6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of: October 2005

Commission file number 0-24762

FIRSTSERVICE CORPORATION

(Name of Registrant)

1140 Bay Street, Suite 4000

Toronto, Ontario, Canada

M5S 2B4

(Address of Principal Executive Offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 Form 20-F o  Form 40-F x

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

 Yes o  No x

If "Yes" is marked, indicate the file number assigned to the Registrant in connection with Rule 12g3-2(b): N/A

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FIRSTSERVICE CORPORATION
Date: October 26, 2005	/s/ John B. Friedrichsen
	Name: John B. Friedrichsen
	Title: Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Second Quarter earnings release dated October 26, 2005

EX-99.1

EXHIBIT 99.1

COMPANY CONTACTS:
	Jay S. Hennick
	Founder & CEO
	D. Scott Patterson
	President & COO
	John B. Friedrichsen
	Senior Vice President & CFO
	(416) 960-9500

FOR IMMEDIATE RELEASE

FirstService reports record second quarter results

Highlights:

• Revenues up 75%

• EBITDA up 57%

• Adjusted net earnings up 46%

• Adjusted diluted EPS up 41%

• Updates financial outlook - fiscal 2006 EPS range now $1.08 to $1.16

TORONTO, Canada, October 26, 2005 - FirstService Corporation (Nasdaq: FSRV; TSX: FSV.SV) today reported record results for its second quarter ended September 30, 2005. All amounts are in US dollars.

Quarterly revenues were $316.2 million, an increase of 75% relative to the same period last year. EBITDA (see definition and reconciliation below) increased 57% to $35.8 million. Adjusted net earnings from continuing operations were $14.1 million, up 46% from $9.7 million in the prior year period. Adjusted diluted earnings per share from continuing operations were $0.45, up 41% from $0.32 in the prior year period. The adjustment (see reconciliation below) represents the non-cash amortization of short-lived intangible assets, relating to pending commercial real estate brokerage transactions and listings, recognized on the November 2004 acquisition of the Company’s Colliers International commercial real estate services platform.

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“The results for the quarter were very impressive and continued the momentum we began in the first quarter. Our cash flow is very strong and our balance sheet is in the best position it has been since we became a public company”, said Jay S. Hennick, Founder and Chief Executive Officer. “Residential Property Management, Commercial Real Estate, Property Improvement and Business Services each generated double-digit internal revenue growth and increased their profit margins”, he added.

About FirstService Corporation

FirstService is a leader in the rapidly growing service sector, providing services in thefollowing areas: residential property management; commercial real estate services; integrated security services; property improvement and business services.  Market-leading brands include The Continental Group in residential property management; Colliers International in commercial real estate; Intercon Security and Security Services & Technologies in integrated security services; California Closets, Paul Davis Restoration, Pillar to Post Home Inspections and CertaPro Painters in property improvement; and Resolve Corporation in business services.

FirstService is a diversified service company with more than US$1.1 billion in annualized revenues and more than 16,000 employees worldwide. More information about FirstService is available at www.firstservice.com. 

Segmented Quarterly Operating Results

Residential Property Management revenues increased to $92.0 million for the quarter, 22% higher than in the prior year period. Internal growth of 18% was attributable to growth in contractual property management fee and ancillary services revenues, while the balance of the revenue growth came from acquisitions completed during the past twelve months. EBITDA for the quarter was $9.4 million, up 26% from $7.4 million one year ago, while margins improved 30 basis points due to operating leverage and an increase in high-margin ancillary services revenues.

Colliers International, the Company’s commercial real estate services operation, generated revenues of $103.9 million for the second quarter representing internal growth of 41% relative to the same period one year ago (at which time this operation was not owned by FirstService) resulting from very robust brokerage activity in most of its markets, especially North America. Second quarter EBITDA was $7.7 million, at a margin of 7.4%.

Revenues in Property Improvement Services totalled $40.5 million, an increase of 28% over the prior year period. Internal growth was 15%. The Company’s franchise systems generated strong system-wide sales increases for the quarter. Royalties and earnings grew in step with the increases in system-wide sales. EBITDA for the seasonally strong second quarter was $12.8 million, an increase of $3.4 million relative to last year, at a margin of 31.6%, 170 basis points higher than last year.

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Integrated Security Services revenues in the second quarter were $35.9 million, flat with the prior year period. Revenues were impacted by delays with two large commercial electronic security system projects as well as the negative effect of hurricanes Katrina and Rita on branches in Gulf Port, Mississippi and Houston, Texas. The Canadian operations reported solid gains in both security officer and security systems revenues, and commenced work on a significant long-term systems project to enhance branch security for a major bank during the quarter. Quarterly EBITDA was $1.8 million versus $2.7 million in the prior year period. For the full fiscal year, these operations are expected to generate revenues and EBITDA similar to the prior year.

Second quarter Business Services revenues were $43.9 million, up 15% relative to the prior year period. The revenue increase was the result of higher volumes from several clients as well as a recently won student loan processing contract. EBITDA was $7.2 million, up from $4.8 million in the second quarter last year while margins increased to 16.3% from 12.7% last year. The increases were attributable mainly to the fulfilment operations, which benefited from higher production volumes and better capacity utilization.

Quarterly corporate costs were $2.9 million, relative to $1.6 million in the prior year period. The majority of the increase was attributable to Sarbanes-Oxley related costs, with the balance attributable to additional management resources necessary to support the growth of the Company,

A comparison of segmented EBITDA to operating earnings is provided below.

Purchase of Additional Shares of Colliers International Operations

On October 1, 2005, subsequent to the end of the second quarter, pursuant to an offer by FirstService, the Company acquired an additional 11% interest in CMN International Inc. from a group of non-executive management employees and brokers, bringing FirstService’s stake to 83%. The purchase, completed at a cost of $10.0 million, is expected to be accretive to net earnings after adjusting for the impact of incremental amortization of short-lived brokerage backlog.

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Financial Outlook

As a result of continuing strong performance, FirstService is increasing the previously issued outlook for fiscal 2006.

	Year ending March 31, 2006
(in millions of US dollars, except per share amounts)	Updated	Previous
Revenues	$1,125 - $1,175	$1,100 - $1,150
EBITDA	$102.0 - $108.0	97.0 - 104.0
Adjusted diluted earnings per share  from continuing operations	$1.08 - $1.16	$1.05 - $1.15

Note: The updated outlook assumes (i) no further acquisitions or divestitures completed during the outlook period and (ii) current economic conditions in the markets in which the Company operates remaining unchanged and in particular the market for commercial real estate services. Actual results may differ materially. The Company undertakes no obligation to continue to update this information.

Conference Call

FirstService will be holding a conference call on Wednesday, October 26, 2005 at 11:00AM Eastern Time to discuss results for the second quarter and year as well as the outlook for the balance of fiscal 2006. 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.

Forward-looking Statements

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 and U.S. Securities and Exchange Commission.

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FIRSTSERVICE CORPORATION

Condensed Consolidated Statements of Earnings

(in thousands of US dollars, except per share amounts)

(unaudited)

		Three months ended September 30					Six months ended September 30
			2005			2004		2005		2004
Revenues		$	316,171		$	180,700	$	604,068	$	347,743
Cost of revenues			199,969			121,418		380,367		236,295
Selling, general and administrative expenses			80,369			36,485		155,911		70,378
Depreciation			4,435			3,410		8,930		6,657
Amortization of intangibles other than backlog			887			680		1,755		1,302
Amortization of brokerage backlog (1)			489			-		1,158		-
Operating earnings			30,022			18,707		55,947		33,111
Other (income) expense			(513	)		-		(1,187		-
Interest expense			3,820			2,321		8,024		4,560
			26,715			16,386		49,110		28,551
Income taxes			9,088			4,790		16,031		8,316
			17,627			11,596		33,079		20,235
Minority interest share of earnings			3,835			1,916		8,167		3,304
Net earnings from continuing operations			13,792			9,680		24,912		16,931
Net (loss) earnings from discontinued operations,  net of income taxes			-			(153		-		1,989
Net earnings		$	13,792		$	9,527	$	24,912	$	18,920
Net earnings (loss) per share
Basic
Continuing operations		$	0.46		$	0.33	$	0.82	$	0.57
Discontinued operations			-			(0.01		-		0.07
		$	0.46		$	0.32	$	0.82	$	0.64
Diluted (2)
Continuing operations		$	0.44		$	0.32	$	0.78	$	0.56
Discontinued operations			-			(0.01		-		0.07
		$	0.44		$	0.31	$	0.78	$	0.63
Adjusted diluted net earnings per share from continuing operations (3)		$	0.45		$	0.32	$	0.80	$	0.56
Weighted average shares outstanding: (in thousands)	Basic		30,256			29,684		30,230		29,624
	Diluted		31,023			30,148		30,959		30,204

Notes

(1) Amortization of short-lived brokerage backlog intangible assets recognized upon the acquisition of CMN International Inc. operating as Colliers International. Brokerage backlog represents the fair value of pending commercial real estate brokerage transactions and listings as at the acquisition date. Amortization is recorded to coincide with the completion of the related brokerage transactions.

(2) Numerators for diluted earnings per share calculations have been adjusted to reflect dilution from stock options at subsidiaries. The adjustment for the three months ended September 30, 2005 is $270 (2004 - nil) and for the six months ended September 30, 2005 is $701 (2004 - nil).

(3) See “Reconciliation of operating earnings, net earnings and net earnings per share to adjusted operating earnings, adjusted net earnings and adjusted net earnings per share” below.

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Reconciliation of Operating Earnings, Net Earnings and Net Earnings Per Share to Adjusted Operating Earnings, Adjusted Net Earnings and Adjusted Net Earnings Per Share

(in thousands of US dollars, except per share amounts)

(unaudited)

The Company is presenting adjusted earnings measures to eliminate the impact of amortization of the short-lived brokerage backlog intangible asset recognized upon the acquisition of CMN International Inc. This amortization is being eliminated because the Company believes the short-lived and non-cash nature of this charge is not reflective of the operating performance of the Company. All of the adjustments are considered “non-GAAP financial measures” under OSC and SEC guidelines. The following tables provide a reconciliation of the adjusted measures:

	Three months ended September 30					Six months ended September 30
		2005			2004		2005			2004
Adjusted operating earnings	$	30,511		$	18,707	$	57,105		$	33,111
Amortization of brokerage backlog		(489	)		-		(1,158	)		-
Operating earnings	$	30,022		$	18,707	$	55,947		$	33,111
Adjusted net earnings from continuing     operations	$	14,105		$	9,680	$	25,653		$	16,931
Amortization of brokerage backlog		(489	)		-		(1,158	)		-
Deferred income taxes		176			-		417			-
Net earnings from continuing operations	$	13,792		$	9,680	$	24,912		$	16,931
Adjusted diluted net earnings per share from     continuing operations	$	0.45		$	0.32	$	0.80		$	0.56
Amortization of brokerage backlog, net of     deferred income taxes		(0.01	)		-		(0.02	)		-
Diluted net earnings per share from     continuing operations	$	0.44		$	0.32	$	0.78		$	0.56

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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 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.

	Three months ended September 30						Six months ended September 30
		2005			2004			2005			2004
EBITDA	$	35,833		$	22,797		$	67,790		$	41,070
Depreciation		(4,435	)		(3,410	)		(8,930	)		(6,657	)
Amortization of intangibles other than brokerage  backlog		(887	)		(680	)		(1,755	)		(1,302	)
Amortization of brokerage backlog		(489	)		-			(1,158	)		-
Operating earnings	$	30,022		$	18,707		$	55,947		$	33,111

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Condensed Consolidated Balance Sheets

(in thousands of US dollars)

(unaudited)

		September 30 2005		March 31 2005
Assets
Cash and cash equivalents	$	79,637	$	37,458
Accounts receivable		177,400		168,927
Inventories		23,435		20,878
Prepaids and other current assets		21,717		21,507
Current assets		302,189		248,770
Fixed assets		63,635		57,241
Other non-current assets		27,261		22,755
Goodwill and intangibles		300,611		297,962
Total assets	$	693,696	$	626,728
Liabilities and shareholders’ equity
Accounts payable and accrued liabilities	$	155,656	$	155,429
Other current liabilities		7,773		9,147
Long term debt - current		18,109		18,206
Current liabilities		181,538		182,782
Long term debt - non-current		231,168		201,809
Deferred income taxes		30,807		29,802
Minority interest		33,824		26,464
Shareholders’ equity		216,359		185,871
Total liabilities and equity	$	693,696	$	626,728
Total debt, excluding interest rate swaps	$	248,463	$	219,732
Total debt, net of cash, excluding interest rate swaps		168,826		182,274

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Condensed Consolidated Statements of Cash Flows

(in thousands of US dollars)

(unaudited)

	Six Months ended September 30
		2005			2004
Operating activities
Net earnings from continuing operations	$	24,912		$	16,931
Items not affecting cash:
Depreciation and amortization		11,843			7,959
Deferred income taxes		(220	)		(727	)
Minority interest share of earnings		8,167			3,304
Other		1,146			257
Changes in operating assets and liabilities		(11,651	)		(13,337	)
Net cash provided by operating activities		34,197			14,387
Investing activities
Acquisitions of businesses, net of cash acquired		(5,461	)		(8,505	)
Purchases of fixed assets, net		(14,989	)		(7,315	)
Other investing activities		(2,290	)		1,093
Net cash used in investing		(22,740	)		(14,727	)
Financing activities
Increase (decrease) in long-term debt		28,623			(457	)
Other financing activities		(1,349	)		445
Net cash provided by (used in) financing		27,274			(12	)
Net cash provided by discontinued operations		-			4,551
Effect of exchange rate changes on cash		3,448			1,514
Increase in cash and cash equivalents during the period		42,179			5,713
Cash and cash equivalents, beginning of period		37,458			15,620
Cash and cash equivalents, end of period	$	79,637		$	21,333

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Segmented Revenues, EBITDA and Operating Earnings

(in thousands of US dollars)

(unaudited)

		Residential Property Management		Commercial Real Estate Services		Integrated Security Services		Property Improve-ment Services		Business Services		Corporate			Consolidated
Three months ended September 30
2005
Revenues	$	91,959	$	103,948	$	35,873	$	40,534	$	43,851	$	6		$	316,171
EBITDA		9,406		7,654		1,758		12,778		7,154		(2,917	)		35,833
Operating  earnings		8,059		6,330		1,100		11,894		5,592		(2,953	)		30,022
2004
Revenues	$	75,479	$	-	$	35,588	$	31,606	$	37,983	$	44		$	180,700
EBITDA		7,446		-		2,686		9,414		4,842		(1,591	)		22,797
Operating  earnings		6,217		-		2,128		8,673		3,323		(1,634	)		18,707

Six months ended September 30
2005
Revenues	$	176,040	$	203,252	$	68,374	$	75,756	$	80,532	$	114		$	604,068
EBITDA		18,036		19,439		3,476		22,313		9,768		(5,242	)		67,790
Operating  earnings		15,392		16,487		2,178		20,600		6,614		(5,324	)		55,947
2004
Revenues	$	143,437	$	-	$	69,713	$	61,125	$	73,403	$	65		$	347,743
EBITDA		14,064		-		5,254		16,946		8,358		(3,552	)		41,070
Operating  earnings		11,753		-		4,142		15,544		5,311		(3,639	)		33,111

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