----

|                                      |                                            |
|-------------------------------------------|-------------------------------------------------|
| /s/ Jay S. HennickChief Executive Officer | /s/ John B. FriedrichsenChief Financial Officer |

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| FIRSTSERVICE CORPORATION                                                   |   |
|----------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)                                 |   |
| (in thousands of US dollars, except per share amounts)                     |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   | Nine months |   |
|                                                                       |   | Year ended |   |   | Year ended |   |   | ended |   |
|                                                                       |   | December 31, |   |   | December 31, |   |   | December 31, |   |
|                                                                       |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
| Revenues                                                                   |   | $ | 1,986,271 |   |   | $ | 1,703,222 |   |   | $ | 1,322,680 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of revenues (exclusive of depreciation and                            |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization shown below)                                                  |   |   | 1,221,323 |   |   |   | 1,062,406 |   |   |   | 801,421 |   |
| Selling, general and administrative expenses                               |   |   | 620,401 |   |   |   | 526,669 |   |   |   | 406,383 |   |
| Depreciation                                                               |   |   | 28,280 |   |   |   | 26,833 |   |   |   | 18,814 |   |
| Amortization of intangible assets                                          |   |   | 19,606 |   |   |   | 19,550 |   |   |   | 12,932 |   |
| Goodwill impairment charge (note 11)                                       |   |   | - |   |   |   | 29,583 |   |   |   | - |   |
| Acquisition-related items (note 5)                                         |   |   | (871 | ) |   |   | - |   |   |   | - |   |
| Operating earnings                                                         |   |   | 97,532 |   |   |   | 38,181 |   |   |   | 83,130 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                           |   |   | 18,347 |   |   |   | 13,923 |   |   |   | 11,107 |   |
| Interest income                                                            |   |   | (950 | ) |   |   | (1,417 | ) |   |   | (2,855 | ) |
| Other expense (income), net (note 6)                                       |   |   | 3,007 |   |   |   | (1,624 | ) |   |   | 3,293 |   |
| (Gain) loss on available-for-sale securities (note 6)                      |   |   | - |   |   |   | (4,488 | ) |   |   | 14,680 |   |
| Earnings before income tax                                                 |   |   | 77,128 |   |   |   | 31,787 |   |   |   | 56,905 |   |
| Income tax (note 16)                                                       |   |   | 29,228 |   |   |   | 39,066 |   |   |   | 30,878 |   |
| Net earnings (loss) from continuing operations                             |   |   | 47,900 |   |   |   | (7,279 | ) |   |   | 26,027 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) earnings from discontinued operations, net of                   |   |   |   |   |   |   |   |   |   |   |   |   |
| income tax (note 4)                                                        |   |   | - |   |   |   | (576 | ) |   |   | 48,840 |   |
| Net earnings (loss)                                                        |   |   | 47,900 |   |   |   | (7,855 | ) |   |   | 74,867 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interest share of earnings (note 13)                       |   |   | 15,420 |   |   |   | 4,397 |   |   |   | 12,831 |   |
| Non-controlling interest redemption increment (note 13)                    |   |   | 18,916 |   |   |   | 32,602 |   |   |   | (25,161 | ) |
| Net earnings (loss) attributable to Company (note 17)                      |   |   | 13,564 |   |   |   | (44,854 | ) |   |   | 87,197 |   |
| Preferred share dividends                                                  |   |   | 10,101 |   |   |   | 10,101 |   |   |   | 7,760 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings (loss) attributable to common shareholders                    |   | $ | 3,463 |   |   | $ | (54,955 | ) |   | $ | 79,437 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings (loss) per common share (note 18)                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                      |   | $ | 0.12 |   |   | $ | (1.85 | ) |   | $ | 0.12 |   |
| Discontinued operations                                                    |   |   | - |   |   |   | (0.02 | ) |   |   | 1.71 |   |
|                                                                       |   | $ | 0.12 |   |   | $ | (1.87 | ) |   | $ | 1.83 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                      |   | $ | 0.11 |   |   | $ | (1.85 | ) |   | $ | 0.11 |   |
| Discontinued operations                                                    |   |   | - |   |   |   | (0.02 | ) |   |   | 1.70 |   |
|                                                                       |   | $ | 0.11 |   |   | $ | (1.87 | ) |   | $ | 1.81 |   |
| The accompanying notes are an integral part of these financial statements. |   |

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| FIRSTSERVICE CORPORATION                                                      |   |              |      |   |              |   |
|-------------------------------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                   |   |              |      |   |              |   |
| (in thousands of US dollars)                                                  |   |
|                                                                          |   |              |      |   |              |   |
|                                                                          |   | December 31, 2010 |      |   | December 31, 2009 |   |
| Assets                                                                        |   |              |      |   |              |   |
| Current assets                                                                |   |              |      |   |              |   |
| Cash and cash equivalents                                                     |   | $                 | 100,359   |   |              | $      | 99,778 |   |
| Restricted cash                                                               |   |              | 4,337     |   |              |   | 5,039 |   |
| Accounts receivable, net of allowance of $18,752 (December 31, 2009           |   |              |      |   |              |   |   |   |
|            - $18,307 ) |   |              | 262,654   |   |              |   | 214,285 |   |
| Income tax recoverable                                                        |   |              | 7,211     |   |              |   | 14,453 |   |
| Inventories (note 7)                                                          |   |              | 9,140     |   |              |   | 9,458 |   |
| Prepaid expenses and other current assets                                     |   |              | 23,036    |   |              |   | 23,480 |   |
| Deferred income tax (note 16)                                                 |   |              | 12,893    |   |              |   | 15,800 |   |
|                                                                          |   |              | 419,630   |   |              |   | 382,293 |   |
|                                                                          |   |              |      |   |              |   |   |   |
| Other receivables                                                             |   |              | 8,452     |   |              |   | 6,269 |   |
| Other assets (note 8)                                                         |   |              | 19,352    |   |              |   | 28,058 |   |
| Fixed assets (note 9)                                                         |   |              | 86,134    |   |              |   | 75,939 |   |
| Deferred income tax (note 16)                                                 |   |              | 22,922    |   |              |   | 12,152 |   |
| Intangible assets (note 10)                                                   |   |              | 193,194   |   |              |   | 164,592 |   |
| Goodwill (note 11)                                                            |   |              | 379,857   |   |              |   | 340,227 |   |
|                                                                          |   |              | 709,911   |   |              |   | 627,237 |   |
|                                                                          |   | $                 | 1,129,541 |   |              | $      | 1,009,530 |   |
|                                                                          |   |              |      |   |              |   |   |   |
| Liabilities and shareholders' equity                                          |   |              |      |   |              |   |   |   |
| Current liabilities                                                           |   |              |      |   |              |   |   |   |
| Accounts payable                                                              |   | $                 | 72,263    |   |              | $      | 61,788 |   |
| Accrued liabilities (note 7)                                                  |   |              | 273,894   |   |              |   | 207,880 |   |
| Income tax payable                                                            |   |              | 3,261     |   |              |   | 7,665 |   |
| Unearned revenues                                                             |   |              | 22,143    |   |              |   | 21,343 |   |
| Long-term debt - current (note 12)                                            |   |              | 39,249    |   |              |   | 22,347 |   |
| Deferred income tax (note 16)                                                 |   |              | 1,094     |   |              |   | - |   |
|                                                                          |   |              | 411,904   |   |              |   | 321,023 |   |
|                                                                          |   |              |      |   |              |   |   |   |
| Long-term debt - non-current (note 12)                                        |   |              | 201,491   |   |              |   | 213,647 |   |
| Convertible debentures (note 12)                                              |   |              | 77,000    |   |              |   | 77,000 |   |
| Contingent acquisition consideration                                          |   |              | 12,088    |   |              |   | 962 |   |
| Other liabilities                                                             |   |              | 20,277    |   |              |   | 26,644 |   |
| Deferred income tax (note 16)                                                 |   |              | 33,175    |   |              |   | 40,052 |   |
|                                                                          |   |              | 344,031   |   |              |   | 358,305 |   |
| Non-controlling interests (note 13)                                           |   |              | 174,358   |   |              |   | 164,168 |   |
|                                                                          |   |              |      |   |              |   |   |   |
| Shareholders' equity                                                          |   |              |      |   |              |   |   |   |
| Preferred shares (note 14)                                                    |   |              | 144,307   |   |              |   | 144,307 |   |
| Common shares (note 14)                                                       |   |              | 106,473   |   |              |   | 90,994 |   |
| Contributed surplus                                                           |   |              | 26,782    |   |              |   | 26,028 |   |
| Deficit                                                                       |   |              | (110,553  | )      |              |   | (114,016 | ) |
| Accumulated other comprehensive earnings                                      |   |              | 32,239    |   |              |   | 18,721 |   |
|                                                                          |   |              | 199,248   |   |              |   | 166,034 |   |
|                                                                          |   | $                 | 1,129,541 |   |              | $      | 1,009,530 |   |

| Commitments and contingencies (notes 14 and 21)                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| The accompanying notes are an integral part of these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| On behalf of the Board of Directors,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |
| /s/Bernard I. Ghert                                                              /s/Jay S. Hennick                                                                                                     |
| Director                                                                                  Director |   |

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| FIRSTSERVICE CORPORATION                                                   |   |
|----------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                            |   |
| (in thousands of US dollars, except share information)                     |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Receivables |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Preferred shares |   |   | Common shares |   |   |   |   |   | pursuant |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                       |   | Issued and |   |   |   |   |   | Issued and |   |   |   |   |   |   |   |   | to share |   |   |   |   |   | other |   |   | Total |   |
|                                                                       |   | outstanding |   |   |   |   |   | outstanding |   |   |   |   |   | Contributed |   |   | purchase |   |   |   |   |   | comprehensive |   |   | shareholders' |   |
|                                                                       |   | shares |   |   | Amount |   |   | shares |   |   | Amount |   |   | surplus |   |   | plan |   |   | Deficit |   |   | earnings |   |   | equity |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2008                                                    |   |   | 5,979,074 |   |   | $ | 149,477 |   |   |   | 30,112,587 |   |   | $ | 88,919 |   |   | $ | 13,135 |   |   | $ | (765 | ) |   | $ | (129,156 | ) |   | $ | 9,943 |   |   | $ | 131,553 |   |
| Comprehensive earnings:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net earnings                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 74,867 |   |   |   | - |   |   |   | 74,867 |   |
|    Foreign currency                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       translation adjustments                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (11,222 | ) |   |   | (11,222 | ) |
|    Less: amount attributable                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          to NCI               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,273 |   |   |   | 2,273 |   |
| Re-class to earnings of                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       unrealized loss on available           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       for sale equity securities,            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       net of income tax of $20               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 89 |   |   |   | 89 |   |
| Comprehensive earnings                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 66,007 |   |
| NCI share of earnings                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (12,831 | ) |   |   | - |   |   |   | (12,831 | ) |
| NCI redemption increment                                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 25,161 |   |   |   | - |   |   |   | 25,161 |   |
| Subsidiaries’ equity transactions                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,268 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,268 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subordinate Voting Shares:                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Stock option expense                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,723 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,723 |   |
|    Stock options exercised                                  |   |   | - |   |   |   | - |   |   |   | 157,245 |   |   |   | 1,388 |   |   |   | (603 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 785 |   |
|    Tax benefit on options                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       exercised                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 376 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 376 |   |
|    Issued for purchase of NCI                               |   |   | - |   |   |   | - |   |   |   | 23,952 |   |   |   | 263 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 263 |   |
|    Purchased for cancellation                               |   |   | - |   |   |   | - |   |   |   | (960,300 | ) |   |   | (3,657 | ) |   |   | - |   |   |   | - |   |   |   | (11,123 | ) |   |   | - |   |   |   | (14,780 | ) |
| Cash payments received                                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | 765 |   |   |   | - |   |   |   | - |   |   |   | 765 |   |
| Preferred Shares:                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Purchased for cancellation                               |   |   | (206,800 | ) |   |   | (5,170 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,781 |   |   |   | - |   |   |   | (3,389 | ) |
|    Dividends (note 14)                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (7,760 | ) |   |   | - |   |   |   | (7,760 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                 |   |   | 5,772,274 |   |   |   | 144,307 |   |   |   | 29,333,484 |   |   |   | 86,913 |   |   |   | 25,899 |   |   |   | - |   |   |   | (59,061 | ) |   |   | 1,083 |   |   |   | 199,141 |   |
| Comprehensive earnings:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net loss                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (7,855 | ) |   |   | - |   |   |   | (7,855 | ) |
|    Foreign currency                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       translation adjustments                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 18,339 |   |   |   | 18,339 |   |
|    Less: amount attributable                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          to NCI               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (701 | ) |   |   | (701 | ) |
| Comprehensive earnings                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9,783 |   |
| NCI share of earnings                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,397 | ) |   |   | - |   |   |   | (4,397 | ) |
| NCI redemption increment                                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (32,602 | ) |   |   | - |   |   |   | (32,602 | ) |
| Subsidiaries’ equity transactions                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (773 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (773 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subordinate Voting Shares:                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Stock option expense                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,833 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,833 |   |
|    Stock options exercised                                  |   |   | - |   |   |   | - |   |   |   | 246,755 |   |   |   | 3,645 |   |   |   | (1,119 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,526 |   |
|    Tax benefit on options                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       exercised                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 188 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 188 |   |
|    Issued for purchase of NCI                               |   |   | - |   |   |   | - |   |   |   | 44,671 |   |   |   | 436 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 436 |   |
| Preferred Shares:                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Dividends (note 14)                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10,101 | ) |   |   | - |   |   |   | (10,101 | ) |
| Balance, December 31, 2009                                                 |   |   | 5,772,274 |   |   | $ | 144,307 |   |   |   | 29,624,910 |   |   | $ | 90,994 |   |   | $ | 26,028 |   |   | $ | - |   |   | $ | (114,016 | ) |   | $ | 18,721 |   |   | $ | 166,034 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |

----

| FIRSTSERVICE CORPORATION                                                   |   |
|----------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                            |   |
| (in thousands of US dollars, except share information)                     |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Preferred shares |   |   | Common shares |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                       |   | Issued and |   |   |   |   |   | Issued and |   |   |   |   |   |   |   |   |   |   |   | other |   |   | Total |   |
|                                                                       |   | outstanding |   |   |   |   |   | outstanding |   |   |   |   |   | Contributed |   |   |   |   |   | comprehensive |   |   | shareholders' |   |
|                                                                       |   | shares |   |   | Amount |   |   | shares |   |   | Amount |   |   | surplus |   |   | Deficit |   |   | earnings |   |   | equity |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                 |   |   | 5,772,274 |   |   | $ | 144,307 |   |   |   | 29,624,910 |   |   | $ | 90,994 |   |   | $ | 26,028 |   |   | $ | (114,016 | ) |   | $ | 18,721 |   |   | $ | 166,034 |   |
| Comprehensive earnings:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net earnings                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 47,900 |   |   |   | - |   |   |   | 47,900 |   |
|    Foreign currency                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       translation adjustments                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,360 |   |   |   | 14,360 |   |
|    Less: amount attributable                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          to NCI               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (842 | ) |   |   | (842 | ) |
| Comprehensive earnings                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 61,418 |   |
| NCI share of earnings                                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (15,420 | ) |   |   | - |   |   |   | (15,420 | ) |
| NCI redemption increment                                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (18,916 | ) |   |   | - |   |   |   | (18,916 | ) |
| Subsidiaries’ equity transactions                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (31 | ) |   |   | - |   |   |   | - |   |   |   | (31 | ) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subordinate Voting Shares:                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Stock option expense                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,575 |   |   |   | - |   |   |   | - |   |   |   | 2,575 |   |
|    Stock options exercised                                  |   |   | - |   |   |   | - |   |   |   | 311,950 |   |   |   | 6,404 |   |   |   | (1,853 | ) |   |   | - |   |   |   | - |   |   |   | 4,551 |   |
|    Tax benefit on options                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       exercised                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 63 |   |   |   | - |   |   |   | - |   |   |   | 63 |   |
|    Issued for purchase of NCI                               |   |   | - |   |   |   | - |   |   |   | 381,414 |   |   |   | 9,075 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,075 |   |
| Preferred Shares:                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Dividends (note 14)                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10,101 | ) |   |   | - |   |   |   | (10,101 | ) |
| Balance, December 31, 2010                                                 |   |   | 5,772,274 |   |   | $ | 144,307 |   |   |   | 30,318,274 |   |   | $ | 106,473 |   |   | $ | 26,782 |   |   | $ | (110,553 | ) |   | $ | 32,239 |   |   | $ | 199,248 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |

----

| FIRSTSERVICE CORPORATION                                                   |   |         |    |   |         |   |     |              |   |
|----------------------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|----------|-------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                      |   |         |    |   |         |   |     |              |   |
| (in thousands of US dollars)                                               |   |
|                                                                       |   |         |    |   |         |   |     |              |   |
|                                                                       |   | Year ended   |    |   | Year ended   |   |     | Nine months ended |   |
|                                                                       |   | December 31, |    |   | December 31, |   |     | December 31,      |   |
|                                                                       |   | 2010         |    |   | 2009         |   |     | 2008              |   |
|                                                                       |   |         |    |   |         |   |     |              |   |
| Cash provided by (used in)                                                 |   |         |    |   |         |   |     |              |   |
|                                                                       |   |         |    |   |         |   |     |              |   |
| Operating activities                                                       |   |         |    |   |         |   |     |              |   |
| Net earnings (loss)                                                        |   | $            | 47,900  |   |         | $      | (7,855   | )                 |   | $ | 74,867 |   |
| Net loss (earnings) from discontinued operations                           |   |         | -       |   |         |   | 576      |              |   |   | (48,840 | ) |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Items not affecting cash:                                                  |   |         |    |   |         |   |     |              |   |   |   |   |
| Depreciation and amortization                                              |   |         | 47,886  |   |         |   | 46,383   |              |   |   | 31,746 |   |
| Goodwill impairment charge                                                 |   |         | -       |   |         |   | 29,583   |              |   |   | - |   |
| Deferred income tax                                                        |   |         | (7,440  | )      |         |   | (3,178   | )                 |   |   | 10,125 |   |
| Loss (earnings) from equity method investments                             |   |         | 4,046   |   |         |   | (1,548   | )                 |   |   | (1,268 | ) |
| Stock option expense                                                       |   |         | 2,761   |   |         |   | 2,649    |              |   |   | 1,620 |   |
| Impairment loss on available-for-sale securities                           |   |         | -       |   |         |   | -        |              |   |   | 14,680 |   |
| Other                                                                      |   |         | (3,927  | )      |         |   | 1,635    |              |   |   | 2,090 |   |
| Incremental tax benefit on stock options exercised                         |   |         | (63     | )      |         |   | (188     | )                 |   |   | (5,184 | ) |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Changes in non-cash working capital:                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Accounts receivable                                                        |   |         | (39,078 | )      |         |   | (38,301  | )                 |   |   | 16,584 |   |
| Inventories                                                                |   |         | 299     |   |         |   | 1,114    |              |   |   | (61 | ) |
| Prepaid expenses and other current assets                                  |   |         | 1,348   |   |         |   | (2,614   | )                 |   |   | 1,397 |   |
| Accounts payable                                                           |   |         | 4,603   |   |         |   | 3,383    |              |   |   | 13,144 |   |
| Accrued liabilities                                                        |   |         | 66,184  |   |         |   | 49,063   |              |   |   | (55,268 | ) |
| Income tax payable                                                         |   |         | (3,331  | )      |         |   | 3,271    |              |   |   | 1,858 |   |
| Unearned revenues                                                          |   |         | 764     |   |         |   | (6,203   | )                 |   |   | (917 | ) |
| Other liabilities                                                          |   |         | (6,901  | )      |         |   | 5,527    |              |   |   | 11,622 |   |
| Discontinued operations                                                    |   |         | -       |   |         |   | (2,248   | )                 |   |   | (1,815 | ) |
| Net cash provided by operating activities                                  |   |         | 115,051 |   |         |   | 81,049   |              |   |   | 66,380 |   |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Investing activities                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Acquisitions of businesses, net of cash acquired (note 3)                  |   |         | (34,710 | )      |         |   | (16,831  | )                 |   |   | (36,494 | ) |
| Investment in equity securities (note 8)                                   |   |         | -       |   |         |   | (13,955  | )                 |   |   | - |   |
| Purchases of fixed assets                                                  |   |         | (32,460 | )      |         |   | (24,234  | )                 |   |   | (14,719 | ) |
| Changes in restricted cash                                                 |   |         | 702     |   |         |   | 5,201    |              |   |   | (1,381 | ) |
| Other investing activities                                                 |   |         | 343     |   |         |   | 2,925    |              |   |   | (2,679 | ) |
| Discontinued operations                                                    |   |         | -       |   |         |   | 1,343    |              |   |   | 153,682 |   |
| Net cash (used in) provided by investing activities                        |   |         | (66,125 | )      |         |   | (45,551  | )                 |   |   | 98,409 |   |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Financing activities                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Increase in long-term debt                                                 |   |         | 86,540  |   |         |   | 110,162  |              |   |   | 89,238 |   |
| Repayment of long-term debt                                                |   |         | (84,793 | )      |         |   | (143,965 | )                 |   |   | (180,033 | ) |
| Issuance of convertible debentures                                         |   |         | -       |   |         |   | 77,000   |              |   |   | - |   |
| Financing fees paid                                                        |   |         | (128    | )      |         |   | (3,801   | )                 |   |   | - |   |
| Purchases of non-controlling interests                                     |   |         | (39,058 | )      |         |   | (42,602  | )                 |   |   | (38,463 | ) |
| Sale of interests in subsidiaries to non-controlling interests             |   |         | 848     |   |         |   | 356      |              |   |   | 168 |   |
| Contingent acquisition consideration paid                                  |   |         | (318    | )      |         |   | -        |              |   |   | - |   |
| Proceeds received on exercise of stock options                             |   |         | 4,551   |   |         |   | 2,526    |              |   |   | 785 |   |
| Incremental tax benefit on stock options exercised                         |   |         | 63      |   |         |   | 188      |              |   |   | 5,184 |   |
| Dividends paid to preferred shareholders                                   |   |         | (10,101 | )      |         |   | (10,101  | )                 |   |   | (7,760 | ) |
| Distributions paid to non-controlling interests                            |   |         | (8,654  | )      |         |   | (13,293  | )                 |   |   | (11,379 | ) |
| Repurchases of Subordinate Voting Shares                                   |   |         | -       |   |         |   | -        |              |   |   | (14,780 | ) |
| Repurchases of Preferred Shares                                            |   |         | -       |   |         |   | -        |              |   |   | (3,389 | ) |
| Collection of receivables pursuant to share purchase plan                  |   |         | -       |   |         |   | -        |              |   |   | 765 |   |
| Net cash used in financing activities                                      |   |         | (51,050 | )      |         |   | (23,530  | )                 |   |   | (159,664 | ) |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Effect of exchange rate changes on cash                                    |   |         | 2,705   |   |         |   | 7,761    |              |   |   | (5,742 | ) |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                           |   |         | 581     |   |         |   | 19,729   |              |   |   | (617 | ) |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Cash and cash equivalents, beginning of period                             |   |         | 99,778  |   |         |   | 79,642   |              |   |   | 75,371 |   |
| Amounts held by discontinued operations, beginning of period               |   |         | -       |   |         |   | 407      |              |   |   | 5,295 |   |
|                                                                       |   |         | 99,778  |   |         |   | 80,049   |              |   |   | 80,666 |   |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| Cash and cash equivalents, end of period                                   |   |         | 100,359 |   |         |   | 99,778   |              |   |   | 79,642 |   |
| Amounts held by discontinued operations, end of period                     |   |         | -       |   |         |   | -        |              |   |   | 407 |   |
|                                                                       |   | $            | 100,359 |   |         | $      | 99,778   |              |   | $ | 80,049 |   |
|                                                                       |   |         |    |   |         |   |     |              |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |   |         |    |   |         |   |     |              |   |

----

----

----

----

----

----

|                                                    |   | Aggregate          |               |
|---------------------------------------------------------|--------|--------------------|--------------------|
|                                                    |   | Acquisitions       |               |
|                                                    |   |               |               |   |
| Current assets                                          |   | $                  |  10,308  |   |
| Long term assets                                        |   |               |  2,707   |   |
| Current liabilities                                     |   |               |  (10,582)     |   |
| Long-term liabilities                                   |   |               |  (7,430)      |   |
| Non controlling interests                               |   |               |  (30,146)     |   |
|                                                    |   |               |  (35,143)     |   |
|                                                    |   |               |               |   |
| Note consideration                                      |   | $                  |  475     |   |
| Cash consideration                                      |   | $                  |  31,928  |   |
| Acquisition date fair value of contingent consideration | $      |  11,672  |               |
|                                                    |   |               |               |   |
| Acquired intangible assets                              |   |               |  46,751  |   |
| Goodwill                                                |   |               |  32,467  |   |

----

|                                                    |   | Aggregate       |              |
|---------------------------------------------------------|--------|-----------------|-------------------|
|                                                    |   | Acquisitions    |              |
|                                                    |   |            |              |   |
| Current assets                                          |   | $               |  253    |   |
| Long term assets                                        |   |            |  357    |   |
| Current liabilities                                     |   |            |  (543)       |   |
| Long-term liabilities                                   |   |            |  (472)       |   |
| Non controlling interests                               |   |            |  (318)       |   |
|                                                    |   |            |  (723)       |   |
|                                                    |   |            |              |   |
| Note consideration                                      |   | $               |  420    |   |
| Cash consideration                                      |   | $               |  4,467  |   |
| Acquisition date fair value of contingent consideration | $      |  949  |              |
|                                                    |   |            |              |   |
| Acquired intangible assets                              |   |            |  3,448  |   |
| Goodwill                                                |   |            |  3,111  |   |

|                                   |   |         |   |   | Purchases of    |   |
|----------------------------------------|--------|--------------|--------|--------|-----------------|--------|
|                                   |   |         |   |   | non-controlling |   |
|                                   |   | Aggregate    |   |   | shareholders'   |   |
|                                   |   | Acquisitions |   |   | interests       |   |
|                                   |   |         |   |   |            |   |
| Current assets                         |   | $            | 7,897  |   |            | $      | - |   |
| Long term assets                       |   |         | 286    |   |            |   | 619 |   |
| Current liabilities                    |   |         | (3,919 | )      |            |   | - |   |
| Long-term liabilities                  |   |         | (1,901 | )      |            |   | (5,447 | ) |
| Non controlling interests              |   |         | (2,472 | )      |            |   | 8,398 |   |
|                                   |   |         | (109   | )      |            |   | 3,570 |   |
|                                   |   |         |   |   |            |   |   |   |
| Subordinate voting share consideration |   | $            | -      |   |            | $      | 263 |   |
| Cash consideration                     |   | $            | 31,760 |   |            | $      | 38,463 |   |
|                                   |   |         |   |   |            |   |   |   |
| Acquired intangible assets             |   |         | 13,652 |   |            |   | 17,149 |   |
| Goodwill                               |   |         | 18,217 |   |            |   | 18,007 |   |

----

|                                                               |         |   |         |   |
|--------------------------------------------------------------------|--------------|--------|--------------|--------|
|                                                               | Year ended   |   | Year ended   |   |
| (Unaudited)                                                        | December 31, |   | December 31, |   |
|                                                               | 2010         |   | 2009         |   |
|                                                               |         |   |         |   |   |   |
| Pro forma revenues                                                 |         | $      | 2,046,173    |   |   | $ | 1,811,483 |   |
| Pro forma net earnings from continuing operations                  |         |   | 50,852       |   |   |   | (2,669 | ) |
|                                                               |         |   |         |   |   |   |   |   |
| Pro forma net earnings per common share from continuing operations |         |   |         |   |   |   |   |   |
| Basic                                                              |         |   | 0.18         |   |   |   | (1.69 | ) |
| Diluted                                                            |         |   | 0.18         |   |   |   | (1.69 | ) |

----

|                                             |   |         |   |   | Nine months  |   |
|--------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                             |   | Year ended   |   |   | ended        |   |
| Operating results                                |   | December 31, |   |   | December 31, |   |
|                                             |   | 2009         |   |   | 2008         |   |
|                                             |   |         |   |   |         |   |
| Revenues                                         |   |         |   |   |         |   |
| ISS                                              |   | $            | -      |   |         | $      | 47,158 |   |
| USMB                                             |   |         | 4,438  |   |         |   | 8,840 |   |
| CCMS                                             |   |         | 623    |   |         |   | (6,407 | ) |
|                                             |   |         | 5,061  |   |         |   | 49,591 |   |
|                                             |   |         |   |   |         |   |   |   |
| Operating loss before income taxes               |   |         |   |   |         |   |   |   |
| ISS                                              |   | $            | -      |   |         | $      | 1,683 |   |
| USMB                                             |   |         | (831   | )      |         |   | (7,141 | ) |
| CCMS                                             |   |         | 580    |   |         |   | (5,852 | ) |
|                                             |   |         | (251   | )      |         |   | (11,310 | ) |
| Provision for (recovery of) income taxes         |   |         | 749    |   |         |   | (1,462 | ) |
| Net operating loss from discontinued operations  |   |         | (1,000 | )      |         |   | (9,848 | ) |
| Net gain on disposal of ISS (after tax)          |   |         | 791    |   |         |   | 69,709 |   |
| Net loss on disposal of USMB (after tax)         |   |         | (367   | )      |         |   | (11,021 | ) |
| Net (loss) earnings from discontinued operations |   |         | (576   | )      |         |   | 48,840 |   |
|                                             |   |         |   |   |         |   |   |   |
| Net (loss) earnings per common share from        |   |         |   |   |         |   |   |   |
|   discontinued operations              |   |         |   |   |         |   |   |   |
| Basic                                            |   | $            | (0.02  | )      |         | $      | 1.71 |   |
| Diluted                                          |   |         | (0.02  | )      |         |   | 1.70 |   |

----

| 5.     | Acquisition-related items                                           |         |
|--------|---------------------------------------------------------------------|--------------|
|   |                                                                |         |   |   |   |   |   |   |   |
|   | Acquisition-related expense (income) is comprised of the following: |         |   |   |   |   |   |   |
|   |                                                                |         |   |   |   |   |   |   |   |   |
|   |                                                                |         |   |   |   |   |   | Nine months |   |
|   |                                                                | Year ended   |   | Year ended |   | ended |   |
|   |                                                                | December 31, |   | December 31, |   | December 31, |   |
|   |                                                                | 2010         |   |   | 2009 |   |   | 2008 |   |
|   |                                                                |         |   |   |   |   |   |   |   |   |
|   | Settlement of acquisition-related liability                         |         | $ | (4,496 | ) |   | $ | - |   |   | $ | - |   |
|   | Contingent consideration compensation expense                       |         |   | 1,532 |   |   |   | - |   |   |   | - |   |
|   | Contingent consideration fair value adjustments                     |         |   | 935 |   |   |   | - |   |   |   | - |   |
|   | Transaction costs                                                   |         |   | 1,158 |   |   |   | - |   |   |   | - |   |
|   |                                                                |         | $ | (871 | ) |   | $ | - |   |   | $ | - |   |

| 6.     | Other expense (income)                         |         |   |         |
|--------|------------------------------------------------|--------------|--------|--------------|
|   |                                           |         |   |         |   |   |   |   |   |   |
|   |                                           |         |   |         |   |   |   | Nine months |   |
|   |                                           | Year ended   |   | Year ended   |   | ended |   |
|   |                                           | December 31, |   | December 31, |   | December 31, |   |
|   |                                           | 2010         |   |         | 2009 |   | 2008 |   |
|   |                                           |         |   |         |   |   |   |   |   |   |
|   | Loss (earnings) from equity method investments |         | $      | 4,046        |   |   | $ | (1,548 | ) |   | $ | (1,268 | ) |
|   | Integrated Security division divestiture bonus |         |   | -            |   |   |   | - |   |   |   | 5,715 |   |
|   | Earnings from available-for-sale securities    |         |   | -            |   |   |   | - |   |   |   | (207 | ) |
|   | Other                                          |         |   | (1,039       | ) |   |   | (76 | ) |   |   | (947 | ) |
|   |                                           |         | $      | 3,007        |   |   | $ | (1,624 | ) |   | $ | 3,293 |   |

| 7.     | Components of working capital accounts   |   |         |    |   |         |   |
|--------|------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|   |                                     |   |         |    |   |         |   |
|   |                                     |   | December 31, |    |   | December 31, |   |
|   |                                     |   | 2010         |    |   | 2009         |   |
|   |                                     |   |         |    |   |         |   |
|   | Inventories                              |   |         |    |   |         |   |
|   | Work-in-progress                         |   | $            | 2,860   |   |         | $      | 3,367 |   |
|   | Finished goods                           |   |         | 2,079   |   |         |   | 2,264 |   |
|   | Supplies and other                       |   |         | 4,201   |   |         |   | 3,827 |   |
|   |                                     |   |         |    |   |         |   |   |   |
|   |                                     |   | $            | 9,140   |   |         | $      | 9,458 |   |
|   |                                     |   |         |    |   |         |   |   |   |
|   | Accrued liabilities                      |   |         |    |   |         |   |   |   |
|   | Accrued payroll, commission and benefits |   | $            | 193,823 |   |         | $      | 141,248 |   |
|   | Accrued interest                         |   |         | 2,160   |   |         |   | 2,851 |   |
|   | Customer advances                        |   |         | 3,178   |   |         |   | 3,566 |   |
|   | Contingent acquisition consideration     |   |         | 1,224   |   |         |   | 2,432 |   |
|   | Other                                    |   |         | 73,509  |   |         |   | 57,783 |   |
|   |                                     |   | $            | 273,894 |   |         | $      | 207,880 |   |

----

| 8.     | Other assets                                       |         |   |         |   |
|--------|----------------------------------------------------|--------------|--------|--------------|--------|
|   |                                               |         |   |         |   |
|   |                                               | December 31, |   | December 31, |   |
|   |                                               | 2010         |   |         | 2009   |   |
|   |                                               |         |   |         |   |   |
|   | Equity method investments                          |         | $      | 13,222       |   |   | $ | 19,034 |   |
|   | Financing fees, net of accumulated amortization of |         |   |         |   |   |   |   |   |
|   | $5,308 (December 31, 2009 - $3,936)                |         |   | 3,824        |   |   |   | 4,710 |   |
|   | Other                                              |         |   | 2,306        |   |   |   | 4,314 |   |
|   |                                               |         | $      | 19,352       |   |   | $ | 28,058 |   |

| 9.     | Fixed assets                    |   |   |         |         |        |   |    |   |   |
|--------|---------------------------------|--------|--------|--------------|--------------|-------------|--------|---------|--------|--------|
|   |                            |   |   |         |         |        |   |    |   |   |
|   | December 31, 2010               |   |   | Accumulated  |         |        |   |
|   |                            | Cost   |   |         | depreciation |        |   | Net     |   |
|   |                            |   |   |         |         |        |   |    |   |   |
|   | Land                            |   | $      | 3,070        |         |        | $      | -       |   |   | $ | 3,070 |   |
|   | Building                        |   |   | 13,790       |         |        |   | 3,984   |   |   |   | 9,806 |   |
|   | Vehicles                        |   |   | 24,586       |         |        |   | 18,021  |   |   |   | 6,565 |   |
|   | Furniture and equipment         |   |   | 59,806       |         |        |   | 38,668  |   |   |   | 21,138 |   |
|   | Computer equipment and software |   |   | 83,487       |         |        |   | 51,743  |   |   |   | 31,744 |   |
|   | Leasehold improvements          |   |   | 38,261       |         |        |   | 24,450  |   |   |   | 13,811 |   |
|   |                            |   | $      | 223,000      |         |        | $      | 136,866 |   |   | $ | 86,134 |   |
|   |                            |   |   |         |         |        |   |    |   |   |   |   |   |
|   | December 31, 2009               |   |   |         |         | Accumulated |   |    |   |   |   |
|   |                            | Cost   |   | depreciation |         | Net         |   |
|   |                            |   |   |         |         |        |   |    |   |   |   |   |   |
|   | Land                            |   | $      | 3,070        |         |        | $      | -       |   |   | $ | 3,070 |   |
|   | Building                        |   |   | 13,114       |         |        |   | 3,197   |   |   |   | 9,917 |   |
|   | Vehicles                        |   |   | 22,817       |         |        |   | 16,112  |   |   |   | 6,705 |   |
|   | Furniture and equipment         |   |   | 53,005       |         |        |   | 32,264  |   |   |   | 20,741 |   |
|   | Computer equipment and software |   |   | 62,619       |         |        |   | 37,186  |   |   |   | 25,433 |   |
|   | Leasehold improvements          |   |   | 29,208       |         |        |   | 19,135  |   |   |   | 10,073 |   |
|   |                            |   | $      | 183,833      |         |        | $      | 107,894 |   |   | $ | 75,939 |   |

----

| 10.    | Intangible assets                |   |     |         |         |   |   |   |   |   |
|--------|----------------------------------|--------|----------|--------------|--------------|--------|--------|--------|--------|--------|
|   |                             |   |     |         |         |   |   |   |   |   |
|   | December 31, 2010                | Gross  |     |         |         |   |   |
|   |                             |   | carrying |         | Accumulated  |   |   |   |   |
|   |                             | amount |     |         | amortization |   |   | Net    |   |
|   |                             |   |     |         |         |   |   |   |   |   |
|   | Customer lists and relationships |   | $        | 148,408      |         |   | $      | 41,321 |   |   | $ | 107,087 |   |
|   | Franchise rights                 |   |     | 37,899       |         |   |   | 10,995 |   |   |   | 26,904 |   |
|   | Trademarks and trade names:      |   |     |         |         |   |   |   |   |   |   |   |   |
|   | Indefinite life                  |   |     | 20,758       |         |   |   | -      |   |   |   | 20,758 |   |
|   | Finite life                      |   |     | 38,857       |         |   |   | 8,828  |   |   |   | 30,029 |   |
|   | Management contracts and other   |   |     | 17,541       |         |   |   | 9,509  |   |   |   | 8,032 |   |
|   | Brokerage backlog                |   |     | 3,981        |         |   |   | 3,597  |   |   |   | 384 |   |
|   |                             |   | $        | 267,444      |         |   | $      | 74,250 |   |   | $ | 193,194 |   |
|   |                             |   |     |         |         |   |   |   |   |   |   |   |   |
|   |                             | Gross  |     |         |         |   |   |   |   |   |   |
|   | December 31, 2009                |   | carrying |         | Accumulated  |   |   |   |   |   |
|   |                             | amount |     | amortization |         | Net    |   |
|   |                             |   |     |         |         |   |   |   |   |   |   |   |   |
|   | Customer lists and relationships |   | $        | 115,139      |         |   | $      | 34,740 |   |   | $ | 80,399 |   |
|   | Franchise rights                 |   |     | 38,887       |         |   |   | 11,313 |   |   |   | 27,574 |   |
|   | Trademarks and trade names:      |   |     |         |         |   |   |   |   |   |   |   |   |
|   | Indefinite life                  |   |     | 20,907       |         |   |   | -      |   |   |   | 20,907 |   |
|   | Finite life                      |   |     | 36,526       |         |   |   | 6,108  |   |   |   | 30,418 |   |
|   | Management contracts and other   |   |     | 12,179       |         |   |   | 6,943  |   |   |   | 5,236 |   |
|   | Brokerage backlog                |   |     | 1,207        |         |   |   | 1,149  |   |   |   | 58 |   |
|   |                             |   | $        | 224,845      |         |   | $      | 60,253 |   |   | $ | 164,592 |   |

| During the year ended December 31, 2010, the Company acquired the following intangible assets: |
|------------------------------------------------------------------------------------------------|
|                                                                                           |   |   |   |   |   |
|                                                                                           |   |   |   |   | Estimated |
|                                                                                           |   |   |   |   |   | weighted |
|                                                                                           |   |   |   |   |   | average |
|                                                                                           |   |   |   |   | amortization |
|                                                                                           |   | Amount |   |   | period (years) |
|                                                                                           |   |   |   |   |   |   |
| Customer lists and relationships                                                               |   | $ |  41,919  |   |   |  10.7  |
| Franchise rights                                                                               |   |   |  140  |   |   |  24.9  |
| Trademarks and trade names                                                                     |   |   |  2,639  |   |   |  12.1  |
| Management contracts                                                                           |   |   |  837  |   |   |  5.4  |
| Brokerage backlog                                                                              |   |   |  1,749  |   |   |  0.7  |
| Other                                                                                          |   |   |  556  |   |   |  4.4  |
|                                                                                           |   |   |  47,840  |   |   |  10.3  |

| 2011  |   | $      |  18,102  |   |
|------------|--------|--------|--------------------|--------|
| 2012  |   |   |  16,906  |   |
| 2013  |   |   |  15,760  |   |
| 2014  |   |   |  13,944  |   |
| 2015  |   |   |  13,510  |   |

----

| 11.    | Goodwill                                     |   |        |        |   |       |   |    |     |   |   |         |   |
|--------|----------------------------------------------|--------|-------------|-------------|--------|------------|--------|---------|----------|--------|--------|--------------|--------|
|   |                                         |   |        |        |   |       |   |    |     |   |   |         |   |
|   | Commercial                                   |   |        | Residential |   |       |   |    |     |   |   |
|   |                                         |   | Real Estate |        |   | Property   |   |    | Property |   |   |         |   |
|   |                                         |   | Services    |        |   | Management |   |    | Services |   |   | Consolidated |   |
|   |                                         |   |        |        |   |       |   |    |     |   |   |         |   |
|   | Balance, December 31, 2008                   |   | $           | 148,688     |   |       | $      | 122,320 |     |   | $      | 77,889       |   |   | $ | 348,897 |   |
|   | Adjustments to goodwill resulting from       |   |        |        |   |       |   |    |     |   |   |         |   |   |   |   |   |
|   | adjustments to purchase price allocations    |   |        | (516        | )      |       |   | 253     |     |   |   | -            |   |   |   | (263 | ) |
|   | Goodwill arising from contingent acquisition |   |        |        |   |       |   |    |     |   |   |         |   |   |   |   |   |
|   | consideration                                |   |        | -           |   |       |   | 2,593   |     |   |   | 7,920        |   |   |   | 10,513 |   |
|   | Goodwill acquired during the period          |   |        | -           |   |       |   | 2,853   |     |   |   | 258          |   |   |   | 3,111 |   |
|   | Goodwill impairment loss                     |   |        | (29,583     | )      |       |   | -       |     |   |   | -            |   |   |   | (29,583 | ) |
|   | Foreign exchange                             |   |        | 6,913       |   |       |   | 52      |     |   |   | 587          |   |   |   | 7,552 |   |
|   | Balance, December 31, 2009                   |   |        | 125,502     |   |       |   | 128,071 |     |   |   | 86,654       |   |   |   | 340,227 |   |
|   | Goodwill arising from contingent acquisition |   |        |        |   |       |   |    |     |   |   |         |   |   |   |   |   |
|   | consideration                                |   |        | -           |   |       |   | 626     |     |   |   | -            |   |   |   | 626 |   |
|   | Goodwill acquired during the period          |   |        | 18,776      |   |       |   | 13,691  |     |   |   | -            |   |   |   | 32,467 |   |
|   | Other items                                  |   |        | -           |   |       |   | (1,723  | )        |   |   | (757         | )      |   |   | (2,480 | ) |
|   | Foreign exchange                             |   |        | 8,540       |   |       |   | 227     |     |   |   | 250          |   |   |   | 9,017 |   |
|   | Balance, December 31, 2010                   |   |        | 152,818     |   |       |   | 140,892 |     |   |   | 86,147       |   |   |   | 379,857 |   |
|   | Goodwill                                     |   |        | 182,401     |   |       |   | 140,892 |     |   |   | 86,147       |   |   |   | 409,440 |   |
|   | Accumulated impairment loss                  |   |        | (29,583     | )      |       |   | -       |     |   |   | -            |   |   |   | (29,583 | ) |
|   |                                         |   | $           | 152,818     |   |       | $      | 140,892 |     |   | $      | 86,147       |   |   | $ | 379,857 |   |

----

| 12.    | Long-term debt and convertible debentures                    |   |         |    |   |         |   |
|--------|--------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|   |                                                         |   |         |    |   |         |   |
|   |                                                         |   | December 31, |    |   | December 31, |   |
|   |                                                         |   | 2010         |    |   | 2009         |   |
|   |                                                         |   |         |    |   |         |   |
|   | Revolving credit facility                                    |   | $            | 68,600  |   |         | $      | 47,000 |   |
|   | 8.06% Senior Notes                                           |   |         | 14,284  |   |         |   | 28,570 |   |
|   | 6.40% Senior Notes                                           |   |         | 50,000  |   |         |   | 50,000 |   |
|   | 5.44% Senior Notes                                           |   |         | 100,000 |   |         |   | 100,000 |   |
|   | Unamortized gain on settlement of interest rate swaps        |   |         | 563     |   |         |   | - |   |
|   | Adjustment to senior notes resulting from interest rate swap |   |         | (377    | )      |         |   | (1,307 | ) |
|   | Capital leases bearing interest ranging from 2% to 16%,      |   |         |    |   |         |   |   |   |
|   | maturing at various dates through 2013                       |   |         | 2,530   |   |         |   | 3,821 |   |
|   | Other long-term debt bearing interest at 2% to 10%, maturing |   |         |    |   |         |   |   |   |
|   | at various dates up to and beyond 2015                       |   |         | 5,140   |   |         |   | 7,910 |   |
|   |                                                         |   |         | 240,740 |   |         |   | 235,994 |   |
|   | Less: current portion                                        |   |         | 39,249  |   |         |   | 22,347 |   |
|   | Long-term debt - non-current                                 |   | $            | 201,491 |   |         | $      | 213,647 |   |
|   | Convertible debentures                                       |   |         | 77,000  |   |         |   | 77,000 |   |
|   |                                                         |   | $            | 278,491 |   |         | $      | 290,647 |   |

----

| 2011  |   | $      |  39,249   |   |
|------------|--------|--------|---------------------|--------|
| 2012  |   |   |  102,441  |   |
| 2013  |   |   |  32,944   |   |
| 2014  |   |   |  109,549  |   |
| 2015  |   |   |  32,536   |   |
| Thereafter |   |   |  835      |   |

|                                      |   | Year ended   |    |   | Year ended   |   |
|-------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|                                      |   | December 31, |    |   | December 31, |   |
|                                      |   | 2010         |    |   | 2009         |   |
|                                      |   |         |    |   |         |   |
| Balance, January 1                        |   | $            | 164,168 |   |         | $      | 196,765 |   |
| NCI share of earnings                     |   |         | 15,420  |   |         |   | 4,397 |   |
| NCI share of other comprehensive earnings |   |         | 842     |   |         |   | 701 |   |
| NCI redemption increment                  |   |         | 18,916  |   |         |   | 32,602 |   |
| Distributions paid to NCI                 |   |         | (8,654  | )      |         |   | (13,293 | ) |
| Purchases of interests from NCI, net      |   |         | (46,480 | )      |         |   | (57,322 | ) |
| NCI recognized on business acquisitions   |   |         | 30,146  |   |         |   | 318 |   |
| Balance, December 31                      |   | $            | 174,358 |   |         | $      | 164,168 |   |

----

|                       |   | Preferred Shares |      |   | Subordinate Voting Shares |   |    | Multiple Voting Shares |   |   | Total Common Shares |   |
|----------------------------|--------|------------------|-----------|--------|---------------------------|--------|---------|------------------------|--------|--------|---------------------|--------|
|                       |   | Number           |      |   | Amount                    |   |    | Number                 |   |   | Amount              |   |   | Number |   | Amount |   |   | Number |   | Amount |   |
|                       |   |             |      |   |                      |   |    |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009 |   |             | 5,772,274 |   |                      | $      | 144,307 |                   |   |   | 28,299,216          |   |   | $ | 90,621 |   |   |   | 1,325,694 |   |   | $ | 373 |   |   |   | 29,624,910 |   |   | $ | 90,994 |   |
| Balance, December 31, 2010 |   |             | 5,772,274 |   |                      | $      | 144,307 |                   |   |   | 28,992,580          |   |   | $ | 106,100 |   |   |   | 1,325,694 |   |   | $ | 373 |   |   |   | 30,318,274 |   |   | $ | 106,473 |   |

----

|                                |                  |   |           |              |   |             | Weighted average |            |   |               |
|-------------------------------------|-----------------------|--------|----------------|-------------------|--------|------------------|------------------|-----------------|--------|--------------------|
|                                |                  |   | Weighted       |              |   | remaining        |             |            |   |
|                                | Number of             |   | average        |              |   | contractual life |             | Aggregate       |
|                                | options               |   | exercise price |              |   | (years)          |             | intrinsic value |
|                                |                  |   |           |              |   |             |             |            |   |               |
| Shares issuable under options -     |                  |   |           |              |   |             |             |            |   |               |
| March 31, 2008                      |  1,454,000  |   | $              |  16.94  |   |             |             |            |   |               |
| Granted                             |  349,000    |   |           |  17.10  |   |             |             |            |   |               |
| Exercised                           |  (157,245)       |   |           |  4.76   |   |             |             |            |   |               |
| Forfeited                           |  (65,000)        |   |           |  15.54  |   |             |             |            |   |               |
| Shares issuable under options -     |                  |   |           |              |   |             |             |            |   |               |
| December 31, 2008                   |  1,580,755  |   | $              |  18.24  |   |             |             |            |   |               |
| Granted                             |  321,000    |   |           |  11.85  |   |             |             |            |   |               |
| Exercised                           |  (246,755)       |   |           |  10.11  |   |             |             |            |   |               |
| Shares issuable under options -     |                  |   |           |              |   |             |             |            |   |               |
| December 31, 2009                   |  1,655,000  |   | $              |  18.22  |   |             |             |            |   |               |
| Granted                             |  520,000    |   |           |  19.15  |   |             |             |            |   |               |
| Exercised                           |  (311,950)       |   |           |  14.59  |   |             |             |            |   |               |
| Forfeited                           |  (12,750)        |   |           |  16.23  |   |             |             |            |   |               |
| Shares issuable under options -     |                  |   |           |              |   |             |             |            |   |               |
| December 31, 2010                   |  1,850,300  |   | $              |  19.03  |   |             |  2.54  |            | $      |  21,010  |
| Options exercisable - End of period |  818,700    |   | $              |  20.49  |   |             |  1.60  |            | $      |  8,202   |

|                        |   |         |    |   |         |   |    | Nine months  |   |
|-----------------------------|--------|--------------|---------|--------|--------------|--------|---------|--------------|--------|
|                        |   | Year ended   |    |   | Year ended   |   |    | ended        |   |
|                        |   | December 31, |    |   | December 31, |   |    | December 31, |   |
|                        |   | 2010         |    |   | 2009         |   |    | 2008         |   |
|                        |   |         |    |   |         |   |    |         |   |
| Number of options exercised |   |         | 311,950 |   |         |   | 246,755 |         |   |   | 157,245 |   |
|                        |   |         |    |   |         |   |    |         |   |   |   |   |
| Aggregate fair value        |   | $            | 6,741   |   |         | $      | 4,070   |         |   | $ | 2,378 |   |
| Intrinsic value             |   |         | 2,190   |   |         |   | 1,544   |         |   |   | 1,593 |   |
| Amount of cash received     |   |         | 4,551   |   |         |   | 2,526   |         |   |   | 785 |   |
|                        |   |         |    |   |         |   |    |         |   |   |   |   |
| Tax benefit recognized      |   | $            | 699     |   |         | $      | 536     |         |   | $ | 542 |   |

----

|                                           |         |       |             |         |       |             |         |       | Nine months      |
|------------------------------------------------|--------------|------------|------------------|--------------|------------|------------------|--------------|------------|------------------|
|                                           |         | Year ended |             |         | Year ended |             |         | ended      |
|                                           | December 31, |       |             | December 31, |       |             | December 31, |
|                                           |         | 2010       |             |         | 2009  |             |         | 2008  |
|                                           |         |       |             |         |       |             |         |       |             |
| Risk free rate                                 |         |       | 1.4%             |         |       | 1.3%             |         |       | 2.2%             |
| Expected life in years                         |         |       |  4.75  |         |       |  4.75  |         |       |  4.70  |
| Expected volatility                            |         |       | 39.8%            |         |       | 38.8%            |         |       | 30.5%            |
| Dividend yield                                 |         |       | 0.0%             |         |       | 0.0%             |         |       | 0.0%             |
|                                           |         |       |             |         |       |             |         |       |             |
| Weighted average fair value per option granted |         | $          | 6.85             |         |       | $ 4.14           |         |       | $ 4.53           |

|                                                    |   |         |   |   |         |   |   | Nine months  |   |
|---------------------------------------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
|                                                    |   | Year ended   |   |   | Year ended   |   |   | ended        |   |
|                                                    |   | December 31, |   |   | December 31, |   |   | December 31, |   |
|                                                    |   | 2010         |   |   | 2009         |   |   | 2008         |   |
|                                                    |   |         |   |   |         |   |   |         |   |
| Income tax expense using combined statutory rate of 31% |   |         |   |   |         |   |   |         |   |
| (December 31, 2009 - 33%, December 31, 2008 - 34%)      |   | $            | 23,909 |   |         | $      | 10,489 |         |   | $ | 19,062 |   |
| Permanent differences                                   |   |         | 165    |   |         |   | 1,146  |         |   |   | (1,117 | ) |
| Goodwill impairment charge                              |   |         | -      |   |         |   | 9,643  |         |   |   | - |   |
| Impact of changes in foreign exchange rates             |   |         | (1,426 | )      |         |   | 4,718  |         |   |   | - |   |
| Adjustments to tax liabilities for prior periods        |   |         | 1,499  |   |         |   | (2,600 | )            |   |   | (2,405 | ) |
| Effects of changes in enacted tax rates                 |   |         | 2,049  |   |         |   | (854   | )            |   |   | 1,495 |   |
| Changes in liability for unrecognized tax benefits      |   |         | (5,881 | )      |         |   | 1,418  |         |   |   | 2,629 |   |
| Stock-based compensation                                |   |         | (39    | )      |         |   | (37    | )            |   |   | (645 | ) |
| Foreign tax rate differential                           |   |         | (3,829 | )      |         |   | (2,795 | )            |   |   | (4,498 | ) |
| Withholding tax                                         |   |         | 396    |   |         |   | 517    |         |   |   | 476 |   |
| Other taxes                                             |   |         | 678    |   |         |   | 453    |         |   |   | 254 |   |
| Loss (earnings) from equity method investments          |   |         | 1,348  |   |         |   | (321   | )            |   |   | - |   |
| Non-taxable income                                      |   |         | (1,398 | )      |         |   | -      |         |   |   | - |   |
| Losses not recognized - increase in valuation allowance |   |         | 11,757 |   |         |   | 17,289 |         |   |   | 15,627 |   |
| Provision for income taxes as reported                  |   | $            | 29,228 |   |         | $      | 39,066 |         |   | $ | 30,878 |   |

----

| Earnings before income tax by jurisdiction comprise the following: |
|--------------------------------------------------------------------|
|                                                               |   |   |   |   |   |   | Nine months |   |
|                                                               | Year ended |   | Year ended |   | ended |   |
|                                                               | December 31, |   | December 31, |   | December 31, |   |
|                                                               | 2010 |   | 2009 |   | 2008 |   |
|                                                               |   |   |   |   |   |   |   |   |   |
| Canada                                                             |   | $ | 22,446 |   |   | $ | 30,112 |   |   | $ | 17,399 |   |
| United States                                                      |   |   | 32,508 |   |   |   | 5,680 |   |   |   | 18,043 |   |
| Australia                                                          |   |   | 21,698 |   |   |   | 11,443 |   |   |   | 4,003 |   |
| Foreign                                                            |   |   | 476 |   |   |   | (15,448 | ) |   |   | 17,460 |   |
| Total                                                              |   | $ | 77,128 |   |   | $ | 31,787 |   |   | $ | 56,905 |   |

| The provision for income tax comprises the following: |
|-------------------------------------------------------|
|                                                  |   |   |   |   |   |   |   | Nine months |   |
|                                                  |   | Year ended |   |   | Year ended |   |   | ended |   |
|                                                  |   | December 31, |   |   | December 31, |   |   | December 31, |   |
|                                                  |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                                  |   |   |   |   |   |   |   |   |   |
| Current                                               |   |   |   |   |   |   |   |   |   |
| Canada                                                |   | $ | 4,758 |   |   | $ | 2,244 |   |   | $ | 3,554 |   |
| United States                                         |   |   | 24,667 |   |   |   | 32,247 |   |   |   | 22,496 |   |
| Australia                                             |   |   | 6,795 |   |   |   | 3,365 |   |   |   | 2,509 |   |
| Foreign                                               |   |   | 448 |   |   |   | 1,795 |   |   |   | 5,480 |   |
|                                                  |   |   | 36,668 |   |   |   | 39,651 |   |   |   | 34,039 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Canada                                                |   |   | (5,441 | ) |   |   | 878 |   |   |   | (6,553 | ) |
| United States                                         |   |   | 29 |   |   |   | (576 | ) |   |   | 4,596 |   |
| Australia                                             |   |   | (1,418 | ) |   |   | 269 |   |   |   | (1,735 | ) |
| Foreign                                               |   |   | (610 | ) |   |   | (1,156 | ) |   |   | 531 |   |
|                                                  |   |   | (7,440 | ) |   |   | (585 | ) |   |   | (3,161 | ) |
| Total                                                 |   | $ | 29,228 |   |   | $ | 39,066 |   |   | $ | 30,878 |   |

| The significant components of deferred income tax are as follows: |   |         |    |   |
|-------------------------------------------------------------------|--------|--------------|---------|--------|
|                                                              |   |         |    |   |   |   |
|                                                              |   | December 31, |    |   | December 31, |   |
|                                                              |   | 2010         |    |   | 2009 |   |
|                                                              |   |         |    |   |   |   |
| Deferred income tax assets                                        |   |         |    |   |   |   |
| Loss carry-forwards                                               |   | $            | 68,074  |   |   | $ | 52,318 |   |
| Expenses not currently deductible                                 |   |         | 12,966  |   |   |   | 10,706 |   |
| Stock-based compensation                                          |   |         | 3,940   |   |   |   | 3,642 |   |
| Investments                                                       |   |         | 1,093   |   |   |   | 158 |   |
| Allowance for doubtful accounts                                   |   |         | 4,751   |   |   |   | 3,825 |   |
| Inventory and other reserves                                      |   |         | 615     |   |   |   | 1,111 |   |
|                                                              |   |         | 91,439  |   |   |   | 71,760 |   |
| Less: Valuation allowance                                         |   |         | (55,624 | )      |   |   | (43,808 | ) |
|                                                              |   |         | 35,815  |   |   |   | 27,952 |   |
|                                                              |   |         |    |   |   |   |   |   |
| Deferred income tax liabilities                                   |   |         |    |   |   |   |   |   |
| Depreciation and amortization                                     |   |         | 33,293  |   |   |   | 37,142 |   |
| Unrealized foreign exchange gains                                 |   |         | 518     |   |   |   | 2,617 |   |
| Prepaid and other expenses deducted for tax purposes              |   |         | 189     |   |   |   | - |   |
| Financing fees                                                    |   |         | 269     |   |   |   | 293 |   |
|                                                              |   |         | 34,269  |   |   |   | 40,052 |   |
| Net deferred income tax asset (liability)                         |   | $            | 1,546   |   |   | $ | (12,100 | ) |

----

| Balance, December 31, 2008                                                    |   | $      |  12,903  |   |
|-------------------------------------------------------------------------------|--------|--------|--------------------|--------|
| Increases based on tax positions related to the current period                |   |   |  1,436   |   |
| Increases for tax positions of prior periods                                  |   |   |  922     |   |
| Decreases for tax positions of prior periods (including lapses in statutes of |   |   |               |   |
| limitations)                                                                  |   |   |  (871)        |   |
|                                                                          |   |   |               |   |
| Balance, December 31, 2009                                                    |   |   |  14,390  |   |
| Increases based on tax positions related to the current period                |   |   |  944     |   |
| Decreases for tax positions of prior periods (including lapses in statutes of |   |   |               |   |
| limitations)                                                                  |   |   |  (7,614)      |   |
|                                                                          |   |   |               |   |
| Balance, December 31, 2010                                                    |   | $      |  7,720   |   |

----

|                                                    |         |   |         |   |         |   | Nine months |   |
|---------------------------------------------------------|--------------|--------|--------------|--------|--------------|--------|-------------|--------|
|                                                    | Year ended   |   | Year ended   |   | ended        |   |
|                                                    | December 31, |   | December 31, |   | December 31, |   |
|                                                    | 2010         |   | 2009         |   | 2008         |   |
| Amounts attributable to the Company:                    |         |   |         |   |         |   |        |   |   |
| Net earnings (loss) from continuing operations          |         | $      | 13,564       |   |         | $      | (44,373     | )      |   | $ | 36,668 |   |
| Net (loss) earnings from discontinued operations        |         |   | -            |   |         |   | (481        | )      |   |   | 50,529 |   |
| Net earnings (loss)                                     |         |   | 13,564       |   |         |   | (44,854     | )      |   |   | 87,197 |   |
| Preferred share dividends                               |         |   | 10,101       |   |         |   | 10,101      |   |   |   | 7,760 |   |
| Net earnings (loss) attributable to common shareholders |         | $      | 3,463        |   |         | $      | (54,955     | )      |   | $ | 79,437 |   |

|                                                       |   |         |    |   |         |   |    | Nine months  |   |
|------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|---------|--------------|--------|
|                                                       |   | Year ended   |    |   | Year ended   |   |    | ended        |   |
|                                                       |   | December 31, |    |   | December 31, |   |    | December 31, |   |
|                                                       |   | 2010         |    |   | 2009         |   |    | 2008         |   |
|                                                       |   |         |    |   |         |   |    |         |   |
| Net earnings (loss) from continuing operations             |   | $            | 47,900  |   |         | $      | (7,279  | )            |   | $ | 11,508 |   |
| Dilution of net earnings resulting from assumed exercise   |   |         |    |   |         |   |    |         |   |   |   |   |
| of stock options in subsidiaries                           |   |         | -       |   |         |   | -       |         |   |   | (530 | ) |
| Preferred share dividends                                  |   |         | (10,101 | )      |         |   | (10,101 | )            |   |   | (7,760 | ) |
| Net earnings (loss) from continuing operations for diluted |   |         |    |   |         |   |    |         |   |   |   |   |
| earnings per share calculation purposes                    |   | $            | 37,799  |   |         | $      | (17,380 | )            |   | $ | 3,218 |   |
|                                                       |   |         |    |   |         |   |    |         |   |   |   |   |
| Net earnings (loss) available to common shareholders       |   | $            | 3,463   |   |         | $      | (54,955 | )            |   | $ | 54,276 |   |
| Dilution of net earnings resulting from assumed exercise   |   |         |    |   |         |   |    |         |   |   |   |   |
| of stock options in subsidiaries                           |   |         | -       |   |         |   | -       |         |   |   | (530 | ) |
| Net earnings (loss) for diluted earnings per share         |   |         |    |   |         |   |    |         |   |   |   |   |
| calculation purposes                                       |   | $            | 3,463   |   |         | $      | (54,955 | )            |   | $ | 53,746 |   |

----

|                                                     |                   |   |         |                   |   |         | Nine months            |
|----------------------------------------------------------|------------------------|--------|--------------|------------------------|--------|--------------|------------------------|
|                                                     | Year ended             |   | Year ended   |                   |   | ended        |
|                                                     | December 31,           |   | December 31, |                   |   | December 31, |
|                                                     | 2010              |   | 2009         |                   |   | 2008    |
|                                                     |                   |   |         |                   |   |         |                   |
| Shares issued and outstanding at beginning of period     |  29,624,910  |   |         |  29,333,484  |   |         |  30,112,587  |
| Weighted average number of shares:                       |                   |   |         |                   |   |         |                   |
| Issued during the period                                 |  455,708     |   |         |  104,091     |   |         |  63,469      |
| Repurchased during the period                            |  -           |   |         |  -           |   |         |  (592,113)        |
| Weighted average number of shares used in computing      |                   |   |         |                   |   |         |                   |
| basic earnings per share                                 |  30,080,618  |   |         |  29,437,575  |   |         |  29,583,943  |
| Assumed exercise of stock options, net of shares assumed |                   |   |         |                   |   |         |                   |
| acquired under the Treasury Stock Method                 |  286,193     |   |         |  78,580      |   |         |  170,739     |
| Number of shares used in computing diluted earnings      |                   |   |         |                   |   |         |                   |
| per share                                                |  30,366,811  |   |         |  29,516,155  |   |         |  29,754,682  |

| 19.    | Other supplemental information         |   |         |   |   |         |   |   |         |   |
|--------|----------------------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
|   |                                   |   |         |   |   |         |   |   |         |   |
|   |                                   |   |         |   |   |         |   |   | Nine months  |   |
|   |                                   |   | Year ended   |   |   | Year ended   |   |   | ended        |   |
|   |                                   |   | December 31, |   |   | December 31, |   |   | December 31, |   |
|   |                                   |   | 2010         |   |   | 2009         |   |   | 2008         |   |
|   |                                   |   |         |   |   |         |   |   |         |
|   | Franchisor operations                  |   |         |   |   |         |   |   |         |   |
|   | Revenues                               |   | $            | 74,308 |   |         | $      | 76,783 |         |   | $ | 74,810 |   |
|   | Operating earnings                     |   |         | 10,060 |   |         |   | 9,705  |         |   |   | 19,034 |   |
|   | Initial franchise fee revenues         |   |         | 4,677  |   |         |   | 5,662  |         |   |   | 3,887 |   |
|   |                                   |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Cash payments made during the period   |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Income taxes                           |   | $            | 43,809 |   |         | $      | 33,270 |         |   | $ | 20,628 |   |
|   | Interest                               |   |         | 18,301 |   |         |   | 13,470 |         |   |   | 13,907 |   |
|   |                                   |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Non-cash financing activities          |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Increases in capital lease obligations |   | $            | 1,240  |   |         | $      | 1,722  |         |   | $ | 1,403 |   |
|   |                                   |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Other expenses                         |   |         |   |   |         |   |   |         |   |   |   |   |
|   | Rent expense                           |   | $            | 57,600 |   |         | $      | 48,957 |         |   | $ | 35,546 |   |

----

|                                        |   | December 31, 2010 |   |
|---------------------------------------------|--------|-------------------|--------|
|                                        |   |              |   |   |   |   |
|                                        |   | Balance sheet     |   | Fair |   |
| Derivative designated as hedging instrument |   | location          |   | Value |   |
|                                        |   |              |   |   |   |   |
|                                        |   | Other liabilities |   |   |   |   |
| Interest rate swaps                         |   | (non-current)     |   | $ |  377  |   |

|                               |              |   |   |    | Fair value measurements at December 31, 2010 |   |
|------------------------------------|-------------------|--------|--------|---------|----------------------------------------------|--------|
|                               |              |   |   |    |                                         |   |   |   |   |   |   |   |
|                               | Carrying value at |   |   |    |                                         |   |   |   |   |
|                               | December 31, 2010 |   |   | Level 1 |                                         |   | Level 2 |   | Level 3 |   |
|                               |              |   |   |    |                                         |   |   |   |   |   |   |   |
|                               |              |   |   |    |                                         |   |   |   |   |   |   |
| Interest rate swap liability       |              | $      | 377    |    |                                         | $      | - |   |   | $ | 377 |   |   | $ | - |   |
| Contingent consideration liability |              |   | 13,312 |    |                                         |   | - |   |   |   | - |   |   |   | 13,312 |   |

|                               |   | Contingent acquisition  |               |
|------------------------------------|--------|-------------------------|--------------------|
|                               |   | consideration liability |               |
|                               |   |                    |               |   |
| Balance, December 31, 2009         |   | $                       |  962     |   |
| Amounts recognized on acquisitions |   |                    |  11,672  |   |
| Fair value adjustments (note 5)    |   |                    |  935     |   |
| Settled for cash                   |   |                    |  (318)        |   |
| Foreign exchange                   |   |                    |  61      |   |
| Balance, December 31, 2010         |   | $                       |  13,312  |   |
|                               |   |                    |               |   |
| Less: current portion              |   | $                       |  1,224   |   |
| Non-current portion                |   | $                       |  12,088  |   |

----

|                                        | December 31, 2010 |   | December 31, 2009 |   |
|---------------------------------------------|-------------------|--------|-------------------|--------|
|                                        | Carrying          |   | Fair              |   | Carrying |   | Fair |   |
|                                        | amount            |   |              | value  |   | amount |   | value |   |
|                                        |              |   |              |   |   |   |   |   |   |   |   |   |
| Other receivables                           |              | $      | 8,452             |   |   | $ | 8,452 |   |   | $ | 6,269 |   |   | $ | 6,269 |   |
| Investment in Colliers International UK plc |              |   | 8,993             |   |   |   | 12,677 |   |   |   | 14,883 |   |   |   | 14,200 |   |
| Long-term debt                              |              |   | 240,740           |   |   |   | 258,930 |   |   |   | 235,994 |   |   |   | 255,468 |   |
| Convertible debentures                      |              |   | 77,000            |   |   |   | 95,865 |   |   |   | 77,000 |   |   |   | 77,000 |   |

| 21.    | Commitments and contingencies                    |                   |   |   |               |
|--------|--------------------------------------------------|------------------------|--------|--------|--------------------|
|   |                                             |                   |   |   |               |   |
|   | (a)  Lease commitments                 |                   |   |   |               |   |
|   | Minimum operating lease payments are as follows: |                   |   |   |               |
|   |                                             |                   |   |   |               |   |
|   |                                             | Year ended December 31 |   |   |               |   |
|   |                                             | 2011              |   | $      |  59,432  |   |
|   |                                             | 2012              |   |   |  50,211  |   |
|   |                                             | 2013              |   |   |  41,919  |   |
|   |                                             | 2014              |   |   |  28,487  |   |
|   |                                             | 2015              |   |   |  20,355  |   |
|   |                                             | Thereafter             |   |   |  59,375  |   |

----

|                           | Commercial  |     | Residential |   |       |    |      |     |         |   |      |    |
|--------------------------------|-------------|----------|-------------|--------|------------|---------|-----------|----------|--------------|--------|-----------|---------|
| Year ended                     | Real Estate |     | Property    |   | Property   |    |      |     |         |   |
| December 31, 2010              |        | Services |        |   | Management |    |      | Services |         |   | Corporate |    |   | Consolidated |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |
| Revenues                       |        | $        | 861,917     |   |       | $       | 662,033   |     |         | $      | 462,141   |    |   | $ | 180 |   |   | $ | 1,986,271 |   |
| Depreciation and amortization  |        |     | 23,362      |   |       |    | 14,605    |     |         |   | 9,544     |    |   |   | 375 |   |   |   | 47,886 |   |
| Operating earnings (loss)      |        |     | 14,694      |   |       | 46,670  |      |     | 58,671       |   |      | (22,503 | ) |   |   | 97,532 |   |
| Other expense, net             |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (3,007 | ) |
| Interest expense, net          |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (17,397 | ) |
| Income taxes                   |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (29,228 | ) |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| Net earnings                   |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | 47,900 |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| Total assets                   |        | $        | 514,060     |   | $          | 359,247 |      | $        | 217,692      |   | $         | 38,542  |   |   | $ | 1,129,541 |   |
| Total additions to long lived  |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| assets                         |        |     | 78,068      |   |       | 41,182  |      |     | 6,650        |   |      | 273     |   |   |   | 126,173 |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
|                           | Commercial  |     | Residential |   |       |    |      |     |         |   |      |    |   |   |   |   |
| Year ended                     | Real Estate |     | Property    |   | Property   |    |      |     |         |   |      |    |   |   |
| December 31, 2009              | Services    |     | Management  |   | Services   |    | Corporate |     | Consolidated |   |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| Revenues                       |        | $        | 622,996     |   | $          | 645,251 |      | $        | 434,838      |   | $         | 137     |   | $ | 1,703,222 |   |
| Depreciation and amortization  |        |     | 25,031      |   |       | 11,561  |      |     | 9,447        |   |      | 344     |   |   | 46,383 |   |
| Operating (loss) earnings      |        |     | (61,665     | )      |       | 49,399  |      |     | 62,028       |   |      | (11,581 | ) |   |   | 38,181 |   |
| Other expense, net             |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | 6,112 |   |
| Interest expense, net          |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (12,506 | ) |
| Income taxes                   |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (39,066 | ) |
| Net earnings from continuing   |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| operations                     |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (7,279 | ) |
| Net earnings from discontinued |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| operations                     |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   | (576 | ) |
| Net earnings                   |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   | $ | (7,855 | ) |
|                           |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| Total assets                   |        | $        | 389,703     |   | $          | 350,025 |      | $        | 204,769      |   | $         | 65,033  |   |   | $ | 1,009,530 |   |
| Total additions to long lived  |        |     |        |   |       |    |      |     |         |   |      |    |   |   |   |   |   |   |   |   |
| assets                         |        |     | 15,281      |   |       | 24,941  |      |     | 13,595       |   |      | 438     |   |   | 54,255 |   |

----

|                           | Commercial  |   |    | Residential |   |    |     |   |    |      |   |   |         |   |
|--------------------------------|-------------|--------|---------|-------------|--------|---------|----------|--------|---------|-----------|--------|--------|--------------|--------|
| Nine months ended              | Real Estate |   |    | Property    |   |    | Property |   |    |      |   |   |         |   |
| December 31, 2008              | Services    |   |    | Management  |   |    | Services |   |    | Corporate |   |   | Consolidated |   |
|                           |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |
| Revenues                       |        | $      | 578,192 |        | $      | 475,251 |     | $      | 269,114 |      | $      | 123    |         | $      | 1,322,680 |   |
| Depreciation and amortization  |        |   | 17,975  |        |   | 7,815   |     |   | 5,695   |      |   | 261    |         |   | 31,746 |   |
| Operating earnings (loss)      |        |   | 17,442  |        |   | 36,436  |     |   | 36,278  |      |   | (7,026 | )            |   |   | 83,130 |   |
| Other expense, net             |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   | (17,973 | ) |
| Interest expense, net          |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   | (8,252 | ) |
| Income taxes                   |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   | (30,878 | ) |
| Net earnings from continuing   |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   |   |   |
| operations                     |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   | 26,027 |   |
| Net earnings from discontinued |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   |   |   |
| operations                     |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   | 48,840 |   |
| Net earnings                   |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   | $ | 74,867 |   |
|                           |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   |   |   |
| Total assets                   |        | $      | 404,781 |        | $      | 332,765 |     | $      | 222,485 |      | $      | 9,893  |         |   | $ | 969,924 |   |
| Discontinued operations        |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   | 20,713 |   |
| Total additions to long lived  |        |   |    |        |   |    |     |   |    |      |   |   |         |   |   |   |   |   | 990,637 |   |
| assets                         |        |   | 21,501  |        |   | 21,068  |     |   | 7,395   |      |   | -      |         |   | 49,964 |   |

|                    |   |         |      |   |         |   |      | Nine months  |   |
|-------------------------|--------|--------------|-----------|--------|--------------|--------|-----------|--------------|--------|
|                    |   | Year ended   |      |   | Year ended   |   |      | ended        |   |
|                    |   | December 31, |      |   | December 31, |   |      | December 31, |   |
|                    |   | 2010         |      |   | 2009         |   |      | 2008         |   |
|                    |   |         |      |   |         |   |      |         |   |
| United States           |   |         |      |   |         |   |      |         |   |
| Revenues                |   | $            | 1,406,713 |   |         | $      | 1,282,129 |         |   | $ | 852,644 |   |
| Total long-lived assets |   |         | 469,465   |   |         |   | 427,217   |         |   |   | 444,192 |   |
|                    |   |         |      |   |         |   |      |         |   |   |   |   |
| Canada                  |   |         |      |   |         |   |      |         |   |   |   |   |
| Revenues                |   | $            | 246,809   |   |         | $      | 178,587   |         |   | $ | 210,048 |   |
| Total long-lived assets |   |         | 76,502    |   |         |   | 56,460    |         |   |   | 70,792 |   |
|                    |   |         |      |   |         |   |      |         |   |   |   |   |
| Australia               |   |         |      |   |         |   |      |         |   |   |   |   |
| Revenues                |   | $            | 164,486   |   |         | $      | 112,369   |         |   | $ | 97,975 |   |
| Total long-lived assets |   |         | 55,291    |   |         |   | 40,341    |         |   |   | 30,658 |   |
|                    |   |         |      |   |         |   |      |         |   |   |   |   |
| Other                   |   |         |      |   |         |   |      |         |   |   |   |   |
| Revenues                |   | $            | 168,263   |   |         | $      | 130,137   |         |   | $ | 162,013 |   |
| Total long-lived assets |   |         | 57,927    |   |         |   | 56,740    |         |   |   | 58,271 |   |
|                    |   |         |      |   |         |   |      |         |   |   |   |   |
| Consolidated            |   |         |      |   |         |   |      |         |   |   |   |   |
| Revenues                |   | $            | 1,986,271 |   |         | $      | 1,703,222 |         |   | $ | 1,322,680 |   |
| Total long-lived assets |   |         | 659,185   |   |         |   | 580,758   |         |   |   | 603,913 |   |

----

|                                                |   | Twelve months |       |   | Twelve months |   |
|-----------------------------------------------------|--------|---------------|------------|--------|---------------|--------|
|                                                |   | ended         |       |   | ended         |   |
|                                                |   | December 31,  |       |   | December 31,  |   |
|                                                |   | 2009          |       |   | 2008          |   |
|                                                |   |          |       |   | (unaudited)   |   |
|                                                |   |          |       |   |          |   |
| Revenue                                             |   | $             | 1,703,222  |   |          | $      | 1,691,811 |   |
| Operating earnings                                  |   |          | 38,181     |   |          |   | 71,327 |   |
|                                                |   |          |       |   |          |   |   |   |
| Earnings before income taxes                        |   |          | 31,787     |   |          |   | 42,083 |   |
| Income taxes                                        |   |          | 39,066     |   |          |   | 22,246 |   |
| (Loss) earnings from continuing operations          |   |          | (7,279     | )      |          |   | 19,837 |   |
| (Loss) earnings from discontinued operations net of |   |          |       |   |          |   |   |   |
| income taxes                                        |   |          | (576       | )      |          |   | 45,297 |   |
|                                                |   |          |       |   |          |   |   |   |
| Net (loss) earnings                                 |   | $             | (7,855     | )      |          | $      | 65,134 |   |
|                                                |   |          |       |   |          |   |   |   |
|                                                |   |          |       |   |          |   |   |   |
| Net (loss) earnings per common share                |   |          |       |   |          |   |   |   |
| Basic                                               |   | $             | (1.87      | )      |          | $      | 1.41 |   |
| Diluted                                             |   |          | (1.87      | )      |          |   | 1.41 |   |
|                                                |   |          |       |   |          |   |   |   |
| Weighted average common shares outstanding          |   |          |       |   |          |   |   |   |
| Basic                                               |   |          | 29,437,575 |   |          |   | 29,683,750 |   |
| Diluted                                             |   |          | 29,516,155 |   |          |   | 29,913,500 |   |

----