doing on some other global accounts, and we see that as an opportunity to pick up growth in those large multinationals that may headquarter in the various European geographies. So I’m kind of separating a bit, that you have the local economies, but you also have the economies if you will of very large multinationals that happen to reside there and therefore the work – the growth opportunity in the short term may actually be more related to our ability to take share in accounts that we are in. When I look back, to two years when we did the acquisition, I would say that we are clearly a lot more bullish on Europe than we were then. And, my sense is it will continue to gradually improve and I think when I look across the peer group operating over there, you can see similar commentaries coming from them, and as I mentioned, I think a number of them are also reporting very strong bookings across Europe.

Great, and sort of a related question, some of your peers have talked about the growing adoption of off-shoring in Europe. Is that the trend that you're seeing? Is your global delivery capability becoming more of a factor in your conversations, or maybe not as much in a specific geographies or verticals you're focused in?

Well, I do. I mean, I have always believed that, global delivery is a lever in terms of growing the business on one hand, taking more share, and on the other hand it is also a tool to increase margins over time. And again as I mentioned before, you have not only some language barriers, but to be transparent you also – we also have some cultural, internal cultural barriers, that we need to work through, and we worked through those in North America. In some cases the work especially on the IP front, other internal work that drops right to the expense line, we have been able over time to migrate more of that offshore, which is bringing down our expense and increasing our margins, and that journey is underway in Europe. But it is a journey in a sense that folks need to understand that using global delivery doesn’t cannibalize the revenue. It actually increases our opportunity to win more business and improve our margins and our cash flow over time. I kind of look at some of the big levers, obviously IP, global delivery focused on utilization, focused on large accounts are all, levers that we are working on and then embedding in our ’15 plan.

Great. Thanks, Michael. I'll pass the line.

You are welcome.

Thanks Sanos. Valerie, I think we have time for one last question.

Thank you. Our last question will be Paul Steep with Scotia Capital. Please go ahead.

Great, thanks. Mike, maybe just to be clear, maybe talk a little bit about leverage and how you are thinking about leverage ratio longer-term, I hear you about terming out some of the debt or looking to do that, I just want to make sure there's not a more fundamental change here in terms of how you are thinking about debt and the business, and your comfort with maybe carrying a little bit more leverage longer-term?

Paul let me pick up this one. Given that we were before, we came from a net debt to – sorry, cash net debt to capitalization ratio of about 46%, 47%, down to about 32.5% over seven quarters. So, we are into this area now where we are very comfortable with the leverage that we have within the organization. As Mike had said, if there is an opportunity in the M&A front that comes along, we are in a position to be able to look at it very seriously. We also with the cash generation that is occurring, we also have the option now to continue to plough some of that cash back into the debt, or do we look at doing maybe some share buybacks et cetera as we push forward. So, we are in a very nice position having a number of options that are open to us and we can execute on any of those levers as we go forward. We also have as Mike had said was the opportunity to look at the lower interest rate structures that are out there today. US Treasuries are at pretty much an all time low, and with the amount of deleveraging that we have done over the last few quarters, when it comes to the risk profile of this company vis-a-vis some of the others, we should be able to go to the market and be able to [Indiscernible]. That is something that we’re seriously looking at. We have also taken a look at, if you are looking at different sides of the company, looking at what the long-term cost is of debt going forward, we have a number of about C$1.3 billion that we have identified as being pretty much the sweet spot for long-term debt as we go forward, and we are kind of looking at, is this the right time to kind of lock in on something like that, get the capital structure nailed down for the next generation as we move forward here, and as Mike had said that is something that we are considering pretty seriously at this stage.

Just to close off and then I'll pass off. Is just on leverage, David, though is it fair to say that you'd be willing to give up if you were to consider some sort of public debt vehicle, not saying you are, but would there be sort of a trade-off there, a willingness to allow sort of, a pick feature, or another feature that would allow you the flexibility to always bring that debt down? Is it, sort of safe to assume there's a willingness to pay off a little more interest on that front long-term?

Well, it is an option we will take a look at for sure. We have looked at a number of different vehicles. At the end of the day we want to make sure that we leave ourselves with lots of opportunity and flexibility, but to the extent that we don’t have to lock ourselves in and we have the ability to make modifications going forward depending on the market opportunities we have. That is really what we’re looking at here.

Perfect. Thanks, guys.

Thank you.

Thank you Paul and thank you everyone for joining us. We will see you back for our, I guess, it will be year-end results on November 13. Have a nice day. Have a good summer.