Bridgemarq Real Estate Services Inc. (BRE) 2024年年度報告「TSX」.pdf

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1、2024 ANNUAL REPORTBRIDGEMARQ REAL ESTATE SERVICES INC.PROFILEBRIDGEMARQ&DESIGN/BRIDGEMARQ REAL ESTATE SERVICES and JOHNSTON&DANIEL are registered trademarks of Residential Income Fund L.P.and are used under licence.ROYAL LEPAGE is a registered trademark of Royal Bank of Canada and is used under lice

2、nce.VIA CAPITALE is a registered trademark of 9120 Real Estate Network L.P.and is used under licence.PROPRIO DIRECT is a registered trademark of Proprio Direct Inc.and is used under licence.The trademarks REALTOR,REALTORS and the REALTOR logo are controlled by The Canadian Real Estate Association(CR

3、EA)and identify real estate professionals who are members of CREA.Bridgemarq Real Estate Services Inc.(“Bridgemarq”and,together with its subsidiaries the“Company”)is a leading provider of services to residential real estate brokers and REALTORS1 across Canada.The Company generates cash flow primaril

4、y from fixed and variable franchise fees that are received from real estate brokers and REALTORS operating under the Royal LePage brand name across Canada,under the Via Capitale Real Estate Network,Proprio Direct and Les Immeubles Mont-Tremblant brands in the province of Quebec,and under the Johnsto

5、n&Daniel banner in upscale neighbourhoods in Ontario.Approximately 76%of the Companys franchise fees in 2024 were fixed in nature;this provides revenue stability and helps insulate cash flows from fluctuations in the Canadian real estate market.Franchise fee revenues are supported by long-term franc

6、hise agreements,predominantly driven by fixed fees based on the number of REALTORS in the Companys network.As at December 31,2024,the Company network consisted of approximately 21,000 REALTORS and participated in approximately 30%of all home resales in Canada during the year.Bridgemarq is listed on

7、the TSX and trades under the symbol“BRE”.For further information about the Company,please visit .JOHNSTON&DANIEL Founded in 1950,Johnston&Daniel is a leading residential real estate boutique firm with approximately 175 real estate professionals selling distinctive homes in southern Ontario.Johnston&

8、Daniel operates as a division of Royal LePage Real Estate Services Ltd.and maintains its market leadership through a combination of rich training and development opportunities,strategic partnerships,in-house marketing services and powerful brand awareness.VIA CAPITALE Via Capitales mission is to del

9、iver the best possible service by focusing on the human aspect of each transaction,professionalism and innovation.Via Capitale has more than 900 real estate professionals in 35 locations across the province of Quebec.It has launched numerous innovative,client focused programs into the Quebec market

10、through specialized web platforms,and has been a leading developer of real estate insurance programs for more than 20 years making it the pioneer in this field and keeping the company at the forefront of the industry.Today,the Via Capitale name is synonymous with protection and innovation in the pro

11、vince of Quebec.COMPANY OPERATIONSThe Company is a Canadian based real estate services firm that supplies REALTORS withinformation,tools and services to assist them in providing efficient and effective deliveryof real estate sales services in the communities they serve.Through a portfolio of highly

12、regarded real estate services brands,the Company caters to the diverse service requirements of regional real estate professionals,in virtually all significant population centres across Canada.ROYAL LePAGE Serving Canadians since 1913,Royal LePage is the countrys leading provider of services to real

13、estate brokerages,with a network of more than 19,000 real estate professionals in over 640 locations nationwide.Since the mid-1990s,Royal LePage has more than tripled the size of its sales force.It offers its network of brokers and agents strong support with state-of-the-art marketing and lead gener

14、ation tools,sophisticated business services,timely market data and analysis,as well as professional development through on-line and in-person training.Royal LePage is the only Canadian real estate company to have its own charitable foundation,the Royal LePage Shelter FoundationTM,which has been dedi

15、cated to supporting womens shelters and domestic violence prevention programs for more than 25 years.PROPRIO DIRECTEstablished in 1987,Proprio Direct operates one of the largest real estate brokerages in the province of Quebec(based on REALTOR count)from a single office located in the Greater Montre

16、al Area.With approximately 700 real estate professionals,this unique,consumer-centric digital brokerage has established itself as a market leader by offering a unique business model that combines the visibility and support of a traditional brokerage with the flexibility todays consumers expect.1BRID

17、GEMARQ REAL ESTATE SERVICES INC.2BRIDGEMARQ REAL ESTATE SERVICES INC.FINANCIAL HIGHLIGHTS2024202020212022202319,04620,15920,68620,52920,974Network Count(annual,five years)2024202020212022202340,33950,20249,87148,454350,670Gross Revenue(annual,five years)LETTER TO SHAREHOLDERSThis past year marked an

18、 important transformation year in Bridgemarqs history.As I reflect on the last 12 months with an eye to the future,Im excited to see that our accomplishments have set us up incredibly well,moving forward.The successful integration of our acquired operations has solidified our strong position in the

19、Canadian real estate market.Today,we have more opportunities for expansion than ever before and multiple pathways by which to grow our business.As we broaden and diversify our operations,we can more fully participate across the various aspects of Canadians home buying and selling journey.With indust

20、ry-leading tools,technology and training,our brands continue to attract top real estate professionals from across the country.Our largest and most established brand,Royal LePage,is a mainstream franchisor of mass appeal,with niche market branches in the luxury,commercial and recreational real estate

21、 segments.Known for service excellence,trustworthiness,market expertise and technological innovation,the brand is home to nearly 20,000 top agents nationwide.Our offering in this space is clearly defined and we are focused on being the best in every way.In addition to Royal LePage,we service real es

22、tate professionals with multiple other branded solutions,each tailored to match agents needs as they decide for themselves how best to serve homebuyers and sellers.This is especially evident today in the province of Quebec,where our Via Capitale brand is home to more than 900 real estate professiona

23、ls who pride themselves on their people-centric approach to real estate.Perhaps one of the most exciting additions to the Bridgemarq portfolio is Proprio Direct,with its unique and innovative online brokerage model that allows sellers the flexibility to find their own buyers without foregoing the be

24、nefits of working with one of our 700 real estate professionals operating under this banner.3BRIDGEMARQ REAL ESTATE SERVICES INC.LETTER TO SHAREHOLDERSBy maintaining a portfolio of brands with diverse yet complementary identities,we have endless opportunities for growth,offering varying levels of pr

25、ofessional real estate services from mainstream residential to luxury to virtual.This unique advantage ensures there is a Bridgemarq brand for everyone,setting us entirely apart from our competitors with broader and more versatile market reach.Every day,we are connecting with Canadians where they ar

26、e,in our in-person and online interactions.In 2024,our brands websites received more than 47 million views,including to royallepage.ca the most-visited real estate company website in Canada.Through our online and social media interactions,we have direct access to Canadians and a better understanding

27、 of their evolving real estate needs.With the acquisition of brokerage operations,we are now able to leverage multiple new organic and inorganic growth levers to expand our market presence and drive long-term value for our shareholders.At the same time,the stability of our cash flows offers a built-

28、in resilience to uncertainty and market volatility.Our approach to growth focuses on three key areas:our established franchise business,mergers and acquisitions to bolster our portfolio of corporately owned brokerages,and lead generation.Our organic growth strategy is centered on empowering our fran

29、chisees in their recruiting efforts by providing the tools and support required to attract top-producing agents and teams.Additionally,we will continue to capitalize on opportunities to re-flag our competitors brokerages,strengthening our brand presence in key markets.Tactical strategies for corpora

30、te acquisitions and brokerage roll-ins will enable us to scale efficiently and drive synergies across our operations.We are also expanding our digital footprint through the virtual brokerage operating model,including lead generation and website monetization.These initiatives position us to capture n

31、ew revenue streams and enhance customer engagement in an increasingly digital marketplace.I want to take this opportunity to thank the incomparable leadership team for their dedication and hard work,and all the employees of the Company who work tirelessly to serve our 21,000 REALTORS in over 700 com

32、munities across the country.I am so proud of the indelible mark Bridgemarq has made,in every province from coast to coast.Our dedication to philanthropic causes both by our employees and our generous brokers and agents is a source of great pride for me personally,and for the board.There is no better

33、 example of that dedication than the incredible work of the Royal LePage Shelter Foundation,which surpassed a huge milestone in 2024,raising more than$51 million to-date in support of 200 local womens shelters and education partners across the country.Bridgemarqs commitment to diversity,innovation a

34、nd thought leadership empowers us to drive growth for our industry-leading brands,unlock new opportunities and deliver greater value for our shareholders.With our unique operating model and stable cash flows,Bridgemarq is well positioned for continued success,in 2025 and beyond.And,being a wholly Ca

35、nadian enterprise,with operations spanning from St.Johns to Victoria,we take great pride in delivering tailor-made,distinctly Canadian solutions to our clients,as well as positive results for our shareholders.I am pleased with all weve achieved over the last year,and optimistic about the opportuniti

36、es that lie ahead.I welcome the challenges that will surely arise,knowing that our strong leadership team and experienced professionals are prepared to rise to the occasion.Id like to extend my sincere gratitude to our board of directors for their support,and to you,our shareholders,for your continu

37、ed trust.I look forward to sharing many future successes with you.Sincerely,Spencer Enright Chief Executive Officer4BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION IntroductionThis managements discussion and analysis(“MD&A”)of the conso

38、lidated financial results and financial condition of Bridgemarq Real Estate Services Inc.for the three months and the year ended December 31,2024,has been prepared as at March 17,2025.The three months ended December 31,2024 shall be referred to in this MD&A as the“Quarter”and the comparative period

39、for the three months ended December 31,2023 shall be referred to as the“Prior Year Quarter”.The year ended December 31,2024 shall be referred to as the“Year”and the comparative period for the year ended December 31,2023 shall be referred to as the“Prior Year”.The financial information presented here

40、in has been prepared on the basis of International Financial Reporting Standards(“IFRS”)and is expressed in Canadian dollars unless otherwise stated.The definitions of certain capitalized terms in this MD&A are provided in the Glossary of Terms commencing on page 39.This MD&A provides the reader wit

41、h an assessment of the Companys past performance as well as its financial position,performance objectives and future outlook.The information in this document should be read in conjunction with the Companys audited financial statements for the year ended December 31,2024,which are prepared in accorda

42、nce with IFRS.Additional information relating to the Company,including its 2023 Annual Information Form,is available on SEDAR+at www.sedarplus.ca or on the Companys website at .As discussed elsewhere in this MD&A,the Company internalized the management of the Company and acquired certain real estate

43、 brokerage operations earlier in the year in a transaction with Brookfield.As the acquisition of these businesses was completed on March 31,2024,the results for the Year include the operating results of the Acquired Businesses since March 31,2024.This MD&A makes reference to Free Cash Flow and Free

44、Cash Flow per Share as well as Adjusted Net Earnings and Adjusted Net Earnings per Share which are non-GAAP financial measures.These financial measures do not have any standardized meaning under IFRS and,accordingly,may not be comparable to similar measures used by other companies.Free Cash Flow rep

45、resents operating income before deducting interest on leases,depreciation and amortization and net impairment and write-off of intangible assets,minus current income tax expense,minus additions to property and equipment and intangible assets,minus repayment of contract transfer obligations,minus lea

46、se payments.Free Cash Flow per Share is calculated by dividing Free Cash Flow by the total number of Restricted Voting Shares outstanding,on a diluted basis.The Company believes that Free Cash Flow and Free Cash Flow per Share are useful supplemental measures of performance as they provide investors

47、 with an indication of the amount of cash flow generated by the Company which Highlights 5Operating Results Summary 6Organization 6Business of the Company 8Management Services Agreement 8Acquisition of Real Estate Brokerages and Internalization of Management 9Company Revenues 10Overview of 2024 Oper

48、ating Results 11Key Performance Drivers 14Composition of the Companys revenue streams 14Number of REALTORS in the Franchise Network 14Number of REALTORS Affiliated with the Brokerage Operations 16Transactional Dollar Volumes of the Canadian Market 16REALTOR Productivity 18Products and services offer

49、ed to REALTORS 18The Canadian Residential Real Estate Market 19Analysis of Fourth Quarter Operating Results 20Summary of Quarterly Results 24Debt Facilities 25Free Cash Flow 26Liquidity 28Cash and Capital Resources 30Commitments and Contingencies 30Off-Balance Sheet Arrangements 31Transactions with

50、Related Parties 31Critical Accounting Estimates and Assumptions 32Financial Instruments 33Disclosure Controls and Internal Controls over Financial Reporting 33Outstanding Restricted Voting Shares 34Risk Factors 34Forward-Looking Statements 35Supplemental Information 36Glossary of Terms 39Consolidate

51、d Financial Statements 4652024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.is available to holders of Restricted Voting Shares and Exchangeable Unitholders,subject to working capital and other investment requirements and principal debt r

52、epayments,if any.Please see Free Cash Flow reconciled to Cash Flow from Operating Activities for a reconciliation of Free Cash Flow to cash flow from operating activities in the consolidated statements of cash flows and Free Cash Flow for further information about Free Cash Flow and Free Cash Flow p

53、er Share.Adjusted Net Earnings represents operating income minus income tax expense.Adjusted Net Earnings per Share is calculated by dividing Adjusted Net Earnings by the total number of Restricted Voting Shares outstanding,on a diluted basis.Management believes that Adjusted Net Earnings and Adjust

54、ed Net Earnings per Share are useful supplemental measures as they provide investors with an indication of the operating results of the Company on a fully-diluted basis(excluding certain non-cash or non-recurring items that do not directly impact the ongoing operations of the Company)as if all Excha

55、ngeable Units had been converted into Restricted Voting Shares at the beginning of the period presented.Non-cash and non-recurring items excluded from the calculation of Adjusted Net Earnings are comprised of losses on interest rate swaps and debt facility amendments,gains on settlement of liabiliti

56、es and losses related to disposal of property and equipment and leases terminations.Adjusted Net Earnings also excludes interest on Exchangeable Units and losses on fair valuation of Exchangeable Units since Adjusted Net Earnings is determined on a fully-diluted basis.Please see ADJUSTED NET EARNING

57、S for a reconciliation of Adjusted Net Earnings to operating income and net and comprehensive earnings(loss)in the consolidated statements of net and comprehensive earnings(loss).HIGHLIGHTS Highlights for the Quarter and Year include:Revenues for the Quarter amounted to$101.5 million,compared to the

58、$10.8 million generated in the Prior Year Quarter.For the Year,revenues increased from$48.5 million in the Prior Year to$350.7 million.The increase in revenues is substantially due to the inclusion of the operating results of the Acquired Businesses from April 1,2024.Franchise fees for the Year incr

59、eased marginally as the benefit of fee increases implemented at the start of the Year and improved market conditions were partly offset by the fact that the franchise fee revenues received from the Acquired Businesses are now eliminated in the consolidated accounts of the Company.The franchise fees

60、received from the Acquired Businesses were treated as third party revenue prior to April 1,2024.For the Quarter,the Company generated a net loss of$9.6 million or$1.02 per Share,compared to a net loss of$1.0 million or$0.11 per Share in the Prior Year Quarter.For the Year,the Company generated a los

61、s of$10.3 million or$1.09 per Share compared to earnings of$4.0 million or$0.42 per Share in the Prior Year.The lower earnings in 2024 are largely driven by a loss of$6.4 million in the Quarter on the valuation of the Exchangeable Units(compared to a loss of$1.4 million in the Prior Year Quarter)and

62、 a loss of$9.3 million in the Year compared to a loss of$1.1 million in the Prior Year.The fair valuation adjustment on the Exchangeable Units is directly related to changes in the market price of Bridgemarqs Restricted Voting Shares.For the Quarter,cash provided by operating activities amounted to$

63、1.8 million,compared to$2.3 million in the Prior Year Quarter primarily driven by higher interest payments.For the Year,cash flow from operations increased by$3.4 million compared to the Prior Year due to increased interest income and a reduction in working capital partly offset by higher interest c

64、osts.Adjusted Net Earnings amounted to a loss of$0.4 million in the Quarter compared to earnings of$2.2 million in the Prior Year Quarter.For the Year,Adjusted Net Earnings was$7.3 million compared to$12.4 million in the Prior Year.The reduction in Adjusted Net Earnings is primarily due to higher in

65、terest expense,higher impairment of intangible assets and increased amortization of intangible assets which were acquired as part of the Transaction,partly offset by the operating results of the Acquired Businesses.Adjusted Net Earnings per Share is also lower in the Quarter and Year due to the dilu

66、tive impact of issuing additional Exchangeable Units to complete the Transaction.The Company generated$1.8 million in Free Cash Flow during the Quarter compared to$3.6 million generated in the Prior Year Quarter.For the Year,Free Cash Flow amounted to$16.8 million,which was lower than the$18.1 milli

67、on recorded in the Prior Year.On March 25,2024,the shareholders of Bridgemarq approved a transaction to acquire the Brokerage Operations,internalize the management of the Company and settle certain deferred payments owed to Brookfield.The Transaction was completed on March 31,2024.As consideration f

68、or the Transaction,the Partnership issued 2,920,877 Exchangeable Units and paid$131,000 in cash during the second quarter of 2024 as a final adjustment to the purchase price.The board of directors of Bridgemarq(the“Board”)declared cash dividends of$0.34 per Restricted Voting Share during the Quarter

69、,unchanged from the Prior Year Quarter.Total dividends paid during the Year amounted to$1.35 per Restricted Voting Share,unchanged from the Prior Year.6BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION OPERATING RESULTS SUMMARY Three mont

70、hs Three months Twelve months Twelve months ended ended ended ended(in 000s)except per Share amounts December 31,December 31,December 31,December 31,2024 2023 2024 2023Revenues 101,498 10,825 350,670 48,454 Expenses Commissions (83,411)(274,907)Cost of other revenue (714)(193)(5,150)(1,031)Operating

71、 Expenses (12,204)(5,482)(41,932)(22,044)Interest on debt (1,056)(738)(4,646)(2,967)Interest on lease obligation (303)(936)Depreciation,amortization and impairment (4,258)(1,708)(14,624)(7,095)Operating income(loss)$(448)$2,704$8,475$15,317 Cash provided by operating activities$1,803$2,272$17,099$13

72、,667 Dividends$3,201$3,201$12,803$12,803 Interest on Exchangeable Units$2,726$1,452$9,628$5,806 Net and comprehensive earnings(loss)$(9,632)$(1,039)$(10,322)$3,997 Diluted earnings(loss)per Share$(1.02)$(0.11)$(1.09)$0.42 Adjusted net earnings(loss)$(413)$2,213$7,326$12,410 Adjusted net earnings(los

73、s)per Share$(0.03)$0.17$0.49$0.97ORGANIZATIONBridgemarqs Restricted Voting Shares are listed on the Toronto Stock Exchange(“TSX”)under the symbol“BRE”.Through its limited partnership holdings,Bridgemarq owns the Brokerage Operations,and certain Franchise Agreements and Trademarks of real estate serv

74、ices Brands in Canada.Bridgemarq directly owns a 61.5%interest in the Partnership which,in turn,owns VCLP.In addition,Bridgemarq directly owns a 75%interest in the General Partner.The Partnership and VCLP own and operate the assets from which Bridgemarq derives its revenue.Brookfield owns the remain

75、ing 38.5%interest in the Partnership through its ownership of the Exchangeable Units,the remaining 25%interest in the General Partner through its ownership of 25 common shares in the General Partner and one Special Voting Share of Bridgemarq.The Special Voting Share entitles Brookfield to a number o

76、f votes at any meeting of the holders of Restricted Voting Shares equal to the number of Restricted Voting Shares that may be obtained upon the exchange of all the Exchangeable Units held by the holder and/or its affiliates,except that the holder of the Special Voting Share is not entitled to vote t

77、o approve or elect the independent directors of Bridgemarq elected by holders of Restricted Voting Shares.In addition to its ownership of the Exchangeable Units,the common shares of the General Partner and the Special Voting Share,Brookfield owns 315,000 Restricted Voting Shares.Prior to April 1,202

78、4,the Company received certain management,administrative and support services from the Manager under the terms of the MSA.As part of the Transaction,the Company has internalized the management of the Company by acquiring the Manager.As such,the employees of the Manager are now employees of Bridgemar

79、q,eliminating all payments of management fees to external parties.After the closing of the Transaction,Bridgemarq generates revenue from two operating segments.The Franchise Operations derives its revenue from franchise fees and other ancillary services it provides to its franchisees and REALTORS.Th

80、e Brokerage Operations derives its revenue through the operation of full-service real estate brokerage locations in British Columbia,Ontario and Qubec operating under the Royal LePage,Via Capitale,Proprio Direct,Johnston&Daniel and Les Immeubles Mont-Tremblant real estate brands.The Brokerage Operat

81、ions provide services to REALTORS which are complementary to those services provided under the Companys Franchise Operations.72024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.The ownership structure of the Company subsequent to the compl

82、etion of the Transaction is set out below:Public CompanyPublic ShareholdersBridgemarq Real Estate Services Inc.(ON)BrookfieldResidential Income Fund General Partner Limited(ON)9,168,850Restricted Voting Shares(96.7%)6,248,544Class B LimitedPartnership Units(100%)General PartnerGeneral Partner1 Speci

83、alVoting Share(100%)Common Shares(75%)Limited Partner(100%limited partner interest)Common Shares(25%)315,000Restricted Voting Shares(3.3%)9,983,000Class A LimitedPartnership Units(100%)Residential Income Fund L.P.(ON)9120 Real Estate Network,L.P./RseauImmobilier 9120 S.E.C.(QC)Bridgemarq Real Estate

84、 Services Manager Limited(ON)Proprio Direct Inc.(QC)Royal LePageCorporately-Owned BrokeragesVia CapitaleCorporately-Owned Brokerages8BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BUSINESS OF THE COMPANYThe Company is a Canadian based

85、real estate services firm that supplies REALTORS with information,tools and services to assist them in providing efficient and effective delivery of real estate sales services in the communities they serve.Through a portfolio of prominent real estate services Brands,each of which offers a unique val

86、ue proposition,the Company caters to the diverse service requirements of regional real estate professionals,in virtually all significant population centres across Canada.The Company operates in two distinct business segments:The Companys Brokerage Operations operate full-service real estate brokerag

87、es under the Royal LePage,Proprio Direct,Via Capitale,Johnston&Daniel and Les Immeubles Mont-Tremblant Brands.As at December 31,2024,the Brokerage Operations were comprised of 2,706 REALTORS operating out of 36 operating locations providing services to REALTORS and their clients in the greater Toron

88、to area,greater Vancouver area and in various locations within the province of Qubec.The Companys Franchise Operations provide franchise services to Brokerages under the Royal LePage Brand across Canada,the Via Capitale Brand in the province of Qubec and Johnston&Daniel in southern Ontario.As at Dec

89、ember 31,2024,the Franchise Network was comprised of 20,283 REALTORS operating under 280 Franchise Agreements from 684 locations,including 2,015 REALTORS and 35 locations operated by the Brokerage Operations.The complementary nature of these two business segments allows Bridgemarq to generate revenu

90、es at multiple points in the real estate transaction including the sale and purchase of real estate,the generation and sale of leads to Brokerages and REALTORS,and by providing services to real estate practitioners through the franchising of the Companys brands.The number of REALTORS in the Franchis

91、e Network and at the Companys Brokerage Operations,the transaction volumes generated in the markets the Company serves,the transaction price of residential and commercial real estate,the success in attracting REALTORS to the Companys Brands through their value propositions and the track record of th

92、e Companys Brands are all important factors in the Companys financial and operating performance.These factors,including,among others,general economic conditions and government and regulatory activity impact the Companys performance and are discussed in greater detail throughout this MD&A and in the

93、Companys 2023 Annual Information Form,which is available on SEDAR+at www.sedarplus.ca or on the Companys website at .The Company seeks to increase its revenues and cash flow by:increasing the number of REALTORS in the Franchise Network through entering into new Franchise Agreements;attracting and re

94、taining REALTORS to the Franchise Network and its Brokerage Operations;and providing services and additional fee for service offerings,which increase the productivity of REALTORS.MANAGEMENT SERVICES AGREEMENTThe Company is party to a Management Services Agreement(the“MSA”),which,prior to April 1,202

95、4,governed the management of the Company and the delivery of services to Brokers and REALTORS by the Manager.The MSA has a term of ten years expiring on December 31,2028.Under the terms of the MSA,the Company paid a monthly management fee to the Manager comprised of:a fixed management fee of$840,000

96、,plus a variable management fee equal to the greater of a)23.5%of Distributable Cash(as such term is defined in the MSA)or 0.342%of the market value of the Restricted Voting Shares on a diluted basis for the first five years of the initial term of the MSA and b)25%of Distributable Cash or 0.375%of t

97、he market value of the Restricted Voting Shares on a diluted basis thereafter.As a result of the capitalization of certain Franchise Agreements and other contracts transferred to the Company upon entering into the MSA,a portion of management fees paid to the Manager was allocated toward reducing the

98、 Companys contract transfer obligation and associated interest expense,with the remainder charged to the Companys consolidated statement of net and comprehensive earnings(loss).Management fees are no longer payable to a third party and the contract transfer obligation was effectively settled upon cl

99、osing of the Transaction.The Company had deferred the payment of certain management fees to the Manager totaling$5.6 million.These deferred payments were non-interest bearing and were due no later than 2025.These deferred payments have been settled as a result of the Transaction.92024 MANAGEMENTS DI

100、SCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.ACQUISITION OF REAL ESTATE BROKERAGES AND INTERNALIZATION OF MANAGEMENTOn December 14,2023,the Company announced that it had entered into a share purchase agreement among Bridgemarq,the Partnership and Brook

101、field to acquire all of the issued and outstanding shares in the capital of the Manager and Proprio Direct from Brookfield and to settle certain deferred payments owing to Brookfield in consideration for the issuance of Exchangeable Units.Bridgemarq was required to seek the approval of shareholders

102、for the issuance of the Exchangeable Units pursuant to the Transaction in accordance with the rules of the TSX.At a meeting of shareholders held on March 25,2024,the shareholders of Bridgemarq approved the issuance of those Exchangeable Units.Brookfield was not entitled to vote at the meeting.The Tr

103、ansaction closed on March 31,2024.Upon closing of the Transaction,the Partnership acquired the Acquired Businesses and settled the deferred payments owing to Brookfield by issuing 2,920,877 Exchangeable Units.During the second quarter of 2024,the Company paid$131,000 to Brookfield representing the d

104、ifference between the actual working capital acquired in the Transaction and the working capital that was estimated on the closing date for the Transaction.The total value of the Transaction is approximately$40.9 million based on the closing price of Bridgemarqs Restricted Voting Shares of$13.97 on

105、the TSX as of March 28,2024 the last trading day prior to the closing of the Transaction.The value ascribed to the Transaction was apportioned between i)the acquisition of the brokerages and internalization of the management of the Company of$40.0 million,and ii)the settlement of certain deferred fe

106、es owing to Brookfield of$0.9 million.As a result of the Transaction,Brookfields ownership interest in the Company(on a fully-diluted basis)increased from approximately 28.4%prior to the closing of the Transaction to approximately 41.7%.As a result of the acquisition of the Brokerage Operations,the

107、Company benefits from a broader revenue base and earns revenues from the Gross Revenue of the acquired brokerages in addition to the franchise fees and ancillary revenues it has historically generated from Franchisees.The completion of the Transaction adds to the Companys capability to capture futur

108、e growth across a broader spectrum of the real estate industry through both organic growth and potential acquisition opportunities.In addition,the Transaction deleverages the business through the settlement of the deferred payments owing to the Manager and to Brookfield,and provides a simplified org

109、anizational structure,which eliminates the requirement to pay management fees to a third party.The Company has consolidated the operating results of the Acquired Businesses starting on March 31,2024.The Company reviews the value of its intangible assets at each reporting period to determine whether

110、the carrying value of those intangible assets is impaired.As a result of the acquisition of the Manager,the Company changed the methodology by which it allocates its expenses in determining the net recoverable amount of its franchise agreements resulting in a$2.6 million impairment charge during the

111、 Year.Prior to the completion of the Transaction,the Company owed certain deferred fees and other obligations to the Manager and to Brookfield.When the Manager was acquired,these obligations were effectively settled,resulting in settlement gains of$1.3 million recorded in the first quarter of 2024.1

112、0BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION COMPANY REVENUESThe primary source of revenue earned by the Franchise Operations is franchise fees it receives from Franchisees.Fixed franchise fees represent approximately 76%of total fr

113、anchise fees and are payable to the Company as a fixed monthly amount per REALTOR without regard to transaction volumes generated by that REALTOR.Variable franchise fees represent franchise fees that are payable to the Company based on the transaction volumes generated by REALTORS,subject to a cap.F

114、ixed franchise fees are earned based on the number of REALTORS in the Franchise Network.Royal LePage Franchisees pay a fixed monthly fee of$139 per REALTOR(2023$136 per REALTOR).An additional monthly fee of$100 is charged for each REALTOR who participates in the Royal LePage CommercialTM program.Fix

115、ed fees from Via Capitale Franchisees consist primarily of a fixed monthly fee of$180 per REALTOR.Variable franchise fees are calculated as 1%of Gross Revenues earned by REALTORS in the Royal LePage Franchise Network,subject to a cap of$1,500 per year(2023$1,450).Certain REALTORS in the Royal LePage

116、 Network work as part of a Team.All REALTORS who are members of a Team pay fixed franchise fees.However,for the purposes of the variable fee cap of$1,500(2023$1,450),the Gross Revenues of all Team members are aggregated to one cap.Other revenues earned by the Franchise Operations are derived from an

117、cillary services provided to Franchisees outside of the services provided under the Franchise Agreements or amounts received from third parties and include the sale of leads and lead management fees received from Franchisees,conference and event registration fees and fees for referral services paid

118、by third parties.The Companys Brokerage operations generate revenue primarily from Gross Revenue(or gross commission income(“GCI”)received through serving as the broker at the closing of real estate transactions.The percentage of GCI paid to each sales representative is negotiated between the broker

119、age and the individual sales representative and is included in an agent agreement.Other revenues earned by the Brokerage Operations include transaction processing fees,rent charged for sales representatives office space,interest revenue earned on deposits,advertising and sponsorship and marketing su

120、pport services.112024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.OVERVIEW OF 2024 OPERATING RESULTSYears Ended December 31,(in 000s)except per Share amounts;Restricted Voting Shares outstanding;Exchangeable Units outstanding;Number of R

121、EALTORS 2024 2023 2022 Gross Commission Income$288,360$Franchise fees 44,994 44,845 45,615 Other revenue 17,316 3,609 4,256 Revenues 350,670 48,454 49,871 Less:Commissions 274,907 Cost of other revenue 5,150 1,030 1,207 Compensation 21,158 General and administration 6,288 2,885 1,120 Software,hostin

122、g and licensing 3,570 Premises 2,387 Marketing and communications 2,296 Other operating 1,491 Management fees 4,742 19,159 19,872 Interest on debt 4,646 2,967 2,970 Interest on lease obligation 936$23,099$22,414$24,702 Impairment and write-off of intangible assets (2,629)(201)(154)Depreciation and a

123、mortization (11,995)(6,894)(7,168)Interest on Exchangeable Units (9,628)(5,806)(5,806)Gain(loss)on fair value of Exchangeable Units (9,286)(1,098)11,547 Gain on settlement of deferred payments 1,224 Gain on settlement of contract transfer obligation 99 Loss on termination of lease (45)Loss on dispos

124、al of property and equipment (12)Gain(loss)on interest rate swap (1,386)2,203 Loss on debt facility amendment (122)Current income tax expense (2,907)(3,396)(3,948)Deferred income tax(recovery)expense 1,758 488 (407)Net and comprehensive earnings(loss)$(10,322)$3,997$20,969 Basic earnings(loss)per Re

125、stricted Voting Share$(1.09)$0.42$2.21 Diluted earnings(loss)per Share$(1.09)$0.42$1.19 Dividends paid per Restricted Voting Share$1.35$1.35$1.35 Interest expense per Exchangeable Unit$1.74$1.74$1.74 Restricted Voting Shares outstanding 9,483,850 9,483,850 9,483,850 Exchangeable Units outstanding 6,

126、248,544 3,327,667 3,327,667 Number of REALTORS 20,974 20,529 20,686(in 000s)December 31,December 31,December 31,As at 2024 2023 2022Total assets$157,445$64,892$72,629 Total liabilities$237,690$122,012$120,94312BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AN

127、D FINANCIAL CONDITION Variation of Operating Results for the Year Compared to the Prior YearRevenues:Revenues for the Year totaled$350.7 million,compared to$48.5 million for the Prior Year.The increase in revenues is primarily due to the inclusion of GCI and other revenues of the Acquired Businesses

128、.Franchise fees for the Year increased marginally as the benefit of fee increases implemented at the start of the Year and improved market conditions were partly offset by the fact that the franchise fee revenues received from the Acquired Businesses are now eliminated in the consolidated accounts o

129、f the Company.The franchise fees received from the Acquired Businesses were treated as third party revenue prior to March 31,2024.Net Earnings:For the Year,the Company generated a net loss of$10.3 million or$1.09 per Share,compared to net earnings of$4.0 million or$0.42 per Share in the Prior Year.T

130、he primary drivers of the decrease in net earnings compared to the Prior Year were:A$302.2 million increase in revenue less$279.0 million in commission expense and cost of other revenue primarily due to the results of the Acquired Businesses being included since April 1,2024;A$1.4 million loss on th

131、e fair value of the interest rate swap upon settlement in the Prior Year;and A$1.3 million gain on the settlement of deferred payments and the contract transfer obligation;partly offset by A$19.9 million increase in operating expenses resulting from the acquisition of the Manager and the Brokerage O

132、perations and increased professional fees associated with the Transaction;A loss of$9.3 million on the fair valuation of the Exchangeable Units compared to a loss of$1.1 million in the Prior Year;A$5.1 million increase in depreciation and amortization expense due to the amortization of intangible as

133、sets acquired in the Transaction;A$3.8 million increase in interest on Exchangeable Units due to the additional Exchangeable Units issued as consideration in the Transaction;A$2.6 million increase in interest expense due to higher interest rates and the inclusion of interest on lease obligations ass

134、umed on the acquisition of the Brokerage Operations;and A$2.4 million increase in write-off and impairment of intangible assets,as the Company changed the methodology by which it allocates its expenses in determining the net recoverable amount of intangible assets after the acquisition of the Manage

135、r.Total Assets:Total assets as at end of the Year increased by$92.6 million compared to December 31,2023 primarily as a result of the assets acquired in the Transaction including cash held in trust,property and equipment,goodwill and right-of-use assets.Total Liabilities:Total liabilities at the end

136、 of the Year increased by$115.7 million compared to December 31,2023.The main drivers of the net increase were:$85.3 million in liabilities assumed as a result of the Transaction including accounts payable and accrued liabilities,customer deposits and lease obligations;A$40.8 million increase in the

137、 liability associated with the Exchangeable Units issued as consideration in the Transaction;and A$9.3 million loss on the revaluation of Exchangeable Units.Dividends and distributions:Dividends approved by the Board on the Restricted Voting Shares were$1.35 per share in the Year,consistent with the

138、 Prior Year.Interest expense on Exchangeable Units increased as a result of the issuance of Exchangeable Units as consideration for the Acquired Businesses under the terms of the Transaction.132024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES

139、 INC.Variation of Operating Results for the Prior Year Compared to 2022Revenues:Revenues for the Prior Year decreased compared to 2022 as a result of weakness in the Canadian Market.Net Earnings:For the Prior Year,the Company generated net earnings of$4.0 million or$0.42 per Share,compared to net ea

140、rnings of$21 million or$1.19 per Share in 2022.The primary drivers of the decrease in net earnings compared to 2022 were:A loss of$1.1 million on the fair valuation of the Exchangeable Units compared to a gain of$11.5 million in 2022;A$1.4 million loss on the fair value of the interest rate swap upo

141、n settlement compared to a$2.2 million gain in 2022;A$1.8 million increase in administration expenses as a result of higher legal and consulting costs and directors fees associated with the evaluation and negotiation of the Transaction;A$1.4 million decrease in revenue as a result of weakness in the

142、 Canadian Market;partly offset by A$1.4 million decrease in income tax expense;A$0.7 million decrease in management fees;and A$0.3 million decrease in amortization expense due to a number of intangible assets being fully amortized during the Prior Year.Total Assets:Total assets as at end of the Prio

143、r Year decreased by$7.7 million compared to December 31,2022.The main drivers of the net decrease were as follows:A$6.8 million decrease in the carrying value of intangible assets,driven by amortization expense during the Prior Year;A$1.4 million decrease in the interest rate swap asset upon expiry;

144、and A$0.7 million decrease in cash;partly offset by A$0.5 million increase in the deferred income tax asset;and A$0.4 million increase in prepaid expenses.Total Liabilities:Total liabilities at the end of the Prior Year increased by$1.1 million compared to December 31,2022.The main drivers of the ne

145、t increase were as follows:A$1.1 million increase in the liability associated with the Exchangeable Units,which is tied to the trading value of the Restricted Voting Shares;A$0.3 million increase in accounts payable and accrued liabilities;and A$0.1 million increase in the debt facilities;partly off

146、set by A$0.6 million decrease in the contract transfer obligation.Dividends and distributions:Dividends approved by the Board on the Restricted Voting Shares were$1.35 per share in the Prior Year,consistent with 2022.Interest on Exchangeable Units also remained consistent with 2022.14BRIDGEMARQ REAL

147、 ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION KEY PERFORMANCE DRIVERSKey performance drivers of the Companys operating performance include:1.The composition of the Companys revenue streams;2.The number of REALTORS in the Franchise Network and at the

148、 Brokerage Operations;3.Transactional dollar volumes of the Canadian Market;4.REALTOR Productivity;and 5.Products and services offered to REALTORS.Composition of the Companys revenue streamsAs a result of the Transaction,the Company has broadened its business to capture additional revenue which is m

149、ore closely correlated with the cyclicality of the Canadian real estate market.The GCI generated by the Brokerage Operations tends to increase or decrease depending on home sale activity.This revenue diversification complements the revenues of the Franchise Operations which are primarily fixed in na

150、ture and have provided a reliable base of cash flow to support the Companys operations,dividends and distributions to holders of Exchangeable Units.The Company estimates that for 2024,approximately 76%of its franchise fee revenues were fixed in nature which includes a substantial portion of variable

151、 franchise fees which were effectively fixed in nature.For those REALTORS or Teams who reach the variable fee cap,the variable franchise fee is effectively fixed in nature,in that the variable franchise fee paid by the REALTOR or Team does not change based on changes in the Canadian Market.Effective

152、 January 1,2025,the Company increased the fees to be paid by REALTORS operating under the Royal LePage and Johnston Daniel Brands with the monthly fixed fees increasing by$5 to$144 and the maximum annual variable franchise fee increasing to$1,525.Monthly fees paid by REALTORS operating under the Via

153、 Capitale Brand were increased to$192 on January 1,2025.Number of REALTORS in the Franchise Network For the Year,the Franchise Network of 20,283 REALTORS decreased by 246 REALTORS compared to a net decrease of 157 in the Prior Year.As of December 31,except as noted 2020 2021 2022 2023 2024Company Ne

154、twork Opening REALTOR Count 19,111 19,046 20,159 20,686 20,529 Net REALTOR growth(attrition)for the period (65)1,113 527 (157)(246)Closing REALTOR Count1 19,046 20,159 20,686 20,529 20,283%Change in the period 0%6%3%-1%-1%Canadian REALTOR Population2 2020 2021 2022 2023 2024CREA REALTOR Membership 1

155、36,605 151,087 160,064 164,598 164,144%Change in the period 3%11%6%3%0%1 CREAThe Company strives to increase the number of REALTORS in the Franchise Network through converting competing brokerages and REALTORS to the Companys Brands and developing programs to increase REALTOR growth.The number of RE

156、ALTORS in the Franchise Network increases when the Company enters into new Franchise Agreements with Franchisees and when existing Franchisees are successful in increasing the number of REALTORS at their Brokerage either through recruitment efforts or acquisitions.152024 MANAGEMENTS DISCUSSION AND A

157、NALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.The Franchise Network is geographically dispersed.The Company strives to grow the Franchise Network in all regions of Canada targeting proportionate participation across the country.Canadian1 Company REALTOR REALTOR As at

158、 Dec.31,2024 Population PopulationOntario 59%55%British Columbia 16%14%Quebec 10%18%Alberta 9%6%Maritimes 3%4%Prairies 3%3%Total 100%100%1 Source:CREAFRANCHISE AGREEMENTS Franchise Agreements are contracts between the Company and Franchisees,which govern matters such as use of the Trademarks,rights

159、and obligations of Franchisees and the Company,renewal terms,services to be provided to Franchisees and franchise fees.The Royal LePage Franchise Agreements,which represent 95%of REALTORS in the Franchise Network,are for 10 to 20-year terms with a standard renewal term of ten years.These long-durati

160、on contracts exceed the industry standard of five years and thereby reduce agreement renewal risk.In addition,the Company regularly attempts to extend contract terms a further ten years in advance of renewal dates when opportunities present themselves.The Via Capitale Franchise Agreements,which repr

161、esent 5%of REALTORS in the Franchise Network,are typically between five to seven years in duration with standard renewal terms extending between five to seven years.A summary of the Companys agreement renewal profiles as at December 31,2024 for the Franchise Network is shown below.Thereafter00510152

162、0253035Thereafter2026202520270%5%10%15%20%25%30%35%40%45%2028202920262025202720282029%Of Franchise Agreements Up For Renewal(by Number of REALTORS)%Of Franchise Agreements Up For Renewal(by Number of Agreements)RENEWALSThe Company has historically achieved a very high renewal success rate with more

163、than 96%of Franchise Agreements renewing in the past five years(expressed as a percentage of the underlying number of REALTORS associated with those agreements).Due to the ongoing success of the Companys Franchisees,a number of opportunities,such as increasing Franchisee locations,present themselves

164、 to renew Franchise Agreements before they come due.Via Capitale renewed two Franchise agreements in the Year and was successful in increasing the term of one of these Franchise Agreements on renewal for a seven year term.During the Quarter,nine Franchisees(Prior Year Quarter six),representing 995 R

165、EALTORS(Prior Year Quarter 283),extended the term of their Franchise Agreements or renewed.During the Year,25 Franchisees(Prior Year 25)representing 3,694 REALTORS(Prior Year 972)extended the term of their Franchise Agreements or renewed.16BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSS

166、ION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION Number of REALTORS Affiliated with the Brokerage Operations For the Quarter,the Brokerage operations declined by 18 REALTORS.The Brokerage Operations employ a number of tools and techniques to recruit new and experienced REALTORS into their operati

167、on.Of the 2,706 REALTORS at the Brokerage operations,2,015 also form part of the Franchise Network and benefit from recruiting programs offered by the Franchise Operations.Transactional Dollar Volumes of the Canadian MarketThe charts below show the cumulative growth in the Canadian Market and select

168、 urban markets since the first quarter of 2021.Transaction Dollar Volume During the pandemic,housing activity across Canada rebounded dramatically to record levels in many markets.Pent-up demand,low interest rates,changing work and commuting patterns,increasing requirements for people to work from h

169、ome during the pandemic and other factors increased the demand for housing.The first quarter of 2022 represented the strongest first quarter ever in the Canadian Market with transactional dollar volumes improving marginally over the first quarter of 2021.However,this increase was a result of increas

170、ed prices substantially offset by a 12%drop in home sale volumes.In the second quarter of 2022,house prices began to retreat from their historic highs as demand moved downward.Commencing in March 2022,the Bank of Canada embarked on a campaign to increase interest rates in an effort to curb inflation

171、ary pressures.Higher borrowing costs,as well as concerns over affordability in general,dampened consumer demand through the last three quarters of 2022.Overall for 2022,the Canadian Market dropped 24%compared to 2021,represented by a 25%reduction in home sale volumes and a 2%reduction in the selling

172、 price of homes.Borrowing costs climbed in 2022 and into 2023,as the Bank of Canada prioritized inflation control in tightening monetary policy.From March,2022 to July,2023,the bank rate increased from 0.5%to 5.25%pushing many would-be buyers to the sidelines and contributing to slowing increases in

173、 home prices.Transaction dollar volume was down 26%year-over-year for the first half of 2023,but was higher by 7%in the second half.Overall,transaction dollar volume in 2023 was down 14%from 2022 as a result of an 11%drop in volumes and a 4%drop in average selling price.During the first quarter of 2

174、024,the Canadian Market saw a year-over-year increase in transactional dollar volume of 17%,albeit comparing to a very weak first quarter of 2023.Market growth had tempered in the second quarter with year-over-year transaction volumes lower by 2%and prices lower by 3%.There was a slight improvement

175、in the third quarter with year-over-year transaction volumes higher by 4%and prices lower by 1%.However,there was apparent strength in the Quarter as transaction volumes showed a year-over-year increase of 38%while the average selling prices were up 9%compared to the Prior Year Quarter.For the Year,

176、primarily on the strength of the Quarter,the market improved compared to the Prior Year with transaction volume increasing by 11%and average selling prices increasing by 2%.QUARTERLY ROLLING TWELVE-MONTH%CHANGE 0%20%40%60%80%100%120%Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2

177、 24Q3 24Q4 24*GTA T$V*Canadian Market T$V*QC T$V*GVA T$V172024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.-40%-20%0%20%40%60%80%Q3 24Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q4 24*GTA Volume*Canadian Market

178、Volume*QC Volume*GVA VolumeThe Canadian Market is generally measured in terms of transactional dollar volume which is the gross value of all homes sold in Canada for a given period.The charts below show the historical volume of homes sold in Canada and the average selling price on a quarterly basis.

179、Residential Home Sales VolumeAverage Home Selling Price 0%20%40%60%Q3 24Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q4 24*GTA Average Selling Price*Canadian Market Average Selling Price*QC Average Selling Price*GVA Average Selling PriceDuring the Quarter,the Canadian Market

180、 closed up 50%,at$84.9 billion,as compared to the Prior Year Quarter at$56.6 billion.The increase in transactional dollar volume was driven by an increase of 38%in the number of units sold and a 9%increase in price.For the Year,the Canadian Market closed up 12%,at$338.3 billion,as compared to the Pr

181、ior Year at$300.8 billion.The increase in transactional dollar volume was driven by an increase of 11%in the number of units sold and a 2%increase in price.During the Quarter,the Greater Toronto Area(“GTA”)market closed up 31%at$17.5 billion,as compared to the Prior Year Quarter at$13.4 billion.For

182、the Year,GTA market closed up 2%at$75.6 billion,as compared to the Prior Year at$74.3 billion.During the Quarter,the Qubec market closed up 58%,at$11.6 billion,as compared to the Prior Year Quarter,driven by a 42%increase in units sold and by an 11%increase in selling price.For the Year,the Qubec ma

183、rket closed up 28%,at$45.2 billion,as compared to the Prior Year,driven by a 19%increase in units sold and by an 8%increase in selling price.During the Quarter,the Greater Vancouver market closed up 29%,at$8.3 billion,as compared to the Prior Year Quarter,driven by a 31%increase in units sold and by

184、 a 1%increase in selling price.During the Year,the Greater Vancouver market closed up 2%,at$34.1 billion,as compared to the Prior Year,driven by a 1%increase in units sold and in selling price.18BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CON

185、DITION REALTOR ProductivityThe average REALTOR in the Franchise Network generated approximately$2.9 million in transactional dollar volume for the twelve months ended December 31,2024,compared to an estimated$1.7 million in transactional dollar volume generated by an average Canadian REALTOR,outside

186、 the Franchise Network.Management believes that the higher productivity of the Franchise Network makes the Company less prone to a loss of REALTORS during a period of reduced transactional dollar volume.The average transactional dollar volume per REALTOR for the past five calendar years is summarize

187、d in the chart below.1000150020002500300035004000Company REALTOR Network*Rest of Canada20212223Average Dollar Volume per REALTOR*Source:CREA2445005000CANADIAN RESIDENTIAL REAL ESTATE MARKET REALTOR PRODUCTIVITY(Average T$V per REALTOR,in 000 of Canadian dollars)Products and Services Provided to REAL

188、TORSThe Company provides a broad array of innovative products and services to Franchisees and REALTORS.Most of these products and services are provided in exchange for the franchise fees paid by our Franchisees.These include,among others,the use of our real estate Brands to promote their businesses,

189、use of and access to internal and external communication tools including our websites and intranets,education and learning services,recruiting support,business development coaching and consulting,and access to fully integrated technology tools to help them manage their business.In addition to those

190、products and services,the Company provides additional services,which are useful to REALTORS and Franchisees,but are not provided under the Franchise Agreements.These include access to branded promotional materials,including office supplies and clothing,a lead referral service and mortgage referral s

191、ervices on behalf of certain financial institutions.Certain of these products and services provide incremental revenue to the Company.In 2024,the Company rolled out RLP InvestorsEdge a new investor-focused portal that offers comprehensive agent training and a lead-generating website targeting indivi

192、duals interested in owning real estate for investment purposes.In addition,the national brand campaign“Royal LePage.The Results People”was launched and resulted in more than 13 million digital impressions within the first three months.The campaign provided the Companys sales representatives with bil

193、ingual graphic and video assets for digital promotion across multiple platforms.The Company also rolled out its new trademarked logos and brand assets for all registered names.During the year,the Company focused on leveraging artificial intelligence tools to support its network of real estate profes

194、sionals.Proprio Direct launched tailored AI tools that provide data-driven insights to brokers and enhance the virtual staging of homes,as well as a virtual assistant program designed to streamline administrative tasks.A comprehensive training series,featuring tips on using ChatGPT,prompting techniq

195、ues and the latest AI tools,was offered to members of the Royal LePage and Johnston&Daniel brands.Further,new awards branding and customized marketing materials for agents operating under the Johnston&Daniel luxury banner were created,including shareable social media assets to support agents digital

196、 marketing efforts.Via Capitale expanded its presence in the Montreal market with the opening of two new franchises,and launched a partnership with a real estate training academy to support new recruits to the industry.192024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRI

197、DGEMARQ REAL ESTATE SERVICES INC.THE CANADIAN RESIDENTIAL REAL ESTATE MARKETSpurred by declining borrowing rates,homebuyer activity increased in 2024 compared to the previous year.Since June of 2024,the Bank of Canada has been gradually reducing its target for the overnight lending rate,including th

198、e latest update on Wednesday,March 12th.The Banks key lending rate currently sits at 2.75%.1 Despite an increase in housing supply in most major markets across the country,average home prices have continued to rise modestly.Historically,housing market activity picks up in the spring,although trade t

199、ensions with the United States have added an additional element of uncertainty in the market.The governing council of the Bank of Canada has noted that it will proceed carefully with any further changes to interest rates,as it assesses both the upward pressures on inflation from higher costs and the

200、 downward pressures from weaker demand.2024 2023 2022JanAprMarMayJunJulAugSepOctNovDecFeb*Source:CREA16%14%12%10%8%6%4%2%0%CANADIAN RESIDENTIAL REAL ESTATE MARKET-SEASONALITY (*%Canadian Market T$V by month)Historically,the second quarter of each year,often referred to as the“spring market”,has seen

201、 the highest value of real estate traded in a given year.However,the pandemic fueled strength in the markets in 2021 and contributed to the first quarter of 2022 being unusually strong.Historical seasonality patterns re-emerged in 2023 and 2024 with second quarter volumes being the strongest for the

202、 year.1 Bank of Canada reduces policy rate by 25 basis points to 23/4%,March 12,202420BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION ANALYSIS OF FOURTH QUARTER AND ANNUAL OPERATING RESULTS AND CASH FLOWSYears Ended December 31,(in 000s

203、)except per Share amounts;Three months Three months Twelve months Twelve months Restricted Voting Shares outstanding;ended ended ended ended Exchangeable Units outstanding;December 31,December 31,December 31,December 31,Number of REALTORS 2024 2023 2024 2023 Gross Commission Income$86,699$288,360$Fr

204、anchise fees 10,466 10,059 44,994 44,845 Other revenue 4,333 766 17,316 3,609 Revenues 101,498 10,825 350,670 48,454 Less:Commissions 83,411 274,907 Cost of other revenue 714 193 5,150 1,030 Compensation 7,518 21,158 General and administration 1,419 1,060 6,288 2,885 Software,hosting and licensing 1

205、,095 3,570 Premises 766 2,387 Marketing and communications 830 2,296 Other operating 576 1,491 Management fees 4,422 4,742 19,159 Interest on debt 1,056 738 4,646 2,967 Interest on lease obligation 303 936$3,810$4,413$23,099$22,414 Impairment and write-off of intangible assets (854)(2,629)(201)Depre

206、ciation and amortization (3,404)(1,708)(11,995)(6,894)Interest on Exchangeable Units (2,726)(1,452)(9,628)(5,806)Loss on fair value of Exchangeable Units (6,436)(1,364)(9,286)(1,098)Gain on settlement of deferred payments 1,224 Gain on settlement of contract transfer obligation 99 Loss on terminatio

207、n of lease (45)(45)Loss on disposal of property and equipment (12)(12)Loss on interest rate swap (436)(1,386)Loss on debt facility amendment (122)Current income tax expense (592)(642)(2,907)(3,396)Deferred income tax recovery 627 151 1,758 488 Net and comprehensive earnings(loss)$(9,632)$(1,039)$(10

208、,322)$3,997 Basic earnings(loss)per Restricted Voting Share$(1.02)$(0.11)$(1.09)$0.42 Diluted earnings(loss)per Share$(1.02)$(0.11)$(1.09)$0.42 Dividends paid per Restricted Voting Share$0.34$0.34$1.35$1.35Interest expense per Exchangeable Unit$0.44$0.44$1.74$1.74 Restricted Voting Shares outstandin

209、g 9,483,850 9,483,850 9,483,850 9,483,850 Exchangeable Units outstanding 6,248,544 3,327,667 6,248,544 3,327,667 Number of REALTORS 20,974 20,529 20,974 20,529Cash Flow Information (in 000s)Cash provided by(used for):Operating activities$1,803$2,272$17,099$13,667 Investing activities (463)(271)2,483

210、 (1,477)Financing activities (4,387)(3,201)(16,237)(12,866)(in 000s)December 31,December 31,As at 2024 2023Total assets$157,445$64,892 Total liabilities$237,690$122,012212024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.FOURTH QUARTER OPE

211、RATING RESULTS AND CASH FLOWS During the Quarter,the Company generated a net loss of$9.6 million compared to a net loss of$1.0 million in the Prior Year Quarter.Revenues for the Quarter totaled$101.5 million,compared to$10.8 million for the Prior Year Quarter.The increase in revenues is due to the i

212、nclusion of GCI and other revenues of the Acquired Businesses.Franchise fees for the Quarter increased,driven by fee increases implemented on January 1,2024 and improving market conditions partly offset by the elimination of franchise fees received from the Acquired Businesses for the Quarter.The fr

213、anchise fees received from the Acquired Businesses were treated as third party revenue prior to April 1,2024.Commissions expense represents commissions paid to sales representatives who sell real estate in the Companys Brokerage Operations.Cost of other revenue represents the direct costs associated

214、 with ancillary and other revenues.Compensation represents compensation expense paid to employees.Prior to the completion of the Transaction,the Company had no employees.All management services were provided under the terms of the MSA prior to April 1,2024.General and administration expenses of$1.4

215、million for the Quarter increased compared to the Prior Year Quarter due to the inclusion of costs of the Brokerage Operations and the Manager,which were acquired on completion of the Transaction.Software,hosting and licensing,premises,marketing and communications and other operating expenses repres

216、ent the expenses incurred by the Acquired Businesses in the Quarter.These represent the expenses of operating the Brokerage Operations as well as expenses that were previously incurred by the Manager in fulfilling its obligations to the Company under the terms of the MSA.Management fee expenses are

217、nil in the Quarter as management of the Company has been internalized as a result of the Transaction.Interest on debt of$1.1 million was higher than the Prior Year Quarter due to higher interest rates compared to the Prior Year.Interest on lease obligation represents the interest charge related to t

218、he leased premises of the Brokerage Operations.Depreciation and amortization for the Quarter of$3.4 million increased by$1.7 million compared to the Prior Year Quarter due to the acquisition of the Brokerage Operations.Under the Transaction,the Company acquired a number of sales agreements associate

219、d with the Brokerage Operations,which are amortized over a period of five years.Interest on Exchangeable Units represents the distributions to Exchangeable Unitholders.For the Quarter,total distributions amounted to$0.44 per Exchangeable Unit,unchanged from the Prior Year Quarter.Aggregate payments,

220、however,totaled$2.7 million compared to$1.5 million in the Prior Year Quarter due to the additional Exchangeable Units issued as consideration under the Transaction.Distributions to Exchangeable Unitholders are determined with reference to dividends paid on Bridgemarqs Restricted Voting Shares.Gain(

221、loss)on fair value of Exchangeable Units represents the change in the fair value of the Exchangeable Units.The Exchangeable Units are valued based on the market value of the Companys Restricted Voting Shares.At December 31,2024,the Companys Restricted Voting Shares were valued at$15.03 per share com

222、pared to$14.00 per share at September 30,2024,resulting in a loss of$6.4 million for the Quarter.This loss represents an increase in the obligation associated with the conversion features of the Exchangeable Units.For the Prior Year Quarter,the price of the Companys Restricted Voting Shares increase

223、d from$12.76 per share at September 30,2023 to$13.17 per share at December 31,2023 resulting in a loss of$1.4 million.Loss on interest rate swap was a non-cash item which represented the change in fair value of the Companys interest rate swaps.The interest rate swap matured in December 2023.22BRIDGE

224、MARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION Income tax expense.The effective income tax rate paid by the Company for the Quarter was 0%(Prior Year Quarter -90%).The Companys effective income tax rate is significantly different than the Co

225、mpanys enacted income tax rate of 26.5%.The difference in the effective income tax rate is driven by a number of items that are included in the determination of net earnings but excluded from the determination of taxable income(including,among other things,non-deductible amortization of intangible a

226、ssets,interest on Exchangeable Units and fair valuation adjustments on Exchangeable Units)as well as items that are excluded from the determination of net earnings but included in the determination of taxable income(including,among other things,payments associated with franchise agreement expenses).

227、Cash provided by operating activities decreased by$0.5 million compared to the Prior Year Quarter.The decrease is driven primarily by higher interest payments.Cash used in investing activities was consistent with the Prior Year Quarter.Cash used in financing activities is comprised of dividends paid

228、 to shareholders and lease payments.The increase in cash used in financing activities is due to the payment of office leases at the Brokerage Operations,which were assumed on completion of the Transaction.ANNUAL OPERATING RESULTS AND CASH FLOWS For the Year,the Company generated a net loss of$10.3 m

229、illion compared to net earnings of$4.0 million in the Prior Year.Revenues for the Year totaled$350.7 million,compared to$48.5 million for the Prior Year.The increase in revenues is due to the inclusion of gross commission income and other revenues of the Acquired Businesses.Franchise fees for the Ye

230、ar increased driven by fee increases implemented on January 1,2024 and improving market conditions partly offset by the elimination of franchise fees received from the Acquired Businesses after the first quarter.The franchise fees received from the Acquired Businesses were treated as third party rev

231、enue prior to April 1,2024.Commissions expense represents commissions paid to sales representatives who sell real estate in the Companys Brokerage Operations.Cost of other revenue represents the direct costs associated with ancillary and other revenues.Compensation represents compensation expense pa

232、id to employees.Prior to the completion of the Transaction,the Company had no employees.All management services were provided under the terms of the MSA prior to April 1,2024.General and administration expenses of$6.3 million for the Year increased compared to the Prior Year due to the inclusion of

233、costs of the Brokerage Operations and the Manager which were acquired on completion of the Transaction as well as professional fees incurred to complete the Transaction.Software,hosting and licensing,premises,marketing and communications other operating expenses represent the expenses incurred by th

234、e Acquired Businesses during the second and third quarters.These represent the expenses of operating the Brokerage Operations as well as expenses that were previously incurred by the Manager in fulfilling its obligation to the Company under the terms of the MSA.Management fee expenses are lower than

235、 the Prior Year as management of the Company has been internalized effective March 31,2024 as a result of the Transaction.Interest on debt of$4.6 million was higher than the Prior Year due to higher interest rates.Interest on lease obligation represents the interest charge related to the leased prem

236、ises of the Brokerage Operations.Depreciation and amortization for the Year of$12.0 million increased by$5.1 million compared to the Prior Year due to the acquisition of the Brokerage Operations.Under the Transaction,the Company acquired a number of sales agreements associated with the Brokerage Ope

237、rations which are amortized over a period of five years.Interest on Exchangeable Units represents the distributions to Exchangeable Unitholders.For the Year,total distributions amounted to$9.6 million compared to$5.8 million in the Prior Year due to the additional Exchangeable Units issued as consid

238、eration in the Transaction.Distributions to Exchangeable Unitholders are determined with reference to dividends paid on Bridgemarqs Restricted Voting Shares.232024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.Gain(loss)on fair value of Ex

239、changeable Units represents the change in the fair value of the Exchangeable Units.The Exchangeable Units are valued based on the value of the Companys Restricted Voting Shares.At December 31,2024,the Companys Restricted Voting Shares were valued at$15.03 per share compared to$13.17 per share at Dec

240、ember 31,2023,resulting in a loss of$9.3 million for the Year.This loss represents an increase in the obligation associated with the conversion features of the Exchangeable Units.For the Prior Year,the price of the Companys Restricted Voting Shares increased from$12.84 per share at December 31,2022

241、to$13.17 per share at December 31,2023,resulting in a loss of$1.1 million.Gains on settlement of deferred payments and contract transfer obligation totaling$1.3 million for the Year were recorded when certain deferred fees and other obligations to the Manager and to Brookfield were effectively settl

242、ed pursuant to the Transaction.Loss on interest rate swap was a non-cash item which represented the change in fair value of the Companys interest rate swaps.The interest rate swap matured in December 2023.Income tax expense.The effective income tax rate paid by the Company for the Year was-13%(Prior

243、 Year 42%).The Companys effective income tax rate is significantly different than the Companys enacted income tax rate of 26.5%.The difference in the effective income tax rate is driven by a number of items that are included in the determination of net earnings but excluded from the determination of

244、 taxable income(including,among other things,non-deductible amortization of intangible assets,interest on Exchangeable Units and fair valuation adjustments on Exchangeable Units)as well as items that are excluded from the determination of net earnings but included in the determination of taxable inc

245、ome(including,among other things,payments associated with franchise agreement expenses).Cash provided by operating activities increased by$3.4 million compared to the Prior Year.The increase is due to increased interest income and a reduction in working capital partly offset by higher interest costs

246、.Cash provided by investing activities increased by$4.0 million compared to the Prior Year primarily due to the$4.0 million cash acquired on the Transaction.Cash used in financing activities increased by$3.4 million due to lease payments of$3.3 million as a result of the acquisition of the Brokerage

247、 Operations.Dividends paid to shareholders were consistent with the Prior Year.The identifiable assets and liabilities acquired in the Transaction are as follows:Fair value of Exchangeable Units issued$39,909 Cash paid for working capital adjustment$131 Less:Cash acquired (4,146)Settlement of pre-ex

248、isting relationships 2,432Net Consideration$38,326 Cash held in trust$52,367 Accounts receivable 3,091Other current assets 4,246Property and equipment 2,599Other non-current assets 217Right-of-use assets 19,034Deferred income taxes,net (539)Intangible assets 18,940Goodwill 23,626Accounts payable and

249、 accrued liabilities (13,883)Customer deposits (52,367)Lease liabilities (19,005)Net assets acquired$38,32624BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION SUMMARY OF QUARTERLY RESULTS(Unaudited)For three months ended,2024 2023 (in 000

250、s)except per Share amounts and number of REALTORS;Dec.31 Sept.30 June 30 Mar.31 Dec.31 Sept.30 June 30 Mar.31Revenues Gross Commission Income$86,699$109,624$92,037$Franchise fees 10,466 11,523 11,929 11,076 10,059 11,852 11,755 11,179 Other revenue 4,333 5,665 6,538 691 766 945 1,086 812 101,498 126

251、,812 110,504 11,767 10,825 12,797 12,841 11,991 Less:Commissions 83,411 104,444 87,052 Cost of other revenue 714 1,973 2,311 152 193 267 345 226 Compensation 7,518 6,642 6,998 General and administration 1,419 1,884 1,874 1,111 1,060 510 948 367 Software,hosting and licensing 1,095 1,225 1,250 Premis

252、es 766 778 843 Marketing and communications 830 746 720 Other operating 576 288 627 Management fees 4,742 4,422 4,997 4,888 4,852 Interest on debt 1,056 1,102 1,205 1,193 738 746 740 743 Interest on lease obligation 303 313 320 3,810 7,417 7,304 4,569 4,413 6,278 5,920 5,803 Impairment and write-off

253、 of intangible assets (854)(54)(180)(1,552)(8)(91)(102)Depreciation and amortization (3,404)(3,422)(3,462)(1,695)(1,708)(1,711)(1,734)(1,741)Interest on Exchangeable units (2,726)(2,726)(2,725)(1,452)(1,452)(1,452)(1,452)(1,452)Gain(loss)on fair value of Exchangeable Units (6,436)(10,810)10,622 (2,6

254、62)(1,364)6,755 (499)(5,990)Loss on termination of lease (45)Loss on disposal of property and equipment (12)Gain on settlement of deferred payments 1,224 Gain on settlement of contract transfer obligation 99 Loss on interest rate swap (436)(420)(152)(378)Loss on debt facility amendment (122)Earnings

255、(loss)before income tax (9,667)(9,595)11,559 (1,469)(548)9,442 1,992 (3,982)Current income tax expense 592 1,246 494 575 642 990 827 937 Deferred income tax expense(recovery)(627)536 (1,666)(151)(149)26 (214)Net and comprehensive earnings(loss)$(9,632)$(10,841)$10,529$(378)$(1,039)$8,602$1,139$(4,70

256、5)Basic earnings(loss)per Restricted Voting Share$(1.02)$(1.14)$1.11$(0.04)$(0.11)$0.91$0.12$(0.50)Diluted earnings(loss)per Share$(1.02)$(1.14)$0.17$(0.04)$(0.11)$0.26$0.12$(0.50)Adjusted net earnings(loss)$(413)$2,695$2,632$2,413$2,213$3,718$3,242$3,237 Adjusted net earnings (loss)Per Share$(0.03)

257、$0.17$0.17$0.19$0.17$0.29$0.25$0.25 Number of REALTORS 20,974 21,144 21,266 20,564 20,529 20,796 20,752 20,619252024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.DEBT FACILITIES Effective March 31,2024,the Company agreed to certain amendm

258、ents to the Companys debt facilities in connection with the Transaction,including an increase in the Operating Facility from$5 million to$10 million.As at December 31,2024,the Companys$95.0 million financing is comprised of the following three arrangements:A$55.0 million non-revolving term facility(

259、the“Term Facility”);A$30.0 million revolving acquisition facility(the“Acquisition Facility”)to support acquisitions pursued by the Company.A standby fee of 0.15%applies on undrawn amounts under this facility;and A$10.0 million revolving operating facility(the“Operating Facility”)to meet the Companys

260、 day-to-day operating requirements.As at December 31,2024,the Company has drawn$55.0 million on the Term Facility,$12 million on the Acquisition Facility and nil on the Operating Facility.Borrowings under each of these arrangements bear interest at a variable rate of Bankers Acceptances(“BAs”)+2.0%(

261、2023 BAs+1.7%)or Prime+0.8%(2023 Prime+0.5%)and are secured by a first ranking security interest in substantially all assets of the Company.The covenants of this financing prescribe that the Company must maintain a ratio of Consolidated EBITDA to Senior Interest Expense at a minimum of 3:1 and a rat

262、io of Senior Indebtedness to Consolidated EBITDA at a maximum of 4:1 as outlined in the loan agreement.Consolidated EBITDA is defined as earnings before income tax adjusted for amortization and net impairment or recovery of intangible assets,interest expense,hedging activities and fair value adjustm

263、ents on the Exchangeable Units.Senior Indebtedness is defined as borrowings on the Companys debt facilities.Senior Interest Expense is defined as interest on Senior Indebtedness.The Company is compliant with these covenants for all periods presented.26BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEM

264、ENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION FREE CASH FLOWFree Cash Flow represents operating income before deducting interest on leases,depreciation and amortization and net impairment and write-off of intangible assets,minus current income tax expense,minus additions to propert

265、y and equipment and intangible assets,minus repayment of contract transfer obligations,minus lease payments.Free Cash Flow is used by the Company as a measure of the amount of cash generated by the Company,which is available for distribution to the Companys shareholders on a diluted basis,subject to

266、 working capital and other investment requirements.The calculation of Free Cash Flow for the Quarter and the Year is presented in the table below with comparative amounts for the Prior Year Quarter and the Prior Year.Three months Three months Twelve months Twelve months ended ended ended ended($000s

267、)December 31,December 31,December 31,December 31,2024 2023 2024 2023Revenues$101,498$10,825$350,670$48,454 Non-cash items included in revenue (134)118 490 535$101,364$10,943$351,160$48,989 Less:Commissions 83,411 274,907 Cost of other revenue 714 193 5,150 1,031 Compensation 7,518 21,158 General and

268、 administration 1,419 1,060 6,288 2,885 Software,hosting and licensing 1,095 3,570 Premises 765 2,387 Marketing and communications 830 2,296 Other operating 575 1,491 Management fees 4,422 4,742 19,159 Interest on debt 1,056 738 4,646 2,967 Current income tax expense 592 642 2,907 3,396 Lease paymen

269、ts 1,105 3,276 Additions to property and equipment and intangible assets 463 116 1,528 873 Repayment of contract transfer obligation 155 4 604 Free Cash Flow$1,821$3,617$16,810$18,074 Free Cash Flow per Share$0.12$0.38$1.12$1.91Free Cash Flow per Share is calculated by dividing Free Cash Flow by the

270、 number of outstanding Restricted Voting Shares on a diluted basis.Free Cash Flow per Share is used by the Company to measure the amount of cash per Share generated which is available for distribution to the Companys shareholders on a diluted basis,subject to working capital and other investment req

271、uirements.Free Cash Flow for the Quarter totaled$1.8 million compared to$3.6 million generated in the Prior Year Quarter.For the Year,Free Cash Flow generated by the Company amounted to$16.8 million compared to$18.1 million in the Prior Year.Free Cash Flow and Free Cash Flow per Share are non-GAAP f

272、inancial measures and do not have standardized meanings under IFRS and,accordingly,may not be comparable to similar measures used by other companies.The Company believes that Free Cash Flow and Free Cash Flow per Share are useful supplemental measures of performance as they provide investors with an

273、 indication of the amount of cash flow generated after investing activities and lease payments which is available to holders of Restricted Voting Shares and Exchangeable Unitholders,subject to working capital and other investment requirements.Investors are cautioned,however,that Free Cash Flow and F

274、ree Cash Flow per Share should not be interpreted as alternatives to using net earnings or net earnings per Share(as measures of profitability)or cash provided by operating activities(as a measure for cash flows)to evaluate the Companys financial performance.272024 MANAGEMENTS DISCUSSION AND ANALYSI

275、S OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.Free Cash Flow Reconciled to Cash Flow from Operating ActivitiesThe table below reconciles cash flow from operating activities,as presented in the consolidated statements of cash flows,to Free Cash Flow for the Quarter and the

276、Year.Free Cash Flow is a measure used by the Company to assess the resources available to the Company for distribution to holders of Restricted Voting Shares and holders of Exchangeable Units subject to other uses for cash.Three months Three months Twelve months Twelve months ended ended ended ended

277、($000s)December 31,December 31,December 31,December 31,2024 2023 2024 2023 Cash flow from operating activities$1,803$2,272$17,099$13,667 Add(deduct):Interest on Exchangeable Units 2,726 1,452 9,628 5,806 Interest on Lease Obligation 303 936 Current Income tax expense (592)(642)(2,907)(3,396)Income t

278、axes paid 507 800 2,909 3,500 Changes in non-cash working capital (1,028)(329)(4,284)(289)Interest expense (4,083)(2,298)(15,210)(9,143)Interest paid 3,758 2,634 13,447 9,406 Interest income 378 113 1,526 404 Interest received (378)(113)(1,526)(404)Lease payments (1,105)(3,276)Additions to property

279、and equipment and intangible assets (463)(116)(1,528)(873)Repayment of contract transfer obligation and other (5)(155)(4)(604)Free Cash Flow$1,821$3,617$16,810$18,074The Company has paid out,in the past,and could pay out,in any given period,cash in excess of net earnings to shareholders as a signifi

280、cant portion of the Companys operating expenses is made up of non-cash amortization of intangible assets and other non-cash charges to net earnings.Management does not view the payment of cash in excess of net earnings as an economic return of capital as these intangible assets and other non-cash ch

281、arges are not expected to require a further cash outlay in the future.28BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION LIQUIDITYRevenues from franchise fees and other services provided to Franchisees by the Franchise Operations have hi

282、storically been the largest source of liquidity for the Company.Given that Franchisees are contractually obligated to pay franchise fees for up to ten years under the Franchise Agreements and given the high degree of success the Company has had in renewing its Franchise Agreements in the past when t

283、hey come due,the Company believes that the existing portfolio of Franchise Agreements,along with its non-cash working capital and capital resources,will continue to generate strong cash flow for the Company.Following the closing of the Transaction,the Company benefits from the operating cash flows o

284、f the Brokerage Operations.In addition,the Company has$9.1 million in cash and access to$28.0 million in credit facilities to supplement the operating cash flows and Free Cash Flow generated by the Company.The Company believes that there is sufficient liquidity to allow it to meet its operating comm

285、itments in the foreseeable future.The Companys ability to grow its Free Cash Flow is dependent upon its ability to increase the size of the Franchise Network,which it may achieve by,a)supporting Franchisees and Company-owned brokerages in their efforts to recruit REALTORS to their Brokerages,b)assis

286、ting Franchisees to acquire Brokerages from outside the Franchise Network c)acquiring additional Company-owned brokerages and,d)entering into new Franchise Agreements.With the acquisition of the Brokerage Operations,the Company expects to add to its capability to capture future growth across a broad

287、er spectrum of the real estate industry through both organic growth and future acquisition opportunities.In addition,the Company has the opportunity to further grow its sources of other revenue and may consider other types of investments in the future.The Acquisition Facility provides capital resour

288、ces for the Company to pursue growth opportunities.During the Quarter,the Company generated Free Cash Flow of$1.8 million,compared to$3.6 million in the Prior Year Quarter.The Company paid dividends to shareholders and interest to holders of Exchangeable Units totaling$5.9 million for the Quarter(Pr

289、ior Year Quarter$4.7 million).During the Year,the Company generated cash from operating activities of$17.1 million,compared to$13.7 million in the Prior Year.The Company paid dividends to shareholders and interest to holders of Exchangeable Units totaling$22.4 million for the Year,compared to$18.6 m

290、illion in the Prior Year due to the additional Exchangeable Units issued as consideration in the Transaction.Distributions to Exchangeable Unitholders are determined with reference to dividends paid on Bridgemarqs Restricted Voting Shares.WORKING CAPITAL Changes in the Companys net working capital a

291、re primarily driven by cash flow from operating activities,collections of accounts receivable,payments of accounts payable and payment of dividends and interest.Overall,working capital decreased to a deficit of$97.3 million as at December 31,2024 compared to$7.1 million as at December 31,2023.The de

292、crease in working capital resulted primarily from:The reclassification of Exchangeable Units from non-current liabilities to current liabilities;and The assumption of negative working capital on closing the Transaction.The Exchangeable Units do not represent a liability that requires any payment of

293、cash.The Exchangeable Units are exchangeable on a one-for-one basis for Restricted Voting Shares at the option of the holder.If a takeover bid is made for 25%or more of the outstanding Restricted Voting Shares and a contemporaneous identical offer is not made for the Exchangeable Units,the holder ca

294、n exchange the Exchangeable Units at a ratio of 1.1 Restricted Voting Shares per Exchangeable Unit.They are classified as a current liability under IAS 1 notwithstanding the fact that,under no circumstance,can the holder exchange the Exchangeable Units for any asset other than Restricted Voting Shar

295、es.292024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVICES INC.A summary of the Companys working capital is presented below:($000s)Dec.31,Sept.30,June 30,Mar.31,Dec.31,Sept.30,June 30,Mar.31,Change Change As at 2024 2024 2024 2024 2023 2023 2023

296、2023 in Quarter in Year Current assets Cash$9,088$12,135$14,080$8,594$5,743$6,943$5,915$6,160$(3,047)$3,345 Cash held in trust 35,467 37,785 61,564 52,367 (2,318)35,467 Accounts receivable and current portion of notes receivable 5,837 5,435 7,104 7,570 3,781 4,253 4,497 4,345 402 2,056 Prepaid expen

297、ses and other current assets 3,326 2,719 4,359 4,415 805 385 362 371 607 2,521 Current income tax receivable 155 147 133 616 85 190 117 8 70 Interest rate swap asset 436 857 1,008 53,873 58,221 87,240 73,562 10,414 12,017 11,821 12,001 (4,348)43,459 Current liabilities Accounts payable and accrued l

298、iabilities$16,837$14,752$19,328$14,799$1,407$1,655$1,508$1,475$2,085$15,430 Customer deposits 35,467 37,785 61,564 52,367 (2,318)35,467 Contract transfer obligation 356 419 481 542 (356)Lease liabilities 3,000 2,944 3,265 3,731 56 3,000 Current income tax liability 73 Interest payable to Exchangeabl

299、e Unitholders 909 909 909 484 484 484 484 484 425 Dividends payable to Restricted Voting shareholders 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 Debt facilities Exchangeable Units 93,916 87,480 76,670 87,292 6,436 93,916 151,196 144,937 162,803 159,740 3,314 3,698 3,540 3,568 6,259 147,882Net w

300、orking capital$(97,323)$(86,716)$(75,563)$(86,178)$7,100$8,319$8,281$8,433$(10,607)$(104,423)30BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION CASH AND CAPITAL RESOURCESA summary of cash and capital resources available to the Company as

301、 at December 31,2024 and December 31,2023 is presented below:(in 000s)December 31,December 31,As at 2024 2023 Cash$9,088$5,743 Acquisition Facility 18,000 18,000 Operating Facility 10,000 5,000 Net borrowing capacity$28,000$23,000 Available resources$37,088$28,743As at December 31,2024,$12.0 million

302、 of the Acquisition Facility has been drawn by the Company,leaving$28.0 million of net borrowing capacity under the debt facilities.In addition to the cash and capital resources included in the table above,the Company generates substantial cash flow from operating activities,which can be used to fun

303、d dividend payments and interest on Exchangeable Units and to repay amounts owing under the debt facilities,subject to working capital requirements and other investment opportunities.COMMITMENTS AND CONTINGENCIESThe estimated contractual liabilities and their dates of maturity are summarized in the

304、chart below.Beyond As at September 30,2024 2025 2026 2027 2028 2028 TotalAccounts payable and accrued liabilities$16,837$16,837 Customer deposits 35,467$35,467 Leases 3,000 2,519 2,157 2,078 2,093 8,404$20,251 Interest payable to Exchangeable Unitholders 909$909 Dividends payable to shareholders 1,0

305、67$1,067 Interest on long-term debt 3,960 3,960$7,920 Debt facilities 67,000$67,000 Exchangeable Units 93,916$93,916 Total$155,156$73,479$2,157$2,078$2,093$8,404$243,367The Company and certain of its Brokerage Operations have been named as defendants in two legal actions seeking orders certifying th

306、e actions as class proceedings filed in April,2021 and January,2024,respectively,which include,among other things,allegations of anti-competitive behaviour and seek general and special damages in an amount to be proven at trial.The April,2021 action initially named the Toronto Regional Real Estate B

307、oard,CREA,seven major real estate brokerages(including certain of the Brokerage Operations)and five franchisors(including certain of the Franchise Operations).The franchisors were removed as defendants following a motion to strike ruled on by the Federal Court of Canada in September,2023.This ruling

308、 was appealed,which appeals were heard over two days during the Quarter.The courts decision is anticipated sometime in 2025.The January,2024 action names CREA,numerous real estate boards across the provinces and territories,eight major real estate brokerages(excluding any of the Brokerage Operations

309、)and eleven franchisors(including certain of the Franchise Operations).The outcome of this claim continues to largely depend on the outcome of the April 2021 action.Neither of these actions has been certified as a class action.The Company understands that one of the franchisors named in the two acti

310、ons has entered into a settlement agreement with the plaintiffs.This franchisor has publicly stated that the decision to settle is a business decision and this franchisor does not admit any wrongdoing.The terms of settlement remain undisclosed and the settlement is subject to court approval.Notwiths

311、tanding this settlement,the Company continues to believe that all allegations in both actions are entirely without merit and that the likelihood of any negative impact on the Company is remote.312024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION BRIDGEMARQ REAL ESTATE SERVIC

312、ES INC.OFF-BALANCE SHEET ARRANGEMENTS The Company has no offbalance sheet arrangements.TRANSACTIONS WITH RELATED PARTIES As at the date of this MD&A,Brookfield controlled approximately 41.7%of the Company through its ownership of the Exchangeable Units of the Partnership and 315,000 Restricted Votin

313、g Shares.Prior to the closing of the Transaction,the Manager operated the corporately-owned Royal LePage and Via Capitale residential Brokerage locations serving more than 2,000 REALTORS primarily in the GTA market and Greater Vancouver and Greater Montral Areas.All of the corporately-owned Royal Le

314、Page and Via Capitale Brokerages operate under Franchise Agreements with standard fixed and variable franchise fees.The Franchise Agreements for the GTA were renewed during 2024.The Franchise Agreements for the Royal LePage Qubec locations are up for renewal in 2028.The Franchise Agreements for the

315、Via Capitale Brokerages expire between 2025-2028.The Company acquired all of the Royal LePage and Via Capitale Brokerages owned by Brookfield under the terms of the Transaction.Prior to completion of the Transaction,the management of the Company was provided by the Manager under the terms of the MSA

316、.The Manager was a company controlled by Brookfield.Under the MSA,the Manager provided certain management,administrative and support services to the Company and its subsidiaries and,in return,was paid a monthly fee equal to$840,000 plus:a)during the first five years of the initial term of the MSA,th

317、e greater of:(i)23.5%of the Distributable Cash(as such term is defined in the MSA)of the Company;and (ii)0.342%of the Current Market Value(as such term is defined in the MSA),and b)after the first five years of the initial term of the MSA,the greater of:(i)25.0%of the Distributable Cash of the Compa

318、ny;and (ii)0.375%of the Current Market Value.As a result of the capitalization of certain Franchise Agreements and other contracts transferred to the Company upon entering into the MSA,a portion of payments for management fees were allocated toward reducing the Companys contract transfer obligation

319、and associated interest expense,with the remainder charged to the Companys consolidated statement of net and comprehensive earnings(loss).The Company acquired the Manager under the terms of the Transaction and,as a result,the management of the Company has been internalized and the MSA is no longer b

320、e required.In addition,the contract transfer obligation and certain deferred fees owing to the Manager were settled as a result of the Transaction.The related party transactions entered into by the Company were transacted at contracted rates or at exchange amounts approximating fair market value.A s

321、ummary of these amounts can be found in Note 17 of the consolidated financial statements.32BRIDGEMARQ REAL ESTATE SERVICES INC.2024 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS Substantially all of the Companys activities are ba

322、sed on cash transactions,with revenue and expenditures based on contracted terms.The operating activities not based on contractual terms include bad debt expense(which is included in the Companys administration costs),and the amortization of intangible assets.The Companys intangible assets are regul

323、arly monitored for indications of impairment and reversal of impairment in the carrying value of these assets.The Companys accounts receivables are regularly monitored to determine their collectability.The preparation of financial statements requires management to select appropriate accounting polic

324、ies and to make judgements,estimates and assumptions that affect the reported amounts of assets and liabilities,disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.In particular,critical

325、 accounting policies and estimates utilized in the normal course of preparing the Companys consolidated financial statements require;the determination of cash generating units,estimating of future cash flows utilized in assessing the fair value and related net impairment or recovery of intangible as

326、sets,determining the useful life of intangible assets,assessing the recoverability of accounts receivable,measuring deferred income taxes,measuring the fair value of the Exchangeable Units and measuring fair values used for disclosure purposes.In making estimates,management relies on external inform

327、ation and observable conditions where possible,supplemented by internal analysis as required.These estimates have been applied in a manner consistent with prior periods.While the Company believes that the potential impact of COVID-19 has lessened,it is possible that any future resurgence may affect

328、the Companys future earnings,cash flows and financial condition and such effects are uncertain,including the nature,severity and duration of any resulting economic curtailment and the short to medium-term effect on Canadian real estate markets and the Canadian economy in general.Accordingly,estimate

329、s used in the preparation of the Companys financial statements including those associated with evaluations of intangible assets and collectability of accounts receivable may be subject to significant adjustments in future periods.The estimates are impacted by,among other things,movements in interest

330、 rates and cash flow forecasts,which involve judgements and are uncertain.The interrelated nature of these factors prevents the Company from quantifying the overall impact of these movements on the Companys consolidated financial statements in a meaningful way.These sources of estimation uncertainty

331、 relate in varying degrees to virtually all asset and liability account balances.CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES The following are the critical judgements that have been made in applying the Companys accounting policies and that have the most significant impact on the amounts rec

332、orded in the consolidated financial statements.IMPAIRMENT OF INTANGIBLE ASSETS AND RECOVERY OF IMPAIRMENTThe Company ensures that the carrying value of intangible assets is not higher than its recoverable amount(i.e.the higher of:a)fair value less costs of disposal;and b)value-in-use).The Company re

333、views intangible assets at each reporting period to determine whether indicators of impairment or a reversal of impairment exist on Agent Agreements,individual Franchise Agreements,franchise agreement expenses,Brands and Trademarks.Determining whether the value of an intangible asset,cash generating unit or the portfolio of intangible assets is impaired or has increased requires considerable judge