TORONTO, Canada, October 27, 2004 — FirstService Corporation (Nasdaq: FSRV; TSX: FSV.SV) today reported record results for its second quarter ended September 30, 2004.

Quarterly revenues were $184.8 million (all amounts are in US dollars), a 17% increase relative to the same period last year, while net earnings from continuing operations increased 30% to $9.5 million. Internal revenue growth excluding the impact of acquisitions for the quarter was 10%. EBITDA was $22.5 million, up 18% relative to the prior year period, and operating earnings were $18.4 million, up 19% relative to the prior year period. See "Reconciliation of EBITDA to Operating Earnings" below. Diluted net earnings per share from continuing operations for the quarter were $0.63, up 24%, from $0.51 a year ago.

The second quarter results reflect a continuation of the positive trends reported in the first quarter. Six-month revenues were $355.7 million, an increase of 16% relative to the prior year period. Year-to-date net earnings from continuing operations were $16.8 million, up 32%, and diluted earnings per share from continuing operations were up 25% to $1.11.

FirstService is a leader in the rapidly growing service sector, providing services to commercial and residential customers in the areas of: residential property management; integrated security services; property improvement services; and business services, including business process outsourcing and marketing support services. Market-leading brands include Continental, Wentworth, and Prime Management in residential property management; Intercon Security and SST in integrated security services; California Closets, Paul Davis Restoration, Pillar to Post Home Inspections and CertaPro and College Pro Painters in property improvement services; and Resolve Corporation in business services.

Property Improvement Services (previously known as Consumer Services) second quarter revenues were $32.3 million, an increase of 30% over the prior year period. Excluding the impact of four acquisitions completed during the past twelve months, revenue growth was 12%. Internal growth was fuelled by the success of the Company's franchisees, particularly College Pro Painters and California Closets, who reported significant year-over-year increases in their revenues. EBITDA was $9.2 million in the current quarter, up from $7.3 million in the prior year period.

Second quarter Integrated Security Services revenues were $35.6 million, up 21% relative to the prior year period. Internal growth accounted for 11% of the increase, while acquisitions accounted for 8% and foreign exchange on Canadian operations accounted for 2%. Internal growth was primarily attributable to higher systems installation revenues in Canada. Operations in Florida and Texas, acquired in February 2004, performed well above expectations in terms of both revenues and profitability. Margins remained constant relative to the prior year at 7.5%.

Residential Property Management revenues increased to $78.9 million for the quarter, 18% higher than in the prior year period. Internal growth of 10% was attributable to (i) growth in contractual property management revenues, particularly in Florida and (ii) higher revenues in the commercial swimming pool management operations. Revenue growth from acquisitions of 8% was attributable to the acquisition of the Company's Chicago platform acquired in June 2004 and two other tuck-under acquisitions operating in South Florida. EBITDA for the quarter was $7.4 million, an increase of $1.4 million. The quarter's EBITDA margin improved by 40 basis points to 9.4% as result of several factors, including higher productivity in certain property services operations.

Second quarter Business Services revenues were $38.0 million, an increase of 5% relative to the prior year period. Excluding the impact of foreign exchange on Canadian operations, revenue growth was 2%. As discussed in the first quarter earnings release, revenues were negatively impacted by lower seasonal textbook fulfilment volumes due to education funding cut backs by certain state governments this year. EBITDA was $4.8 million versus $5.2 million in the comparable period. The decline in EBITDA, which was expected, was impacted by foreign exchange on operations in which revenues are denominated in US dollars, while services are provided using Canadian resources, and which amounted to a reduction in EBITDA of approximately $0.3 million.

Quarterly corporate costs were $1.6 million, down slightly from $1.7 million recorded during the prior year period.

For a reconciliation of segmented EBITDA to operating earnings, see "Segmented Revenues, EBITDA and Operating Earnings" below.

Between August 5, 2004 and September 9, 2004, the Company purchased for cancellation an aggregate of 61,100 subordinate voting shares pursuant to its normal course issuer bid at a cost of $1.4 million. Of such shares, 54,100 were purchased through the facilities of the Toronto Stock Exchange at an average price per share of C$30.52 and 7,000 were purchased through the facilities of the NASDAQ National Market at an average price per share of US$22.90.

Based on operating results to date and expectations for the balance of the year for existing operations, FirstService is updating the outlook previously issued on July 28, 2004.

	Year ending March 31, 2005
(in millions of US dollars, except per share amounts)	Previous	Updated
Revenues	$660.0-$680.0	$660.0-$680.0
EBITDA	62.0-64.0	62.0-64.0
Diluted earnings per share from continuing operations	$1.45-$1.55	$1.47-$1.55
Note: The updated outlook assumes: 1) an annual average foreign exchange rate of $US0.7700 per $Cdn1.0000 (implying a $US0.8000 per $Cdn1.0000 exchange rate for the balance of the fiscal year) and a 100 basis point increase in average interest rates during fiscal 2005; and 2) no further acquisitions or divestitures completed during the balance of fiscal 2005; acquisitions (including CMN as described below) or divestitures actually completed during the balance of fiscal 2005 may materially impact these amounts. The updated outlook is based on current expectations of existing operations and is forward-looking. Actual results may differ materially. Please refer to the cautionary language below when considering this information. The Company undertakes no obligation to update this information.

On October 14, 2004, FirstService announced that it had agreed to acquire approximately 70% of the shares of CMN, the largest member of the Colliers International network of commercial real estate service providers. The transaction has been approved by the boards of directors of both companies, but is subject to regulatory, shareholder and other approvals. The expected closing date of the transaction is November 30, 2004.

In the twelve month period ended August 31, 2004, CMN generated revenues of approximately $280 million and EBITDA of approximately $18 million. On a pro forma basis, CMN would have generated $0.20 to $0.24 of incremental diluted earnings per share for FirstService during that period. For the four month period from the anticipated closing date of November 30, 2004 to the March 31, 2005 year-end, CMN is expected to contribute incremental revenues of $85.0 to $95.0 million, EBITDA of $4.0 to $5.0 million and diluted earnings per share of $0.01 to $0.04.

FirstService will be holding a conference call on Wednesday, October 27, 2004 at 11:00 am Eastern Time to discuss results for the second quarter and the outlook for the remainder of fiscal 2005. The call will be simultaneously web cast and can be accessed live or after the call at www.firstservice.com in the "Investor Relations / News Releases" section.

This press release includes forward-looking statements. Forward-looking statements include the Company's financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for the Company's services and the cost of providing services; (ii) the ability of the Company to implement its business strategy, including the Company's ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in the Company's filings with the Ontario Securities Commission.

FIRSTSERVICE CORPORATION
Condensed Consolidated Statements of Earnings
(in thousands of US dollars, except per share amounts)
(unaudited)

Reconciliation of EBITDA to Operating Earnings
(in thousands of US dollars)
(unaudited)

EBITDA is defined as net earnings from continuing operations before minority interest share of earnings, income taxes, interest, depreciation and amortization. The Company uses EBITDA to evaluate operating performance and as a measure for debt covenants with its lenders. EBITDA is an integral part of the Company's planning and reporting systems. Additionally, the Company uses multiples of current and projected EBITDA in conjunction with discounted cash flow models to determine its overall enterprise valuation and to evaluate acquisition targets. The Company believes EBITDA is a reasonable measure of operating performance because of the low capital intensity of its service operations. The Company believes EBITDA is a financial metric used by many investors to compare companies, especially in the services industry, on the basis of operating results and the ability to incur and service debt. EBITDA is not a recognized measure of financial performance under United States or Canadian generally accepted accounting principles (GAAP), and should not be considered as a substitute for operating earnings, net earnings or cash flows from operating activities, as determined in accordance with GAAP. The Company's method of calculating EBITDA may differ from other issuers and accordingly, EBITDA may not be comparable to measures used by other issuers. A reconciliation of EBITDA to operating earnings appears below.

Condensed Consolidated Balance Sheets
(in thousands of US dollars)
(unaudited)

Condensed Consolidated Statements of Cash Flows
(in thousands of US dollars)
(unaudited)

Segmented Revenues, EBITDA and Operating Earnings
(in thousands of US dollars)
(unaudited)

		FOR:		FIRSTSERVICE CORPORATION
		COMPANY CONTACTS:
				Jay S. Hennick President & CEO (416) 960-9500
				John B. Friedrichsen Senior Vice President & CFO (416) 960-9500

•	RECORD RESULTS IN KEY MEASURES:
	–	NET EARNINGS UP 30%
	–	DILUTED EPS UP 24%
	–	REVENUES UP 17%
•	FISCAL 2005 OUTLOOK UPDATED

			Three months ended September 30				Six months ended September 30
			2004		2003		2004		2003
Revenues			$	184,774	$	157,393	$	355,744	$	305,875
Cost of revenues				125,243		107,827		243,760		210,102
Selling, general and administrative expenses				37,001		30,494		71,179		61,075
Depreciation and amortization				4,129		3,629		8,040		7,338

Operating earnings				18,401		15,443		32,765		27,360
Interest				2,323		2,050		4,559		4,105

				16,078		13,393		28,206		23,255
Income taxes				4,667		4,581		8,180		7,906

				11,411		8,812		20,026		15,349
Minority interest share of earnings				1,884		1,497		3,267		2,631

Net earnings from continuing operations				9,527		7,315		16,759		12,718
Net earnings from discontinued operation, net of income taxes				—		1,654		—		2,662
Gain on sale of discontinued operation, net of income taxes				—		—		2,161		—

Net earnings			$	9,527	$	8,969	$	18,920	$	15,380

Net earnings per share
	Basic
		Continuing operations	$	0.64	$	0.51	$	1.13	$	0.90
		Discontinued operation		—		0.12		—		0.19
		Gain on sale of discontinued operation		—		—		0.15		—

			$	0.64	$	0.63	$	1.28	$	1.09

	Diluted
		Continuing operations	$	0.63	$	0.51	$	1.11	$	0.89
		Discontinued operation		—		0.11		—		0.18
		Gain on sale of discontinued operation		—		—		0.14		—

			$	0.63	$	0.62	$	1.25	$	1.07

Weighted average shares outstanding: (in thousands)
	Basic			14,843		14,172		14,812		14,168
	Diluted			15,074		14,442		15,102		14,329

	Three months ended September 30				Six months ended September 30
	2004		2003		2004		2003
EBITDA	$	22,530	$	19,072	$	40,805	$	34,698
Less: depreciation and amortization		4,129		3,629		8,040		7,338

Operating earnings	$	18,401	$	15,443	$	32,765	$	27,360

		September 30, 2004		March 31, 2004
Assets
Cash and cash equivalents		$	21,333	$	15,620
Accounts receivable			114,636		97,367
Inventories			16,488		15,229
Prepaids and other current assets			13,693		19,017

	Current assets		166,150		147,233
Fixed assets			49,205		49,826
Other assets			15,772		17,198
Goodwill and intangibles			227,923		223,296

	Total assets	$	459,050	$	437,553

Liabilities and shareholders' equity
Accounts payable and other current liabilities		$	77,949	$	73,130
Unearned revenues			4,342		9,736
Long term debt — current			17,762		3,502

	Current liabilities		100,053		86,368
Long term debt less current portion			142,430		160,386
Deferred income taxes			20,878		19,594
Minority interest			19,019		16,104
Shareholders' equity			176,670		155,101

	Total liabilities and equity	$	459,050	$	437,553

Total debt, excluding interest rate swaps		$	156,780	$	157,083

Total debt, net of cash, excluding interest rate swaps			135,447		141,463

		Six months ended September 30
		2004			2003
*Operating activities*
Net earnings		$	18,920		$	15,380
Less: net earnings from discontinued operation			—			(2,662	)
Less: gain on sale of discontinued operation			(2,161	)		—
Items not affecting cash:
	Depreciation and amortization		8,040			7,338
	Deferred income taxes		(727	)		265
	Minority interest share of earnings		3,267			2,631
	Other		257			311
Changes in operating assets and liabilities			(13,337	)		953

Net cash provided by operating activities			14,259			24,216

*Investing activities*
Acquisitions of businesses, net of cash acquired			(8,505	)		(1,953	)
Purchases of fixed assets, net			(7,315	)		(6,080	)
Other investing activities			1,093			(1,623	)

Net cash used in investing			(14,727	)		(9,656	)

*Financing activities*
Decrease in long-term debt			(457	)		(9,172	)
Other financing activities			445			286

Net cash used in financing			(12	)		(8,886	)

Net cash provided by (used in) discontinued operation			4,679			(597	)

Effect of exchange rate changes on cash			1,514			721

Increase in cash and cash equivalents during the period			5,713			5,798
Cash and cash equivalents, beginning of period			15,620			5,378

Cash and cash equivalents, end of period		$	21,333		$	11,176

Three months ended September 30		Residential Property Management		Integrated Security Services		Property Improvement Services*		Business Services		Corporate			Consolidated
2004
	Revenues	$	78,879	$	35,588	$	32,280	$	37,983	$	44		$	184,774
	EBITDA		7,397		2,686		9,196		4,842		(1,591	)		22,530
	Operating earnings		6,140		2,128		8,444		3,323		(1,634	)		18,401
2003
	Revenues	$	66,820	$	29,529	$	24,873	$	36,086	$	85		$	157,393
	EBITDA		6,021		2,202		7,346		5,172		(1,669	)		19,072
	Operating earnings		4,973		1,749		6,848		3,578		(1,705	)		15,443

Six months ended September 30		Residential Property Management		Integrated Security Services		Property Improvement Services*		Business Services		Corporate			Consolidated
2004
	Revenues	$	150,022	$	69,713	$	62,541	$	73,403	$	65		$	355,744
	EBITDA		14,028		5,254		16,717		8,358		(3,552	)		40,805
	Operating earnings		11,658		4,142		15,293		5,311		(3,639	)		32,765
2003
	Revenues	$	128,941	$	59,721	$	47,832	$	69,206	$	175		$	305,875
	EBITDA		12,653		4,275		11,952		8,926		(3,108	)		34,698
	Operating earnings		10,475		3,355		10,956		5,755		(3,181	)		27,360