第99.1展示文本

FIRSTSERVICE CORPORATION

中期合并财务报表

第三季度

2024年9月30日

暂行基本报表未经审计通知

FirstService公司的中期综合财务报表，包括截至2024年9月30日的中期综合资产负债表和截至当时结束的三个月和九个月期间的中期综合利润表、综合利润表、股东权益表和现金流量表由管理层负责。 这些财务报表是根据美国通用会计原则编制的，在适当的情况下反映了基于管理层最佳判断的估计。

这些中期综合财务报表尚未由公司的独立外部审计师普华永道有限责任合伙企业代表股东进行审计或审阅。

2024年11月1日

FIRSTSERVICE CORPORATION

2020年11月1日

(未经审计)

(以千美元为单位，除每股金额外) - 根据普遍公认的会计原则

美利坚合众国

附注是财务报表的一部分

附注是财务报表的一部分

FIRSTSERVICE CORPORATION

基本报表

(未经审计)

(以美元千为单位) - 符合美国通用会计原则

附注是财务报表的一部分      

FIRSTSERVICE CORPORATION

股东权益合并报表

（未经审计）

(以千美元为单位，股份信息除外)

FIRSTSERVICE CORPORATION

股东权益变动表（续）

（未经审计）

(以千美元计，除股份信息外)

FIRSTSERVICE CORPORATION

综合现金流量表

（未经审计）

(以美元千为单位) - 符合美国通用会计原则

附注是财务报表的一部分

FIRSTSERVICE CORPORATION

基本报表附注

2024年9月30日

（未经审计）

（以千美元为单位，除每股金额外）

1. 业务描述 - FirstService公司是一家提供住宅物业管理和其他必要物业服务给住宅和商业客户的北美公司。该公司的业务分为两个部分：FirstService住宅和FirstService品牌。这两个部分根据提供的服务性质和使用这些服务的客户类型进行分组。

firstservice物业是一家全方位的物业管理公司，在许多市场主要提供以下领域的全方位辅助服务：现场工作人员，包括楼宇工程和维护、全方位便利设施管理、安防、礼宾和前台人员；专属银行和保险产品；以及能源保护和管理解决方案。

firstservice品牌通过公司自营门店和特许经营网络向北美的住宅和商业客户提供一系列必要的物业服务。该部门的主要品牌包括First Onsite Property Restoration、Paul Davis Restoration、Roofing corp of America、Century Fire Protection、California Closets、CertaPro Painters、Floor Coverings International和Pillar to Post Home Inspectors。

2. 重要会计政策摘要 - 这些简明合并基本报表是公司根据适用的加拿大证券法规披露要求编制的。根据这种披露要求，按照美国普通会计准则（“GAAP”）编制的年度基本报表中通常包括的某些信息和脚注披露已经简并或省略，尽管公司认为这些披露足以使信息不具有误导性。应当同时阅读截至2023年12月31日的审计合并基本报表。

这些中期基本报表遵循与最近审计的合并基本报表相同的会计政策。在管理层看来，这份简明合并基本报表包含了呈现公司截至2024年9月30日的财务状况以及截至2024年和2023年9月30日结束的三个月和九个月期间的运营结果和现金流量所需的所有调整，这些调整均为正常周期性调整。截至2024年9月30日结束的三个月和九个月期间的运营结果未必能够代表预期将于2024年12月31日结束的年度结果。

3. 营业收入确认 - 各项收入细分如下:

公司按部门细分营业收入。在firstservice品牌部门，公司进一步细分公司拥有的运营收入；这些业务主要因为持续向客户转移控制权而随着执行而确认收入。因此，收入是根据履行承诺的完成程度来确认的。公司通常使用完成百分比法。

我们相信这种分解最好地描述了公司营业收入和现金流量受经济因素影响的性质、金额、时间和不确定性。

公司的积压订单代表尚未履行的绩效义务，定义为尚未完成的合同工作。截至2024年9月30日，积压金额为989,049美元（2023年12月31日为838,335美元）。公司预计在未来12个月内将对大部分未履行的积压订单确认为营业收入。

2024年9月30日的大部分未实现收入 预计将在接下来的12个月内确认为收入。

4.收购 - 截至2024年9月30日的九个月内，公司完成了七项收购，其中在FirstService住宅部门完成两项，在FirstService品牌部门完成五项。在FirstService住宅部门，公司分别收购了两家在佛罗里达坦帕和加利福尼亚旧金山运营的物业管理公司。在FirstService品牌部门，公司收购了一家独立的位于佐治亚亚特兰大的修复公司，以及分别在阿拉巴马州伯明翰和北卡罗来纳州阿什伯勒运营的两家消防保护公司。此外，在FirstService品牌部门，公司分别收购了总部位于佛罗里达迈尔波和马拉巴的两家商业屋顶公司。转移的考虑权公允价值收购日期如下：现金158,665美元（扣除收购现金24,732美元），及42,885美元的有条件考虑。

在2023年9月30日结束的九个月内，公司以现金购买完成了八项收购，金额为112,816美元，其中12,625美元在2022年12月31日前支付至第三方担保账户，以及9,062美元的各项待定支付。

“收购相关项目”包括交易成本和待定收购对价公允价值调整。截至2024年9月30日的九个月收购相关交易成本总额为3,296美元（2023年为1,892美元）。收购相关项目中还包括与待定收购对价公允价值调整相关的12,426美元的冲销（2023年为增加3,140美元）。

在过去的九个月内完成的某些交易的购买价格分配尚未完成，因为正在确定收购资产的公允价值。这些收购是根据购买价格的会计处理方法来记账的，因此，在各自的截止日期之前，合并利润表不包括与这些收购相关的任何收入或费用。在2024年9月30日结束的九个月内，自收购时确定的估计购买价格分配没有重大变化。

除非安排代表公司获益的补偿，否则各项待定款项将在每个报告期初公允价值记录。截至2024年9月30日的协调资产负债表上记录的公允价值为$67,798（见附注10）。这些待定款项的预计结果区间（未折现）为$58,422至最高$68,732。待定事项将在延伸至2026年5月的期间到期。在截至2024年9月30日的九个月期间，已支付了$26,620作为这些待定款项的参考（2023年 - $15,802）。

5. 租赁 - 公司租用企业办公室、复印机和某些设备。其租赁剩余租期为1年至15年，其中一些可能包括延长租约至15年的期权，另一些可能包括在1年内终止租约的选择。公司评估每个租约的续约条件，以确定续约是否相对确定。截至2024年9月30日九个月结束的财务报表中记录的经营租赁费用为47,882美元（2023年 - 40,006美元）。

租赁相关的其他信息如下（以千为单位）：

6. 其他收入 - 其他收入包括以下内容:

在去年第二季度，公司以 7,350 美元的收入出售了南佛罗里达的一栋大楼。该销售交易的税前利润为 4,351 美元。此次销售属于 FirstService 住宅部门。

7. 存货 - 存货包括以下内容：

8. 所得税 - 截至2024年9月30日的九个月的所得税准备反映出27%的有效税率（2023年 - 26%），相对于约27%的法定税率（2023年 - 27%）。有效税率和法定税率之间的差异与某些司法管辖区的税率差异以及应税永久性差异有关。

9.       开多期债务 – 公司持有30,000美元的优先担保票据（“优先票据”），利率为3.84%。优先票据到期日为2025年1月16日。

2022年2月，公司与一组贷款人签订了第二份修订和重新确定的信贷协议（“信贷协议”）。 信贷协议提供了一个承诺性的多货币循环信贷额度，金额为12.5亿美元，以无担保形式发放。 信贷协议到期日为2027年2月，并根据特定的杠杆比率以0.20%至2.50%的浮动基准利率计息。 信贷协议取代了公司之前的45亿美元循环信贷额度和44亿美元的定期贷款（一次性发放），这些贷款原定于分别于2023年1月和2024年6月到期。 2023年12月，公司行使了信贷协议的25亿美元手风琴功能，用于资助其收购美国屋面公司，从而将信贷协议的总借款能力提高至12.5亿美元。

2022年9月（并于2024年4月根据下文修订）的私下发行定向增发潜在发行额度为55万美元的优先无抵押票据（“票据”）两笔循环未承诺融资设施，分别为其现有债权人纽约人寿投资者有限责任公司（“纽约人寿”）最高25万美元和PGIm私人资本（“普世”）最高30万美元，均已减除他们手中持有的任何现有票据。普世的设施于2025年9月29日到期，纽约人寿的设施于2027年4月3日到期。作为纽约人寿设施的结束，公司以私下发行的形式向纽约人寿发行了60,000美元面值的4.53%票据，全款到期日为2032年9月29日，利息每半年支付一次。2024年4月，纽约人寿的设施经修订增加了1亿美元的潜在融资能力，目前为25万美元，并将纽约人寿设施的期限从2025年9月29日延长至目前的2027年4月3日。公司有权根据公司确定的不同到期日和票面价格，根据纽约人寿或普世的接受发行额外票据额度。

2024年1月，公司向纽约人寿定向增发了50,000美元的5.48%票据，到期日为2029年1月30日，并向纽约人寿定向增发了25,000美元的5.60%票据，到期日为2031年1月30日，两者均为半年付息。同样在2024年1月，公司向保诚定向增发了50,000美元的5.64%票据，到期日为2031年1月30日，半年付息。

根据信贷协议、高级票据和票据，所欠债务在优先次序方面平等。根据信贷协议和高级票据，公司被禁止在未经信贷协议的贷款人和高级票据持有人事先批准的情况下进行某些收购和处置，以及承担某些债务和负担。

10. 资产负债表 以下表格提供了截至2024年9月30日按照重复性基础计量的公允价值财务资产和负债：

公司已经进行两项利率互换来交换信贷协议下200,000美元债务上的浮动利率为固定利率。利率互换负债的公允价值是通过以适当的即期利率互换曲线调整信用风险后贴现未来预计现金流量进行计算的。与收购相关的待定对价公允价值的衡量采用Level 3输入，使用贴现现金流模型；重要的模型输入是预期未来经营现金流（根据每个特定收购业务确定）和折现率（在8%到10%的区间）。折现率的区间归因于与经济增长因素相关的风险水平以及待定支付期限的长短；离散度由所收购企业的独特特征和这些待定支付的相应条款驱动。在折现率的区间内，有一个在9%处的数据点集中。加权平均折现率增加2%将不会对待定对价余额的公允价值产生显著影响。

对待定对价债务的公允价值变动包括以下内容：

现金及现金等价物、受限现金、应收账款、应付账款和预提费用的账面价值，由于这些工具具有短期性，与公允价值接近，除非另有说明。衡量长期债务公允价值的输入为Level 2的输入。公允价值测量采用净现值方法进行；重要的模型输入为预期未来现金流出和折现率（范围从4.0%至4.5%）。

11.赎回性非控制权益 - 公司子公司的少数股权被称为可赎回的非控制权益（" RNCI "）。 RNCI被视为可赎回证券。因此，根据两者中的较大值记录RNCI：（i）赎回金额；或（ii）在少数股权设立之日起最初记载的RNCI金额。该金额记录在资产负债表的“中间”部分，不包括股东权益。 RNCI金额的变动会在发生时立即确认。以下表格提供了初始和最终RNCI金额的调解：

公司在其非全资子公司都签订了股东协议。这些协议允许公司根据一个公式价格“看涨”非控股权，该价格通常等于过去两年平均税前收入、利息、折旧和摊销净利润的固定倍数，扣除债务。协议还包括赎回条款，允许RNCI的所有者根据一定限制条件将其股权“看跌”到公司，价格相同。公式价格被称为赎回金额，可以用现金或公司的普通股支付。截至2024年9月30日，赎回金额为382,826美元。赎回金额低于资产负债表上记录的金额，因为某些RNCI的公式价格低于少数股权持有初期记录的金额。如果截至2024年9月30日所有看跌或看涨期权都以公司普通股结算，大约会发行2,100,000股这样的股份；这将对每股普通股的净收益产生增值效应。

Increases or decreases to the formula price of the underlying shares are recognized in the statement of earnings as the NCI redemption increment or decrement.

12.       NET EARNINGS PER COMMON SHARE – The following table reconciles the basic and diluted common shares outstanding:

13.       STOCK-BASED COMPENSATION

Company stock option plan

The Company has a stock option plan for certain directors, officers and key full-time employees of the Company and its subsidiaries, other than its Founder and Chairman. The stock option plan came into existence on June 1, 2015. Options are granted at the market price for the underlying shares on the date of grant. Each option vests over a three-to-five-year term, expires five to six years from the date granted and allows for the purchase of one Common Share. All Common Shares issued are new shares. As at September 30, 2024, there were 1,350,240 options available for future grants. A portion of the options outstanding will vest upon the Company achieving a certain threshold percentage of Adjusted Earnings per Share compounded annual growth over specified measurement periods.

Grants under the Company’s stock option plan are equity-classified awards. There were no stock options granted during the three months ended September 30, 2024 (2023 – nil). The Company estimates the probability of achievement of performance conditions at each reporting period and reflects the estimates in the number of options expected to vest with any changes recognized through stock-based compensation expense. Stock option activity for the nine months ended September 30, 2024 was as follows:

The amount of compensation expense recorded in the statement of earnings for the nine months ended September 30, 2024 was $19,626 (2023 - $16,461). As of September 30, 2024, there was $33,742 of unrecognized compensation cost related to non-vested awards which is expected to be recognized over the next 5 years. During the nine month period ended September 30, 2024, the fair value of options vested was $17,156 (2023 - $15,695).

14.       CONTINGENCIES – In the normal course of operations, the Company is subject to routine claims and litigation incidental to its business. Litigation currently pending or threatened against the Company includes disputes with former employees and commercial liability claims related to services provided by the Company. The Company believes resolution of such proceedings, combined with amounts set aside, will not have a material impact on the Company’s financial condition or the results of operations.

15.       SEGMENTED INFORMATION – The Company has two reportable operating segments and Corporate. The segments are grouped with reference to the nature of services provided and the types of clients that use those services. The Company assesses each segment’s performance based on operating earnings or operating earnings before depreciation and amortization. FirstService Residential provides property management and related property services to residential communities in North America. FirstService Brands provides franchised and company-owned essential property services to residential and commercial customers in North America. Corporate includes the costs of operating the Company’s corporate head office.

OPERATING SEGMENTS

GEOGRAPHIC INFORMATION

FIRSTSERVICE CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Nine Month Period Ended September 30, 2024

(in US dollars)

November 1, 2024

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, 2024 and the Company’s audited consolidated financial statements, and MD&A, for the year ended December 31, 2023. 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, 2024 and up to and including November 1, 2024.

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.sedarplus.ca and on the US Securities and Exchange Commission website at www.sec.gov.

Results of operations - three months ended September 30, 2024

Revenues for our third quarter were $1.40 billion, 25% higher than the comparable prior year quarter.

Adjusted EBITDA (see “Reconciliation of non-GAAP measures” below) for the third quarter was $160.0 million, up from $111.9 million reported in the prior year quarter. Our Adjusted EBITDA margin was 11.5% of revenues versus 10.0% of revenues in the prior year quarter. Operating earnings for the third quarter were $125.9 million, compared to $73.6 million in the prior year quarter. Our operating earnings margin was 9.0% of revenues versus 6.6% of revenues in the prior year quarter.

Depreciation and amortization expense totalled $41.4 million, relative to $33.1 million in the prior year, with the increase primarily related to recently acquired operations in both our FirstService Residential and FirstService Brands segments.

Acquisition-related items in the quarter was $13.0 million of recovery versus $1.3 million of expense in the prior year quarter, with the current quarter impacted by significant contingent acquisition consideration fair value adjustments related to certain contingent upside earn-out structures in connection with recently completed acquisitions in the FirstService Brands segment.

Net interest expense was $22.2 million, up from $12.0 million recorded in the prior year quarter, with the difference primarily attributable to a higher cost of debt, as well as the increase in our average outstanding debt.

The consolidated income tax rate for the quarter was 25% of earnings before income tax, versus 26% in the prior year quarter, and relative to the statutory rate of 27% in both periods. The effective tax rate for the full year is expected to be approximately 27%.

Net earnings for the quarter were $77.8 million, versus $45.9 million in the prior year quarter, with the increase primarily attributable to higher profitability in the FirstService Brands segment, partially offset by increased interest expense.

The non-controlling interest (“NCI”) share of earnings was $7.8 million for the third quarter, relative to $4.4 million in the prior period, with the increase due to higher earnings from non-wholly owned operations.

The FirstService Residential segment reported revenues of $559.6 million for the third quarter, up 4% versus the prior year, including organic growth of 3%. Top-line growth moderated compared to recent quarters due to tempered fees and reduced service scope in the face of budgetary pressures impacting our community association clients in certain markets. Adjusted EBITDA was $58.6 million, or 10.5% of revenues, versus $56.6 million, or 10.5% of revenues, in the prior year quarter. Operating earnings were $49.1 million, or 8.8% of revenues, versus $49.0 million, or 9.1% of revenues, for the third quarter of last year.

Third quarter revenues at our FirstService Brands segment were $836.5 million, up 44% relative to the prior year quarter. Strong organic growth of 10% was primarily due to robust activity levels at our restoration operations arising from local weather events and large-loss claims across North America. The recent addition of our Roofing Corp of America operations contributed to the balance of growth in the segment. Adjusted EBITDA for the quarter was $105.8 million, or 12.6% of revenues, versus $60.7 million, or 10.5% of revenues, in the prior year quarter. Operating earnings for the third quarter were $87.1 million, or 10.4% of revenues, versus $33.9 million, or 5.9% of revenues, in the prior year quarter. Adjusted EBITDA margin expansion was driven by operating leverage from the strong top-line restoration growth, as well as improved margins at our home services brands which benefited from both reduced promotional initiatives and realized operating efficiencies. The further increase in the Operating Earnings margin performance resulted from contingent acquisition consideration fair value adjustments related to certain recently completed acquisitions.

Corporate costs (see definitions and reconciliations below), as presented in Adjusted EBITDA, were $4.4 million, relative to $5.3 million in the prior year quarter. Corporate costs for the current quarter were $10.2 million in the quarter versus $9.4 million in the prior year quarter.

Results of operations - nine months ended September 30, 2024

Revenues for the nine months ended September 30, 2024 were $3.85 billion, 18% higher than the comparable prior year period.

Year-to-date Adjusted EBITDA (see “Reconciliation of non-GAAP measures” below) was $375.8 million, up from $312.4 million reported in the comparable prior year period. Our Adjusted EBITDA margin was 9.8% of revenues versus 9.6% of revenues in the prior year. Operating earnings for the period were $247.9 million, versus $196.8 million in the prior year. Our operating earnings margin was 6.4% of revenues versus 6.0% of revenues in the prior year period.

Depreciation and amortization expense totalled $117.4 million, relative to $94.1 million in the prior year, with the increase primarily related to recently acquired company-owned operations in our FirstService Brands segment.

Acquisition-related items for the nine-month period was $9.1 million of recovery versus $5.0 million of expense in the prior year. The current year-to-date period was impacted by contingent acquisition consideration fair value adjustments related to certain contingent upside earn-out structures in connection with recently completed acquisitions in the FirstService Brands segment.

Net interest expense was $61.7 million, up from $34.5 million recorded in the prior year period, with the difference primarily attributable to a higher cost of debt and an increase in our average outstanding debt.

Other income was $2.4 million versus $5.2 million in the prior year. Other income in the prior year period included a pre-tax gain of $4.4 million from the sale of a building located in South Florida within the FirstService Residential segment.

Our consolidated income tax rate for the nine-month period was 27%, versus 26% in the prior year-to-date period, and relative to the statutory rate of 27% in both periods.

Net earnings for the nine-month period were $137.6 million, up from $123.2 million in the prior year period, and was driven by increased profitability in both the FirstService Residential and FirstService Brands segments, partially offset by higher interest costs.

The RNCI redemption increment for the period was $23.7 million, versus $18.9 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 $1.61 billion for the nine-month period, up 8% over the prior year period, including 6% organic growth. The organic top-line growth was driven by new property management contract wins across various markets. Adjusted EBITDA was $153.3 million, or 9.5% of revenues, up from $144.3 million, or 9.6% of revenues, in the prior year period. Operating earnings were $124.8 million, or 7.7% of revenues, for the nine-month period, relative to $120.9 million, or 8.1% of revenues, in the prior year period. The decrease in Operating Earnings margin was due to higher amortization expense in connection with recently completed tuck-under acquisitions.

Year-to-date revenues at FirstService Brands were $2.24 billion, an increase of 28% relative to the prior year period. Revenue growth was driven by solid organic growth at Century Fire Protection, as well as contribution from our Roofing Corp of America acquisition. Segment revenues declined 1% on an organic basis, versus the prior year period, which benefited from significant weather-related claims activity at our restoration businesses. Adjusted EBITDA for the period was $238.8 million, or 10.7% of revenues, up from $181.3 million, or 10.3% of revenues, in the prior year period. Operating earnings were $160.2 million, or 7.2% of revenues, versus $105.9 million, or 6.0% of revenues, in the prior year. The significant increase in Operating Earnings margin was due to contingent acquisition consideration fair value adjustments related to certain recently completed acquisitions.

Corporate costs (see definitions and reconciliations below), as presented in Adjusted EBITDA, for the nine-month period were $16.2 million versus $13.2 million in the prior year period. Corporate costs were $37.1 million, compared to $29.9 million in the prior year, with the increase primarily due to the impact of foreign exchange, as well as higher stock-based compensation expense.

Summary of quarterly results

The following table sets forth FirstService’s 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 interim consolidated financial statements (except for other data which is non-GAAP), 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. 

Seasonality and quarterly fluctuations

Certain segments of the Company’s operations 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 consolidated service mix.

FirstService Residential generates peak revenues and earnings in the third quarter, as seasonal ancillary swimming pool management revenues are earned. FirstService Brands includes certain home improvement brands, which generate the majority of their revenues during the second and third quarters, and restoration operations which are influenced by weather patterns that typically can result in higher revenues and earnings in any given reporting quarter.

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, net; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. 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.

A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.

(1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Adjusted EBITDA.

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; and (iv) stock-based compensation expense. 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.

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, 2024 was $199.0 million, up from $169.9 million in the prior year period. The year-over-year increase in cash flow was primarily driven by increased profitability in the FirstService Brands segment. 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, 2024, capital expenditures were $80.9 million, up from $67.7 million in the prior year period. Current year investments include service vehicle fleet replacements and additions in the FirstService Brands segment, as well as information technology system improvements in both segments. Based on our current operations, total capital expenditures for the year ending December 31, 2024 are expected to be approximately $115 million.

In October 2024, we paid a quarterly dividend of $0.25 per share on the Common Shares in respect of the quarter ended September 30, 2024.

Net indebtedness as at September 30, 2024 was $1.08 billion, versus $994.5 million at December 31, 2023. 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, 2024 and, based on our outlook for the balance of the year, we expect to remain in compliance with these covenants. We had $137.6 million of available undrawn credit as of September 30, 2024.

In relation to acquisitions completed during the past two years, we have outstanding contingent consideration totalling $67.8 million as at September 30, 2024 ($63.5 million as at December 31, 2023) assuming all contingencies are satisfied and payment is due in full. Such payments, if any, are due during the period extending to May 2026. 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.

The following table summarizes our contractual obligations as at September 30, 2024: