Risk factors

General overview. Our business is complex, dynamic, entrepreneurial and international. Accordingly, it is subject to a number of significant risks in the ordinary course of its operations. If we cannot or do not successfully manage the risks associated with the services we provide, our operations, business, operating results, reputation and/or financial condition could be materially and adversely affected.

One of the challenges of a global business such as ours is to determine in a sophisticated manner the critical enterprise risks that exist or may newly develop over time as our business evolves. We must then determine how best to employ reasonably available resources to prevent, mitigate and/or minimize those risks that we are able to identify as having the greatest potential to cause significant damage from an operational, financial or reputational standpoint. An important dynamic we must also consider and appropriately manage is how much and what types of commercial insurance to obtain and how much potential liability may remain uninsured consistent with the infrastructure that is in place within the organization to identify and properly manage it.

Various factors over which we have no control significantly affect commercial real estate markets. These include (1) macro movements of the stock, bond, currency and derivatives markets; (2) the political environment; (3) government policy and regulations, in each case whether at local, national or international levels; and (4) the cost and availability of natural and non-renewable resources used to operate real estate. As an example, the severe financial disruption and global recession that occurred during 2008 and 2009 materially impacted global real estate markets as the volume and pace of commercial real estate transactions contracted and real estate pricing and leasing in many countries and markets fell substantially. More recently, the Russian geopolitical developments have significantly impacted the economy in that country, with no clear resolution in sight, and therefore the willingness for multi-national companies to expand their businesses. Although commercial real estate markets in most major cities were stable to improved during 2014, primarily as a result of the low interest rate environment that has been encouraged by the activities of various central banks, their 40 continued recovery has in some cases remained uncertain for various reasons. These include (1) significant uncertainties arising out of the ongoing financial and political challenges within the European Union; (2) stubbornly high unemployment and underemployment and/or low middle-class wage growth around the world, including within the U.S and various European countries in particular; (3) the relative slow-down in certain economies in Asia, including those of China and India; and (4) uncertainty added to the forecast for many economies, particularly in Russia and the Middle East, as the result of the sharp drop in oil and commodity prices later in 2014. Governments are responding to problematic situations in different and sometimes unpredictable and politically motivated ways. Accordingly, it is inherently difficult to make accurate predictions about the future movements in the markets in which we operate even as we did see continued improvement during 2014 and clear strength in the U.S. equities markets.

For additional information, please see Item 1A. Risk Factors on pages 40-68 of our 2014 Annual Report.

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