Document:

EX-4.6

  Exhibit 4.6
  

 
 

FIRSTSERVICE CORPORATION

 
 MANAGEMENT’S DISCUSSION AND ANALYSIS
 FOR
THE nine MONTH PERIOD ENDED September 30, 2019
 (in US dollars)

November 8, 2019
  

The following Management’s Discussion and Analysis (“MD&A”) should be read together with the unaudited interim consolidated financial
statements of FirstService Corporation (the “Company” or “FirstService”) for the three and nine month periods ended September 30, 2019 and the Company’s audited consolidated financial statements, and MD&A, for the year
ended December 31, 2018. The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). All financial information herein is presented in United
States dollars.
  
 The Company has prepared
this MD&A with reference to National Instrument 51-102 – Continuous Disclosure Obligations of the Canadian Securities Administrators (the "CSA"). Under the U.S./Canada Multijurisdictional Disclosure System, the Company is permitted to
prepare this MD&A in accordance with the disclosure requirements of Canada, which requirements are different from those of the United States. This MD&A provides information for the three and nine month periods ended September 30, 2019 and up
to and including November 8, 2019.
  
 Additional information about the Company, including the Company’s Annual Information Form, which is included in FirstService’s Annual Report on Form 40-F, can be found on SEDAR at
www.sedar.com and on the US Securities and Exchange Commission website at www.sec.gov.

 
  

Consolidated review
  

We reported strong operating results for the third quarter ended September 30, 2019. Consolidated revenue growth was 33% relative to the same quarter in the
prior year. The top-line performance included approximately 8% organic growth, with the balance from recent acquisitions, and resulted in growth in adjusted EBITDA, operating earnings and adjusted earnings per share. GAAP earnings per share were
down versus the prior year period primarily as a result of accelerated backlog amortization in connection with our recent Global Restoration Holdings acquisition.

 
 During the first three quarters of 2019, we acquired
controlling interests in thirteen businesses, three in the FirstService Residential segment, and ten in the FirstService Brands segment, including the recent completion of our significant acquisition of Global Restoration Holdings. The total initial
cash consideration for these acquisitions was $555.1 million. During the past year, we also completed several other acquisitions in our two divisions, which provided additional revenue growth for the third quarter of 2019. These tuck-under
acquisitions increase the geographic footprint and our service offering at FirstService Residential. The acquisitions also support the execution of our company-owned strategy at FirstService Brands to acquire California Closets and Paul Davis
Restoration franchises in selected key markets and expand our operations and broaden our service capabilities at Century Fire Protection. Our acquisition of Global Restoration Holdings provides us with a market leader in large loss and commercial
property restoration and a platform for future growth both organically and through tuck-under acquisitions to expand its geographic footprint and increase its national client account coverage.

 
 Results of operations - three months
ended September 30, 2019
  
 Revenues for our
third quarter were $672.3 million, 33% higher than the comparable prior year quarter. On an organic basis, revenues were up 8% with the balance coming from recent acquisitions.

 
 Adjusted EBITDA (see “Reconciliation of non-GAAP
measures” below) for the third quarter was $77.1 million versus $59.4 million reported in the prior year quarter. Our Adjusted EBITDA margin was 11.5% of revenues versus 11.7% of revenues in the prior year quarter. Operating earnings for the
third quarter were $49.7 million, up from $45.3 million of operating earnings in the prior year quarter.
  

  

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 Depreciation and amortization expense totalled
$24.2 million for the quarter relative to $12.3 million for the prior year quarter, with the increase primarily related to our significant Global Restoration acquisition in the FirstService Brands segment.

 
 Net interest expense was $12.7 million, versus $3.1 million
recorded in the prior year quarter, with the difference primarily attributable to an increase in our average outstanding debt to finance the large Global Restoration acquisition.

 
 The consolidated income tax rate for the quarter was 29%,
compared to 25% of earnings before income tax in the prior year quarter, and relative to the statutory rate of 27% in both periods. The current period’s tax rate was impacted by certain permanent non-deductible items in the quarter.

 
 Net earnings for the quarter was $26.3 million, versus $31.7
million in the prior year quarter. The increase was attributable to the growth in operating earnings in both the FirstService Residential and FirstService Brands segments, offset by higher amortization and interest expense, as noted above.

 
 The non-controlling interest (“NCI”) share of
earnings was $2.1 million for the third quarter, relative to $3.7 million in the prior period, with the decrease primarily due to the significant purchases of NCI in the current year. The NCI redemption increment for the third quarter was $4.4
million, versus $2.2 million in the prior period, and was attributable to changes in the trailing two-year average of earnings of non-wholly owned subsidiaries.

 
 The FirstService Residential segment reported revenues of
$375.2 million for the third quarter, up 13% versus the prior year quarter. The revenue increase included strong 8% organic growth, driven by new contract wins resulting from an active sales effort in recent periods. Adjusted EBITDA was $39.8
million, versus $35.9 million in the prior year quarter. Operating earnings for the third quarter were $33.0 million, versus $29.9 million for the third quarter of last year.

 
 Third quarter revenues at our FirstService Brands segment were
$297.1 million, up 70% relative to the prior year period. Organic growth within the division was 8%, with the balance of the significant revenue increase driven by acquisition activity, including contribution from the large Global Restoration
transaction which closed late in the second quarter of this year. Organic growth was strong within our home improvement-driven brands, including California Closets, CertaPro Painters, and Floor Coverings International, as well as our Century Fire
Protection operations. Adjusted EBITDA for the quarter was $40.8 million, or 13.7% of revenues, versus $26.6 million, or 15.2% of revenues, in the prior year period. Margin decline was principally driven by the addition of Global Restoration, which
has lower margins than the overall division, as well as the impact of lower weather-related activity levels within our overall restoration platform, which includes both Global Restoration and Paul Davis Restoration. Operating earnings for the third
quarter were $22.1 million, or 7.4% of revenues, versus $19.7 million, or 11.3% of revenues, in the prior year quarter.
  

Corporate costs, as presented in Adjusted EBITDA, were $3.5 million for the quarter, relative to $3.2 million in the prior year period. On a GAAP basis,
corporate costs for the quarter were $5.4 million, versus $4.4 million in the prior year period, with the increase primarily attributable to stock-based compensation.
  

Results of operations - nine months ended September 30, 2019

 
 Revenues for the nine months ended September 30, 2019
were $1.73 billion, 21% higher than the comparable prior year. Revenues on an organic basis were up 7% with the balance of growth coming from acquisitions.

 
 Year-to-date Adjusted EBITDA (see “Reconciliation of
non-GAAP measures” below) was $171.3 million versus $142.0 million reported in the comparable prior year period. The operating loss for the period was $205.8 million, down from $98.7 million of operating earnings in the prior year period, with
the decrease attributable to the settlement of the long-term incentive arrangement (“LTIA”) with our Founder and Chairman in the amount of $314.4 million.

 

  

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 We recorded depreciation and amortization
expense of $51.0 million for the nine month period relative to $37.0 million for the prior year period, with the increase primarily related to recently acquired company-owned operations in our FirstService Brands segment, including our significant
Global Restoration acquisition.
  
 Net
interest expense for the nine month period was $21.1 million, up from $9.2 million recorded in the prior year period. The increase was driven primarily by the increase in our average outstanding debt versus the prior year to finance the Global
Restoration acquisition.
  
 Other income of $6.4 million was
primarily due to the gain on sale from two small, non-core divestitures: (i) our Arizona and Florida-based landscaping operations; and (ii) our national accounts commercial painting operations, both occurring in the second quarter of the current
year.
  
 Our consolidated income tax rate for the nine month
period was negative 9%, compared to 21% of earnings before income tax in the prior year-to-date period, and relative to the statutory rate of 27% in both periods. The current period’s tax rate was affected by the settlement of the LTIA, which
is not deductible for tax purposes.
  
 Net loss for the nine
month period was $241.2 million, versus net earnings of $70.5 million in the prior year period. The decrease was attributable to the settlement of the LTIA.

 
 The non-controlling interest (“NCI”) share of
earnings was $6.3 million for the nine month period, relative to $8.9 million in the prior year period, with the decrease primarily attributable to the significant purchases of NCI in the current year. The NCI redemption increment for the third
quarter was $9.4 million, versus $7.1 million in the prior period, and was attributable to changes in the trailing two-year average of earnings of non-wholly owned subsidiaries.

 
 Our FirstService Residential segment reported revenues of
$1.06 billion for the nine month period, up 13% over the prior year period. Organic revenue growth was 7%, primarily driven by new contract wins and was broad-based across most markets. Adjusted EBITDA was $100.8 million relative to $86.8 million in
the prior year period. Operating earnings were $81.4 million for the nine month period, relative to $68.8 million in the prior year period.
  

Year-to-date revenues at FirstService Brands were $666.9 million, an increase of 37% relative to the prior year period. Organic growth was 7%, while acquisitions
contributed the remaining balance. Organic revenue growth resulted primarily from strong performance at our California Closets and Century Fire Protection company-owned operations, as well as from higher system-wide sales at several of our home
improvement-driven franchised brands. Adjusted EBITDA for the period was $80.3 million, or 12.0% of revenues, versus $64.5 million, or 13.3% of revenues, for the prior year period. Operating earnings were $46.7 million, or 7.0% of revenues, versus
$44.0 million, or 9.1% of revenues, in the prior year period. The margins were negatively impacted by our recently acquired Global Restoration operation, which has lower margins than the overall division. The decline in margins was also due to
weaker performance at our Paul Davis Restoration company-owned operations, which experienced lower weather-related activity levels and job volumes. Our operating earnings margin was also impacted by increased intangible amortization from the Global
Restoration acquisition.
  
 Corporate costs, as presented in
Adjusted EBITDA, for the nine month period were $9.8 million, relative to $9.3 million in the prior year period. On a GAAP basis, corporate costs were $333.9 million versus $14.1 million in the prior year period, with the increase primarily
attributable to the settlement of the LTIA.
  

  

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 Summary of quarterly results (unaudited)

 
 The following table sets forth FirstService’s unaudited
quarterly consolidated results of operations data for each of the eleven most recent quarters. The information in the table below has been derived from FirstService’s unaudited interim consolidated financial statements that, in
management’s opinion, have been prepared on a consistent basis and include all adjustments necessary for a fair presentation of information. The information below is not necessarily indicative of results for any future quarter.

 
  

	Quarter	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 
	(in thousands of US$, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	YEAR ENDING DECEMBER 31, 2019	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	485,655	 	 	$	573,908	 	 	$	672,253	 	 	 	 	 
	Operating earnings	 	 	12,930	 	 	 	(268,470	)	 	 	49,698	 	 	 	 	 
	Net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	 	0.06	 	 	 	(7.48	)	 	 	0.51	 	 	 	 	 
	Diluted	 	 	0.06	 	 	 	(7.48	)	 	 	0.50	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	YEAR ENDED DECEMBER 31, 2018	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	426,456	 	 	$	495,348	 	 	$	506,356	 	 	$	503,313	 
	Operating earnings	 	 	11,073	 	 	 	42,350	 	 	 	45,298	 	 	 	28,847	 
	Net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	 	0.17	 	 	 	0.63	 	 	 	0.72	 	 	 	0.32	 
	Diluted	 	 	0.17	 	 	 	0.62	 	 	 	0.70	 	 	 	0.31	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	YEAR ENDED DECEMBER 31, 2017	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	380,349	 	 	$	441,666	 	 	$	463,379	 	 	$	443,637	 
	Operating earnings	 	 	8,971	 	 	 	35,266	 	 	 	34,019	 	 	 	26,706	 
	Net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	 	0.12	 	 	 	0.50	 	 	 	0.42	 	 	 	0.39	 
	Diluted	 	 	0.12	 	 	 	0.49	 	 	 	0.41	 	 	 	0.38	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OTHER DATA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted EBITDA - 2019	 	$	29,150	 	 	$	65,031	 	 	$	77,144	 	 	 	 	 
	Adjusted EBITDA - 2018	 	 	25,414	 	 	 	57,118	 	 	 	59,426	 	 	$	48,653	 
	Adjusted EBITDA - 2017	 	 	20,127	 	 	 	47,076	 	 	 	52,624	 	 	 	39,485	 
	Adjusted EPS - 2019	 	 	0.30	 	 	 	1.12	 	 	 	0.92	 	 	 	 	 
	Adjusted EPS - 2018	 	 	0.25	 	 	 	0.86	 	 	 	0.89	 	 	 	0.62	 
	Adjusted EPS - 2017	 	 	0.16	 	 	 	0.60	 	 	 	0.73	 	 	 	0.49	 

  

Seasonality and quarterly fluctuations

 
 Certain segments of the operations of FirstService are
subject to seasonal variations. The seasonality of the service lines results in variations in quarterly revenues and operating margins. Variations can also be caused by acquisitions or dispositions, which alter the combined service mix.

 
 The FirstService Residential segment generates peak revenues
and earnings in the third quarter, as seasonal ancillary swimming pool management revenues are earned.
  

The FirstService Brands segment includes outdoor painting and other franchised operations, which generate the majority of their revenues during the second and
third quarters.
  

  

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 Reconciliation of non-GAAP measures

 
 In this MD&A, we make reference to “adjusted
EBITDA” and “adjusted earnings per share”, which are financial measures that are not calculated in accordance with GAAP.
  

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense; (iv) depreciation and
amortization; (v) acquisition-related items; (vi) stock-based compensation expense; and (vii) settlement of the LTIA. We use adjusted EBITDA to evaluate our own operating performance and our ability to service debt, as well as an integral part of
our planning and reporting systems. Additionally, we use this measure in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. We present adjusted EBITDA as a
supplemental measure because we believe such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of the Company’s service operations. We believe this measure is a financial
metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating
earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by
other issuers. A reconciliation of net earnings to adjusted EBITDA appears below.
  

 

	 	 	Three months ended	 	 	Nine months ended	 
	(in thousands of US$)	 	September 30	 	 	September 30	 
	 	 	2019	 	 	2018	 	 	2019	 	 	2018	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings (loss)	 	$	26,336	 	 	$	31,664	 	 	$	(241,199	)	 	$	70,493	 
	Income tax	 	 	10,872	 	 	 	10,508	 	 	 	20,650	 	 	 	19,121	 
	Other income, net	 	 	(229	)	 	 	25	 	 	 	(6,353	)	 	 	(78	)
	Interest expense, net	 	 	12,719	 	 	 	3,101	 	 	 	21,060	 	 	 	9,185	 
	Operating earnings (loss)	 	 	49,698	 	 	 	45,298	 	 	 	(205,842	)	 	 	98,721	 
	Depreciation and amortization	 	 	24,181	 	 	 	12,277	 	 	 	51,033	 	 	 	36,963	 
	Settlement of long-term incentive arrangement	 	 	-	 	 	 	-	 	 	 	314,379	 	 	 	-	 
	Acquisition-related items	 	 	1,493	 	 	 	618	 	 	 	5,373	 	 	 	1,727	 
	Stock-based compensation expense	 	 	1,772	 	 	 	1,233	 	 	 	6,382	 	 	 	4,547	 
	Adjusted EBITDA	 	$	77,144	 	 	$	59,426	 	 	$	171,325	 	 	$	141,958	 

  

 
 Adjusted earnings per share is defined as diluted net earnings
per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; (iv)
stock-based compensation expense; (v) a stock-based compensation tax adjustment related to a US GAAP change; and (vi) settlement of the LTIA. We believe this measure is useful to investors because it provides a supplemental way to understand the
underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted earnings per share is not a recognized measure of financial performance under GAAP, and should not be considered as a
substitute for diluted net earnings per share, as determined in accordance with GAAP. Our method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other
issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted earnings per share appears below.

 

  

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	 	 	Three months ended	 	 	Nine months ended	 
	(in thousands of US$)	 	September 30	 	 	September 30	 
	 	 	2019	 	 	2018	 	 	2019	 	 	2018	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings (loss)	 	$	26,336	 	 	$	31,664	 	 	$	(241,199	)	 	$	70,493	 
	Non-controlling interest share of earnings	 	 	(2,057	)	 	 	(3,653	)	 	 	(6,262	)	 	 	(8,888	)
	Settlement of long-term incentive arrangement	 	 	-	 	 	 	-	 	 	 	314,379	 	 	 	-	 
	Acquisition-related items	 	 	1,493	 	 	 	618	 	 	 	5,373	 	 	 	1,727	 
	Amortization of intangible assets	 	 	13,029	 	 	 	4,343	 	 	 	22,235	 	 	 	12,993	 
	Stock-based compensation expense	 	 	1,772	 	 	 	1,233	 	 	 	6,382	 	 	 	4,547	 
	Stock-based compensation tax adjustment for US GAAP change	 	 	-	 	 	 	(87	)	 	 	(2,854	)	 	 	(3,124	)
	Income tax on adjustments	 	 	(3,848	)	 	 	(1,450	)	 	 	(8,149	)	 	 	(4,560	)
	Non-controlling interest on adjustments	 	 	(374	)	 	 	(132	)	 	 	(542	)	 	 	(388	)
	Adjusted net earnings	 	$	36,351	 	 	$	32,536	 	 	$	89,363	 	 	$	72,800	 

  

	 	 	Three months ended	 	 	Nine months ended	 
	(in US$)	 	September 30	 	 	September 30	 
	 	 	2019	 	 	2018	 	 	2019	 	 	2018	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Diluted net earnings (loss) per share	 	$	0.50	 	 	$	0.70	 	 	$	(6.84	)	 	$	1.49	 
	Non-controlling interest redemption increment	 	 	0.11	 	 	 	0.06	 	 	 	0.25	 	 	 	0.19	 
	Settlement of long-term incentive arrangement	 	 	-	 	 	 	-	 	 	 	8.37	 	 	 	-	 
	Acquisition-related items	 	 	0.04	 	 	 	0.02	 	 	 	0.12	 	 	 	0.05	 
	Amortization of intangible assets, net of tax	 	 	0.24	 	 	 	0.08	 	 	 	0.43	 	 	 	0.26	 
	Stock-based compensation expense, net of tax	 	 	0.03	 	 	 	0.03	 	 	 	0.13	 	 	 	0.09	 
	Stock-based compensation tax adjustment for US GAAP change	 	 	-	 	 	 	-	 	 	 	(0.08	)	 	 	(0.09	)
	Adjusted earnings per share	 	$	0.92	 	 	$	0.89	 	 	$	2.38	 	 	$	1.99	 

  

We believe that the presentation of adjusted EBITDA and adjusted earnings per share, which are non-GAAP financial measures, provides important supplemental
information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. We use these non-GAAP financial measures when evaluating operating performance because we
believe that the inclusion or exclusion of the items described above, for which the amounts are non-cash or non-recurring in nature, provides a supplemental measure of our operating results that facilitates comparability of our operating performance
from period to period, against our business model objectives, and against other companies in our industry. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use
this information in their assessment of our core business and the valuation of the Company. Adjusted EBITDA and adjusted earnings per share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a
substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs or benefits associated with the operations of our business as determined
in accordance with GAAP. As a result, investors should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP.
  

Liquidity and capital resources

 
 Net cash provided by operating activities for the nine month
period ended September 30, 2019 was $64.6 million, versus $81.4 million in the prior year period. The decrease in operating cash flow was primarily attributable to the cash payment in connection with the settlement of the LTIA. We believe that cash
from operations and other existing resources will continue to be adequate to satisfy the ongoing working capital needs of the Company.
  

For the nine months ended September 30, 2019, capital expenditures were $34.1 million, versus $29.7 million for the prior year period. Significant capital
purchases this year include service vehicles in the FirstService Brands segment, as well as information technology system and hardware investments in both segments. Based on our current operations, maintenance capital expenditures for the year
ending December 31, 2019 are expected to be around $50 million.
  

  

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 In October 2019, we paid a quarterly dividend
of $0.15 per share on the Common Shares in respect of the quarter ended September 30, 2019.
  

Net indebtedness as at September 30, 2019 was $843.5 million, versus $268.2 million at December 31, 2018. Net indebtedness is calculated as the current and
non-current portion of long-term debt less cash and cash equivalents. We are in compliance with the covenants contained in our financing agreements as at September 30, 2019 and, based on our outlook for the balance of the year, we expect to remain
in compliance with these covenants. We had $93.6 million of available un-drawn credit as of September 30, 2019.
  

In June 2019, in connection with the acquisition of Global Restoration, we entered into a $890 million amended and restated credit facility, consisting of our
existing $450 million revolving credit facility and a new $440 million term loan. The maturity date of the revolving credit facility remains January 2023, and the maturity date of the term loan is June 2024.

 
 In relation to acquisitions completed during the past two
years, we have outstanding contingent consideration totalling $11.5 million as at September 30, 2019 ($13.3 million as at December 31, 2018) assuming all contingencies are satisfied and payment is due in full. Such payments, if any, are due during
the period extending to July 2022. The contingent consideration liability is recognized at fair value upon acquisition and is updated to fair value each quarter, unless it contains an element of compensation, in which case such element is treated as
compensation expense over the contingency period. The contingent consideration is based on achieving specified earnings levels, and is paid or payable at the end of the contingency period. We estimate that, based on current operating results,
approximately 85% of the contingent consideration outstanding as of September 30, 2019 will ultimately be paid.
  

The following table summarizes our contractual obligations as at September 30, 2019:
  

	Contractual obligations	 	Payments due by period	 
	(in thousands of US$)	 	 	 	 	Less than	 	 	 	 	 	 	 	 	After	 
	 	 	Total	 	 	1 year	 	 	1-3 years	 	 	4-5 years	 	 	5 years	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Long-term debt	 	$	940,103	 	 	$	2,584	 	 	$	105,190	 	 	$	802,329	 	 	$	30,000	 
	Interest on long-term debt	 	 	177,124	 	 	 	45,013	 	 	 	80,410	 	 	 	49,523	 	 	 	2,178	 
	Capital lease obligations	 	 	9,637	 	 	 	3,683	 	 	 	4,438	 	 	 	1,516	 	 	 	-	 
	Contingent acquisition consideration	 	 	11,478	 	 	 	6,637	 	 	 	4,841	 	 	 	-	 	 	 	-	 
	Operating leases	 	 	136,497	 	 	 	8,785	 	 	 	61,173	 	 	 	35,244	 	 	 	31,295	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total contractual obligations	 	$	1,274,839	 	 	$	66,702	 	 	$	256,052	 	 	$	888,612	 	 	$	63,473	 

  

At September 30, 2019, we had commercial commitments totaling $6.1 million comprised of letters of credit outstanding due to expire within one year. We are
required to make semi-annual payments of interest on our senior secured notes at an interest rate of 4.8%.
  

Redeemable non-controlling interests
  

In most operations where managers or employees are also minority owners, the Company is party to shareholders’ agreements. These
agreements allow us to “call” the minority position at a value determined with the use of a formula price, which is in most cases equal to a multiple of trailing two-year average earnings, less debt. Minority owners may also
“put” their interest to the Company at the same price, with certain limitations including: (i) the inability to “put” more than one-third to one-half of their holdings in any twelve-month period; and (ii) the inability to
“put” any holdings for at least one year after the date of our initial acquisition of the business or the date the minority shareholder acquired the stock, as the case may be. The total value of the minority shareholders’ interests
(the “redemption amount”), as calculated in accordance with shareholders’ agreements, was as follows.
  

 

  

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	 	 	September 30	 	 	December 31	 
	(in thousands of US$)	 	2019	 	 	2018	 
	 	 	 	 	 	 	 
	FirstService Residential	 	$	59,897	 	 	$	80,631	 
	FirstService Brands	 	 	93,864	 	 	 	68,501	 
	 	 	$	153,761	 	 	$	149,132	 

  

 
 The amount recorded on our
balance sheet under the caption “Redeemable non-controlling interests” (“RNCI”) is the greater of: (i) the redemption amount (as above); and (ii) the amount initially recorded as RNCI at the date of inception of the minority
equity position. As at September 30, 2019, the RNCI recorded on the balance sheet was $157.3 million. The purchase prices of the RNCI may be satisfied in cash or in Common Shares of FirstService. If all RNCI were redeemed with cash on hand and
borrowings under our Facility, the pro forma estimated accretion to diluted net earnings per share for the nine months ended September 30, 2019 would be $0.31 and the accretion to adjusted EPS would be $0.06.

 
 Off-balance sheet arrangements

 
 We do not have any material off-balance sheet arrangements
other than those disclosed in notes 11 and 17 to the December 31, 2018 audited consolidated financial statements.
  

Critical accounting policies and estimates
  

The preparation of consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. These estimates and assumptions are based upon management’s historical experience and are believed by management to be reasonable under the
circumstances. Such estimates and assumptions are evaluated on an ongoing basis and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ
significantly from these estimates. Our critical accounting policies and estimates have been reviewed and discussed with our Audit Committee. There have been no material changes to our critical accounting policies and estimates from those disclosed
in the Company’s MD&A for the year ended December 31, 2018, except as noted below.
  

On January 1, 2019, FirstService adopted ASU 842, Leases, using the modified retrospective approach. In addition, we elected the package of practical
expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.

 
 We have lease agreements with lease and non-lease components,
and have elected to account for each lease component (e.g., fixed rent payments) separately from the non-lease components (e.g., common-area maintenance costs). We have also elected not to recognize the right-of-use assets and lease liabilities for
short-term leases that have a lease term of 12 months or less. Leases are recognized on the balance sheet when the lease term commences, and the associated lease payments are recognized as an expense on a straight-line basis over the lease term.

 
 The standard had a material impact on our consolidated balance
sheet, the primary impact being the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. The standard did not impact our
consolidated net earnings and had no impact on cash flows.
  

Impact of recently issued accounting standards
  

In June 2016, FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In November
2018, FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, which amends the scope and transition requirements of ASU 2016-13. The standard requires a financial asset (or a group of financial
assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions
and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard will become effective beginning January 1, 2020 and will require a cumulative-effect adjustment to accumulated retained earnings as of the
beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). We are currently evaluating the impact of this guidance on our consolidated financial statements.

 

  

	 	Page
9
 of 10	 

 
 Financial instruments

 
 We use financial instruments as part of our strategy to manage
the risk associated with interest rates and currency exchange rates from time to time. We do not use financial instruments for trading or speculative purposes. As of the date of this MD&A, we have no such financial instruments in place.

 
 Transactions with related parties

 
 The Company has entered into office space rental arrangements
and property management contracts with senior managers of certain subsidiaries. These senior managers are usually also minority shareholders of the subsidiaries. The business purpose of the transactions is to rent office space for the Company and to
generate property management revenues for the Company. The recorded amount of the rent expense for the nine months ended September 30, 2019 was $0.8 million (2018 - $0.7 million).

 
 As at September 30, 2019, the Company had $2.6 million of
loans receivable from minority shareholders (December 31, 2018 - $2.1 million). The business purpose of the loans receivable was to finance the sale of non-controlling interests in subsidiaries to senior managers. The loan amounts are measured based
on the formula price of the underlying non-controlling interests, and interest rates are determined based on the Company’s cost of borrowing plus a spread. The loans generally have terms of 5 to 10 years, but are open for repayment without
penalty at any time.
  
 Outstanding share data

 
 The authorized capital of the Company consists of an unlimited
number of Common Shares. The holders of Common Shares are entitled to one vote in respect of each Common Share held at all meetings of the shareholders of the Company.

 
 As of the date hereof, the Company has outstanding 39,330,957
Common Shares. In addition, as at the date hereof, 1,639,100 Common Shares are issuable upon exercise of options granted under the Company’s stock option plan.

 
 Canadian tax treatment of dividends

 
 For the purposes of the enhanced dividend tax credit rules
contained in the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation, all dividends (and deemed dividends) paid by us to Canadian residents on our Common Shares are designated as “eligible dividends”.
Unless stated otherwise, all dividends (and deemed dividends) paid by us hereafter are designated as “eligible dividends” for the purposes of such rules.

 
 Changes in internal controls over financial
reporting
  
 There have been no changes in our internal
controls over financial reporting during the three and nine month periods ended September 30, 2019 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

 
  

 
  

 
  

  

	 	Page
10
 of 10	 

 
 Forward-looking statements

 
 This MD&A contains forward-looking statements with respect
to expected financial performance, strategy and business conditions. The words “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “project,”
“will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements reflect management's current beliefs with
respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risk and uncertainties. Many factors could cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Factors which may cause such differences include, but are not limited to those set out
below and those set out in detail in the “Risk Factors” section of the Company’s Annual Information Form, which is included in the Company’s Annual Report on Form 40-F:

 

		•	Economic conditions, especially as they relate to commercial and consumer credit conditions and consumer spending.

		•	Commercial real estate property values, vacancy rates and general conditions of financial liquidity for real estate transactions.

		•	Residential real estate property values, resale rates and general conditions of financial liquidity for real estate transactions.

		•	Extreme weather conditions impacting demand for our services or our ability to perform those services.

		•	Competition in the markets served by the Company.

		•	Labour shortages or increases in wage and benefit costs.

		•	The effects of changes in interest rates on our cost of borrowing.

		•	Unexpected increases in operating costs, such as insurance, workers’ compensation, health care and fuel prices.

		•	Changes in the frequency or severity of insurance incidents relative to our historical experience.

		•	The effects of changes in foreign exchange rates in relation to the US dollar on the Company’s Canadian dollar denominated revenues and expenses.

		•	Our ability to make acquisitions at reasonable prices and successfully integrate acquired operations.

		•	Political conditions, including any outbreak or escalation of terrorism or hostilities and the impact thereof on our business.

		•	Changes in government policies at the federal, state/provincial or local level that may adversely impact our businesses.

 
 We caution that the foregoing list is not exhaustive of all
possible factors, as other factors could adversely affect our results, performance or achievements. The reader is cautioned against undue reliance on these forward-looking statements. Although we believe that the assumptions underlying our
forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in such forward-looking statements will be realized. The inclusion of such
forward-looking statements should not be regarded as a representation by the Company or any other person that the future events, plans or expectations contemplated by the Company will be achieved. We note that past performance in operations and
share price are not necessarily predictive of future performance. We disclaim any intention and assume no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events except as
required by securities law.
  
 Additional
information
  
 Additional information regarding
the Company, including our Annual Information Form, is available on SEDAR at www.sedar.com.EX-4.7

  Exhibit 4.7
  
 

FIRSTSERVICE CORPORATION
  

MATERIAL CHANGE REPORT
 (Form 51-102F3)

 

	1.		Name and Address of Company

  

FirstService Corporation (“FirstService” or the “Company”)

1140 Bay Street, Suite 4000
 Toronto, Ontario M5S 2B4

 

	2.		Date of Material Change

  

March 12, 2019.
  

	3.		News Release

  
 The news
release was disseminated on March 12, 2019 through GlobeNewswire.
  

	4.		Summary of Material Change

  
 On March 12,
2019, FirstService announced that it had entered into an agreement with Jay S. Hennick, the Company’s Founder, Chairman and largest voting shareholder, pursuant to which disinterested holders of FirstService’s Subordinate Voting Shares
will be given an opportunity to approve a transaction to settle the Restated Management Services Agreement, including the long-term incentive arrangement, entered into on February 1, 2004, between the Company, Mr. Hennick and Jayset Management FSV
Inc., a corporation controlled by Mr. Hennick and to eliminate the dual class voting structure of FirstService.
  

	5.		Full Description of Material Change

  
 On
March 12, 2019 – FirstService announced that it had entered into an agreement with Jay S. Hennick, the Company’s Founder, Chairman and largest voting shareholder, pursuant to which disinterested holders of FirstService’s Subordinate
Voting Shares will be given an opportunity to approve a transaction (the “Transaction”) to settle the Restated Management Services Agreement (the “MSA”), including the long-term incentive arrangement (the
“LTIA”), entered into on February 1, 2004, between the Company, Mr. Hennick and Jayset Management FSV Inc. (“HennickCo”), a corporation controlled by Mr. Hennick and to eliminate the dual class voting structure of
FirstService.
  
 Over the past several years, the FirstService Board of Directors has been
considering the financial implications of the MSA as the Company continues to grow. The LTIA included in the MSA was established in 2004 in lieu of stock options and other compensation entitlements and was consistent with similar arrangements
implemented at the time to motivate entrepreneurial founders/CEOs to create long-term value for shareholders. The arrangement achieved the desired result as the market value of FirstService increased by more than US$3 billion since 2004,
representing an annualized return of over 24%. Given the growth of the FirstService business and the seasoned management team in place, which took on responsibility for the management and success of FirstService since the completion of the spin-off
transaction in June 2015, Mr. Hennick indicated that he was prepared to receive a proposal from FirstService to terminate the MSA and unwind the dual class share structure, thereby relinquishing his effective control of the Company. In February
2019, the Board of Directors empowered the Executive Compensation Committee (the “Compensation Committee”), consisting of independent directors, Michael Stein (Chair), Bernard I. Ghert and Brendan Calder to, among other things,
evaluate, make proposals, negotiate and consider the desirability, feasibility and fairness of, and report to the Board of Directors on, a potential transaction, including as to whether a potential transaction was in the best interests of the
Company.
 

  

	 	-
2
-	 

 As part of the Transaction:
  

		•	Henset Capital Inc., a corporation controlled by Mr. Hennick, will convert 1,325,694 Multiple Voting Shares of the Company (being 100% of the outstanding Multiple Voting Shares) into Subordinate Voting Shares on a
one-for-one basis and for no consideration, thereby eliminating FirstService’s dual class share structure;

  

		•	FirstService will acquire, directly or indirectly, all of the shares of HennickCo, the recipient of all fees and other entitlements under the MSA, for a purchase price determined with reference to the LTIA formula
provided in the MSA which would have applied on a change of control transaction, and thereafter FirstService will terminate the MSA thereby eliminating the LTIA and all future fees and other entitlements owing thereafter;

 

		•	Mr. Hennick will retain his role as Chairman of FirstService, at the discretion of the Board, with compensation commensurate with that of a Non-Executive Chairman of a public company of similar size to FirstService;
and

  

		•	FirstService will: (a) pay US$62.9 million in cash; and (b) issue a total of 2,918,860 Subordinate Voting Shares at a price of Cdn$115.58 per share (which is the 20-trading day VWAP of the Subordinate Voting Shares on
the TSX determined on March 11, 2019, the day prior to the announcement of the Transaction).

  

 
 The Transaction is subject to, among other conditions, the approval of a majority of the
disinterested holders of FirstService’s Subordinate Voting Shares at an Annual and Special Meeting of Shareholders to be held on May 3, 2019 at 2:00 p.m. in Toronto, Ontario at The Design Exchange, 234 Bay Street, Toronto-Dominion Centre (the
“Meeting”). The Board (with Mr. Hennick recusing himself) believes the Transaction is in the best interests of FirstService and the holders of Subordinate Voting Shares. All FirstService directors have advised FirstService that they
will vote for the Transaction at the Meeting. The Board recommends that FirstService shareholders approve the Transaction.
 

  

	 	-
3
-	 

 The Company and Mr. Hennick have executed a binding term sheet dated March 12, 2019 and will negotiate in good faith to conclude and execute a definitive
agreement contemplated by the binding term sheet no later than April 2, 2019. If the parties fail to agree and execute a definitive agreement prior to April 2, 2019, the binding term sheet will terminate and be of no further force or effect.

 
 The Transaction will create alignment among all FirstService shareholders, each of whom will
own the same class of voting shares. In addition, the Transaction will facilitate an orderly transition by providing shareholders and the Board of Directors with greater flexibility to determine the future direction of the Company. The Transaction
was structured to ensure an appropriate mix of cash and share consideration to maintain the Company’s conservative balance sheet, and Mr. Hennick’s continued commitment to FirstService.

 
 T. Rowe Price Associates, Inc., the largest holder of Subordinate Voting Shares, has advised
FirstService that, based on the information provided by the Company, it supports the Transaction. T. Rowe Price Associates, Inc., on behalf of accounts over which it exercises discretionary investment authority, owns or controls approximately 17.6%
of the outstanding Subordinate Voting Shares and is considered a disinterested holder of Subordinate Voting Shares for purposes of the Transaction. T. Rowe Price Associates, Inc.’s beneficial ownership could change between the date hereof and
the date of the Meeting.
  
 Immediately following the completion of the Transaction, Mr.
Hennick is expected to have control and direction over 5,767,080 Subordinate Voting Shares, representing 14.8% of the then expected outstanding shares. FirstService anticipates having 39,026,207 Subordinate Voting Shares outstanding immediately
following completion of the Transaction.
  
 “I am delighted to see FirstService, the
company I founded 30 years ago, mature to the point where I feel comfortable taking a more hands-off role with respect to the operations of the business,” said Jay S. Hennick. “Agreeing to give up effective voting control and ongoing
contractual entitlements under the MSA, which has been in place for 15 years, was a difficult decision. I have great confidence in Scott Patterson and the rest of the leadership team, and am very excited about the Company’s prospects for the
future. Retaining a significant equity investment in the Company going forward was a pre-condition and retaining strategic oversight as Chairman of the Company has always been a privilege”.

  

	 	-
4
-	 

 “Working closely with Jay for more than 24 years has been rewarding,” said D. Scott Patterson, President and Chief Executive Officer of
FirstService. “His vision and the culture he created were critical to our success and in delivering substantial returns for shareholders over many years. This transition of control demonstrates Jay’s confidence in our management team and
his desire to remain our founding shareholder and Chairman shows his commitment to our Company’s future.”
  

At the Meeting, the Company also intends to seek approval to eliminate the Multiple Voting Shares as part of the authorized capital of the Company and to re-designate its
Subordinate Voting Shares as Common Shares.
  
 The cash payment under the Transaction is
expected to be funded via the Company’s revolving credit facility. After giving effect to the Transaction, FirstService’s leverage is expected to increase by 0.3x Net Debt to Trailing 12 Months EBITDA.

 
 In February 2019, the Compensation Committee and its advisors proceeded to engage in
negotiations with Mr. Hennick and his advisors culminating in the Transaction. Following a rigorous independent review process, including receipt of advice from the Compensation Committee’s independent legal and compensation consultant
advisors, the Compensation Committee unanimously recommended the Transaction to the Board of Directors, who then unanimously (with Mr. Hennick recusing himself) approved it. In support of its recommendation in favour of approving the Transaction,
the Compensation Committee received a written opinion from its independent compensation consultant, Hugessen Consulting, that the Transaction is desirable from a compensation perspective as it would stem the ongoing dilutive effect of the LTIA, as
well as better suit the current stage of the Company’s development and Mr. Hennick’s current role. Mr. Hennick and the Company believe that it was reasonable and appropriate that disinterested shareholders be given the opportunity to vote
on the Transaction. The Compensation Committee also received independent legal advice from Miller Thomson LLP. The Transaction remains subject to customary closing conditions, including disinterested shareholder approval, lender approval and receipt
of all other third party and regulatory consents and approvals, including from the Toronto Stock Exchange and NASDAQ.
 

  

	 	-
5
-	 

 The Compensation Committee and the Board of Directors of the Company identified, among others, the following material considerations which it took into
account with respect to, and material benefits expected to be achieved on completion of, the Transaction:
  

		•	the Transaction will result in the elimination of FirstService’s dual class voting structure for no consideration, the result of which:

 

		–	Allows shareholders and the Board of Directors to consider a broad range of corporate decisions and strategic alternatives without a possible veto by Mr. Hennick

 

		–	Provides all shareholders with the same vote in proportion to their relative equity stake in the Company

  

		–	Allows investors who may not wish to invest, or whose investment policies prevent them from investing in shares of companies with dual class share structures to purchase Subordinate Voting Shares, thereby potentially
enhancing liquidity, and

  

		–	Allows the Company to use the Subordinate Voting Shares for purposes of raising additional capital, effecting an acquisition or merger transaction or issuing additional equity without further dilution resulting from
the MSA.

  

		•	the Transaction will facilitate an orderly transition of effective control by FirstService’s Founder to its shareholders, the Board of Directors and its professional management team and provides shareholders with
greater flexibility to determine the future direction of the Company;

  

		•	Mr. Hennick agreed to forgo all future fees and other entitlements to which he would otherwise be permitted under the MSA, and is accepting a substantial portion of the consideration under the Transaction in
Subordinate Voting Shares; and

  

		•	Mr. Hennick remains committed to the future direction of FirstService, and is expected to own or control 5,767,080 Subordinate Voting Shares representing 14.8% of the outstanding
shares of the Company at the time of the completion of the Transaction. He will also continue to serve as non-executive Chairman of the Board of Directors.

 
 The required information for FirstService shareholders to consider in relation to their vote
on the resolution to approve the Transaction will be contained in the management information circular to be mailed to shareholders in respect of the Meeting. This management information circular will also be available at that time on SEDAR
(www.sedar.com) and on the Company’s website at www.firstservice.com. A copy of the definitive transaction agreement will also be filed on SEDAR and accessible at www.sedar.com.

  

	 	-
6
-	 

 Forward-looking Statements
  

This report contains statements that constitute “forward-looking statements” within the meaning of applicable securities legislation, including, but not limited to,
statements relating to the potential benefits expected to be achieved on the completion of the Transaction, the expected continued commitment of Mr. Hennick to FirstService, the expected voting at the Meeting to approve the Transaction by
FirstService directors, contemplated changes to the articles and option plan of FirstService and future filings to be made under securities laws. Much of this information can be identified by words such as “expect to,”
“expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be
given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
  

Forward-looking statements are based on current information and expectations that involve a number of risks and uncertainties, which could cause actual results or events to
differ materially from those anticipated. These risks include, but are not limited to, risks associated with the ability to satisfy shareholder, regulatory, third party and stock exchange approvals and conditions to consummate the Transaction or for
any related changes to the articles and option plan of FirstService, the market value and trading price of the Subordinate Voting Shares of FirstService and other risks related to FirstService’s business, including those identified in
FirstService’s annual information form for the year ended December 31, 2018 under the heading “Risk factors” (a copy of which may be obtained at www.sedar.com) and Annual Report on Form 40-F filed with the United States Securities and
Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings. Forward-looking statements contained in this report are made as of the date hereof and are subject to change. All forward-looking statements in this report
are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this report to reflect
subsequent information, events, results or circumstances or otherwise.
  

	6.		Reliance on subsection 7.1(2) of National Instrument 51-102

  

This report is not being filed on a confidential basis.
  

	7.		Omitted Information

  
 No
significant fact remains confidential in, and no information has been omitted from, this report.
  

  

	 	-
7
-	 

 

	8.		Executive Officer

  
 If further information is
required, please contact Jeremy Rakusin, Chief Financial Officer, at 416-960-9500
  

	9.		Date of Report

  
 Dated at
Toronto, Ontario, this 13th day of March 2019.
  
 

  FIRSTSERVICE CORPORATION
  

MATERIAL CHANGE REPORT
 (Form 51-102F3)

 
  

		1.	Name and Address of Company

 
  

FirstService Corporation (“FirstService”)
 1140 Bay Street,
Suite 4000
 Toronto, Ontario M5S 2B4
  

		2.	Date of Material Change

  

May 10, 2019
  

		3.	News Release

 
  

A news release was disseminated on May 10, 2019 through GlobeNewswire.
  

		4.	Summary of Material Change

  
 On May 10, 2019,
FirstService announced that it had completed the settlement of the Restated Management Services Agreement, including the long-term incentive arrangement, between FirstService, Jay S. Hennick and Jayset Management FSV Inc. and eliminated
FirstService’s dual class share structure. FirstService also effected an amendment to its articles that eliminated the Multiple Voting Shares and the “blank cheque” preference shares as part of the authorized capital of FirstService
and re-classified its Subordinate Voting Shares as common shares. FirstService’s common shares will commence trading under the symbol “FSV” on the Toronto Stock Exchange and The NASDAQ Global Select Market at the start of trading on
May 14, 2019.
 
  

		5.	Full Description of Material Change

  
 The news
release annexed hereto as Schedule “A” provides a full description of the material change.
  

		6.	Reliance on Subsection 7.1(2) of National Instrument 51-102

  

This report is not being filed on a confidential basis.
  

		7.	Omitted Information

  
 No
significant facts remain confidential in, and no information has been omitted from, this report.
  

		8.	Executive Officer

  
 If further information is
required, please contact Jeremy Rakusin, Chief Financial Officer, at 416-960-9500.
  

		9.	Date of Report

 
  

DATED at Toronto, Ontario this 10th day of May, 2019.
  

  

 

  
 SCHEDULE “A”

 
 

	 	 	

	 	 	 
	 	 	COMPANY CONTACTS:
	 	 	 
	 	 	D. Scott Patterson
	 	 	President & CEO
	 	 	(416) 960-9500
	 	 	 
	 	 	Jeremy Rakusin
	 	 	Chief Financial Officer
	 	 	(416) 960-9500

  
 

 

 FOR IMMEDIATE RELEASE

 
 FIRSTSERVICE COMPLETES TRANSACTION TO SETTLE LONG-TERM INCENTIVE ARRANGEMENT AND ELIMINATE DUAL CLASS
VOTING STRUCTURE
  
 Jay S.
Hennick Remains as Chairman and a Significant Shareholder
  
 TORONTO, Canada, May 10, 2019 – FirstService Corporation (TSX: FSV; NASDAQ: FSV) (“FirstService”) announced that it has completed the settlement of the Restated Management Services Agreement,
including the long-term incentive arrangement, between FirstService, Jay S. Hennick and Jayset Management FSV Inc. and eliminated FirstService’s dual class share structure. FirstService has also effected an amendment to its articles that
eliminated the Multiple Voting Shares and the “blank cheque” preference shares as part of the authorized capital of FirstService and re-classified its Subordinate Voting Shares as common shares. FirstService’s common shares will
commence trading under the symbol “FSV” on the Toronto Stock Exchange and The NASDAQ Global Select Market at the start of trading on May 14, 2019.
  
 Mr. Hennick remains as a director and the Chairman of FirstService, and has control and direction over 5,767,080 common
shares of FirstService, representing 14.8% of the outstanding common shares of FirstService.
  

  

 

 
 -A2-

 
  

  

About FirstService Corporation
  
 FirstService Corporation is a North American leader in the property services sector, serving its customers through two
industry-leading service platforms: FirstService Residential, North America’s largest manager of residential communities; and FirstService Brands, one of North America’s largest providers of essential property services
delivered through individually branded franchise systems and company-owned operations.
  

FirstService generates approximately US$2 billion in annual revenues and has more than 20,000 employees across North America. With significant insider
ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The common shares of FirstService trade on NASDAQ and the Toronto Stock Exchange under the symbol
“FSV”.
  
 For the
latest news from FirstService Corporation, visit www.firstservice.com.

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