Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of: August 2023

Commission file number 001-36898

COLLIERS INTERNATIONAL GROUP INC.

(Translation of registrant’s name into English)

1140 Bay Street, Suite 4000

Toronto, Ontario, Canada

M5S 2B4

(Address of principal executive office)

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 [ ]                                           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): [ ]

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): [ ]

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 [ ]                                                        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.

		COLLIERS INTERNATIONAL GROUP INC.



Date: August 4, 2023		/s/ Christian Mayer
		Name: Christian Mayer
		Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit

99.1	Interim consolidated financial statements and management’s discussion & analysis for the three-month and six-month periods ended June 30, 2023.

Exhibit 99.1

Page 2 of 25

Colliers International Group Inc.

Consolidated Statements of Earnings (Loss)

(Unaudited)

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

	Three months						Six months
	ended June 30						ended June 30
	2023			2022			2023			2022
Revenues (note 20)	$	1,078,038		$	1,127,846		$	2,043,941		$	2,128,758
Cost of revenues (exclusive of depreciation and
amortization shown below)		640,650			703,302			1,226,910			1,334,855
Selling, general and administrative expenses		297,382			266,282			578,921			516,994
Depreciation		13,464			11,818			26,113			23,867
Amortization of intangible assets		37,330			32,279			74,173			56,870
Acquisition-related items (note 7)		11,668			9,365			38,136			24,448
Loss on disposal of operations (note 5)		2,282			950			2,282			27,040
Operating earnings		75,262			103,850			97,406			144,684

Interest expense, net		24,670			9,571			47,502			15,889
Earnings from equity accounted investments		(532	)		(906	)		(3,686	)		(4,066	)
Other income		(354	)		(156	)		(520	)		(124	)
Earnings before income tax		51,478			95,341			54,110			132,985
Income tax expense (note 17)		16,477			28,610			20,016			44,937
Net earnings		35,001			66,731			34,094			88,048

Non-controlling interest share of earnings		13,816			11,806			24,757			20,322
Non-controlling interest redemption increment (note 14)		28,036			24,564			36,340			56,005

Net earnings (loss) attributable to Company	$	(6,851	)	$	30,361		$	(27,003	)	$	11,721

Net earnings (loss) per common share (note 15)
Basic	$	(0.15	)	$	0.70		$	(0.61	)	$	0.27
Diluted	$	(0.16	)	$	0.67		$	(0.61	)	$	0.26

The accompanying notes are an integral part of these interim consolidated financial statements.

Page 3 of 25

Colliers International Group Inc.

Consolidated Statements of Comprehensive Earnings (Loss)

(Unaudited)

(in thousands of US dollars)

	Three months						Six months
	ended June 30						ended June 30
	2023			2022			2023			2022
Net earnings	$	35,001		$	66,731		$	34,094		$	88,048
Other comprehensive earnings (loss), net of tax:
Change in foreign currency translation		(2,831	)		(12,829	)		(2,834	)		(14,820	)
Reclassification of accumulated foreign currency translation
on disposal of operations (note 5)		541			36			541			18,272
Unrealized gain on interest rate swaps, net of tax		8,419			460			4,535			924
Pension liability adjustments, net of tax		-			-			(257	)		9
Total other comprehensive earnings (loss), net		6,129			(12,333	)		1,985			4,385
Comprehensive earnings		41,130			54,398			36,079			92,433
Less: Comprehensive earnings attributable to non-controlling interests		42,970			43,557			60,514			85,377
Comprehensive earnings (loss) attributable to Company	$	(1,840	)	$	10,841		$	(24,435	)	$	7,056

The accompanying notes are an integral part of these interim consolidated financial statements.

Page 4 of 25

Colliers International Group Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands of US dollars)

	June 30, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	172,371		$	173,661
Restricted cash		85,207			25,381
Accounts receivable, net of allowance of $26,433 (December 31, 2022 - $25,332)		584,572			577,879
Contract assets (note 20)		84,739			91,924
Warehouse receivables (note 18)		77,443			29,623
Income tax recoverable		26,653			21,970
Prepaid expenses and other current assets		260,837			247,635
Real estate held for sale (note 6)		41,084			45,353
		1,332,906			1,213,426
Other receivables		13,048			12,461
Contract assets (note 20)		16,047			15,755
Other assets		153,210			138,510
Fixed assets		182,944			164,493
Operating lease right-of-use assets		365,198			341,623
Deferred tax assets, net		67,959			63,460
Intangible assets (note 8)		1,138,168			1,159,910
Goodwill		2,028,895			1,988,539
		3,965,469			3,884,751
	$	5,298,375		$	5,098,177
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued expenses	$	531,177		$	503,189
Accrued compensation		477,141			625,565
Income tax payable		11,937			32,282
Contract liabilities (note 20)		45,136			25,616
Long-term debt - current (note 9)		8,960			1,360
Contingent acquisition consideration - current (note 18)		44,455			42,942
Warehouse credit facilities (note 11)		70,009			24,286
Operating lease liabilities		88,659			84,989
Liabilities related to real estate held for sale (note 6)		-			1,353
		1,277,474			1,341,582
Long-term debt (note 9)		1,659,461			1,437,739
Contingent acquisition consideration (note 18)		51,371			48,287
Operating lease liabilities		348,707			322,496
Other liabilities		106,008			91,105
Deferred tax liabilities, net		44,722			57,754
Convertible notes (note 10)		-			226,534
		2,210,269			2,183,915
Redeemable non-controlling interests (note 14)		1,093,696			1,079,306
Shareholders' equity
Common shares		1,092,843			845,680
Contributed surplus		112,707			104,504
Deficit		(418,279	)		(384,199	)
Accumulated other comprehensive loss		(73,720	)		(76,288	)
Total Company shareholders' equity		713,551			489,697
Non-controlling interests		3,385			3,677
Total shareholders' equity		716,936			493,374
	$	5,298,375		$	5,098,177

Commitments and contingencies and subsequent events (note 19 and note 22)

The accompanying notes are an integral part of these interim consolidated financial statements.

Page 5 of 25

Colliers International Group Inc.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands of US dollars, except share information)

Six months ended June 30, 2023
	Common shares										Accumulated
	Issued and										other			Non-			Total
	outstanding				Contributed						comprehensive			controlling			shareholders'
	shares		Amount		surplus			Deficit			loss			interests			equity
Balance, December 31, 2022		42,933,156	$	845,680	$	104,504		$	(384,199	)	$	(76,288	)	$	3,677		$	493,374
Net earnings		-		-		-			34,094			-			-			34,094
Pension liability adjustment,
net of tax		-		-		-			-			(257	)		-			(257	)
Foreign currency translation loss		-		-		-			-			(2,834	)		-			(2,834	)
Unrealized gain on interest rate
swaps, net of tax		-		-		-			-			4,535			-			4,535
Other comprehensive earnings
attributable to NCI		-		-		-			-			583			277			860
NCI share of earnings		-		-		-			(24,757	)		-			1,666			(23,091	)
NCI redemption increment		-		-		-			(36,340	)		-			-			(36,340	)
Distributions to NCI		-		-		-			-			-			(993	)		(993	)
Disposal of businesses, net		-		-		-			-			-			(32	)		(32	)
Reclass to net earnings on disposal
of operations (note 5)		-		-		-			-			541			(1,210	)		(669	)
Subsidiaries’ equity transactions		-		-		1,481			-			-			-			1,481
Subordinate Voting Shares:
Redemption of Convertible
Notes (note 10)		4,015,720		227,101		-			-			-			-			227,101
Stock option expense		-		-		11,213			-			-			-			11,213
Stock options exercised		230,500		20,062		(4,491	)		-			-			-			15,571
Dividends		-		-		-			(7,077	)		-			-			(7,077	)
Balance, June 30, 2023		47,179,376	$	1,092,843	$	112,707		$	(418,279	)	$	(73,720	)	$	3,385		$	716,936

Three months ended June 30, 2023
	Common shares									Accumulated
	Issued and									other			Non-			Total
	outstanding				Contributed					comprehensive			controlling			shareholders'
	shares		Amount		surplus		Deficit			loss			interests			equity
Balance, March 31, 2023		43,163,656	$	865,742	$	106,008	$	(404,351	)	$	(78,731	)	$	4,603		$	493,271
Net earnings		-		-		-		35,001			-			-			35,001
Foreign currency translation loss		-		-		-		-			(2,831	)		-			(2,831	)
Unrealized gain on interest rate
swaps, net of tax		-		-		-		-			8,419			-			8,419
Other comprehensive earnings
attributable to NCI		-		-		-		-			(1,118	)		100			(1,018	)
NCI share of earnings		-		-		-		(13,816	)		-			739			(13,077	)
NCI redemption increment		-		-		-		(28,036	)		-			-			(28,036	)
Distributions to NCI		-		-		-		-			-			(847	)		(847	)
Reclass to net earnings on disposal
of operations (note 5)		-		-		-		-			541			(1,210	)		(669	)
Subsidiaries’ equity transactions		-		-		1,143		-			-			-			1,143
Subordinate Voting Shares:
Redemption of Convertible
Notes (note 10)		4,015,720		227,101		-		-			-			-			227,101
Stock option expense		-		-		5,556		-			-			-			5,556
Dividends		-		-		-		(7,077	)		-			-			(7,077	)
Balance, June 30, 2023		47,179,376	$	1,092,843	$	112,707	$	(418,279	)	$	(73,720	)	$	3,385		$	716,936

Page 6 of 25

Colliers International Group Inc.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands of US dollars, except share information)

Six months ended June 30, 2022
	Common shares												Accumulated
	Issued and												other			Non-			Total
	outstanding						Contributed						comprehensive			controlling			shareholders'
	shares			Amount			surplus			Deficit			loss			interests			equity
Balance, December 31, 2021		44,054,744		$	852,167		$	79,407		$	(279,724	)	$	(70,251	)	$	3,670		$	585,269
Net earnings		-			-			-			88,048			-			-			88,048
Pension liability adjustment,
net of tax		-			-			-			-			9			-			9
Foreign currency translation loss		-			-			-			-			(14,820	)		-			(14,820	)
Unrealized gain on interest rate
swaps, net of tax		-			-			-			-			924			-			924
Other comprehensive earnings
attributable to NCI		-			-			-			-			(9,050	)		23			(9,027	)
NCI share of earnings		-			-			-			(20,322	)		-			1,348			(18,974	)
NCI redemption increment		-			-			-			(56,005	)		-			-			(56,005	)
Distributions to NCI		-			-			-			-			-			(609	)		(609	)
Acquisition of businesses, net		-			-			-			-			-			(267	)		(267	)
Reclass to net earnings on disposal
of operations (note 5)		-			-			(93	)		-			18,272			-			18,179
Subsidiaries’ equity transactions		-			-			8,480			-			-			-			8,480
Subordinate Voting Shares:
Stock option expense		-			-			9,351			-			-			-			9,351
Stock options exercised		221,625			14,341			(3,085	)		-			-			-			11,256
Dividends		-			-			-			(6,490	)		-			-			(6,490	)
Purchased for cancellation		(999,439	)		(19,555	)		-			(106,811	)		-			-			(126,366	)
Balance, June 30, 2022		43,276,930		$	846,953		$	94,060		$	(381,304	)	$	(74,916	)	$	4,165		$	488,958

Three months ended June 30, 2022
	Common shares											Accumulated
	Issued and											other			Non-			Total
	outstanding						Contributed					comprehensive			controlling			shareholders'
	shares			Amount			surplus		Deficit			loss			interests			equity
Balance, March 31, 2022		43,675,830		$	854,760		$	89,507	$	(363,296	)	$	(55,396	)	$	4,331		$	529,906
Net earnings		-			-			-		66,731			-			-			66,731
Foreign currency translation loss		-			-			-		-			(12,829	)		-			(12,829	)
Unrealized gain on interest rate		-			-			-		-			-			-
swaps, net of tax		-			-			-		-			460			-			460
Other comprehensive earnings		-			-			-		-			-			-
attributable to NCI		-			-			-		-			(7,187	)		(139	)		(7,326	)
NCI share of earnings		-			-			-		(11,806	)		-			669			(11,137	)
NCI redemption increment		-			-			-		(24,564	)		-			-			(24,564	)
Distributions to NCI		-			-			-		-			-			(429	)		(429	)
Acquisition of businesses, net		-			-			-		-			-			(267	)		(267	)
Reclass to net earnings on disposal		-			-			-		-			-			-			-
of operations (note 5)		-			-			-		-			36			-			36
Subsidiaries’ equity transactions		-			-			63		-			-			-			63
Subordinate Voting Shares:		-			-			-		-			-			-			-
Stock option expense		-			-			4,490		-			-			-			4,490
Dividends		-			-			-		(6,490	)		-			-			(6,490	)
Purchased for cancellation		(398,900	)		(7,807	)		-		(41,879	)		-			-			(49,686	)
Balance, June 30, 2022		43,276,930		$	846,953		$	94,060	$	(381,304	)	$	(74,916	)	$	4,165		$	488,958

The accompanying notes are an integral part of these interim consolidated financial statements.

Page 7 of 25

Colliers International Group Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of US dollars)

	Three months						Six months
	ended June 30						ended June 30
	2023			2022			2023			2022

Cash provided by (used in)
Operating activities
Net earnings	$	35,001		$	66,731		$	34,094		$	88,048

Items not affecting cash:
Depreciation and amortization		50,794			44,097			100,286			80,737
Loss on disposal of operations (note 5)		2,282			950			2,282			27,040
Gains attributable to mortgage servicing rights		(6,052	)		(2,526	)		(9,087	)		(7,823	)
Gains attributable to the fair value of mortgage
premiums and origination fees		(4,009	)		(4,272	)		(8,026	)		(11,554	)
Deferred tax		(10,915	)		(16	)		(21,904	)		(11,193	)
Earnings from equity accounted investments		(532	)		(906	)		(3,686	)		(4,066	)
Stock option expense (note 16)		5,556			4,490			11,213			9,351
Amortization of advisor loans		8,274			6,548			15,884			12,781
Contingent consideration (note 7)		8,037			8,505			32,249			14,995
Other		9,877			4,205			10,861			7,568
Increase in accounts receivable, prepaid expenses and other assets		(26,970	)		(165,922	)		(56,725	)		(337,927	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(2,654	)		(19,206	)		457			(9,346	)
Increase (decrease) in accrued compensation		26,678			60,535			(153,630	)		(208,235	)
Contingent acquisition consideration paid		(2,719	)		(1,257	)		(2,991	)		(60,810	)
Proceeds received on sale of mortgage loans		504,824			296,613			604,072			666,524
Principal funded on originated mortgage loans		(456,216	)		(200,476	)		(640,724	)		(514,549	)
Increase (decrease) in warehouse credit facilities		(42,323	)		(88,610	)		45,722			(135,704	)
Sales to AR Facility, net (note 12)		40			22,916			6,058			145,853
Net cash provided by (used in) operating activities		98,973			32,399			(33,595	)		(248,310	)

Investing activities
Acquisitions of businesses, net of cash acquired (note 4)		(59,698	)		(328,120	)		(59,698	)		(380,598	)
Purchases of fixed assets		(22,179	)		(13,581	)		(41,062	)		(23,416	)
Advisor loans issued		(14,787	)		(9,460	)		(35,558	)		(22,899	)
Purchase of held for sale real estate assets		(2,580	)		(117,042	)		(40,576	)		(117,042	)
Proceeds from sale of held for sale real estate assets		-			48,505			44,000			48,505
Collections of AR facility deferred purchase price (note 12)		28,539			90,101			59,311			256,429
Other investing activities		6,311			(1,222	)		6,015			(8,748	)
Net cash used in investing activities		(64,394	)		(330,819	)		(67,568	)		(247,769	)

Financing activities
Increase in long-term debt		222,698			479,931			579,782			674,866
Repayment of long-term debt		(175,450	)		(134,255	)		(360,114	)		(137,460	)
Purchases of non-controlling interests' subsidiary shares, net		(3,789	)		(7,595	)		(16,333	)		(33,557	)
Contingent acquisition consideration paid		(547	)		(1,322	)		(1,082	)		(42,211	)
Proceeds received on exercise of stock options		-			42			15,571			11,256
Dividends paid to common shareholders		-			-			(6,440	)		(6,608	)
Distributions paid to non-controlling interests		(40,059	)		(26,628	)		(51,120	)		(41,554	)
Repurchases of Subordinate Voting Shares		-			(53,681	)		-			(126,366	)
Other financing activities		(803	)		(3,049	)		(852	)		(3,098	)
Net cash provided by financing activities		2,050			253,443			159,412			295,268

Effect of exchange rate changes on cash		(1,704	)		(14,167	)		287			(18,006	)

Page 8 of 25

Colliers International Group Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of US dollars)

	Three months					Six months
	ended June 30					ended June 30
	2023		2022			2023		2022

Net change in cash, cash equivalents and restricted cash		34,925		(59,144	)		58,536		(218,817	)
Cash, cash equivalents and restricted cash, beginning of period		222,653		265,598			199,042		425,271
Cash, cash equivalents and restricted cash, end of period	$	257,578	$	206,454		$	257,578	$	206,454

The accompanying notes are an integral part of these interim consolidated financial statements.

Page 9 of 25

Colliers International Group Inc.

Notes to Consolidated Financial Statements

(unaudited)

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

1.	Description of the business

Colliers International Group Inc. (“Colliers” or the “Company”) provides commercial real estate professional services and investment management to corporate and institutional clients in 34 countries around the world (66 countries including affiliates and franchisees). Colliers’ primary service lines are Outsourcing & Advisory, Investment Management (“IM”), Leasing and Capital Markets. Operationally, Colliers is organized into four distinct segments: Americas; Europe, Middle East and Africa (“EMEA”); Asia and Australasia (“Asia Pacific”) and Investment Management.

2.	Summary of presentation

These unaudited Interim Consolidated Financial Statements (the “Financial Statements”) have been prepared by the Company in accordance with disclosure requirements for the presentation of interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America have been condensed or omitted in accordance with such disclosure requirements. These Financial Statements should be read in conjunction with the audited consolidated financial statements of Colliers for the year ended December 31, 2022.

These Financial Statements follow the same accounting policies as the most recent audited consolidated financial statements, except as noted in Note 3. In the opinion of management, the Financial Statements contain all adjustments necessary to a fair statement of the financial position of the Company as at June 30, 2023 and the results of operations and its cash flows for the three and six months ended June 30, 2023 and 2022. All such adjustments are of a normal recurring nature. The results of operations for the six-month period ended June 30, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023.

3.	Impact of recently issued accounting standards

Recently adopted accounting guidance

Contract Assets and Contract Liabilities from Contracts with Customers – Business Combinations

In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Subtopic 805-10: Business Combinations). The ASU requires that recognition and measurement principles of ASC 606 Revenue Recognition be applied for contract assets and contract liabilities acquired in a business combination. The guidance in ASC 805 listing exceptions to recognition principle was amended to include contract assets and contract liabilities. The Company adopted the guidance effective January 1, 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Reference Rate Reform

The FASB has issued three ASUs related to reference rate reform. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. With reference rates like the various tenors of the London Interbank Offered Rates (“LIBOR”) being discontinued between December 31, 2021 and June 30, 2023, a significant volume of contracts and other arrangements will be impacted by the transition required to alternative reference rates. The ASUs provides optional expedients and exceptions to reduce the costs and complexity of applying existing GAAP to contract modifications and hedge accounting if certain criteria are met. The standard is effective for a limited time for all entities through December 31, 2022. In December 2022, FASB issued ASU No. 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, with immediate effect, to defer the sunset date from December 31, 2022 to December 31, 2024, after which the entities will no longer be permitted to apply the relief in Topic 848. The Company has certain debt arrangements which may qualify for use of the practical expedients permitted under the guidance. The Company has evaluated and will continue to evaluate arrangements subject to rate reform and the options under the ASUs to facilitate an orderly transition to alternative reference rates and their potential impacts on its consolidated financial statements and disclosures.

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Recently issued accounting guidance, not yet adopted

Management has reviewed the recently issued accounting guidance and there are no standards that have not yet been adopted that are expected to have a material impact on the Company’s consolidated financial statements.

4.	Acquisitions

2023 Acquisitions

During the six months ended June 30, 2023, the Company acquired controlling interests in three businesses. Two in Asia Pacific, Greenstone Group Ltd., a project management and property advisory firm New Zealand and Craig & Rhodes Pty Limited, an engineering design and survey firm in Australia, and one in the Americas HILGARTWILSON, LLC, an engineering, planning and survey firm in the United States.

As of June 30, 2023, the Company has not completed its analysis to assign fair values to all the identifiable tangible and intangible assets acquired in 2023 and, therefore, the purchase price allocations for these acquired businesses are preliminary and subject to change within the respective measurement period which will not extend beyond one year from the acquisition date. The acquisition date fair value of consideration transferred and the preliminary purchase price allocations are summarized as follows:

	Aggregate
	Acquisitions

Current assets, excluding cash	$	16,241
Non-current assets		6,552
Current liabilities		5,816
Long-term liabilities		9,313
	$	7,664

Cash consideration, net of cash acquired of $7,274	$	59,698
Acquisition date fair value of contingent consideration		1,582
Total purchase consideration	$	61,280

Acquired intangible assets (note 8)
Finite life	$	41,341
Goodwill	$	36,483
Redeemable non-controlling interest (note 14)	$	24,208

The purchase price allocations of acquisitions resulted in the recognition of goodwill. The primary factors contributing to goodwill are future growth prospects, assembled workforces and synergies with existing operations. For acquisitions completed during the six months ended June 30, 2023, goodwill in the amount of $24,921 is deductible for income tax purposes (December 31, 2022 - $483,159).

2022 acquisitions

During the six months ended June 30, 2022, the Company acquired controlling interests in six businesses operating in the Americas, EMEA, and Investment Management. The acquisition date fair value of consideration transferred consisted of $377,150 in cash (net of cash acquired of $73,270).

Contingent acquisition consideration

The Company typically structures its business acquisitions to include contingent consideration. Certain vendors, at the time of acquisition, are entitled to receive a contingent consideration payment if the acquired businesses achieve specified earnings levels during the one- to five-year periods following the dates of acquisition. The ultimate amount of payment is determined based on a formula, the key inputs to which are (i) a contractually agreed maximum payment; (ii) a contractually specified earnings level and (iii) the actual earnings for the contingency period. If the acquired business does not achieve the specified earnings level, the maximum payment is reduced for any shortfall, potentially to nil.

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Unless it contains an element of compensation, contingent consideration is recorded at fair value each reporting period. The fair value recorded on the consolidated balance sheet as at June 30, 2023, was $95,826 (December 31, 2022 - $91,229). See note 18 for discussion on the fair value of contingent consideration. Contingent consideration where the seller is required to remain employed to be entitled to payment is considered to have a compensatory element and is revalued at each reporting period and recognized on a straight-line basis over the term of the contingent consideration arrangement. The liability recorded on the balance sheet for the compensatory element of contingent consideration arrangements as at June 30, 2023, was $88,451 (December 31, 2022 - $61,870). The estimated range of outcomes (undiscounted) for all contingent consideration arrangements, including those with an element of compensation is determined based on the formula price and the likelihood of achieving specified earnings levels over the contingency period, and ranges from $378,455 to a maximum of $436,472. These contingencies will expire during the period extending to December 2027.

5.	Business disposals

In June 2023, the Company exited part of its operations in Peru. In relation to exiting this portion of the Peru operations, $9,739 of assets and $6,788 of liabilities, which largely consisted of working capital, were derecognized from the Company’s consolidated balance sheets. The proceeds received from the disposals were de minimus and in the three and six-month periods ended June 30, 2023 the Company recognized a loss on disposal in the amount of $2,282.

In 2022, the Company discontinued its businesses in Russia, by way of a sale of its controlling interests to local management. The Company also sold four individually insignificant operations (EMEA – Morocco and Americas – Panama, Colombia and Costa Rica). The proceeds received from disposals were de minimus. During the three and six-month periods end June 30, 2022, the Company recognized an aggregated loss on disposal of operations in the amount of $950 and $27,040 respectively.

6.	Real estate held for sale

From time to time, the Company’s Investment Management segment purchases real estate for placement into a fund. This typically occurs in the early stages of fundraising where temporary liquidity is needed to fund investment opportunities that arise prior to the availability of fund capital. The purchased assets are recorded as real estate held for sale prior to the ultimate sale to the identified fund. The transactions are not intended as an alternative source of operating earnings and the arrangements to sell the assets to a fund are generally structured not to generate any gain or loss.

In February 2023, the Company sold the portfolio of real estate held for sale as at December 31, 2022 to a newly established closed-end fund which is managed by the Company, without gain or loss.

In March 2023, the Company acquired controlling interests in two portfolios of land and buildings located in Europe. The Company expects to sell these portfolios, which are classified as held for sale, to a newly established closed-end fund which is managed by the Company, without gain or loss, before the end of 2023.

As is customary for closed-end funds, the Company typically holds an equity interest of between 1% and 2% in these funds. There was no significant impact on net earnings related to real estate held for sale in the three and six months ended June 30, 2023, or 2022.

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The following table summarizes the real estate held for sale:

	June 30,		December 31,
	2023		2022
Real estate held for sale
Real estate held for sale - current	$	41,084	$	45,353
Liabilities related to real estate held for sale - current	$	-	$	1,353
Net real estate held for sale	$	41,084	$	44,000

7.	Acquisition-related items

	Three months ended					Six months ended
	June 30					June 30
	2023		2022			2023		2022
Transaction costs	$	3,631	$	2,737		$	5,887	$	9,452
Contingent consideration fair value adjustments (note 18)		473		(480	)		2,684		4,887
Contingent consideration compensation expense (note 4)		7,564		7,108			29,565		10,109
	$	11,668	$	9,365		$	38,136	$	24,448

8.	Intangible assets

The following table summarizes the gross value, accumulated amortization and net carrying value of the Company’s indefinite life and finite life intangible assets:

	Gross
	carrying		Accumulated
June 30, 2023	amount		amortization		Net
Indefinite life intangible assets:
Licenses	$	29,200	$	-	$	29,200
Trademarks and trade names		23,356		-		23,356
	$	52,556	$	-	$	52,556
Finite life intangible assets:
Customer lists and relationships	$	732,456	$	219,560	$	512,896
Investment management contracts		591,074		154,261		436,813
Mortgage servicing rights ("MSRs")		180,962		74,566		106,396
Trademarks and trade names		27,904		6,253		21,651
Management contracts and other		15,410		11,692		3,718
Backlog		8,794		4,656		4,138
	$	1,556,600	$	470,988	$	1,085,612
	$	1,609,156	$	470,988	$	1,138,168

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	Gross
	carrying		Accumulated
December 31, 2022	amount		amortization		Net
Indefinite life intangible assets:
Licenses	$	29,200	$	-	$	29,200
Trademarks and trade names		23,285		-		23,285
	$	52,485	$	-	$	52,485
Finite life intangible assets:
Customer lists and relationships	$	695,007	$	187,743	$	507,264
Investment management contracts		589,885		126,904		462,981
Mortgage servicing rights ("MSRs")		170,213		65,771		104,442
Trademarks and trade names		27,702		4,389		23,313
Management contracts and other		15,426		10,635		4,791
Backlog		8,299		3,665		4,634
	$	1,506,532	$	399,107	$	1,107,425
	$	1,559,017	$	399,107	$	1,159,910

The MSR assets are evaluated quarterly for impairment by stratifying the servicing portfolio according to predominant risk characteristics, primarily investor type and interest rate. An impairment is recorded if the carrying value of an individual stratum exceeds its estimated fair value. There was no impairment recorded for the six-month period ended June 30, 2023, or 2022.

The following table summarizes activity related to the Company’s mortgage servicing rights for the period ended June 30, 2023:

	2023
Balance, January 1	$	104,442
Additions, following the sale of loan		10,749
Amortization		(7,327	)
Prepayments and write-offs		(1,468	)
Balance, June 30	$	106,396

The following is the estimated future expense for amortization of the recorded MSRs and other intangible assets for each of the next five years and thereafter:

For the year ended December 31,	MSRs		Other Intangibles		Total
2023 (remaining six months)	$	6,809	$	66,813	$	73,622
2024		12,207		111,715		123,922
2025		11,340		101,984		113,324
2026		10,680		98,186		108,866
2027		10,013		92,377		102,390
Thereafter		55,347		508,141		563,488
	$	106,396	$	979,216	$	1,085,612

9.	Long-term debt

On May 27, 2022, the Company amended and extended the multi-currency, sustainability-linked senior unsecured revolving credit facility (the “Revolving Credit Facility”) of $1,500,000. On April 28, 2023, the Company increased the Revolving Credit Facility by $250,000 to $1,750,000 as per the terms of the agreement. The Revolving Credit Facility has a 5-year term ending May 27, 2027, and bears interest at an applicable margin of 1.125% to 2.5% over floating reference rates, depending on financial leverage ratios. The applicable margin may be adjusted, annually, plus or minus 0.05% subject to achieving certain sustainability metrics. The weighted average interest rate on borrowings under the Revolving Credit Facility for the three months ended June 30, 2023 was 6.5% (2022 – 2.4%). The Revolving Credit Facility had $593,350 of available undrawn credit as at June 30, 2023 ($557,594 as at December 31, 2022). As at June 30, 2023, letters of credit in the amount of $12,656 were outstanding against the Revolving Credit Facility ($12,365 as at December 31, 2022). The Revolving Credit Facility requires a commitment fee of 0.11% to 0.35% of the unused portion, depending on financial leverage ratios.

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The Company has outstanding €210,000 of senior unsecured notes with a fixed interest rate of 2.23% (the “Senior Notes due 2028”), which are held by a group of institutional investors. The Senior Notes due 2028 have a 10-year term ending May 30, 2028.

The Company also has outstanding €125,000 and $150,000 of senior unsecured notes with fixed interest rates of 1.52% and 3.02%, respectively (the “Senior Notes due 2031”), which are held by a group of institutional investors. The Senior Notes due 2031 have a 10-year term ending October 7, 2031.

The Revolving Credit Facility, Senior Notes due 2028, and Senior Notes due 2031 rank equally in terms of seniority and have similar financial covenants, including leverage and interest coverage. The Company was in compliance with all covenants as of June 30, 2023. The Company is limited from undertaking certain mergers, acquisitions and dispositions without prior approval.

10.

Convertible notes

On April 4, 2023, the Company issued a notice of redemption to all holders of its 4.0% Convertible Senior Subordinated Notes (the “Convertible Notes”). During the three-month period ended June 30, 2023, $230,000 of Convertible Notes were converted and redeemed into 4,015,720 Subordinate Voting Shares. Accrued and unpaid interest for the period from December 1, 2022 to the redemption date of June 1, 2023 was paid.

Upon the conversion and redemption of Convertible Notes, the unamortized financing cost of $2,899 was settled as part of the Convertible Notes, in exchange for equity.

11.

Warehouse credit facilities

The following table summarizes the Company’s mortgage warehouse credit facilities as at June 30, 2023:

		June 30, 2023				December 31, 2022
	Current	Maximum		Carrying		Maximum		Carrying
	Maturity	Capacity		Value		Capacity		Value
Facility A - SOFR plus 1.40%	October 19, 2023	$	275,000	$	70,009	$	125,000	$	1,924
Facility B - SOFR plus 1.70%	On demand		125,000		-		125,000		7,619
Facility C - SOFR plus 1.60%	N/A		-		-		150,000		14,743
		$	400,000	$	70,009	$	400,000	$	24,286

Colliers Mortgage LLC (“Colliers Mortgage”) has warehouse credit facilities which are used exclusively for the purpose of funding warehouse mortgages receivable. The warehouse credit facilities are recourse only to Colliers Mortgage, are revolving and are secured by any warehouse mortgages financed on the facilities.

On April 17, 2023, the Company terminated Facility C and amended Facility A to increase the borrowing capacity to $275,000 with the right to increase its borrowing capacity up to an additional $150,000. The amendment also modified the interest rate to SOFR plus 1.40% without any change in the maturity.

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12.

AR Facility

In April 2019, the Company entered into a structured accounts receivable facility (the “AR Facility”). Under the AR Facility, certain of the Company's subsidiaries continuously sell trade accounts receivable and contract assets (the “Receivables”) to wholly owned special purpose entities at fair market value. The special purpose entities in turn sell the Receivables to a third-party financial institution (the “Purchaser”).

On October 28, 2022, the Company expanded the committed availability of its AR Facility with two third-party financial institutions to $175,000, from $150,000, with a term extending to October 24, 2024. As of June 30, 2023, the Company’s draw under the AR Facility was $175,000.

All transactions under the AR Facility are accounted for as a true sale in accordance with ASC 860, Transfers and Servicing (“ASC 860”). Following the sale of the Receivables to the Purchaser, the Receivables are legally isolated from the Company and its wholly owned special purpose entities. The AR Facility is recorded as a sale of accounts receivable, and accordingly sold receivables are derecognized from the consolidated balance sheet. The Company continues to service, administer and collect the Receivables on behalf of the Purchaser, and recognizes a servicing liability in accordance with ASC 860. The Company has elected the amortization method for subsequent measurement of the servicing liability, which is assessed for changes in the obligation at each reporting date. As of June 30, 2023, the servicing liability was nil.

Under the AR Facility, the Company receives a cash payment and a deferred purchase price (“Deferred Purchase Price” or “DPP”) for sold Receivables. The DPP is paid to the Company in cash on behalf of the Purchaser as the Receivables are collected; however, due to the revolving nature of the AR Facility, cash collected from the Company's customers is reinvested by the Purchaser monthly in new Receivable purchases under the AR Facility. As at June 30, 2023, the DPP was $101,761 (December 31, 2022 - $92,278) and was included in Prepaid expenses and other current assets on the Consolidated Balance Sheets. For the six months ending June 30, 2023, Receivables sold under the AR Facility were $817,734 and cash collections from customers on Receivables sold were $801,405, all of which were reinvested in new Receivables purchases and are included in cash flows from operating activities in the consolidated statement of cash flows. As of June 30, 2023, the outstanding principal on trade accounts receivable, net of expected credit losses, sold under the AR Facility was $173,937; and the outstanding principal on contract assets, current and non-current, sold under the AR Facility was $129,047. See note 18 for fair value information on the DPP.

For the six months ended June 30, 2023, the Company recognized a gain related to Receivables sold of $108 (2022 - $108 loss) that was recorded in other expense in the consolidated statement of earnings. Based on the Company’s collection history, the fair value of the Receivables sold subsequent to the initial sale approximates carrying value.

The non-cash investing activities associated with the DPP for the six months ended June 30, 2023, were $68,218.

13.

Variable interest entities

The Company holds variable interests in certain Variable Interest Entities (“VIE”) in its Investment Management segment which are not consolidated as it was determined that the Company is not the primary beneficiary. The Company’s involvement with these entities is in the form of advisory fee arrangements and equity co-investments (typically 1%-2%). Equity co-investments are included in Other non-current assets on the Consolidated Balance Sheets.

The following table provides the maximum exposure to loss related to these non-consolidated VIEs:

	June 30,		December 31,
	2023		2022
Equity accounted investments	$	26,887	$	22,361
Co-investment commitments		44,867		18,588
Maximum exposure to loss	$	71,754	$	40,949

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14.

Redeemable non-controlling interests

The minority equity positions in the Company’s subsidiaries are referred to as redeemable non-controlling interests (“RNCI”). The RNCI are considered to be redeemable securities. Accordingly, the RNCI is recorded at the greater of (i) the redemption amount or (ii) the amount initially recorded as RNCI at the date of inception of the minority equity position. This amount is recorded in the “mezzanine” section of the balance sheet, outside of shareholders’ equity. Changes in the RNCI amount are recognized immediately as they occur. The following table provides a reconciliation of the beginning and ending RNCI amounts:

	2023
Balance, January 1	$	1,079,306
RNCI share of earnings		23,091
RNCI redemption increment		36,340
Distributions paid to RNCI		(51,736	)
Purchase of interests from RNCI		(19,510	)
Sale of interests to RNCI		1,997
RNCI recognized on business acquisitions (note 4)		24,208
Balance, June 30	$	1,093,696

The Company has shareholders’ agreements in place at each of its non-wholly owned subsidiaries. These agreements allow the Company to “call” the RNCI at a price determined with the use of a formula price, which is usually equal to a fixed multiple of average annual net earnings before income taxes, interest, depreciation, and amortization. The agreements also have redemption features which allow the owners of the RNCI to “put” their equity to the Company at the same price subject to certain limitations. The formula price is referred to as the redemption amount and may be paid in cash or in Subordinate Voting Shares. The redemption amount as of June 30, 2023, was $1,007,602 (December 31, 2022 - $1,027,124). The redemption amount is lower than that recorded on the balance sheet as the formula price of certain RNCI are lower than the amount initially recorded at the inception of the minority equity position. If all put or call options were settled with Subordinate Voting Shares as at June 30, 2023, approximately 10,400,000 such shares would be issued.

Increases or decreases to the formula price of the underlying shares are recognized in the statement of earnings as the NCI redemption increment.

15.

Net earnings (loss) per common share

The earnings per share calculation cannot be anti-dilutive. The impact of stock options would be anti-dilutive when the numerator is in a loss position. Consequently, the stock options would be anti-dilutive for the three and six-month periods ended June 30, 2023.

Diluted EPS is calculated using the “if-converted” method of calculating earnings per share in relation to the Convertible Notes. The Convertible Notes were issued on May 19, 2020 and were fully converted or redeemed by June 1, 2023. (See note 10) The “if-converted” method is used if the impact of the assumed conversion is dilutive. When dilutive, the interest charges (net of income tax) recorded in relation to the Convertible Notes prior to conversion or redemption is adjusted from the numerator and the additional shares issuable on conversion of the Convertible Notes for the portion of the period while they were outstanding are added to the denominator of the earnings per share calculation.

The “if-converted” method is dilutive for the three-month period ended June 30, 2023 and for the three-month period ended June 30, 2022. The “if-converted” method is anti-dilutive for the six-month period ended June 30, 2023 and for the six-month period ended June 30, 2022.

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The following table reconciles the basic and diluted common shares outstanding:

	Three months ended					Six months ended
	June 30					June 30
(in thousands)	2023			2022		2023			2022
Net earnings (loss) attributable to Company	$	(6,851	)	$	30,361	$	(27,003	)	$	11,721
After-tax interest on Convertible Notes		(476	)		1,691		-			-
Adjusted numerator considering the If-Converted Method	$	(7,327	)	$	32,052	$	(27,003	)	$	11,721

Weighted average common shares - Basic		45,069			43,336		44,064			43,698
Exercise of stock options		-			494		-			630
Conversion of Convertible Notes		293			3,974		-			-
Weighted average common shares - Diluted		45,362			47,804		44,064			44,328

16.

Stock-based compensation

The Company has a stock option plan for certain officers, key full-time employees and directors of the Company and its subsidiaries. Options are granted at the market price for the underlying shares on the day immediately prior to the date of grant. Each option vests over a four-year term, expires five years from the date granted and allows for the purchase of one Subordinate Voting Share. All Subordinate Voting Shares issued are new shares. As at June 30, 2023, there were 883,550 options available for future grants.

Grants under the Company’s stock option plan are equity-classified awards.

There were 23,750 stock options granted during the six months ended June 30, 2023 (2022 - 28,750). Stock option activity for the six months ended June 30, 2023 was as follows:

						Weighted average
				Weighted		remaining		Aggregate
	Number of			average		contractual life		intrinsic
	options			exercise price		(years)		value
Shares issuable under options -
December 31, 2022		3,053,000		$	94.30
Granted		23,750			99.18
Exercised		(230,500	)		67.55
Forfeited		(15,250	)		123.91
Shares issuable under options -
June 30, 2023		2,831,000		$	96.36		2.9	$	32,073
Options exercisable - June 30, 2023		1,182,158		$	84.83		1.9	$	22,446

The amount of compensation expense recorded in the statement of earnings for the three and six months ended June 30, 2023 was $5,556 and $11,213, respectively (2022 - $4,490 and $9,351). As of June 30, 2023, there was $31,215 of unrecognized compensation cost related to non-vested awards which is expected to be recognized over the next 4 years. During the six-month period ended June 30, 2023, the fair value of options vested was $3,067 (2022 - $4,461).

17.

Income tax

The provision for income tax for the six months ended June 30, 2023, reflected an effective tax rate of 37.0% (2022 - 33.8%) relative to the combined statutory rate of approximately 26.5% (2022 - 26.5%). The current year’s rate was impacted by the amortization of intangible assets and contingent acquisition consideration associated with an investment in a UK flowthrough entity, on which no tax benefit was recognizable.

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18.

Financial instruments

Fair values of financial instruments

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2023:

	Level 1		Level 2		Level 3
Assets
Cash equivalents	$	4,518	$	-	$	-
Equity securities		8,018		5		-
Debt securities		-		18,582		-
Mortgage derivative assets		-		-		17,023
Warehouse receivables		-		77,443		-
Interest rate swap assets		-		12,286		-
Deferred Purchase Price on AR Facility		-		-		101,761
Total assets	$	12,536	$	108,316	$	118,784

Liabilities
Mortgage derivative liabilities	$	-	$	-	$	12,737
Contingent consideration liabilities		-		-		95,826
Total liabilities	$	-	$	-	$	108,563

Other than the assets and liabilities acquired in relation to business combinations (see note 4), there were no significant non-recurring fair value measurements recorded during the six months ended June 30, 2023.

Cash equivalents

Cash equivalents include highly liquid investments with original maturities of less than three months. Actively traded cash equivalents where a quoted price is readily available are classified as Level 1 in the fair value hierarchy.

Debt and equity securities

The Company records debt and equity securities at fair value on the Consolidated Balance Sheets. These financial instruments are valued based on observable market data that may include quoted market prices dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instruments’ terms and conditions and are classified as Level 2 of the fair value hierarchy.

Certain investments in equity securities where quoted prices are readily available are classified as Level 1 in the fair value hierarchy. The Company increases or decreases its investment each reporting period by the change in the fair value of the investment reported in net earnings on the Consolidated Statements of Earnings.

Mortgage-related derivatives

Interest rate lock commitments and forward sale commitments are derivative instruments which use a discounted cash flow model and consider observable market data in determining their fair values, particularly changes in interest rates. In the case of interest rate lock commitments, the fair value measurement also considers the expected net cash flows associated with the servicing of the loans. The Company also considers the impact of unobservable inputs related to counterparty non-performance risk when measuring the fair value of these derivatives. Therefore, these mortgage-related derivatives are categorized as Level 3.

Given the credit quality of the Company’s counterparties, the short duration of interest rate lock commitments and forward sale commitments and the Company’s historical experience, management does not believe the risk of non-performance is significant. An increase in counterparty non-performance risk assumptions would result in a lower fair value measurement.

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Changes in the fair value of the net mortgage derivative assets and liabilities comprises the following:

	2023
Balance, January 1	$	6,949
Settlements		(27,997	)
Realized gains recorded in earnings		13,882
Unrealized gains recorded in earnings		11,452
Balance, June 30	$	4,286

Warehouse receivables

Warehouse receivables represent mortgage loans originated by the Company with commitments to sell to third party investors. Principal funded on mortgage loans plus gains attributable to the fair value of mortgage premiums and origination fees increase warehouse receivables and proceeds received from the sale of mortgage loans to third party investors reduce warehouse receivables. As at June 30, 2023, all warehouse facility liabilities are supported by mortgage warehouse receivables which are under commitment to be purchased by a qualifying investor. These assets are classified as Level 2 in the fair value hierarchy as a substantial majority of the inputs are readily observable.

AR Facility deferred purchase price (“DPP”)

The Company recorded a DPP under its AR Facility. The DPP represents the difference between the fair value of the Receivables sold and the cash purchase price and is recognized at fair value as part of the sale transaction. The DPP is remeasured each reporting period in order to account for activity during the period, including the seller’s interest in any newly transferred Receivables, collections on previously transferred Receivables attributable to the DPP and changes in estimates for credit losses. Changes in the DPP attributed to changes in estimates for credit losses are expected to be immaterial, as the underlying Receivables are short-term and of high credit quality. The DPP is valued using Level 3 inputs, primarily discounted cash flows, with the significant inputs being discount rates ranging from 2.5% to 5.0% depending upon the aging of the Receivables. See note 12 for information on the AR Facility.

Changes in the fair value of the DPP comprises the following:

	2023
Balance, January 1	$	92,278
Additions to DPP		68,218
Collections on DPP		(59,311	)
Fair value adjustment		108
Foreign exchange and other		468
Balance, June 30	$	101,761

Interest rate swaps

The Company has entered into interest rate swap agreements (“IRS”) to convert floating interest on US dollar denominated debt to fixed interest rates. The interest rate swaps are measured at fair value on the consolidated balance sheets. The table below summarizes the details of the interest rate swaps in place as at June 30, 2023.

Effective

Maturity

Notional Amount

Interest rates

Date

of US dollar debt

Floating

Fixed

2018 IRS¹

December 7, 2018

N/A²

100,000

SOFR

2.6026

2022 IRS A

July 15, 2022

May 27, 2027

150,000

SOFR

2.8020

2022 IRS B

December 21, 2022

May 27, 2027

250,000

SOFR

3.5920

2023 IRS

April 28, 2023

May 27, 2027

100,000

SOFR

3.7250

(1) In May 2022, the Company amended the 2018 IRS to convert SOFR floating interest rates into a weighted average fixed interest rate of 2.6026%. Previously it was converting from LIBOR floating interest rate into a fixed interest rate of 2.7205%.

(2) The 2018 IRS matured on April 30, 2023.

2022 IRS A, 2022 IRS B and 2023 IRS (collectively the “Designated IRSs”) are being accounted for as cash flow hedges and are measured at fair value on the consolidated balance sheets. Gains or losses on the Designated IRSs, which are determined to be effective as hedges, are reported in accumulated other comprehensive income (“AOCI”).

Page 20 of 25

In the three months and six months ended June 30, 2023, $207 and $825 of the AOCI, respectively, was included in interest expense on the consolidated statements of earnings (2022 - $626 and $1,245) associated with the 2018 IRS where the hedging relationship was dedesignated on July 1, 2021.

Contingent acquisition consideration

The inputs to the measurement of the fair value of contingent consideration related to acquisitions are Level 3 inputs. The fair value measurements were made using a discounted cash flow model; significant model inputs were expected future operating cash flows (determined with reference to each specific acquired business) and discount rates (which range from 2.1% to 9.6%, with a weighted average of 5.5%). The wide range of discount rates is attributable to the level of risk related to economic growth factors combined with the length of the contingent payment periods; and the dispersion was driven by unique characteristics of the businesses acquired and the respective terms for these contingent payments. A 2% increase in the weighted average discount rate would reduce the fair value of contingent consideration by $2,300. See note 4 for discussion on contingent acquisition consideration.

Changes in the fair value of the contingent consideration liability comprises the following:

	2023
Balance, January 1	$	91,229
Amounts recognized on acquisitions		1,582
Fair value adjustments (note 7)		2,684
Resolved and settled in cash		(1,082	)
Other		1,413
Balance, June 30	$	95,826

Less: current portion	$	44,455
Non-current portion	$	51,371

The carrying amounts for cash, restricted cash, accounts receivable, accounts payable, advisor loans, other receivables and accrued liabilities approximate their estimated fair values due to the short-term nature of these instruments, unless otherwise indicated. The carrying value of the Company’s Revolving Credit Facility and other short-term borrowings approximate their estimated fair value due to their short-term nature and variable interest rate terms. These fair value measurements use a net present value approach; significant model inputs were expected future cash outflows and discount rates which are Level 3 inputs within the fair value hierarchy.

The carrying amount and the estimated fair value of Senior Notes and Convertible Notes are presented in the table below. Interest rate yield curves, interest rate indices and market prices (Level 2 inputs within the fair value hierarchy) are used in determining the fair value of the Senior Notes and Convertible Notes.

	June 30, 2023				December 31, 2022
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
Senior Notes	$	514,127	$	420,777	$	506,533	$	414,195
Convertible Notes (note 10)		-		-		226,534		366,183

19.

Commitments and Contingencies

Claims and Litigation

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 accrued, will not have a material impact on the Company’s financial condition or the results of operations.

Contingencies associated with US government sponsored enterprises

Colliers Mortgage is a lender in the Fannie Mae Delegated Underwriting & Servicing Program (the “DUS Program”). Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in note 18, the Company accounts for these commitments as derivatives recorded at fair value.

Page 21 of 25

Colliers Mortgage is obligated to share in losses, if any, related to mortgages originated under the DUS Program. These obligations expose the Company to credit risk on mortgage loans for which the Company is providing underwriting, servicing, or other services under the DUS Program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios, and typically, the Company is subject to sharing up to one-third of incurred losses on loans originated under the DUS Program. As of June 30, 2023, the Company has funded and sold loans subject to such loss sharing obligations with an aggregate unpaid principal balance of approximately $4,852,000. As at June 30, 2023, the loss reserve was $13,731 (December 31, 2022 - $14,470) and was included within Other liabilities on the Consolidated Balance Sheets.

Pursuant to its licenses with Fannie Mae, Ginnie Mae and HUD, Colliers Mortgage is required to maintain certain standards for capital adequacy which include minimum net worth and liquidity requirements. If it is determined at any time that Colliers Mortgage fails to maintain appropriate capital adequacy, the licensor reserves the right to terminate the Company’s servicing authority for all or some of the portfolio. At June 30, 2023, Colliers Mortgage was in compliance with all such requirements.

Page 22 of 25

20.

Revenue

Disaggregated revenue

Colliers has disaggregated its revenue from contracts with customers by type of service and operating segment as presented in the following table.

OPERATING SEGMENT REVENUES
						Asia		Investment
		Americas		EMEA		Pacific		Management		Corporate		Consolidated

Three months ended June 30,

2023
Leasing	$	194,246	$	30,333	$	32,105	$	-	$	-	$	256,684
Capital Markets		125,390		23,436		34,090		-		-		182,916
E&D and Project management		165,652		63,406		29,211		-		-		258,269
Property management		78,505		20,954		28,602		-		-		128,061
Valuation and advisory		44,135		34,451		27,106		-		-		105,692
IM - Advisory and other		-		-		-		118,860		-		118,860
IM - Incentive Fees		-		-		-		-		-		-
Other		23,404		1,238		2,801		-		113		27,556
Total Revenue	$	631,332	$	173,818	$	153,915	$	118,860	$	113	$	1,078,038

2022
Leasing	$	214,507	$	35,593	$	27,296	$	-	$	-	$	277,396
Capital Markets		224,176		38,189		37,093		-		-		299,458
E&D and Project management		133,492		44,773		15,420		-		-		193,685
Property management		73,013		16,849		35,721		-		-		125,583
Valuation and advisory		71,647		32,685		22,777		-		-		127,109
IM - Advisory and other		-		-		-		73,227		-		73,227
IM - Incentive Fees		-		-		-		1,900		-		1,900
Other		23,876		1,182		4,297		21		112		29,488
Total Revenue	$	740,711	$	169,271	$	142,604	$	75,148	$	112	$	1,127,846

Six months ended June 30,

2023
Leasing	$	382,666	$	55,969	$	56,436	$	-	$	-	$	495,071
Capital Markets		238,182		41,749		54,825		-		-		334,756
E&D and Project management		306,270		112,986		53,655		-		-		472,911
Property management		157,873		39,720		56,789		-		-		254,382
Valuation and advisory		85,483		63,875		46,556		-		-		195,914
IM - Advisory and other		-		-		-		239,606		-		239,606
IM - Incentive Fees		-		-		-		-		-		-
Other		42,409		2,890		5,747		-		255		51,301
Total Revenue	$	1,212,883	$	317,189	$	274,008	$	239,606	$	255	$	2,043,941

2022
Leasing	$	403,195	$	65,910	$	45,563	$	-	$	-	$	514,668
Capital Markets		416,242		79,073		66,861		-		-		562,176
E&D and Project management		252,169		81,338		32,506		-		-		366,013
Property management		143,290		33,837		67,538		-		-		244,665
Valuation and advisory		124,140		60,156		42,816		-		-		227,112
IM - Advisory and other		-		-		-		134,874		-		134,874
IM - Incentive Fees		-		-		-		26,630		-		26,630
Other		43,373		2,282		6,700		21		244		52,620
Total Revenue	$	1,382,409	$	322,596	$	261,984	$	161,525	$	244	$	2,128,758

Page 23 of 25

Revenue associated with the Company’s debt finance and loan servicing operations are outside the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”). In the three months and six months ended June 30, 2023, $11,696 and $21,489 of Capital Markets revenue (2022 - $9,738 and $26,596) and $10,870 and $21,729 of Other Revenue (2022 - $15,424 and $27,877) respectively, was excluded from the scope of ASC 606. Substantially all of these revenues were included within the Americas segment.

Contract balances

As at June 30, 2023, the Company had contract assets totaling $100,786 of which $84,739 was current ($107,679 as at December 31, 2022 - of which $91,924 was current). During the six months ended June 30, 2023, approximately 72% of the current contract assets were moved to accounts receivable or sold under the AR Facility (Note 12).

As at June 30, 2023, the Company had contract liabilities (all current) totaling $45,136 ($25,616 as at December 31, 2022). $1,220 and $18,572 of the contract liability balance at the beginning of the year was recognized to revenue in the three and six months ended June 30, 2023, respectively (2022 - $5,469 and $26,555).

Certain constrained revenues may arise from services that began in a prior reporting period. Consequently, a portion of the revenues the Company recognizes in the current period may be partially related to the services performed in prior periods. Typically, less than 5% of Leasing and Capital Markets revenue recognized in a period had previously been constrained and substantially all investment management incentive fees recognized in the period were previously constrained.

21.

Segmented information

Operating segments

Colliers has identified four reportable operating segments. Three segments are grouped geographically into Americas, Asia Pacific and EMEA. The Investment Management segment operates in the Americas and EMEA. The groupings are based on the manner in which the segments are managed. Management assesses each segment’s performance based on operating earnings or operating earnings before depreciation and amortization. Corporate includes the unallocated costs of global administrative functions and the corporate head office. Operating earnings (loss) for the three and six month periods ended June 30, 2023, include losses on disposal of the Company’s operations of $1,282. (2022 - $950 and 27,040, respectively). The losses on disposal in 2023 are all in the Americas and substantially all of the losses in 2022 were in EMEA (see note 5).

OPERATING SEGMENTS
						Asia		Investment
	Americas		EMEA			Pacific		Mgmt		Corporate			Consolidated

Three months ended June 30

2023
Revenues	$	631,332	$	173,818		$	153,915	$	118,860	$	113		$	1,078,038
Depreciation and amortization		21,293		8,269			2,771		17,813		648			50,794
Operating earnings (loss)		46,450		(5,053	)		19,554		26,407		(12,096	)		75,262

2022
Revenues	$	740,711	$	169,271		$	142,604	$	75,148	$	112		$	1,127,846
Depreciation and amortization		23,860		8,098			2,008		9,377		754			44,097
Operating earnings (loss)		81,108		4,209			17,558		19,150		(18,175	)		103,850

Page 24 of 25

						Asia		Investment
	Americas		EMEA			Pacific		Mgmt		Corporate			Consolidated

Six months ended June 30

2023
Revenues	$	1,212,883	$	317,189		$	274,008	$	239,606	$	255		$	2,043,941
Depreciation and amortization		39,762		17,776			5,781		35,689		1,278			100,286
Operating earnings (loss)		79,321		(30,087	)		24,593		41,211		(17,632	)		97,406

2022
Revenues	$	1,382,409	$	322,596		$	261,984	$	161,525	$	244		$	2,128,758
Depreciation and amortization		45,676		13,462			3,856		16,185		1,558			80,737
Operating earnings (loss)		142,415		(26,572	)		25,783		36,371		(33,313	)		144,684

Geographic information

Revenues in each geographic region are reported by customer locations except for Investment Management where revenues are reported by the location of the fund management.

GEOGRAPHIC INFORMATION
	Three months ended				Six months ended
	June 30				June 30
	2023		2022		2023		2022
United States
Revenues	$	589,427	$	657,748	$	1,157,642	$	1,250,460
Total long-lived assets						2,328,498		1,486,352

Canada
Revenues	$	111,626	$	127,010	$	207,542	$	246,269
Total long-lived assets						78,730		79,933

Euro currency countries
Revenues	$	98,033	$	105,192	$	184,428	$	187,962
Total long-lived assets						370,821		360,912

Australia
Revenues	$	75,062	$	67,741	$	127,662	$	115,472
Total long-lived assets						114,890		65,913

United Kingdom
Revenues	$	61,821	$	48,231	$	116,332	$	85,210
Total long-lived assets						527,512		515,257

China
Revenues	$	18,867	$	24,126	$	39,107	$	45,540
Total long-lived assets						9,113		7,782

Other
Revenues	$	123,202	$	97,798	$	211,228	$	197,845
Total long-lived assets						285,641		143,495

Consolidated
Revenues	$	1,078,038	$	1,127,846	$	2,043,941	$	2,128,758
Total long-lived assets						3,715,205		2,659,644

Page 25 of 25

22.

Subsequent events

Normal Course Issuer Bid

On July 17, 2023, the Company announced the approval by the Toronto Stock Exchange of its notice to implement a normal course issuer bid (the “2023/2024 NCIB”). The 2023/2024 NCIB allows the Company to purchase for cancellation, up to 4,000,000 Subordinate Voting Shares. The 2023/2024 NCIB period commenced on July 20, 2023 and is set to expire on July 19, 2024.

Page 2 of 16

COLLIERS INTERNATIONAL GROUP INC.

Management’s discussion and analysis

For the six months ended June 30, 2023

(in US dollars)

August 4, 2023

The following management’s discussion and analysis (“MD&A”) should be read together with the unaudited consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of Colliers International Group Inc. (“we,” “us,” “our,” the “Company” or “Colliers”) for the three and six months ended June 30, 2023 and the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2022. The 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 six months ended June 30, 2023 and up to and including August 4, 2023.

Additional information about the Company can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

This MD&A includes references to “local currency revenue growth rate”, “internal revenue growth rate”, “adjusted EBITDA”, “adjusted EPS”, “free cash flow” and “assets under management (“AUM”)”, which are financial measures that are not calculated in accordance with GAAP. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures, see “Reconciliation of non-GAAP financial measures”.

Consolidated review

Our consolidated revenues for the three months ended June 30, 2023 were $1.08 billion, a decrease of 4% versus the prior year quarter (4% in local currency). Capital Markets and, to a lesser extent, Leasing revenues declined consistent with overall market conditions and relative to record performance in the prior year, partly offset by robust growth in Investment Management and Outsourcing & Advisory revenues. The GAAP diluted net loss per share was $0.16 as compared to diluted net earnings of $0.67 in the prior year quarter. Adjusted earnings per share, which exclude acquisition-related costs, non-controlling interest redemption increment, loss on disposal of operations and amortization of intangible assets (see “Reconciliation of non-GAAP financial measures” below) were $1.31 relative to $1.84 in the prior year quarter. The decrease was attributable to (i) lower revenues; (ii) higher interest expense from increased debt levels resulting from 2022 acquisition activity and higher interest rates as well as (iii) higher non-controlling interest share of earnings of acquired businesses. GAAP diluted net earnings per share and adjusted net earnings per share for the three months ended June 30, 2023 were impacted approximately $0.01 and $0.01, respectively, from changes in foreign exchange rates.

In April 2023, the Company acquired Greenstone Group Limited, a project management and property advisory firm in New Zealand. The business rebranded as “Colliers Project Leaders” and will integrate into our New Zealand operations.

In May 2023, the Company acquired Craig & Rhodes Pty Limited, a multi-discipline engineering, design and survey firm in Australia. The business rebranded as “Colliers Engineering & Design” and will integrate into our existing operations in Australia.

In May 2023, the Company also acquired HILGARTWILSON, LLC, an Arizona-based engineering, planning and survey firm in the US. The business will rebrand and be integrated into our Colliers Engineering & Design operations.

For the three months ended June 30, 2023, local currency revenue declined by 4%. Investment Management and Outsourcing & Advisory were up strongly. Capital Markets and Leasing declined consistent with overall market conditions.

Page 3 of 16

	Three months ended				Change			Change			Six months ended				Change			Change
(in thousands of US$)	June 30				in US$			in LC			June 30				in US$			in LC
(LC = local currency)	2023		2022		%			%			2023		2022		%			%

Outsourcing & Advisory	$	519,578	$	475,865		9	%		10	%	$	974,508	$	890,410		9	%		11	%
Investment Management ⁽¹⁾		118,860		75,127		58	%		58	%		239,606		161,504		48	%		48	%
Leasing		256,684		277,396		-7	%		-7	%		495,071		514,668		-4	%		-2	%
Capital Markets		182,916		299,458		-39	%		-38	%		334,756		562,176		-40	%		-39	%
Total revenues	$	1,078,038	$	1,127,846		-4	%		-4	%	$	2,043,941	$	2,128,758		-4	%		-3	%

^{(1) Investment Management local currency revenues, excluding pass-through carried interest, were up 62% and 78% for the three and six months ended June 30, 2023, respectively.}

Results of operations – three months ended June 30, 2023

For the three months ended June 30, 2023, revenues were $1.08 billion, 4% lower than the comparable prior year quarter (4% in local currency). Investment Management and Outsourcing & Advisory generated robust growth, while Capital Markets and, to a lesser extent, Leasing declined consistent overall market conditions and relative to record performance in the prior year quarter. Internally generated revenues declined 10% while acquisitions contributed 6% to local currency revenue growth.

Operating earnings for the second quarter were $75.3 million versus $103.9 million in the prior year quarter. The operating earnings margin was 7.0% as compared to 9.2% in the prior year quarter. The margin decline was attributable to a (i) change in service mix and (ii) an $11.7 million gain on termination of lease in the prior year quarter. Adjusted EBITDA (see “Reconciliation of non-GAAP financial measures” below) was $147.1 million, down 9% versus $161.3 million reported in the prior year quarter. The Adjusted EBITDA margin was 13.6% in the quarter as compared to 14.3% in the prior year quarter.

Depreciation expense was $13.5 million relative to $11.8 million in the prior year quarter with the increase attributable to increased investments in office leaseholds and the impact of recent business acquisitions.

Amortization expense was $37.3 million, versus $32.3 million recorded in the prior year quarter with the increase attributable mainly to intangible assets acquired with recent business acquisitions.

Net interest expense was $24.7 million, versus $9.6 million recorded in the prior year quarter. The increase in interest expense was attributable to higher usage of the Revolving Credit Facility and higher reference rates relative to the prior year quarter on our floating rate debt. The average interest rate on debt during the period was 4.6%, relative to 3.3% in the prior year quarter.

Consolidated income tax expense for the quarter was $16.5 million, relative to $28.6 million in the prior year quarter. The current quarter’s effective tax rate of 32.0% versus 30.0% in the prior year quarter. The current period tax rate was impacted by the outside basis difference in an investment in the United Kingdom on which a deferred tax benefit could not be recognized.

Net earnings for the quarter were $35.0 million versus $66.7 million in the prior year quarter.

Revenues in the Americas region totalled $631.3 million down 15% (14% in local currency) versus $740.7 million in the prior year quarter. The decline was attributable to lower Capital Markets activity and, to a lesser extent, Leasing relative to a record prior year quarter. Outsourcing & Advisory revenues were up, led by Engineering & Design and Project Management. Adjusted EBITDA was $69.6 million, down 31% (31% in local currency) relative to the prior year quarter, which was favourably impacted by an $11.7 million gain on the termination of a lease. GAAP operating earnings were $46.5 million, relative to $81.1 million in the prior year quarter.

Revenues in the EMEA region totalled $173.8 million, up 3% (1% in local currency) compared to $169.3 million in the prior year quarter on higher Outsourcing & Advisory revenues (including recent acquisitions), while Capital Markets and Leasing declined, consistent with market conditions in the region. Adjusted EBITDA was $6.3 million compared to $14.4 million in the prior year quarter, attributable to the reduction in higher-margin transactional revenues. The GAAP operating loss was $5.1 million compared to earnings of $4.2 million in the prior year quarter.

Page 4 of 16

Revenues in the Asia Pacific region totalled $153.9 million compared to $142.6 million in the prior year quarter, up 8% (14% in local currency), with growth in Leasing and Outsourcing & Advisory (including recent acquisitions) more than offsetting a modest decline in Capital Markets. Foreign exchange impacted revenues by 6%. Adjusted EBITDA was $23.0 million, up 18% (24% in local currency) primarily on changes in service mix. GAAP operating earnings were $19.6 million, versus $17.6 million in the prior year quarter.

Investment Management revenues were $118.9 million compared to $75.1 million in the prior year quarter, up 58% (58% in local currency). Passthrough revenue (from historical carried interest) was nil versus $1.9 million in the prior year quarter. Excluding the impact of carried interest, revenue was up 62% (62% in local currency) driven by both acquisitions and management fee growth from increased assets under management (“AUM”). Adjusted EBITDA was $50.0 million, up 71% (71% in local currency) over the prior year quarter. GAAP operating earnings were $26.4 million in the quarter, versus $19.2 million in the prior year quarter. AUM were $99.0 billion as of June 30, 2023 compared to $97.7 billion as of December 31, 2022.

Unallocated global corporate costs as reported in Adjusted EBITDA were $1.9 million in the second quarter, relative to $3.4 million in the prior year quarter. The corporate GAAP operating loss for the quarter was $12.1 million relative to $18.2 million in the second quarter of 2022.

Results of operations – six months ended June 30, 2023

For the six months ended June 30, 2023, revenues were $2.04 billion, down 4% compared to the prior year (3% in local currency). Internally generated revenues were down 10% on significantly lower Capital Markets activity, consistent with overall market conditions. Investment Management and Outsourcing & Advisory delivered solid growth. Acquisitions contributed 7% to local currency revenue growth versus the prior year period.

Operating earnings for the six months ended June 30, 2023 were $97.4 million relative to $144.7 million in the prior year period. The operating earnings margin was 4.8% versus 6.8% in the prior year period. The decrease in margin was attributable to (i) service mix, which was impacted by a lower proportion of higher-margin Capital Markets revenues; and (ii) an $11.7 million gain on termination of a lease in the Americas in the prior year period. Adjusted EBITDA (see “Reconciliation of non-GAAP financial measures” below) was $251.7 million, down 11% versus $282.8 million in the prior year period. The Adjusted EBITDA margin was 12.3% compared to 13.3% in the prior year period.

Depreciation expense was $26.1 million relative to $23.9 million in the prior year period, with the increase attributable to the impact of recent acquisitions and increased investments in office leaseholds.

Amortization expense was $74.2 million relative to $56.9 million in the prior year period, with the increase attributable mainly to intangible assets recognized in connection with recent business acquisitions.

Net interest expense was $47.5 million compared to $15.9 million in the prior year period. The average interest rate on our debt during the period was 4.4%, versus 3.2% in the prior year period.

Consolidated income tax expense for the six months ended June 30, 2023 was $20.0 million, relative to $44.9 million in the prior year period. The effective tax rate of 37.0% compared to 33.8%. The current period tax rate was impacted by the outside basis difference in an investment in the United Kingdom on which a deferred tax benefit could not be recognized.

Net earnings for the six months ended June 30, 2023 were $34.1 million compared to $88.0 million in the prior year period.

Revenues in the Americas region totalled $1.21 billion for the six months ended June 30, 2023 compared to $1.38 billion in the prior year period, down 12% (12% in local currency). Revenue decline was largely driven by a significant decline in Capital Markets revenue, consistent with the market conditions as well as versus a very strong prior year comparative. The decline was partly offset by growth in Outsourcing & Advisory revenues, primarily from Engineering & Design and Project Management. Adjusted EBITDA was $123.5 million, down 32% (32% in local currency) from $182.6 million in the prior year, driven by (i) changes in service mix; and (ii) an $11.7 million gain on the termination of a lease which favourably impacted the prior year period. GAAP operating earnings were $79.3 million, versus $142.4 million in 2022.

EMEA region revenues were $317.2 million for the six months ended June 30, 2023 compared to $322.6 million in the prior year period, down 2% (flat in local currency). Capital Markets and Leasing revenues were lower due to difficult macroeconomic conditions, partly offset by higher Outsourcing & Advisory revenues (including recent acquisitions). Adjusted EBITDA was a loss of $4.9 million, relative to earnings of $19.3 million in the prior year period on significantly lower higher-margin Capital Markets revenues. The GAAP operating loss was $30.1 million compared to $26.6 million in the prior year period.

Page 5 of 16

The Asia Pacific region generated revenues of $274.0 million for the six months ended June 30, 2023 compared to $262.0 million in the prior year period, up 5% (11% in local currency). Both Leasing and Outsourcing & Advisory revenues (including recent acquisitions) were up, partly offset by continued decline in Capital Markets activity consistent with the market conditions in the region. Foreign exchange headwinds impacted revenues by 6%. Adjusted EBITDA was $31.1 million, up 4% (10% in local currency) versus $29.8 million in the prior year period. GAAP operating earnings were $24.6 million, versus $25.8 million in the prior year period.

Investment Management revenues were $239.6 million compared to $161.5 million in the prior year period, up 48% (48% in local currency). Pass-through carried interest revenue from historical carried interest represented nil in the current period, versus $26.6 million in the prior year period. Excluding the impact of pass-through revenue, revenues were up 78% (78% in local currency) and were positively impacted by (i) acquisitions and (ii) fundraising across all investment strategies which led to increased management fees. Adjusted EBITDA was $104.9 million, up 87% (87% in local currency), relative to $56.0 million in the prior year period. GAAP operating earnings were $41.2 million, versus $36.4 million in the prior year period.

Unallocated global corporate costs as reported in Adjusted EBITDA were $2.8 million relative to $4.9 million in the prior year period. The corporate GAAP operating loss was $17.6 million, relative to $33.3 million in the prior year period.

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Summary of quarterly results

The following table sets forth our quarterly consolidated results of operations data. The information in the table below has been derived from interim consolidated financial statements 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.

Summary of quarterly results - years ended December 31, 2023, 2022 and 2021
(in thousands of US$, except per share amounts)

		Q1			Q2			Q3		Q4

Year ended December 31, 2023
Revenues	$	965,903		$	1,078,038
Operating earnings		22,144			75,262
Net earnings (loss)		(907	)		35,001
Basic net loss per common share		(0.47	)		(0.15	)
Diluted net loss per common share		(0.47	)		(0.16	)

Year ended December 31, 2022
Revenues	$	1,000,912		$	1,127,846		$	1,108,324	$	1,222,405
Operating earnings		40,834			103,850			84,030		103,782
Net earnings		21,317			66,731			44,524		61,972
Basic net earnings (loss) per common share		(0.42	)		0.70			0.28		0.52
Diluted net earnings (loss) per common share		(0.42	)		0.67			0.27		0.51

Year ended December 31, 2021
Revenues	$	774,914		$	945,994		$	1,022,756	$	1,345,465
Operating earnings (loss) ¹		39,956			(385,777	)		75,966		138,354
Net earnings (loss)		24,807			(412,601	)		50,496		99,741
Basic net earnings (loss) per common share		0.11			(10.53	)		0.41		0.98
Diluted net earnings (loss) per common share		0.11			(10.53	)		0.40		0.92

Other data ²
Adjusted EBITDA - 2023	$	104,623		$	147,080
Adjusted EBITDA - 2022		121,461			161,313		$	145,065	$	202,686
Adjusted EBITDA - 2021		92,129			136,558			123,641		192,010
Adjusted EPS - 2023		0.86			1.31
Adjusted EPS - 2022		1.44			1.84			1.41		2.31
Adjusted EPS - 2021		1.04			1.58			1.27		2.25

¹ Operating loss for Q2 2021 reflects the settlement of the Long Term Incentive Arrangement with the Company's Chairman and Chief Executive Officer, which resulted in a charge of $471,928

² See "Reconciliation of non-GAAP financial measures"

Seasonality and quarterly fluctuations

The Company historically generates peak revenues and earnings in the month of December followed by a low in January and February as a result of the timing of closings on Capital Markets transactions. Revenues and earnings during the balance of the year are relatively even. Capital Markets operations comprised 24% of consolidated annual revenues for 2022. Variations can be caused by business acquisitions which alter the consolidated service mix.

Outlook for 2023

The Company is maintaining the outlook previously provided in May 2023. Lower Capital Markets and Leasing transaction volumes are expected to persist for the remainder of the year. Robust growth (including the impact of recent acquisitions) is expected to continue in the Company’s high value recurring service lines, Investment Management and Outsourcing & Advisory. The Company expects higher Adjusted EBITDA margins in 2023 due to the change in service mix (greater proportion of earnings coming from higher-margin Investment Management) offset in part by lower Capital Markets margins, net of cost control measures across the Company. Adjusted EPS growth is expected to continue to be impacted by increased interest expense as well as a larger proportion of earnings growth generated from non-wholly owned operations.

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The outlook for 2023, including the impact of acquisitions completed in 2022 and to the present date in 2023, is as follows:

Measure	2022	Outlook for 2023
Revenue	$4.5 billion	$4.4 billion - $4.6 billion
AEBITDA	$630.5 million	$670 million - $720 million
AEPS	$6.99	$6.70 - $7.50

The financial outlook is based on the Company’s best available information as of the date of this MD&A, and remains subject to change based on, but not limited to, numerous macroeconomic, health, social, geopolitical and related factors.

Liquidity and capital resources

Net cash used in operating activities for the six months ended June 30, 2023 was $33.6 million, versus $248.3 million used in the prior year period. The decrease in cash usage was driven primarily by lower working capital usage as well as lower contingent acquisition consideration paid. We believe that cash from operations and other existing resources, including our $1.75 billion multi-currency Revolving Credit Facility, will continue to be adequate to satisfy the ongoing working capital needs of the Company.

For the six months ended June 30, 2023, capital expenditures were $41.1 million (June 30, 2022 - $23.4 million). Capital expenditures for the year ending December 31, 2023 are expected to be between $90-$100 million, with the increase primarily attributable to investments in office space in major markets, some of which were deferred from 2022 and are expected to be funded by cash on hand.

Net indebtedness is considered a supplementary financial measure and as of June 30, 2023 was $1.50 billion, versus $1.27 billion as of December 31, 2022. Net indebtedness is calculated as the current and non-current portion of long-term debt (excluding the Convertible Notes and warehouse credit facilities, in accordance with our debt agreements) less cash and cash equivalents. As of June 30, 2023, the Company’s financial leverage ratio expressed in terms of net debt to pro forma Adjusted EBITDA, as defined in our debt agreements, was 2.4x (1.8x as of December 31, 2022), relative to a maximum of 3.5x permitted under our debt agreements. We were in compliance with the covenants contained in our debt agreements as of June 30, 2023 and, based on our outlook for 2023, we expect to remain in compliance with these covenants.

The Company’s Revolving Credit Facility matures in May 2027. The Revolving Credit Facility is sustainability-linked and includes pricing adjustments tied to achievements of performance targets over time aligned with Colliers’ Elevate the Built Environment framework available on corporate.colliers.com. These targets include: i) reducing greenhouse gas emissions consistent with the Science-Based Targets initiative (“SBTi”); ii) increasing female representation in management roles and iii) ensuring Colliers-occupied offices obtain the WELL Health-Safety certification. We met our annual sustainability targets for 2022, and as of July 27, 2023, we achieved a full five basis point reduction in the borrowing cost on our Revolving Credit Facility.

In April 2023 the Company increased its borrowing capacity under its Revolving Credit Facility by $250 million to $1.75 billion. The Company was in compliance with all covenants as of June 30, 2023. As of June 30, 2023, the Company had $593.3 million of unused credit under the Revolving Credit Facility.

On April 4, 2023, the Company issued a notice of redemption to all holders of its Convertible Notes due 2025 (“Convertible Notes”). The applicable redemption date was June 1, 2023 (the “Redemption Date”), and the Company, in accordance with the terms and conditions of the indenture governing the Convertible Notes, satisfied its obligations in connection with any redeemed Convertible Notes by issuing an amount of Subordinate Voting Shares per US$1,000 of redeemed principal amount that is calculated based on the average of daily volume-weighted average trading prices of the Shares for the thirty trading day period ending on May 24, 2023. Substantially all of the Convertible Notes were converted into Subordinate Voting Shares, prior to the Redemption Date, at a conversion rate of 17.7607 shares per US$1,000 of principal amount, which is equivalent to a conversion price of approximately $56.30 per share. All remaining Convertible Notes were redeemed on June 1, 2023.

Colliers Mortgage utilizes warehouse credit facilities for the purpose of funding warehouse receivables. Warehouse receivables represent mortgage loans receivable, the majority of which are offset by borrowings under warehouse credit facilities which fund loans that financial institutions have committed to purchase. The warehouse credit facilities are excluded from the financial leverage calculations under our debt agreements.

Page 8 of 16

The Company’s accounts receivable facility (“AR Facility”) (which includes selected US and Canadian trade accounts receivable) with two third-party financial institutions has committed availability of $175 million with a maturity date of October 24, 2024. The AR Facility is recorded as a sale of accounts receivable, and accordingly sold receivables are derecognized from the consolidated balance sheet. The AR Facility results in a decrease to our borrowing costs. As of June 30, 2023, the Company’s AR Facility was fully drawn.

During 2022, the Company acquired certain real estate assets in the US in connection with the establishment of new Investment Management funds. The real estate assets, as well as corresponding liabilities, were transferred to the respective funds during the first quarter of 2023, without gain or loss. Also in the first quarter of 2023, the Company acquired real estate assets located in Europe. The Company recorded the corresponding assets and liabilities on the consolidated balance sheet as of June 30, 2023. We expect to enter into similar transactions from time to time in the future to facilitate the formation of new Investment Management funds.

The Company pays semi-annual dividends in cash after the end of the second and fourth quarters to shareholders of record on the last business day of the quarter. The Company’s policy is to pay dividends on its common shares in the future, subject to the discretion of our Board of Directors. On May 16, 2023, the Company’s Board of Directors declared a semi-annual dividend of $0.15 per share to shareholders of record on June 30, 2023, paid on July 14, 2023. Total common share dividends paid by the Company during the six months ended June 30, 2023 were $6.4 million.

During the six months ended June 30, 2023, the Company invested cash in acquisitions as follows: $59.7 million in acquisitions, $18.3 million in purchases of redeemable non-controlling interest and $4.1 million in contingent consideration payments. All acquisitions during the six-month period were funded from borrowings on the Revolving Credit Facility and cash on hand (See Note 4 in our consolidated financial statements). The Company expects to fund any future acquisitions from borrowings on the Revolving Credit Facility and cash on hand.

As at June 30, 2023, in relation to acquisitions completed during the past three years, we have outstanding contingent consideration, assuming all contingencies are satisfied and payment is due in full, totalling $436.5 million (December 31, 2022 - $422.0 million). Unless it contains an element of compensation, contingent consideration is recorded at fair value each reporting period. The fair value recorded on the consolidated balance sheet as at June 30, 2023 was $95.8 million (December 31, 2022 - $91.2 million). Contingent consideration with a compensatory element is revalued at each reporting period and recognized on a straight-line basis over the term of the contingent consideration arrangement. The liability recorded on the consolidated balance sheet for the compensatory element of contingent consideration arrangements as at June 30, 2023 was $88.5 million (December 31, 2022 - $61.9 million). The contingent consideration is based on achieving specified earnings levels and is paid or payable after the end of the contingency period, which extends to December 2027. We estimate that approximately 87% of the contingent consideration outstanding as of June 30, 2023 will ultimately be paid.

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The following table summarizes our contractual obligations as at June 30, 2023:

Contractual obligations	Payments due by period
(in thousands of US$)			Less than						After
	Total		1 year		1-3 years		4-5 years		5 years

Long-term debt	$	1,666,647	$	8,095	$	413	$	1,372,662	$	285,477
Warehouse credit facilities		70,009		70,009		-		-		-
Interest on long-term debt ⁽¹⁾		80,381		12,309		23,470		23,015		21,587
Finance lease obligations		1,774		865		871		38		-
Contingent acquisition consideration⁽²⁾		95,826		44,455		50,346		909		116
Operating leases obligations		562,093		107,680		171,947		107,610		174,856
Purchase commitments		73,896		33,774		25,901		5,074		9,147
Co-investment Commitments		44,867		44,867		-		-		-
Total contractual obligations	$	2,595,493	$	322,054	$	272,948	$	1,509,308	$	491,183

(1)

Figures do not include interest payments for borrowings under the Revolving Credit Facility. Assuming the Revolving Credit Facility is held until maturity, using current interest rate, we estimate that we will make $310.2 million of interest payments, $79.4 million of which will be made in the next 12 months.

(2)

Estimated fair value as at June 30, 2023.

At June 30, 2023, we had commercial commitments totaling $12.7 million comprised of letters of credit outstanding due to expire within one year.

Redeemable non-controlling interests

In most operations where managers or employees are also non-controlling owners, the Company is party to shareholders’ agreements. These agreements allow us to “call” the redeemable non-controlling interests (“RNCI”) at a value determined with the use of a formula price, which is in most cases equal to a multiple of trailing two-year average earnings, less debt. Non-controlling owners may also “put” their interest to the Company at the same price, with certain limitations including (i) the inability to “put” more than 25% to 50% of their holdings in any twelve-month period and (ii) the inability to “put” any holdings for at least one year after the date of our initial acquisition of the business or the date the non-controlling shareholder acquired their interest, as the case may be.

The total value of the RNCI (the “redemption amount”), as calculated in accordance with shareholders’ agreements, was $1.01 billion as of June 30, 2023 (December 31, 2022 - $1.03 billion). The amount recorded on our balance sheet under the caption “redeemable non-controlling interests” is the greater of (i) the redemption amount (as above) or (ii) the amount initially recorded as RNCI at the date of inception of the minority equity position. As at June 30, 2023, the RNCI recorded on the balance sheet was $1.09 billion (December 31, 2022 - $1.08 billion). The purchase prices of the RNCI may be paid in cash or in Subordinate Voting Shares of Colliers. If all RNCI were redeemed in cash, the pro forma estimated accretion to diluted net earnings per share for the six months ended June 30, 2023 would be $0.95, and the accretion to adjusted EPS would be $0.12.

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Critical accounting estimates

Critical accounting estimates are those that we deem to be most important to the portrayal of our financial condition and results of operations, and that require management’s most difficult, subjective or complex judgments due to the need to make estimates about the effects of matters that are inherently uncertain. We have identified eight critical accounting estimates, which are discussed below.

Revenue recognition. We earn revenues from brokerage transaction commissions, advisory fees, debt finance fees, property management fees, project management fees, engineering and design fees, loan servicing fees and investment management fees. Some of the contractual terms related to the process of earning revenue from these sources, including potentially contingent events, can be complex and may require us to make judgments about the timing of when we should recognize revenue and whether revenue should be reported on a gross basis or net basis. Changes in judgments could result in a change in the period in which revenues are reported, or in the amounts of revenue and cost of revenue reported.

Goodwill. Goodwill impairment testing involves assessing whether events have occurred that would indicate potential impairment and making estimates concerning the fair values of reporting units and then comparing the fair value to the carrying amount of each unit. The determination of what constitutes a reporting unit requires significant management judgment. We have four reporting units, consistent with our four operating segments. Goodwill is attributed to the reporting units at the time of acquisition. Estimates of fair value can be impacted by changes in the business environment, prolonged economic downturns or declines in the market value of the Company’s own shares and therefore require significant management judgment in their determination. When events have occurred that would suggest a potential decrease in fair value, the determination of fair value is calculated with reference to a discounted cash flow model which requires management to make certain estimates. The most sensitive estimates are estimated future cash flows and the discount rate applied to future cash flows. Changes in these assumptions could result in a materially different fair value.

Business combinations. The determination of fair values of assets acquired and liabilities assumed in business combinations requires the use of estimates and management judgment, particularly in determining fair values of intangible assets acquired. For example, if different assumptions were used regarding the profitability and expected attrition rates of acquired customer relationships or forecasted committed capital and assets under management related to asset management contracts, different amounts of intangible assets and related amortization could be reported.

Contingent acquisition consideration. Contingent consideration is required to be measured at fair value at the acquisition date and at each balance sheet date until the contingency expires or is settled. The fair value at the acquisition date is a component of the purchase price; subsequent changes in fair value are reflected in earnings. Most acquisitions made by us have a contingent consideration feature, which is usually based on the acquired entity’s profitability (measured in terms of adjusted EBITDA) during a one to five year period after the acquisition date. Significant estimates are required to measure the fair value of contingent consideration, including forecasting profits for the contingency period and the selection of an appropriate discount rate.

Mortgage servicing rights (“MSRs”). MSRs, or the rights to service mortgage loans for others, result from the sale or securitization of loans originated by the Company and are recognized as intangible assets on the Consolidated Balance Sheets. The Company initially recognizes MSRs based on the fair value of these rights on the date the loans are sold. Subsequent to initial recognition, MSRs are amortized and carried at the lower of amortized cost or fair value. They are amortized in proportion to and over the estimated period that net servicing income is expected to be received based on projections and timing of estimated future net cash flows.

Allowance for credit loss reserves. Colliers Mortgage is obligated to share in losses, if any, related to mortgages originated under the Fannie Mae Delegated Underwriting and Servicing (“DUS”) Program. These obligations expose the Company to credit risk on mortgage loans for which the Company is providing underwriting, servicing, or other services under the DUS Program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios, and typically, the Company is subject to sharing up to one-third of incurred losses on loans originated under the DUS Program. As of June 30, 2023, the Company has funded and sold loans subject to such loss sharing obligations with an aggregate unpaid principal balance of approximately $4.9 billion. As at June 30, 2023, the loss reserve was $13.7 million (December 31, 2022 - $14.5 million) and was included within Other liabilities on the consolidated balance sheet.

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Reconciliation of non-GAAP financial measures

In this MD&A, we make reference to certain 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; (iv) loss on disposal of operations; (v) depreciation and amortization, including amortization of mortgage servicing rights (“MSRs”); (vi) gains attributable to MSRs; (vii) acquisition-related items (including contingent acquisition consideration fair value adjustments, contingent acquisition consideration-related compensation expense and transaction costs); (viii) restructuring costs and (ix) 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.

	Three months ended						Six months ended
	June 30						June 30
(in thousands of US$)	2023			2022			2023			2022

Net earnings	$	35,001		$	66,731		$	34,094		$	88,048
Income tax		16,477			28,610			20,016			44,937
Other income, including equity earnings from non-consolidated investments		(886	)		(1,062	)		(4,206	)		(4,190	)
Interest expense, net		24,670			9,571			47,502			15,889
Operating earnings		75,262			103,850			97,406			144,684
Loss on disposal of operations		2,282			950			2,282			27,040
Depreciation and amortization		50,794			44,097			100,286			80,737
Gains attributable to MSRs		(6,052	)		(2,526	)		(9,087	)		(7,823	)
Equity earnings from non-consolidated investments		532			906			3,686			4,066
Acquisition-related items		11,668			9,365			38,136			24,448
Restructuring costs		7,038			181			7,781			271
Stock-based compensation expense		5,556			4,490			11,213			9,351
Adjusted EBITDA	$	147,080		$	161,313		$	251,703		$	282,774

Similar to GAAP diluted EPS, Adjusted EPS is defined as diluted net earnings per share as calculated under the “if-converted” method, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) loss on disposal of operations; (iii) amortization expense related to intangible assets recognized in connection with acquisitions and MSRs; (iv) gains attributable to MSRs; (v) acquisition-related items; (vi) restructuring costs and (vii) 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 EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share from continuing operations, 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 EPS appears below.

Adjusted EPS is calculated using the “if-converted” method of calculating earnings per share in relation to the Convertible Notes, which were issued on May 19, 2020 and fully converted or redeemed by June 1, 2023. As such, the interest (net of tax) on the Convertible Notes is added to the numerator and the additional shares issuable on conversion of the Convertible Notes are added to the denominator of the earnings per share calculation to determine if an assumed conversion is more dilutive than no assumption of conversion. The “if-converted” method is used if the impact of the assumed conversion is dilutive. The “if-converted” method is dilutive for the adjusted EPS calculation for all periods presented.

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	Three months ended						Six months ended
	June 30						June 30
(in thousands of US$)	2023			2022			2023			2022

Net earnings	$	35,001		$	66,731		$	34,094		$	88,048
Non-controlling interest share of earnings		(13,816	)		(11,806	)		(24,757	)		(20,322	)
Interest on Convertible Notes		561			2,300			2,861			4,600
Loss on disposal of operations		2,282			950			2,282			27,040
Amortization of intangible assets		37,330			32,279			74,173			56,870
Gains attributable to MSRs		(6,052	)		(2,526	)		(9,087	)		(7,823	)
Acquisition-related items		11,668			9,365			38,136			24,448
Restructuring costs		7,038			181			7,781			271
Stock-based compensation expense		5,556			4,490			11,213			9,351
Income tax on adjustments		(11,845	)		(9,891	)		(23,193	)		(16,310	)
Non-controlling interest on adjustments		(5,773	)		(4,269	)		(10,926	)		(7,939	)
Adjusted net earnings	$	61,950		$	87,804		$	102,577		$	158,234

	Three months ended						Six months ended
	June 30						June 30
(in US$)	2023			2022			2023			2022

Diluted net earnings (loss) per common share⁽¹⁾	$	(0.14	)	$	0.64		$	(0.57	)	$	0.24
Interest on Convertible Notes, net of tax		0.01			0.04			0.04			0.07
Non-controlling interest redemption increment		0.59			0.51			0.77			1.16
Loss on disposal of operations		0.05			0.02			0.05			0.56
Amortization expense, net of tax		0.49			0.41			0.97			0.71
Gains attributable to MSRs, net of tax		(0.07	)		(0.03	)		(0.11	)		(0.09	)
Acquisition-related items		0.19			0.18			0.70			0.45
Restructuring costs, net of tax		0.11			-			0.12			-
Stock-based compensation expense, net of tax		0.08			0.07			0.19			0.18
Adjusted EPS	$	1.31		$	1.84		$	2.16		$	3.28

Diluted weighted average shares for Adjusted EPS (thousands)		47,422			47,804			47,442			48,302

⁽¹⁾ Amounts shown reflect the "if-converted" method's dilutive impact on the adjusted EPS calculation for the three months and six months ended June 30, 2023 and 2022, respectively.

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.

Percentage revenue and AEBITDA variances presented on a local currency basis are calculated by translating the current period results of our non-US dollar denominated operations to US dollars using the foreign currency exchange rates from the periods against which the current period results are being compared. Percentage revenue variances presented on an internal growth basis are calculated assuming no impact from acquired entities in the current and prior periods. Revenue from acquired entities, including any foreign exchange impacts, are treated as acquisition growth until the respective anniversaries of the acquisitions. We believe that these revenue growth rate methodologies provide a framework for assessing the Company’s performance and operations excluding the effects of foreign currency exchange rate fluctuations and acquisitions. Since these revenue growth rate measures are not calculated under GAAP, they may not be comparable to similar measures used by other issuers.

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Adjusted EBITDA from recurring revenue percentage is computed on a trailing twelve-month basis and represents the proportion of adjusted EBITDA that is derived from Outsourcing & Advisory and Investment Management service lines. Both these service lines represent medium to long-term duration revenue streams that are either contractual or repeatable in nature. Adjusted EBITDA for this purpose is calculated in the same manner as for our debt agreement covenant calculation purposes, incorporating the expected full year impact of business acquisitions and dispositions.

We use the term assets under management (“AUM”) as a measure of the scale of our Investment Management operations. AUM is defined as the gross market value of operating assets and the projected gross cost of development assets of the funds, partnerships and accounts to which we provide management and advisory services, including capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments. Our definition of AUM may differ from those used by other issuers and as such may not be directly comparable to similar measures used by other issuers.

Free cash flow is defined as net cash flow from operating activities plus contingent acquisition consideration paid, less purchases of fixed assets, plus cash collections on AR Facility deferred purchase price less distributions to non-controlling interests. We use free cash flow as a measure to evaluate and monitor operating performance as well as our ability to service debt, fund acquisitions and pay of dividends to shareholders. We present free cash flow as a supplemental measure because we believe this measure is a financial metric used by many investors to compare valuation and liquidity measures across 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 free cash flow may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net cash flow from operating activities to free cash flow appears below.

	Three months ended						Six months ended
	June 30						June 30
(in thousands of US$)	2023			2022			2023			2022

Net cash provided by (used in) operating activities	$	98,973		$	32,399		$	(33,595	)	$	(248,310	)
Contingent acquisition consideration paid		2,719			1,257			2,991			60,810
Purchase of fixed assets		(22,179	)		(13,581	)		(41,062	)		(23,416	)
Cash collections on AR Facility deferred purchase price		28,539			90,101			59,311			256,429
Distributions paid to non-controlling interests		(40,059	)		(26,628	)		(51,120	)		(41,554	)
Free cash flow	$	67,993		$	83,548		$	(63,475	)	$	3,959

Recently adopted accounting guidance

Contract Assets and Contract Liabilities from Contracts with Customers – Business Combinations

Reference Rate Reform

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Financial instruments

We use financial instruments as part of our strategy to manage the risk associated with interest rates and currency exchange rates. We do not use financial instruments for trading or speculative purposes. In December 2018 (amended in May 2022), the Company entered into interest rate swap agreements to convert the SOFR floating interest rate on $100.0 million of US dollar denominated debt into a fixed interest rate of 2.6026% plus the applicable margin. These swaps matured on April 30, 2023.

In July and December 2022, the Company entered into similar interest rate swap agreements (the “2022 IRS”) to hedge an additional $150.0 million and $250.0 million of US dollar borrowings under the Revolving Credit Facility at fixed interest rates of 2.8020% and 3.5920%, respectively. In April 2023, the Company entered into another similar swap agreement (the “2023 IRS”) to hedge an additional $100.0 million of US dollar borrowings under the Revolving Credit Facility at a fixed interest rate of 3.7250%. The 2022 IRS and 2023 IRS have a maturity of May 27, 2027. The swaps are measured at fair value on the balance sheet. Gains or losses on the 2022 IRS and 2023 IRS, which are determined to be effective as hedges, are reported in other comprehensive income.

Financial instruments involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. If we have financial instruments outstanding and such events occur, our results of operations and financial position may be adversely affected.

Transactions with related parties

As at June 30, 2023, the Company had $3.3 million of loans receivable from non-controlling shareholders (December 31, 2022 - $3.6 million). The majority of the loans receivable represent amounts to finance the sale of non-controlling interests in subsidiaries to senior managers. The loans are of varying principal amounts and interest rates which range from nil to 7.17%. These loans are due on demand or mature on various dates up to 2028 but are open for repayment without penalty at any time.

Outstanding share data

The authorized capital of the Company consists of an unlimited number of preference shares, issuable in series, an unlimited number of Subordinate Voting Shares and an unlimited number of Multiple Voting Shares. The holders of Subordinate Voting Shares are entitled to one vote in respect of each Subordinate Voting Share held at all meetings of the shareholders of the Company. The holders of Multiple Voting Shares are entitled to twenty votes in respect of each Multiple Voting Share held at all meetings of the shareholders of the Company. Each Multiple Voting Share is convertible into one Subordinate Voting Share at any time at the election of the holders thereof.

As of the date hereof, the Company has outstanding 45,853,682 Subordinate Voting Shares and 1,325,694 Multiple Voting Shares. In addition, as at the date hereof 2,831,000 Subordinate Voting Shares are issuable upon exercise of options granted under the Company’s stock option plan.

On July 17, 2023, the Company announced a Normal Course Issuer Bid (“NCIB”) effective from July 20, 2023 to July 19, 2024. The Company may repurchase up to 4,000,000 Subordinate Voting Shares on the open market pursuant to the NCIB.

Canadian tax treatment of common share dividends

For the purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation, all dividends (and deemed dividends) paid by us to Canadian residents on our Subordinate Voting Shares and Multiple Voting Shares are designated as “eligible dividends”. Unless stated otherwise, all dividends (and deemed dividends) paid by us hereafter are designated as “eligible dividends” for the purposes of such rules.

Disclosure controls and procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted by us under U.S. and Canadian securities legislation is recorded, processed, summarized and reported within the time periods specified in those rules, and include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted by us under U.S. and Canadian securities legislation is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to permit timely decisions regarding required disclosure. Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators, as at June 30, 2023. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as at June 30, 2023.

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Changes in internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system of internal control over financial reporting, no matter how well-designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 framework to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, management has concluded that as at June 30, 2023, our internal control over financial reporting was effective.

During the three months ended June 30, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Legal proceedings

There are no legal proceedings to which Colliers is a party to, or in respect of which, any of the property of Colliers is the subject of, which is or was material to Colliers during 2023, and Colliers is not aware of any such legal proceedings that are contemplated. In the normal course of operations, Colliers is subject to routine immaterial claims and litigation incidental to its business. Litigation currently pending or threatened against Colliers includes disputes with former employees and commercial liability claims related to services provided by Colliers. Colliers 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.

Forward-looking statements and risks

This MD&A contains forward-looking statements with respect to expected financial performance, strategy and business conditions. The words “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “project,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risk and uncertainties. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Factors which may cause such differences include, but are not limited to those set out below and those set out in detail in the “Risk Factors” section of the Company’s Annual Information Form:

Economic conditions, especially as they relate to rising interest rates, commercial and consumer credit conditions and business spending, particularly in regions where our operations may be concentrated.

Rising inflation and its impact on compensation costs, hiring and retention of talent, and the Company’s ability to recover costs from our clients.

The continuing impact and aftermath of the global COVID-19 pandemic and its related impact on economic conditions, and in particular its impact on client demand for our services, our ability to deliver services and ensure the health and productivity of our employees.

Commercial real estate and real asset values, vacancy rates and general conditions of financial liquidity for transactions.

The effect of significant movements in average capitalization rates across different property types.

A change in or loss of our relationship with US government agencies.

Defaults by borrowers on loans originated under the Fannie Mae Delegated Underwriting and Servicing Program.

A reduction by clients in their reliance on outsourcing for their commercial real estate needs.

Competition in the markets served by the Company.

The impact of changes in the market value of assets under management on the performance of our Investment Management business.

A decline in our ability to fundraise in our Investment Management operations, or an increase in redemptions from our perpetual funds and separately managed accounts.

A decline in our ability to attract, recruit and retain talent.

A decline in our performance impacting our continued compliance with the financial covenants under our debt agreements, or our ability to negotiate a waiver of certain covenants with our lenders.

The effect of increases in interest rates on our cost of borrowing.

Unexpected increases in operating costs, such as insurance, workers’ compensation and health care.

Changes in the frequency or severity of insurance incidents relative to our historical experience.

The effects of changes in foreign exchange rates in relation to the US dollar on the Company’s Canadian dollar, Euro, Australian dollar and UK pound sterling denominated revenues and expenses.

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A decline in our ability to identify and make acquisitions at reasonable prices and successfully integrate acquired operations.

Disruptions, cyber attacks or security failures in our information technology systems, and our ability to recover from such incidents.

The ability to comply with laws and regulations related to our global operations, including real estate and mortgage banking licensure, labour and employment laws and regulations, as well as the anti-corruption laws and trade sanctions.

Political conditions, including political instability, any outbreak or escalation of hostilities, elections, referenda, trade policy changes, immigration policy changes and terrorism and the impact thereof on our business.

Changes in climate and environment-related policies that directly impact our businesses.

Changes in government laws and policies at the federal, state/provincial or local level that directly impact our businesses.

We caution that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results, performance or achievements. The reader is cautioned against undue reliance on these forward-looking statements. Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in such forward-looking statements will be realized. The inclusion of such forward-looking statements should not be regarded as a representation by the Company or any other person that the future events, plans or expectations contemplated by the Company will be achieved. We note that past performance in operations and share price are not necessarily predictive of future performance. We disclaim any intention and assume no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

Additional information

Additional information about Colliers, including our Annual Information Form for the year ended December 31, 2022, is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Further information about us can also be obtained at www.colliers.com.