Creating
Value
One Step
at a Time
2015 Annual Report
Two Decades of
Consistent Growth
5-YEAR REVENUE
CAGR
11%
$1,264MM
20+ YEARS REVENUE
COMPOUNDED
ANNUAL GROWTH 20%
$37MM
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
About FirstService
Corporation
FirstService Corporation is a North
American leader in the essential
property services sector serving its
customers through two industry-
leading 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 to residential and
commercial customers delivered through
individually branded franchise systems
and company-owned operations.
FirstService Residential and FirstService
Brands both rely on the same operational
foundations for success – a core
competency in managing and growing
market-leading, value-added out-
sourced property services businesses;
significant scale advantages that
are leveraged to create more value
for clients; a culture focused around
customer service excellence; and
strong brand recognition.
FirstService generates more than
US$1.2 billion in annual revenues and
has approximately 16,000 employees
across North America. With significant
insider ownership and an experienced
management team, FirstService has a
long-term track record of creating value
and superior returns for shareholders.
The common shares of FirstService
trade on the NASDAQ and on the
Toronto Stock Exchange under the
symbol “FSV”. More information is
available at www.firstservice.com.
Revenue
Segmentation
Divisional
Revenue
Breakdown
Geographical
Revenue
Breakdown
80%
FIRSTSERVICE
RESIDENTIAL
20%
FIRSTSERVICE
BRANDS
U.S.
93%
7%
CANADA
FINANCIAL HIGHLIGHTS
1,264
103
1,132
1,038
940
857
79
79
75
71
2011 2012
2013
2014
2015
2011 2012
2013
2014
2015
Revenues
(US$ millions)
Adjusted EBITDA
(US$ millions)
Why Invest In FirstService?
Strong Financial Profile
• Strong free cash flow
generation with low capital
expenditures
• Conservative balance sheet
• Ample capital and liquidity to
fund future growth
• Dividends paid on common
shares
Compelling Growth Prospects
• Long and consistent track
record of delivering growth
• Strong organic growth through
competitive advantages in
attractive markets
• Margin enhancement
potential through operating
efficiencies
• Disciplined tuck-under
acquisition strategy
Leadership Positions In
Virtually Every Market
• #1 or #2 player in each market
supported by well-recognized
brands
• Very large and highly fragmented
industries
• Scale advantage, proprietary
products/services and national
coverage are competitive
differentiators which are
difficult to replicate
Proven Business Model
• Essential services with highly
predictable and recurring
revenue streams
• Focus on customer service
excellence throughout our
businesses
• Leverage our differentiators to
extend our leadership positions
and win new business
• Partnership philosophy
aligns business leaders with
shareholders
(US$ thousands, except per share amounts)
Year ended December 31
2015
2014
2013
2012
2011
Results From Operations
Revenues
Adjusted EBITDA1
Operating earnings
Net earnings
Financial Position
Total assets
Long-term debt
Shareholders’ equity
$ 1,264,077
103,038
70,747
38,198
$ 1,132,002
74,997
45,621
26,192
$ 1,038,087
78,913
37,083
18,452
$ 939,821
78,932
53,478
30,765
$ 857,201
70,565
38,674
24,157
$ 600,483
201,199
167,026
$ 615,544
239,357
158,749
$ 610,297
225,425
168,660
$ 591,438
216,370
174,834
$ 566,972
174,150
203,165
Year ended December 31
2015
2014
2013
Earnings Per Share Data
Adjusted EPS2
Diluted net earnings per common share
Diluted weighted average
common shares outstanding (thousands)
$
1.20
0.59
$
0.84
0.36
$
0.96
0.09
36,425
36,363
36,306
Notes
1. Adjusted EBITDA is defined as net earnings before income tax, interest, depreciation, amortization, other (income) expense, acquisition-related items, and stock-based
compensation expense.
2. Adjusted earnings per share is defined as diluted net earnings (loss) per common share, adjusted for the effect, after income tax, of non-controlling interest redemption increment,
amortization, acquisition-related items, stock-based compensation expense, and spin-off charges.
A MESSAGE FROM OUR CEO
THE STORY OF
2015
North American leader in essential
outsourced property services
To Our Fellow Shareholders:
2015 was a milestone year for FirstService
Corporation marked by the separation
on June 1 of “old” FirstService into two
independent public companies: Colliers
International and “new” FirstService. I am
proud and honoured to have been named
President and Chief Executive Officer of
new FirstService which comprises our
FirstService Residential and FirstService
Brands operating divisions. I have been
integrally involved in the growth and
strategy of these businesses for over
20 years and am a passionate believer
in our proven business model, operating
partners and future opportunities.
This annual report reflects the financial
performance of newly independent
FirstService for the full 2015 year and
establishes a foundation to measure our
progress as we embark on our exciting new
path forward.
Our 2015 highlights include:
Strong Organic Growth
Revenue grew across all our business lines
– 12% in total, driven largely by robust
organic growth of 8%.
Expanded EBITDA Margins
EBITDA grew by 37% and margins expanded
by 160 basis points to 8.2%, primarily
through cost reduction and operating
efficiencies at FirstService Residential.
Significant Cash Flow Generation
Cash flow from operations almost doubled
in 2015 allowing us to aggressively invest in
our future while also paying down total debt.
Our leverage ratio declined from 2.3x net
debt to EBITDA to 1.5x at year-end.
D. Scott Patterson
Chief Executive Officer
Jeremy Rakusin
Chief Financial Officer
Continued Investments to Drive
Operational Improvements
During the year, we continued to deploy
capital across our businesses to propel
further operational efficiencies. At California
Closets, we established a new state-of-the-
art production facility in Phoenix, Arizona
which opened in June. This location will
serve as a centralized hub for several of our
company-owned operations, resulting in
margin expansion through scale related
production improvements and cost reductions.
At FirstService Residential, we continued
our multi-year investment in the operating
platform to improve our service offering,
support our national brand and drive further
efficiencies, while continuing to differentiate
ourselves from our competitors.
Strategically Important
Tuck-Under Acquisitions
2015 was an important year in terms of the
strategic significance of several of our
acquisitions, including:
• Southwest Management Services – the
residential property management leader
in Austin, Texas, one of the fastest growing
metropolitan areas in the U.S.
• American Leisure – the NYC-based leader in
the management of luxury high-rise
amenity facilities, expanding our capability
in this important market; and
• Paul Davis Pennsylvania – one of our largest
and most successful Paul Davis Restoration
franchisees marking the first acquisition
towards achieving a national company-
owned platform.
Leadership
Several important changes were made in
the leadership and governance of our new
stand-alone public company. Jay Hennick,
our founder and largest shareholder became
our Chairman. I thank him on behalf of all
our shareholders for his vision and tireless
efforts in building our company. On a personal
level – I want to thank him for the opportunity
of working closely with him over the years
and the privilege of continuing to build upon
the legacy. Jeremy Rakusin assumed the
role of Chief Financial Officer. He previously
served for three years as VP, Acquisitions
and Strategy following 15 years of blue chip
investment banking experience. And Erin
Wallace joined the Board of Directors in
October adding extensive experience from
her 30-year tenure as a senior operating
executive at The Walt Disney Company.
As we reflect on 2015 and look forward to
the future, it is worthwhile reviewing the
unique characteristics of our proven
business model.
Across our businesses, we enjoy leadership
positions in very large, fragmented, essential
property service markets. Yet our market
shares remain modest – generally in the
low single digits. This dynamic is conducive
to consistent long-term organic growth
and significant acquisition opportunity. We
enhance organic growth by leveraging our
leadership position and capital to create
value for our clients and offer tangible
differentiators that cannot be easily
replicated by our smaller, generally
undercapitalized competitors.
Our greatest differentiator – and our greatest
asset – is our people. We recognized many
years ago that our long-term success would
depend on our quality of service which in turn
is dependent on the professionalism and
engagement of our people. We continually
invest in improving our ability to recruit
and develop the best talent in our markets.
Today our employee base of 16,000 is
more committed than ever to delivering
exceptional customer service. We know
this because we measure it continuously.
Together we understand that our growth
is driven by customer loyalty and “word of
mouth” referral, which is our focus each and
every day.
Our business is first and foremost an
organic growth story. Two-thirds of our 11%
average annual growth rate over the last five
years is organic with tuck-under acquisitions
accounting for the remaining one-third.
We believe we can continue to grow at a
similar rate for the foreseeable future. Our
consistent growth and recurring revenue
combined with the low capital intensity of
our business model results in very strong
free cash flow – cash flow that will enable
us to aggressively invest in growth while
de-levering our balance sheet over time. Our
debt leverage ratios will likely fluctuate with
the pace of acquisition activity over the next
several years but, on average, we expect
them to decline over time.
We often get asked what we are going to
do with our cash. We consider this a high
class “problem” to have. Our conservative
balance sheet provides financial strength
and stability. We have ample capital available
to accelerate investment at FirstService
Residential along with newer initiatives
such as the expansion of our company-
owned operations at California Closets
and Paul Davis Restoration. We are also
well-positioned to be opportunistic when
it comes to a larger-sized acquisition that
meets our strategic objectives and valuation
criteria. As stewards of our shareholders’
investment dollars, we are always mindful
of deploying capital efficiently towards
maximizing investor returns.
We enter 2016 with great excitement about the
opportunities in front of us and a determined
focus to continue to “create value one step
at a time” which has been the FirstService
motto for 20 years. The motto guides our
daily decision-making and reflects our
operating philosophy and long-term vision
– and it has served our shareholders well.
A $100,000 investment in 1995 was worth
about $4.5 million at the end of 2015 – a
20% compound annual return over the
20-year period. We are proud of this track
record and determined to build on it for
many years to come.
We thank our partners and employees
for their efforts in helping us achieve such
strong results in 2015, our customers for
their trust and confidence in our service
offerings and our shareholders for
their continued belief in the future of our
Company. With this continued support, we
look forward to another successful year.
D. Scott Patterson
President & Chief Executive Officer
FirstService Residential
is the largest residential
property manager in
North America. Its
mission is to deliver
exceptional client
service and solutions
that enhance the value
of every property and the
lifestyle of every resident
in the communities it
manages. In achieving
Chuck M. Fallon
Chief Executive Officer
FirstService Residential
these objectives, FirstService Residential
leverages its scale, expertise and local knowledge
to add value to its clients and differentiate itself
from its competitors. The business invests
extensively in a team of people who are
committed to customer service excellence and
living its values on a daily basis: Being genuinely
helpful, aiming high, owning it, doing what’s right,
improving it and building great relationships.
$1,017 Million
Revenues
$69 Million
EBITDA
Largest Player In North America
• High, medium and low-rise condominiums and co-operatives
• Large-scale master-planned and active adult/life-style home-
owner associations
• 7,400 managed communities
• 1.6+ million managed residential units
• 120 offices across North America
• 95%+ contract retention rate
• $7+ billion in client budgets
• Ancillary on-site staffing services include: pool, recreational
facility and amenity management; building engineering and
maintenance; security; front-desk/concierge; and landscaping
• Proprietary banking and insurance products as well as energy
conservation and management solutions which are difficult to
replicate
Growth Strategy
• Leverage scale advantages and our access to capital to drive
new business through differentiated value-added services and
reduced client costs
• Further increase customer retention and target referral
opportunities
• Integrated marketing, lead generation and business
development effort
• Continue to expand our ancillary service offerings
• Improve operational efficiency
• Augment organic growth with selective tuck-under acquisitions
which expand our geographic footprint, enhance our market
leadership positions, or broaden our ancillary service offering
FirstService
Brands
Charlie E. Chase
Chief Executive Officer
FirstService Brands
FirstService Brands is a
leading North American
operator and provider
of essential property
services to residential
and commercial
customers, with
extensive franchise
networks comprising
over 1,900 franchises
and 13 company-owned
locations in all 50 U.S.
states and ten Canadian provinces. In 2015,
FirstService Brands serviced more than
500,000 customers and generated aggregate
system-wide revenues of more than US$1.6
billion from franchised and corporate-owned
operations. Services are delivered through
seven well-known brands, each of which is the
#1 or #2 player in its respective market.
$247 Million
Revenues
$43 Million
EBITDA
Growth Strategy
• Very large, highly fragmented markets provide significant
opportunity for organic growth
• Expand same store capacity in the areas of sales, design
and field service
• Continue to drive repeat business and referral leads from
its customers through service excellence and market-leading
brands
• Strategically add company-owned operations at California
Closets and Paul Davis Restoration
• Leverage best-in-class franchising capabilities to acquire
other property services franchise models
CORPORATE INFORMATION
Board of Directors
Corporate Offices
Legal Counsel
Canada – Fogler, Rubinoff LLP
United States – Ferrante & Associates
Independent Auditors
PricewaterhouseCoopers LLP
Registrar and Transfer Agent
Canada – TMX Equity Transfer Services
Phone: 1.866.393.4891
E-mail: TMXEInvestorServices@tmx.com
U.S. co-transfer agent – Computershare
Phone: 1.800.368.5948
E-mail: webqueries@computershare.com
Stock Exchange Listings
NASDAQ Global Select Market – FSV
Toronto Stock Exchange – FSV
FirstService common shares are included
in the S&P/TSX Composite Index.
Jay S. Hennick 3
Founder & Chairman, FirstService Corporation
Chairman & CEO,
Colliers International Group Inc.
Brendan Calder 2, 3
Corporate Director, Professor, “GettingItDone”
Rotman School of Management
University of Toronto
Bernard I. Ghert 1, 2
President, The B.I. Ghert Family Foundation
D. Scott Patterson
President & CEO, FirstService Corporation
Head Office, Canada
1140 Bay Street, Suite 4000
Toronto, Ontario
M5S 2B4
Phone: 416.960.9500
Head Office, United States
1855 Griffin Road
Dania Beach, Florida 33004
Senior Officers
D. Scott Patterson
President & CEO
Jeremy Rakusin
CFO
Douglas G. Cooke
Vice-President, Corporate Controller
& Corporate Secretary
Alex Nguyen
Vice-President, Strategy & Corporate
Development
FirstService Residential
Chuck M. Fallon
CEO
FirstService Brands
Charles E. Chase
CEO
Frederick F. Reichheld 3
Partner, Bain & Company, Inc.
Michael Stein 1, 2
Founder, Chairman & CEO,
MPI Group, Inc.
Erin J. Wallace 1
COO, The Learning Care Group
1 Audit Committee
2 Executive Compensation Committee
3 Nominating and Corporate
Governance Committee
Notice of Shareholders’ Meeting
The annual meeting of the shareholders
will be held on Thursday April 14, 2016
at 4:00 p.m. (ET) at The Design Exchange,
234 Bay Street, Toronto-Dominion Centre,
Toronto, Ontario
www.FirstService.com