第99.1展示文本

FIRSTSERVICE CORPORATION

中期合併財務報表

第三季度

2024年9月30日

暫行基本報表未經審計通知

FirstService公司的中期綜合財務報表，包括截至2024年9月30日的中期綜合資產負債表和截至當時結束的三個月和九個月期間的中期綜合利潤表、綜合利潤表、股東權益表和現金流量表由管理層負責。 這些財務報表是根據美國通用會計原則編制的，在適當的情況下反映了基於管理層最佳判斷的估計。

這些中期綜合財務報表尚未由公司的獨立外部核數師普華永道有限責任合夥企業代表股東進行審計或審閱。

2024年11月1日

FIRSTSERVICE CORPORATION

2020年11月1日

(未經審計)

(以千美元爲單位，除每股金額外) - 根據普遍公認的會計原則

美利堅合衆國

附註是財務報表的一部分

附註是財務報表的一部分

FIRSTSERVICE CORPORATION

基本報表

(未經審計)

(以美元千爲單位) - 符合美國通用會計原則

附註是財務報表的一部分      

FIRSTSERVICE CORPORATION

股東權益合併報表

（未經審計）

(以千美元爲單位，股份信息除外)

FIRSTSERVICE CORPORATION

股東權益變動表（續）

（未經審計）

(以千美元計，除股份信息外)

FIRSTSERVICE CORPORATION

綜合現金流量表

（未經審計）

(以美元千爲單位) - 符合美國通用會計原則

附註是財務報表的一部分

FIRSTSERVICE CORPORATION

基本報表附註

2024年9月30日

（未經審計）

（以千美元爲單位，除每股金額外）

1. 業務描述 - FirstService公司是一家提供住宅物業管理和其他必要物業服務給住宅和商業客戶的北美公司。該公司的業務分爲兩個部分：FirstService住宅和FirstService品牌。這兩個部分根據提供的服務性質和使用這些服務的客戶類型進行分組。

firstservice物業是一家全方位的物業管理公司，在許多市場主要提供以下領域的全方位輔助服務：現場工作人員，包括樓宇工程和維護、全方位便利設施管理、安防、禮賓和前臺人員；專屬銀行和保險產品；以及能源保護和管理解決方案。

firstservice品牌通過公司自營門店和特許經營網絡向北美的住宅和商業客戶提供一系列必要的物業服務。該部門的主要品牌包括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. 重要會計政策摘要 - 這些簡明合併基本報表是公司根據適用的加拿大證券法規披露要求編制的。根據這種披露要求，按照美國普通會計準則（「GAAP」）編制的年度基本報表中通常包括的某些信息和腳註披露已經簡併或省略，儘管公司認爲這些披露足以使信息不具有誤導性。應當同時閱讀截至2023年12月31日的審計合併基本報表。

這些中期基本報表遵循與最近審計的合併基本報表相同的會計政策。在管理層看來，這份簡明合併基本報表包含了呈現公司截至2024年9月30日的財務狀況以及截至2024年和2023年9月30日結束的三個月和九個月期間的運營結果和現金流量所需的所有調整，這些調整均爲正常週期性調整。截至2024年9月30日結束的三個月和九個月期間的運營結果未必能夠代表預期將於2024年12月31日結束的年度結果。

3. 營業收入確認 - 各項收入細分如下:

公司按部門細分營業收入。在firstservice品牌部門，公司進一步細分公司擁有的運營收入；這些業務主要因爲持續向客戶轉移控制權而隨着執行而確認收入。因此，收入是根據履行承諾的完成程度來確認的。公司通常使用完成百分比法。

我們相信這種分解最好地描述了公司營業收入和現金流量受經濟因素影響的性質、金額、時間和不確定性。

公司的積壓訂單代表尚未履行的績效義務，定義爲尚未完成的合同工作。截至2024年9月30日，積壓金額爲989,049美元（2023年12月31日爲838,335美元）。公司預計在未來12個月內將對大部分未履行的積壓訂單確認爲營業收入。

2024年9月30日的大部分未實現收入 預計將在接下來的12個月內確認爲收入。

4.收購 - 截至2024年9月30日的九個月內，公司完成了七項收購，其中在FirstService住宅部門完成兩項，在FirstService品牌部門完成五項。在FirstService住宅部門，公司分別收購了兩家在佛羅里達坦帕和加利福尼亞舊金山運營的物業管理公司。在FirstService品牌部門，公司收購了一家獨立的位於佐治亞亞特蘭大的修復公司，以及分別在阿拉巴馬州伯明翰和北卡羅來納州阿什伯勒運營的兩家消防保護公司。此外，在FirstService品牌部門，公司分別收購了總部位於佛羅里達邁爾波和馬拉巴的兩家商業屋頂公司。轉移的考慮權公允價值收購日期如下：現金158,665美元（扣除收購現金24,732美元），及42,885美元的有條件考慮。

在2023年9月30日結束的九個月內，公司以現金購買完成了八項收購，金額爲112,816美元，其中12,625美元在2022年12月31日前支付至第三方擔保帳戶，以及9,062美元的各項待定支付。

「收購相關項目」包括交易成本和待定收購對價公允價值調整。截至2024年9月30日的九個月收購相關交易成本總額爲3,296美元（2023年爲1,892美元）。收購相關項目中還包括與待定收購對價公允價值調整相關的12,426美元的沖銷（2023年爲增加3,140美元）。

在過去的九個月內完成的某些交易的購買價格分配尚未完成，因爲正在確定收購資產的公允價值。這些收購是根據購買價格的會計處理方法來記賬的，因此，在各自的截止日期之前，合併利潤表不包括與這些收購相關的任何收入或費用。在2024年9月30日結束的九個月內，自收購時確定的估計購買價格分配沒有重大變化。

除非安排代表公司獲益的補償，否則各項待定款項將在每個報告期初公允價值記錄。截至2024年9月30日的協調資產負債表上記錄的公允價值爲$67,798（見附註10）。這些待定款項的預計結果區間（未折現）爲$58,422至最高$68,732。待定事項將在延伸至2026年5月的期間到期。在截至2024年9月30日的九個月期間，已支付了$26,620作爲這些待定款項的參考（2023年 - $15,802）。

5. 租賃 - 公司租用企業辦公室、複印機和某些設備。其租賃剩餘租期爲1年至15年，其中一些可能包括延長租約至15年的期權，另一些可能包括在1年內終止租約的選擇。公司評估每個租約的續約條件，以確定續約是否相對確定。截至2024年9月30日九個月結束的財務報表中記錄的經營租賃費用爲47,882美元（2023年 - 40,006美元）。

租賃相關的其他信息如下（以千爲單位）：

6. 其他收入 - 其他收入包括以下內容:

在去年第二季度，公司以 7,350 美元的收入出售了南佛羅里達的一棟大樓。該銷售交易的稅前利潤爲 4,351 美元。此次銷售屬於 FirstService 住宅部門。

7. 存貨 - 存貨包括以下內容：

8. 所得稅 - 截至2024年9月30日的九個月的所得稅準備反映出27%的有效稅率（2023年 - 26%），相對於約27%的法定稅率（2023年 - 27%）。有效稅率和法定稅率之間的差異與某些司法管轄區的稅率差異以及應稅永久性差異有關。

9.       開多期債務 – 公司持有30,000美元的優先擔保票據（「優先票據」），利率爲3.84%。優先票據到期日爲2025年1月16日。

2022年2月，公司與一組貸款人簽訂了第二份修訂和重新確定的信貸協議（「信貸協議」）。 信貸協議提供了一個承諾性的多貨幣循環信貸額度，金額爲12.5億美元，以無擔保形式發放。 信貸協議到期日爲2027年2月，並根據特定的槓桿比率以0.20%至2.50%的浮動基準利率計息。 信貸協議取代了公司之前的45億美元循環信貸額度和44億美元的定期貸款（一次性發放），這些貸款原定於分別於2023年1月和2024年6月到期。 2023年12月，公司行使了信貸協議的25億美元手風琴功能，用於資助其收購美國屋面公司，從而將信貸協議的總借款能力提高至12.5億美元。

2022年9月（並於2024年4月根據下文修訂）的私下發行定向增發潛在發行額度爲55萬美元的優先無抵押票據（「票據」）兩筆循環未承諾融資設施，分別爲其現有債權人紐約人壽投資者有限責任公司（「紐約人壽」）最高25萬美元和PGIm私人資本（「普世」）最高30萬美元，均已減除他們手中持有的任何現有票據。普世的設施於2025年9月29日到期，紐約人壽的設施於2027年4月3日到期。作爲紐約人壽設施的結束，公司以私下發行的形式向紐約人壽發行了60,000美元面值的4.53%票據，全款到期日爲2032年9月29日，利息每半年支付一次。2024年4月，紐約人壽的設施經修訂增加了1億美元的潛在融資能力，目前爲25萬美元，並將紐約人壽設施的期限從2025年9月29日延長至目前的2027年4月3日。公司有權根據公司確定的不同到期日和票面價格，根據紐約人壽或普世的接受發行額外票據額度。

2024年1月，公司向紐約人壽定向增發了50,000美元的5.48%票據，到期日爲2029年1月30日，並向紐約人壽定向增發了25,000美元的5.60%票據，到期日爲2031年1月30日，兩者均爲半年付息。同樣在2024年1月，公司向保誠定向增發了50,000美元的5.64%票據，到期日爲2031年1月30日，半年付息。

根據信貸協議、高級票據和票據，所欠債務在優先次序方面平等。根據信貸協議和高級票據，公司被禁止在未經信貸協議的貸款人和高級票據持有人事先批准的情況下進行某些收購和處置，以及承擔某些債務和負擔。

10. 資產負債表 以下表格提供了截至2024年9月30日按照重複性基礎計量的公允價值財務資產和負債：

公司已經進行兩項利率互換來交換信貸協議下200,000美元債務上的浮動利率爲固定利率。利率互換負債的公允價值是通過以適當的即期利率互換曲線調整信用風險後貼現未來預計現金流量進行計算的。與收購相關的待定對價公允價值的衡量採用Level 3輸入，使用貼現現金流模型；重要的模型輸入是預期未來經營現金流（根據每個特定收購業務確定）和折現率（在8%到10%的區間）。折現率的區間歸因於與經濟增長因素相關的風險水平以及待定支付期限的長短；離散度由所收購企業的獨特特徵和這些待定支付的相應條款驅動。在折現率的區間內，有一個在9%處的數據點集中。加權平均折現率增加2%將不會對待定對價餘額的公允價值產生顯著影響。

對待定對價債務的公允價值變動包括以下內容：

現金及現金等價物、受限現金、應收賬款、應付賬款和預提費用的賬面價值，由於這些工具具有短期性，與公允價值接近，除非另有說明。衡量長期債務公允價值的輸入爲Level 2的輸入。公允價值測量採用淨現值方法進行；重要的模型輸入爲預期未來現金流出和折現率（範圍從4.0%至4.5%）。

11.贖回性非控制權益 - 公司子公司的少數股權被稱爲可贖回的非控制權益（" RNCI "）。 RNCI被視爲可贖回證券。因此，根據兩者中的較大值記錄RNCI：（i）贖回金額；或（ii）在少數股權設立之日起最初記載的RNCI金額。該金額記錄在資產負債表的「中間」部分，不包括股東權益。 RNCI金額的變動會在發生時立即確認。以下表格提供了初始和最終RNCI金額的調解：

公司在其非全資子公司都簽訂了股東協議。這些協議允許公司根據一個公式價格「看漲」非控股權，該價格通常等於過去兩年平均稅前收入、利息、折舊和攤銷淨利潤的固定倍數，扣除債務。協議還包括贖回條款，允許RNCI的所有者根據一定限制條件將其股權「看跌」到公司，價格相同。公式價格被稱爲贖回金額，可以用現金或公司的普通股支付。截至2024年9月30日，贖回金額爲382,826美元。贖回金額低於資產負債表上記錄的金額，因爲某些RNCI的公式價格低於少數股權持有初期記錄的金額。如果截至2024年9月30日所有看跌或看漲期權都以公司普通股結算，大約會發行2,100,000股這樣的股份；這將對每股普通股的淨收益產生增值效應。

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: