Good morning, ladies and gentlemen. Thank you for joining us for our second quarter webcast and conference call.

On the call with me today are Bruce Flatt, our Chief Executive Officer; and Brian Lawson, our Chief Financial Officer. Brian will start this morning, discussing the highlights of our financial and operating results.

Bruce will then discuss our views on the current investment and market environment, as well as a number of our major growth initiatives in the quarter. At the end of our formal comments, we will turn the call over to the operator to open up the call for questions.

[Operator Instructions] I would, at this time, remind you that in responding to questions and in talking about our new initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks and future results may differ materially.

For further information for investors, I would encourage you to review our annual information form or our annual report, both of which are available on our website. Thank you, and I'd like to turn the call over to Brian.

Thank you, Amar, and good morning. We had a solid quarter across all of our major businesses.

And looking ahead, we are optimistic about the growth prospects for the company. Our funds from operations in the quarter increased by 24% compared to the 2013 quarter to $569 million or $0.84 a share.

The increase was driven by a significant rise in our fee income, an increased level of realized disposition gains and a larger contribution from our property business following the sale of our office -- sorry, following the acquisition of our office portfolio. Disposition gains in the quarter totaled $147 million, roughly $100 million of that amount came on gains from the sale of commercial properties and around $30 million from the repayment of a distressed debt investment.

We continue to look for opportunities to recycle capital by selling mature assets. Net income nearly doubled in the quarter to $1.6 billion or $1.19 per share due to substantially higher appraisal gains on U.S.

office properties, in particular. Our fee revenues increased to $702 million on a trailing 12-month basis, and our annualized fee base, included target carried interest, now exceeds $1.1 billion.

FFO from asset management operations during the quarter totaled $88 million, up 19% year-over-year and was $341 million over the last 12 months. The increase reflects growth in our listed partnership capital, particularly Brookfield Property Partners, and base management fees were up $36 million to $154 million in the quarter.

The incentive distributions from our listed partnerships rose by $5 million to $13 million, representing our share in distribution increases to unitholders. Our fee-bearing capital was up 16% year-over-year on a comparable basis to $84 billion.

The increase reflects equity issued by Brookfield Property Partners to complete the acquisition of our office property company and the continued expansion of our renewable power and infrastructure businesses. We deployed capital from all of our listed partnerships and private funds at attractive valuations.

Our major investments were consistent with our themes of investing in emerging markets, Europe and assets that will benefit from an increase in the price of natural gas. We're acquiring an $800 million portfolio of office properties in India.

We closed the purchase of Irish wind farms for just around $700 million, and we announced plans to acquire a gas storage business in California. Our assets under management on a gross basis are now $192 billion.

With our recent investments, our flagship property -- private property fund will soon have invested over 75% of its capital and our product flagship private equity fund is 65% committed. Our flagship infrastructure fund, which closed last year, is roughly 50% committed.

With this much capital now deployed and given the substantial pipeline of new investment opportunities that we expect to be in a position to launch successor funds well before the end of their investment periods. Turning to the results from the capital invested in our operations.

Our property business generated $137 million of FFO, representing a $13 million increase over the 2013 quarter. FFO increased as a result of the privatization of our office property business and strong leasing activity.

However, this was offset, in part, by lower vacancy following the expiry of a major lease in Manhattan late last year. But we have been signing large leases with major media companies and banks, and we are making substantial progress in filling that vacancy and increasing occupancy across the portfolio.

Specifically, we signed 2.7 million square feet of leases at Brookfield Place, New York, alone, over the past 12 months, and expect to more than fully replace net operating income from that lease expiry once the property is fully leased. And overall, new leases in our office portfolio are being done at 5% above expiring rents.

And in our shopping mall portfolio, new leases are 14% higher than expiring rents. FFO from our renewable energy portfolio was $83 million, up modestly year-over-year.

The increase came from new hydroelectric facilities that we acquired in the Northeastern U.S., along with increased pricing and capacity sales. Energy prices rose in Brazil, and we used this as an opportunity to lock in long-term power contracts at attractive rates.

Generation was in line with long-term averages. In our newly acquired Irish wind farm portfolio, we have 321 megawatts of operating wind capacity across 17 facilities, along with an additional 137 million -- sorry, 137 megawatts of projects already in construction and a development pipeline of approximately 300 additional megawatts.

So we see significant growth potential for renewable power in Europe from this project and other opportunities. Our listed renewable power partnership raised $325 million in an equity offering to fund growth -- fund these growth projects.

And in our infrastructure business, turning to that, FFO was on target at $53 million, which represented a 12% increase on a same-store basis. We continued to see improving results from businesses, where we have invested in organic growth, such as our Australian rail road and South American toll roads.

And looking ahead, we expect to close acquisitions of a rail and port network in Brazil, district energy businesses in 3 U.S. cities and a California gas storage facility during the third quarter.

Our private equity business generated FFO of $123 million, which is down year-over-year. But this reflects lower prices and volumes in our panel board business, where we were getting record prices a year ago.

We are continuing to see improvement in the results from our North American residential property business and continue to believe that U.S. housing market is in the early stages of a prolonged recovery.

Finally, the Board of Directors declared a quarterly dividend of $0.16 per share to be paid at the end of September. So with that, thank you.

And I would now like to turn the call over to Bruce.

Thank you, Brian, and good morning, everyone. I -- today I'll comment on 3 items before turning the line over for questions.

First, we thought you'd be interested in our views just on the overall environment for investing; second, how we're responding to this environment; and third, I thought I would mention one investment, which we've been involved with. On the environment, our observation is that this current market is difficult for many investors.

In fact, interest rates make it almost impossible to earn any return from a fixed income portfolio, particularly a short one. And valuations on equities are high by many measures.

As a result, clients, we continue to see, are increasingly making further allocations to real assets. And we're seeing strong inflows into all the products we offer in each of our private funds, our listed partnerships and our public securities mandates.

We are also finding many transactions to put money to work at very good returns. This seems incongruous, given that we adhere to value-based investment principles, but we believe it is largely because we have access to different opportunities than most, largely as a result of our vast resources and organization across the world.

We believe that this is only because we're able to use the competitive advantages we have, and which we think of really in 3 ways -- or 3 things: first, the amount of capital that we can deploy; two, our global scale; and three, our operating presence. And I'll take each of those in order, but this is in contrast to a regular investor in these types of real assets that may only have access to assets being bid on in the market by vast numbers of people and significant amounts of money that are in some markets today.

Because they are smaller in size, they may have -- people may have geographic restrictions or they have investment restrictions from the capital that they've raised. Taking the 3 in order, when it comes to size of capital, we tend to focus on larger transactions, and there are only a handful of global investors able to look at some size of transactions, and we include ourselves in that group.

We have -- for example, we have approximately $16 billion of capital available for investment and we also have excellent relationships for co-investment on top of that from clients. So this puts us in an exclusive group.

This provides us, we believe, with a competitive advantage when looking at large-scale transactions. In addition, it allows us to look at several transactions all at once.

Typically, only a few of those come to an actual investment. But even if we had a number of commitments come together at the same time, which has happened on occasion in past.

We do have the resources to close all of those transactions. The second point is our global scale, and as many of you know we have almost 30,000 employees and are in upwards of 30 countries around the world.

This allows us to allocate capital to areas where capital is scarce and correspondingly, and maybe even importantly, avoid regions that may be underpricing risk at a certain point in time. For example, right now, North America and the U.K.

have significant amounts of capital looking to invest in real assets from many global investors. This is certainly not the case in Brazil, China or India and parts of Europe.

And as a result, most of our money has recently, as Brian mentioned, been invested in Ireland, Brazil, India, and China. Thirdly, our operating presence allows us to invest around the world with confidence.

And as an example, just to highlight that, Brian mentioned we acquired a portfolio of office properties in India, and these are mostly office properties with international tenants near Delhi. And we think this is a great opportunity based, first, on our placement costs; second on cash yields; and third, on the recovery of India, both economically and with their currency over the next 5 years.

We were able to make this substantial commitment of equity because we have -- first, have a very experienced team of people in India. But we're also able to make use of our skills and intelligence that come from owning one of the largest global construction businesses and also one of the most sophisticated office leasing operations in the world.

Without the combination of those 3 things, I can tell you that we wouldn't have been comfortable in doing that. And over the year, the couple of years that we worked on that specific transaction, there weren't too many others that we completed with, just because of the scale of it, where it was and the many things that it involved.

Bottom line, I guess, it's our size of capital, our global scale and our operational experience, those 3 things, that give us the ability to continue to invest capital on behalf of clients and shareholders, we believe, across many market cycles. Even when it does not appear, from the macroeconomic environment, that one should be able to invest and still adhere to value investment principles.

Turning to one specific investment. Over the past few years, we have been accumulating debt in a company called Energy Future Holdings.

As many of you may know, this company, which is also referred to as EFH or TXU, is a Texas utility company, which recently filed for bankruptcy, as it was overwhelmed with a very substantial amount of debt, approximately $40 billion. EFH is the main generator and distributor of power in Texas and also owns a transmission business.

We believe that EFH is a good company that had a very bad capital structure. And this is a situation that is similar to many of the restructurings that we have been involved in past, where fundamental business is very sound, but the balance sheet is burdened.

A prime example of that recently was our involvement originally with General Growth. We came to this investment through our knowledge of being a very large energy producer, but also because we're a very substantial investor in Texas.

And some of you may not know, that we're the largest owner of office buildings and the largest owner of retail malls in the State of Texas. We're also completing construction of a significant electricity transmission line in the state, and we own the district power company in downtown Houston.

As a result, we have acquired a substantial amount of debt in the power generation and distribution subsidiary of EFH within our private equity funds, and we're now one of the company's largest creditors. We expect to become a cornerstone investor as the company emerges from bankruptcy and attend -- intend to do anything we can to assist management make this a solidly financed company and a reliable provider of electricity in Texas.

With that, operator, we'll open the lines to any questions that anyone might have.

Bruce, on the Energy Future Holdings, I was just wondering if you could provide us with a little bit more insight into how far this restructuring process has progressed so far? Any idea of how long it might take?

And I guess, how complex it might be compared to General Growth, being a private company versus a public company, and what that might imply in terms of when you could see a resolution to the restructuring?

It's Bruce. I guess, I'd say, that I'm going to limit my comments because there is only so many things that we can say about it and -- but I'd just say that we're very supportive of the company, and we've been having discussions with the groups and hope over the next 12 months a plan emerges.

And we want it to happen as quick as possible and get the company properly capitalized and back in the market, doing things for all the constituents, so -- but these things are large and it will take time.

And so is it -- I guess, are there more parties involved or is it -- and I guess, just trying to compare it to the experience of General Growth?

As you would well imagine, there is -- originally, there was $40 billion of debt. So there's lots of parties involved.

But there was in General Growth and many other restructurings that we've been involved in.

Just on the Energy Future Holdings, the possible transaction and your involvement in the restructuring. Could you provide any more specificity as to where your investment interest lies?

Is it actually at the EFH Holdco? Or is it at Energy Future Intermediate Holding Co.

or Competitive Holdings? I mean, there's number of things in the capital structure, just sort of curious as to what you will disclose at this stage.

Yes, it's in the power generation and distribution subsidiary of EFH.

So is that Texas Competitive Electricity Holdings?

That is Texas Competitive Electricity Holdings, correct.

Okay, that's very helpful. And then, I guess, a follow-up to that is, is this a natural morphing of your business?

It's just within that sub, the generation exposure is predominantly coal and nuclear, 2 areas which you've never had involvement before, and a lot of power contracts on the energy retailing side. So is this a bit of the expansion of Brookfield's business lines into other areas that you really haven't been involved in before?

Yes, I guess I'd say the following: we -- firstly, we have invested in the coal business before. Today, our renewable power business is hydro and wind.

But our -- the private equity business and most of the investments we make, or almost all the investments we make in our private equity business, are adjacent businesses to what we invest in. And that's really our competitive advantage, we believe, is taking the information, knowledge that we have by being in those businesses and assisting our private equity group to deploy that knowledge to make investments.

And I think that's the competitive advantage that we have versus other private equity groups. So it's really just using that firm information to be able to make private equity investments for that group.

Okay, that's helpful. And so, I guess, you look at this as being a really good highlight of the crossover of knowledge among your business groups.

Much as with the district heating business and your buildings, the malls and the industrials business, and this is just another case of that?

Yes, our -- we have a very -- our groups work closely together, and we try to share knowledge amongst the different businesses. And this wouldn't fit into our renewable power partnership, and I think everyone would agree with that.

But it's -- these businesses are very good businesses. Texas is a very good place to invest.

And therefore, it's just using that information.

Thank you, operator.

Great. Thank you, and we look forward to updating you in the third quarter.