Welcome to the second quarter investors conference call. Today's call is being recorded. Legal counsel requires us to advice 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 in 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 Tuesday, July 26, 2016. 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 for the second quarter conference call. As the operator mentioned, I’m Jay Hennick, the Chairman and Chief Executive Officer and with me today is John Friedrichsen, our Chief Financial Officer. This conference call is being webcast and is available on the Investors Relations section of our Web site. A presentation slide deck is also available to accompany today’s call. Earlier today Colliers International reported strong financial results for the second quarter despite many operating currencies declining against the U.S. dollar which negatively impacted our reported results. Revenues were up 18% on a reported currency basis and 21% in local currency. Adjusted EBITDA was up 18% and 23% in local currency while adjusted EPS increased 9% over the prior year, up 14% if the currencies held constant. During the quarter we consolidated the global leadership of Colliers in Toronto with Seattle and Vancouver continuing as shared service centers. The plan resulted in the downsizing of the Seattle office and modest headcount reductions but overall it will improve our operating effectiveness for the future. We also increased our semi-annual dividend to $0.05 per share from $0.04. Operationally strong internal growth continued in most major markets, especially in the Americas region and pipelines continue to reflect solid activity. That’s despite the uncertainty in the western European markets which is causing us to manage our operations closely. Strategically we continue to look for ways to diversify our business by service line and by geography so that we can strengthen our already well-balanced global operating platform. For example, during the quarter, we experienced excellent growth across all service lines with sales brokerage leading the way this time. Geographically, each of our regions, the Americas, EMEA and Asia Pac, reported solid quarters with the Americas…

Thank you, Jay. As announced in our press release this morning and highlighted by Jay in his opening remarks, Colliers International Group reported strong consolidated financial results for our second quarter 2016 with solid contributions from most of our operations across our global platform, including some exceptional results in a couple of markets. I will address our overall consolidated financial results for the quarter, our operating results by region, as well as our capital usage and financial position, all of which relates to continuing operations. For our second quarter 2016, consolidated revenues increased to $483 million, up 21% in local currencies from $410 million in the second quarter of 2015 with 11% of our growth generated internally and 10% from acquisitions. Total revenue growth for the quarter in our U.S. dollar reporting currency was 18%. Adjusted EBITDA for the quarter totaled $52.8 million, up from $44.6 million in Q2 of last year, an increase of 23% in local currencies and 18% in U.S. dollars with our margins at 10.9%, even with our margin reported last year. Adjusted earnings per share came in at $0.63 compared to $0.58 last year, up 9% in U.S. dollars with our growth negatively impacted by higher tax rate in the current year compared to 2015 and a less favorable translation of foreign exchange rates also negatively impacted adjusted earnings per share in the quarter by $0.03. Our adjustments to GAAP EPS in arriving in adjusted EPS are outlines in our press release issued this morning and are composed primarily of non-cash charges that we view as largely unrelated to our operating results. Now turning to our operating results, our $483 million of revenues for the quarter was comprised of $151 million of sales brokerage, up 34% of local currencies while lease brokerage came in at…

[Operator Instructions] And we do have our first question and it comes from Stephen MacLeod from BMO. Please go ahead.

Just on the strong sales and lease brokerage activity in the quarter. Was there anything demand-wise that would have skewed that number higher, like maybe some business being pushed out of Q1 into Q2 or being pulled from Q3 into Q2? Or is that real organic growth that you are seeing in the market?

I think there was a slight amount of activity in EMEA, a little bit in U.S. that was deferred from Q1 into Q2. But it was not anything material and not anything of significance pulled forward into Q2 from Q3 that would have materially impacted results at all.

Okay. Great. And then in terms of the outlook for the full year, you are still kind of cautiously optimistic that you are going to achieve the high end of that high single-digit organic growth rate for 2016.

Yes.

Okay. That’s great. And in Asia, you talked about some new personnel additions. Can you just talk a little bit about what markets you have invested in and what specifically you have invested in, like what parts of the business you have decided to bolster with new hires in Asia?

Well, Steve, you probably recall but a year ago we replaced the CEO for our Asia business, probably a little bit longer than that, probably 18 monthish, and a first class guy with a long-term reputation. And part of the goal there was, we wanted to upgrade our key professionals and leadership to put us ready for the next phase of growth in Asia and so you are just seeing some of it happening now. We have been investing in markets like Hong Kong, markets like Singapore. Two or three markets in China. Those are mostly the leadership of those markets and at the same time we have been recruiting heavily to augment our business, but in particular to full fill some service lines gaps that we have there. So I think you are going to continue to see a little bit of investment in Asia for the balance of the year. When key people come on, I generally takes six to nine months before you actually see results from them. But we are very excited about some of the moves that we have made and look forward to having a stronger business and becoming more active in Asia just generally. As the market's weaker there, we tend to look a little bit deeper from an acquisition or strategic growth perspective and these are all just steps leading up to it.

Okay. That’s very helpful. Thanks, Jay. And then finally, can you just talk a little bit about what you are seeing in the acquisition pipeline?

Yes. I mean from an acquisition perspective, our pipelines continue to be robust. This quarter, just interesting as I prepared my prepared remarks, most of the activity was in the Americas. But we have activity really in most of our regions throughout the pipeline. And so you will continue to see some smaller acquisitions, we tend to focus on acquisitions that are smaller. We can easily integrate them. We don’t have culture issues when we integrate them. So there is a lot but generally speaking, smaller.

Thank you. And we will go to our second question and it comes from Michael Smith from RBC. Please go ahead.

Just following up on that comment about the pipeline, the robust pipeline. I mean I guess year-to-date you have done double the acquisition spend you did last year, year-to-date for the first two quarters. Is that a good run rate? Do you think you will hit $100 million in total?

It's a good question, Michael and revealing. We have, as you know, an Enterprise 2020 plan which deals with both internal growth and acquisition. And as long as we continue to move along that plan, we will get to essentially double the size of the business by the fifth year. And so we have had a good first start in acquisitions this year, there is no reason to -- we could have a good finish to the year. But our sort of hope is that we continue to complete acquisitions in an orderly way over the course of time and integrate them properly. So would we double? That would be a stretch, I would say, but you never know.

Okay. But suffice to say that the 10%, as part of your enterprise 2020, the 10% external growth through acquisitions is on track?

It is, yes.

Okay. And I wonder if you could just give us some color on -- you had a big jump in the Americas margin. So from what I understand, you have made a bunch of investments in the last 18 months. I wonder, if you could just give us a little color on how that’s going and the investments are over?

Michael, it's John. Yes, over the last year, year and half for sure, particularly in our project management business, we did invest heavily in additional professionals to provide that service to the end markets. And it's something we needed to do to make investment first and then we have been successful in executing a bunch of additional contracts which now is effectively covering those additional costs that we saw some very good operating leverage in that particular part of the business. And then also obviously with transaction activity up as well, we were a beneficiary of that too from a mix perspective. So both things really impacting us positively in the Canadian market and then acquisitions as well complementing that, adding to our favorable outcome around the margin in the Americas.

Great. Thank you. And lastly, I wonder if you could just give us a little bit more color on the U.K. and what your thoughts are?

Look, first of all, you know from following us, U.K. is an important market for us. One that we have been investing in pretty regularly over the last several years. We have great hopes for the U.K. in terms of the market being an important part of our overall growth plan and platform. So we are closely in touch with our operating management team in that region. They continue to update us. To date, I think the headlines at least as it relates to us, is probably a little bit misleading. We continue to see activity there. Of course, it's a fluid situation and every day there maybe new information that comes out that could potentially impact the markets, but we are planning a way to service our clients and service the market and we are also looking for opportunities to grow our business in that time of certainty. Something that we have done in the past. And at this point, again, we are going to monitor the situation there closely but activity levels continue to be good really across most of our service lines in the U.K. and we are going to continue to, hopefully, have a good 2016. Take advantage of any uncertainty that might serve as some growth opportunities for us longer-term.

And so when John says growth, it's both acquisition growth but also recruiting opportunities. There are a few of our competitors in that market that are under pressure, given the mix of their business relative to others. Some have significant residential components to their business, the residential business is under some pressure. And that is giving us an opportunity to bring over some key people who we have been talking to for a long period of time and these are game changers in some cases. So it's never easy but growth in the U.K. is clearly in our sights and also in the rest of western Europe, I know the question was particularly related to the U.K. So growth from acquisitions but also growth from recruiting.

Thank you, Michael. And we have two more questions in the queue. Our next one comes from Brandon Dobell from William Blair. Please go ahead.

First one, I guess get some color on the interplay between the leasing business and some of the outsourcing or advisory contracts. What are you guys doing to incent, I don’t know, let's call it cross-sell behavior, kind of more team play as opposed to silo play, either from an organizational structure or from a compensation perspective to make sure that you are capturing as much wallet share as you can on between outsourcing and leasing, any other kind of high-end service offerings.

Well, let me begin by saying we are not doing a good enough job. We have got a lot of work to do there and it pisses us off, to be honest, because there is so much more work we can do. But it's clearly in our sights and increasing the cross-referral of opportunity, not just in leasing, to outsourcing, but outsourcing to leasing and capital markets and vice versa. We are looking at this very closely and it's one of our strategic initiatives, frankly for the next year, is to find additional ways to create, I want to use the word flow, better flow between our different service lines. But we are not doing a good enough job there.

I see. My guess is somehow you are not going to be satisfied no matter what happens but that makes sense. Rather have that than the opposite, I guess. Within the Americas business in particular, what are you guys seeing from a customer or inbound customer interest perspective in terms of service offerings or services that people are looking to you for that you can't or don’t have enough, or aren't broad enough, aren't deep enough. I am trying to figure out where we should expect, let's call it the non-capital markets business in the U.S., to focus on in terms of growth in the next couple of years.

Well, you have asked the first question, it actually relates to the second. We are seeing a lot of interest from foreign investors investing in the U.S. for obvious reasons. And capital markets is a wide description of the sale of real estate, whether it's big real estate, big, medium-size or small real estate. And as you can see, our sales brokerage business has been very strong. And I think part of that is foreign clients coming to the U.S., wanting to buy property there. It's happening in Canada as well, by the way because these are two stable markets and are seemingly not have been impacted by what's going on in western Europe and in Asia. So we are professionals in Asia. Primarily are introducing clients to North America in greater amounts. It's also interestingly happening in the U.K. There is a lot of interest now among Asian investors to buy real estate in the U.K. for two reasons. One is the obvious weakness there, but second is the currency impact. So there is a lot of cross-selling flow getting created and I think that that’s why you are seeing our sales brokerage up as much as it is.

Got it. And one final question from that perspective as well. I think I know the answer but if you were to characterize the, I guess, the key property types, property sizes and maybe it's the sellers that you work with the most. How would you do that in the Americas? For example, big portfolio sales or opposed to deals that are $20 million, industrial versus office. I want to make sure I understand what the mix looks like now especially in investment sales in the Americas.

I mean it's a bit all over the map. I don’t see big portfolios being sold, that’s typically more of a large capital markets at relatively low rates type transactions. We are seeing sort of $25 million to $40 million transactions. More interest in secondary markets, I think the primary markets have been to some extent picked over and the yields on that level of transaction in the major markets is very very low. So we are seeing activity in great markets like St. Louis and even Michigan has been very good for us. So that’s what we are seeing.

Thank you. And our last question in the queue comes from Stephanie Price from CIBC. Please go ahead.

Could you talk a bit about your pace of hiring brokers and whether it's changed at all, and also what regions you are adding brokers in?

What was the last thing Stephanie?

Sorry, also the regions you are adding brokers in?

Look the pace continues, Stephanie. I mean as part of our long-term plan, again identifying gaps in our service offering where we believe that we have a presence but we are not perhaps competing in a level that we want to and whatever pick you area, the transaction side, it could be on the sales side or leasing, depending on what we are representing, landlords or tenants. But we are continuing to focus on filling those gaps. And the pace has been pretty consistent over the last year or two. We have seen during the current year, some elevated expectations that you typically do. And we are being very disciplined and selective around our recruiting. It's a core part of our growth strategy but at the same time, we are being disciplined and need to generate a return like we do on any type of investment we make, even in these situations where we don’t have something on the balance sheet per say, these are very very important investment decisions to make and we are continuing to be very focused on it.

Yes. So I would add a little bit to John's question there. We happen to be in a market now where there is dislocation in some of the competitors, which is creating opportunities for us generally. And then we are looking at it from the standpoint of where do we have service gaps and I would say, 50%, 60%, 70% of the cases there is little or no cash that changes hands with brokers. It's only in some of the key markets when you are looking for a big player that’s going to be an impact player in a market or in a service line. And that, as John said, is critically important that we look at the return on invested capital if we were to do that and it’s not typically one person, it's typically a team that gets disgruntled wherever they are. Believes that there could be better opportunity in a more enterprising entrepreneurial environment. All want a change of scenery for a variety of reasons and the opportunity is to bring over a team. It takes a long time. I would say recruiting teams takes longer from start to finish than an acquisition, in many cases. And so it's a lot of dating, it's a lot of allowing them to understand what we have to offer versus where they are today, and at the same time us trying to figure out whether that person, the leader of the team, is our kind of person leader team. And so it's all over the place from that perspective but I think in this industry you have got to hug your ways and you have got to try and find other ways to bring in and you have got to develop your Bs to be As. I mean they both sound like trade comments but it is the reality of what we do and our leadership has to be fully aware of that, market by market, and let us know exactly what their keying in on and why.

Okay. Thank you. And John, just on the cash flow from operations, the working capital this quarter was a bit higher than we were expecting. Can you talk briefly about that?

Working capital. It would just timing related, nothing -- if you look at the year-to-date, very very solid obviously. But any working capital usage will be, generally, timing related. Can be a little bit mix related in terms of some of the project management stuff where there is a little bit more of a working capital component. But nothing that would be materially impactful in terms of a full year basis.

Okay. Great. Thank you. And just finally, circling back to the acquisition environment. To date have you seen any change in the pricing expectations out there, especially in the U.K. and Western Europe?

Well, the U.K. and European acquisitions always seem to be a little bit more expensive in our experience than we have seen in North America but they tend to bring long tails with them. So if somebody is making a change in Europe, remember you are buying an organization of a number of people and they tend to be wide firms of people that sign up for a long period of time. So it could be five or seven years. So they are making a decision on where they want to be for the rest of their lives. And sometimes that justifies a little bit higher purchase price.

Thank you, Stephanie. That was our last question in the queue.

Okay. Ladies and gentlemen, thank you for joining us at today's conference call. We look forward to visiting with you again on the third quarter conference call whenever it is. So thanks for joining us.

Ladies and gentlemen, this concludes the second quarter investors conference call. Thank you for your participation and have a nice day.