Mr. Jay Hennick reports

COLLIERS INTERNATIONAL REPORTS STRONG THIRD QUARTER RESULTS

Colliers International Group Inc. has released its operating and financial results for its third quarter ended Sept. 30, 2018. All amounts are in U.S. dollars.

Revenues for the third quarter were $715.7-million, a 16-per-cent increase (17 per cent in local currency) relative to the same quarter in the prior year, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $72.7-million, up 31 per cent (33 per cent in local currency) and adjusted EPS (earnings per share) was 92 cents, a 39-per-cent increase versus the prior-year quarter. Third quarter adjusted EPS would have been approximately one cent higher excluding foreign exchange impacts. GAAP (generally accepted accounting principles) operating earnings were $42.0-million, relative to $34.5-million in the prior-year period. GAAP diluted net earnings per common share was 41 cents in the quarter, versus 16 cents per share for the same quarter a year ago. Third quarter GAAP EPS would have been approximately one cent higher excluding changes in foreign exchange rates.

For the nine months ended Sept. 30, 2018, revenues were $1.94-billion, a 16-per-cent increase (14 per cent in local currency) relative to the comparable prior-year period, adjusted EBITDA was $178.2-million, up 21 per cent (20 per cent in local currency) and adjusted EPS was $2.32, a 30-per-cent increase versus the prior-year period. Year-to-date adjusted EPS would have been approximately four cents lower excluding foreign exchange impacts. GAAP operating earnings were $103.3-million, relative to $88.5-million in the prior-year period. GAAP diluted net earnings per common share for the nine month period was $1.13, compared with 48 cents per share in the prior-year period. Year-to-date GAAP EPS would have been approximately four cents lower excluding changes in foreign exchange rates.

"We generated strong overall revenue and earnings growth during the quarter, with a significant contribution from our new investment management platform. Given our performance through the first nine months of the year, current business pipelines and expectations of continuing stable to growing market conditions generally, we expect a solid fourth quarter and finish to the year," said Jay S. Hennick, chairman and chief executive officer of Colliers International. "At the beginning of the quarter, we completed our strategic investment in Harrison Street Real Estate Capital, one of the largest real estate investment firms dedicated to the education, health care and storage sectors globally. Harrison Street, together with our existing European investment management business, will form the core of our new investment management platform going forward with $25.9-billion in assets under management as of Sept. 30, 2018. Since the beginning of the quarter, we also completed strategic acquisitions strengthening our services businesses in Denmark, Canada, Germany and Australia," he concluded.

About Colliers International Group Inc.

Colliers International Group is a top-tier global real estate services and investment management company operating in 69 countries with a work force of more than 13,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3-billion ($2.7-billion including affiliates).

Consolidated revenues

Consolidated revenues for the third quarter grew 17 per cent on a local currency basis, with contributions from each service line. Consolidated internal revenue growth in local currencies was 6 per cent led by lease brokerage.

For the nine months ended Sept. 30, 2018, consolidated revenues grew 14 per cent on a local currency basis. Year-to-date consolidated internal revenue growth in local currencies was 6 per cent led by lease brokerage.

Segmented quarterly results

The Americas region's revenues totalled $404.6-million for the third quarter compared with $359.4-million in the prior-year quarter, up 13 per cent (14 per cent on a local currency basis). Local currency revenue growth comprised 9-per-cent internal growth and 5 per cent from recent acquisitions. Internal growth for the quarter was split evenly among service lines. Adjusted EBITDA was $33.3-million, versus $30.8-million in the prior-year quarter, up 8 per cent. GAAP operating earnings were $24.4-million, versus $21.2-million in the prior-year period.

EMEA (Europe, Middle East and Africa) region revenues totalled $146.3-million for the third quarter compared with $128.1-million in the prior-year quarter, up 14 per cent (15 per cent on a local currency basis). Local currency revenue growth comprised 13-per-cent growth from recent acquisitions and 2-per-cent internal growth. Internal revenue growth was led by an increase in lease brokerage largely offset by a decline in sales brokerage relative to a strong comparative in the prior-year period. Adjusted EBITDA was $17.3-million, versus $11.1-million in the prior-year quarter, up 56 per cent. GAAP operating earnings were $9.4-million, versus $6.1-million in the prior-year quarter.

Asia Pacific region revenues totalled $132.5-million for the third quarter compared with $128.1-million in the prior-year quarter, up 3 per cent (8 per cent on a local currency basis). Local currency revenue growth comprised 5-per-cent internal growth and 3-per-cent growth from recent acquisitions. Internal growth was led by lease brokerage and outsourcing and advisory. Adjusted EBITDA was $17.8-million, versus $15.6-million in the prior-year quarter, up 14 per cent. GAAP operating earnings were $16.2-million, versus $14.1-million in the prior-year period.

The new investment management segment comprises Harrison Street which was acquired in July, 2018, and the company's existing European investment management business which was previously reported within the EMEA segment. Investment management revenues for the third quarter were $31.8-million and adjusted EBITDA was $9.6-million. Operating earnings were $2.4-million and were impacted by a significant increase in acquisition-related intangible asset amortization. Assets under management increased to $25.9-billion as of Sept. 30, 2018, up 9 per cent sequentially from $23.7-billion at the beginning of the third quarter when the company acquired Harrison Street.

Global corporate costs as reported in adjusted EBITDA were $5.3-million in the third quarter, up from $2.2-million in the prior-year period, primarily on account of higher insurance costs as well as performance-based incentive compensation accruals. The corporate GAAP operating loss for the quarter was $10.4-million, relative to $6.9-million in the prior period.

Conference call

Colliers will be holding a conference call on Tuesday, Oct. 30, 2018, at 11 a.m. Eastern Time to discuss the quarter's results. The call, as well as a supplemental slide presentation, will be simultaneously webcast and can be accessed live or after the call at the company's website in the events section.

                                                       
                           CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS 
                        (in thousands of dollars, except per-share amounts) 

                                                        Three months              Nine months
                                                      ended Sept. 30           ended Sept. 30    
                                                     2018       2017         2018        2017

Revenues                                         $715,721   $618,798   $1,935,544  $1,671,294
Cost of revenues                                  472,079    413,965    1,265,104   1,088,992
Selling, general and administrative expenses      172,254    151,250      497,601     440,725
Depreciation                                        7,906      6,793       22,679      19,236
Amortization of intangible assets                  15,255      6,183       32,624      20,148
Acquisition-related items                           6,271      6,149       14,265      13,666
Operating earnings                                 41,956     34,458      103,271      88,527
Interest expense, net                               6,896      3,487       13,753       9,708
Other income (loss)                                  (581)      (332)      (1,041)     (2,368)
Earnings before income tax                         35,641     31,303       90,559      81,187
Income tax expense                                 10,257     10,941       27,832      28,068
Net earnings                                       25,384     20,362       62,727      53,119
Non-controlling interest share of earnings          4,073      5,462        8,290      12,755
Non-controlling interest redemption increment       5,125      8,631        9,439      21,381
Net earnings attributable to company              $16,186     $6,269      $44,998     $18,983
Net earnings per common share
Basic                                               $0.41      $0.16        $1.15       $0.49
Diluted                                             $0.41      $0.16        $1.13       $0.48
Adjusted earnings per share                         $0.92      $0.66        $2.32       $1.79

We seek Safe Harbor.