Fee Revenue up 12% (19% in local
currency)Normalized EBITDA up 16% (22% in local
currency)Adjusted Earnings Per Share up 17% (31% without
currency effects)
CBRE Group, Inc. (NYSE:CBG) today reported strong revenue and
earnings growth for the second quarter ended June 30, 2015.
Second-Quarter 2015 Results*
- Revenue for the quarter totaled $2.4
billion, an increase of 12% (19% in local currency1). Fee revenue2
also increased 12% (19% in local currency) to $1.8 billion.
- On a U.S. GAAP basis, net income rose
19% to $125.0 million. GAAP earnings per diluted share rose 16% to
$0.37.
- Adjusted net income3 rose 18% to $140.0
million, while adjusted earnings per share3 improved 17% to $0.42.
For the second quarter of 2015, selected charges (net of income
taxes) totaled $15.0 million.
- Normalized EBITDA4 increased 16% to
$303.8 million and EBITDA4 rose 14% to $296.9 million. Normalized
EBITDA margin on fee revenue was 17.1%, a 60 basis point increase
from the prior-year second quarter.
- These strong results were achieved
despite negative foreign currency effects in the quarter. Foreign
currency movement, including the marking of currency hedges to
market, reduced EBITDA by approximately $27.3 million (or $0.05 per
share, net of tax) as compared to the prior-year second
quarter.
*All percentage changes versus prior-year periods are in U.S.
dollars except where noted.
Management Commentary
“We exhibited broad strength in our business during the second
quarter, as our talented people, coupled with our high quality,
integrated service offering, produced excellent outcomes for our
clients and our shareholders,” said Bob Sulentic, CBRE’s president
and chief executive officer. “We were especially pleased to achieve
outstanding top-line growth, operating leverage and margin
expansion in all three regions.”
In EMEA (Europe, the Middle East & Africa), revenue rose 15%
(32% in local currency). Growth was vigorous in most EMEA countries
and across all business lines. Revenue continued to increase
strongly in the Americas, rising 16% (18% in local currency). All
Americas business lines posted double-digit revenue growth for the
fourth consecutive quarter. In Asia Pacific, revenue improved 9%
(21% in local currency). In local currency, Australia and India
were strong contributors to the region’s revenue growth.
CBRE continued to capitalize on strong capital flows into
commercial real estate. Global property sales revenue surged 23%
(32% in local currency) with growth in the vast majority of
countries worldwide. Commercial mortgage services revenue growth
exceeded 40% for the second consecutive quarter. Loan activity with
the U.S. Government-Sponsored Enterprises continued to grow
rapidly.
Global leasing revenue rose 9% (15% in local currency). The
Americas recorded its eighth consecutive quarter of double-digit
leasing revenue growth, led by Brazil, Mexico and the U.S.
Australia, Germany and the United Kingdom, among others, also
generated significantly higher leasing revenue.
Global Corporate Services, CBRE’s occupier outsourcing business
line, continued its long-term secular growth, despite negative
foreign currency trends. Global Corporate Services revenue
(excluding related transaction revenue, which is accounted for in
sales and leasing revenue) improved 9% (17% in local currency). Fee
revenue (excluding related transaction revenue) from this business
line increased 6% (15% in local currency). CBRE had one of its best
quarters for total outsourcing contracts – including 32 expansions
of existing client relationships, a new high for the company.
The ongoing growth of Global Corporate Services is being fueled
by large space occupiers’ increasing preference for purchasing
integrated real estate and facilities services on an account basis.
CBRE is extremely well positioned to benefit from this trend. Its
service offering for occupiers will be further enhanced with the
planned acquisition of the Global Workplace Solutions business of
Johnson Controls, Inc., announced on March 31, 2015. The
acquisition of Global Workplace Solutions, a leading provider of
integrated facilities management services on a global basis,
remains on course to be completed later in the third quarter or
early in the fourth quarter of 2015, subject to, among other
things, receipt of customary regulatory approvals.
The company’s Valuation and Asset Services business lines both
achieved strong growth during the second quarter. Valuation revenue
rose 23% (35% in local currency) with notable growth in the
Americas and EMEA. Asset Services revenue jumped 21% (28% in local
currency) while fee revenue from this business line increased 17%
(24% in local currency).
Reflecting the company’s strong financial position, Standard
& Poor’s raised CBRE’s investment grade credit rating to BBB
from BBB- on July 28, 2015.
Second-Quarter 2015 Segment
Results
Americas Region (U.S., Canada and
Latin America)
- Revenue rose 16% (18% in local
currency) to $1.4 billion. Fee revenue rose 18% (19% in local
currency) to $1.06 billion.
- Normalized EBITDA increased 23% to
$207.6 million and EBITDA increased 20% to $203.4 million.
- Operating income rose 20% to $152.9
million.
EMEA Region (primarily Europe)
- Revenue improved 15% (32% in local
currency) to $585.7 million. Fee revenue rose 14% (33% in local
currency) to $409.1 million. Revenue growth was broad-based across
the region, led by Germany, Spain and the United Kingdom.
Performance in these countries was strong even after the negative
effects of currency movement.
- EBITDA and Normalized EBITDA both
totaled $47.8 million, an increase of 75%.
- Operating income totaled $32.5 million,
an increase of 173%.
Asia Pacific Region (Asia,
Australia and New Zealand)
- Revenue increased 9% (21% in local
currency) to $261.8 million. Fee revenue rose 3% (17% in local
currency) to $200.1 million. Performance improved in several
countries, particularly Australia and India.
- Normalized EBITDA increased 21% to
$28.7 million and EBITDA increased 19% to $28.2 million.
- Operating income totaled $24.3 million,
an increase of 19%.
Global Investment Management
(investment management operations in the U.S., Europe and Asia
Pacific)
- Revenue totaled $94.1 million, a
decrease of 26% (18% in local currency).
- Normalized EBITDA decreased to $18.4
million and EBITDA decreased to $16.3 million.
- Operating income decreased to $12.7
million.
- The decline in revenue and earnings was
driven by minimal incentive fees and carried interest achieved in
this year’s second quarter, the performance of the Real Estate
Investment Trust market in second-quarter 2015 compared with
second-quarter 2014, as well as negative foreign currency
movement.
- Assets Under Management (AUM) totaled
$88.4 billion. Compared with the second quarter of 2014, AUM was up
$2.1 billion in local currency, but down when converted into U.S.
dollars.
Development Services (real estate
development and investment activities primarily in the U.S.)
- Revenue increased to $14.4
million.
- EBITDA decreased to $1.2 million.
- Operating income improved to $6.3
million.
- Development projects in process totaled
$6.0 billion, up $500 million over the first quarter of 2015. The
pipeline inventory totaled $3.7 billion, up $100 million over the
first quarter of 2015.
Six-Month Results
- Revenue for the six months ended June
30, 2015 totaled $4.4 billion, an increase of 11% (18% in local
currency). Fee revenue increased 11% (17% in local currency) to
$3.2 billion.
- On a U.S. GAAP basis, net income rose
26% to $218.0 million. GAAP earnings per diluted share rose 25% to
$0.65.
- Adjusted net income rose 22% to $246.0
million, while adjusted earnings per share improved 22% to $0.73.
For the six months ended June 30, 2015 selected charges (net of
income taxes) totaled $28.0 million.
- Normalized EBITDA increased 19% to
$550.5 million and EBITDA rose 19% to $543.1 million.
- Foreign currency movement, including
the marking of currency hedges to market, reduced EBITDA by
approximately $14.3 million (or $0.03 per share, net of tax) as
compared to the prior-year six-month period.
Business Outlook
“At the mid-point of 2015, CBRE is on course for another year of
very strong financial performance,” Mr. Sulentic said. “Our
business has positive underlying momentum and we are seeing great
benefit from the steps we have taken to enhance our service
delivery for clients and fortify our market position.”
CBRE believes its full-year 2015 performance is likely to be
toward the upper end of its guidance range of $1.90 to $1.95 for
adjusted earnings per share.
Conference Call Details
The Company’s second-quarter earnings conference call will be
held today (Wednesday, July 29, 2015) at 8:00 a.m. Eastern Time. A
webcast, along with an associated slide presentation, will be
accessible through the Investor Relations section of the Company’s
website at www.cbre.com/investorrelations.
The direct dial-in number for the conference call is
877-407-8037 for U.S. callers and 201-689-8037 for international
callers. A replay of the call will be available starting at 1 p.m.
Eastern Time on July 29, 2015, and ending at midnight Eastern Time
on August 5, 2015. The dial-in number for the replay is
877-660-6853 for U.S. callers and 201-612-7415 for international
callers. The access code for the replay is 13612139. A transcript
of the call will be available on the Company’s Investor Relations
website at www.cbre.com/investorrelations.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500
company headquartered in Los Angeles, is the world’s largest
commercial real estate services and investment firm (in terms of
2014 revenue). The Company has more than 52,000 employees
(excluding affiliates), and serves real estate owners, investors
and occupiers through more than 370 offices (excluding affiliates)
worldwide. CBRE offers strategic advice and execution for property
sales and leasing; corporate services; property, facilities and
project management; mortgage banking; appraisal and valuation;
development services; investment management; and research and
consulting. Please visit our website at www.cbre.com.
Note: This release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including statements
regarding our future growth momentum, operations (including the
expected closing date of the Global Workplace Solutions
acquisition), financial performance (including adjusted earnings
per share expectations) and business outlook. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the Company’s actual results and performance
in future periods to be materially different from any future
results or performance suggested in forward-looking statements in
this release. Any forward-looking statements speak only as of the
date of this release and, except to the extent required by
applicable securities laws, the Company expressly disclaims any
obligation to update or revise any of them to reflect actual
results, any changes in expectations or any change in events. If
the Company does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements. Factors that
could cause results to differ materially include, but are not
limited to: disruptions in general economic and business
conditions, particularly in geographies where our business may be
concentrated; volatility and disruption of the securities, capital
and credit markets; interest rate increases; the cost and
availability of capital for investment in real estate; clients’
willingness to make real estate or long-term contractual
commitments and other factors affecting the value of real estate
assets, inside and outside the United States; increases in
unemployment and general slowdowns in commercial activity; trends
in pricing and risk assumption for commercial real estate services;
the effect of significant movements in average cap rates across
different property types; a reduction by companies in their
reliance on outsourcing for their commercial real estate needs,
which would affect our revenues and operating performance; client
actions to restrain project spending and reduce outsourced staffing
levels; declines in lending activity of Government Sponsored
Enterprises, regulatory oversight of such activity and our mortgage
servicing revenue from the U.S. commercial real estate mortgage
market; our ability to diversify our revenue model to offset
cyclical economic trends in the commercial real estate industry;
our ability to attract new user and investor clients; our ability
to retain major clients and renew related contracts; our ability to
leverage our global services platform to maximize and sustain
long-term cash flow; our ability to maintain EBITDA margins that
enable us to continue investing in our platform and client service
offerings; our ability to control costs relative to revenue growth;
variations in historically customary seasonal patterns that cause
our business not to perform as expected; changes in domestic and
international law and regulatory environments (including relating
to anti-corruption, anti-money laundering, trade sanctions,
currency controls and other trade control laws), particularly in
Russia, Eastern Europe and the Middle East, due to the level of
political instability in those regions; foreign currency
fluctuations; our ability to identify, acquire and integrate
synergistic and accretive businesses; costs and potential future
capital requirements relating to businesses we may acquire;
integration challenges arising out of our pending Global Workplace
Solutions (“GWS”) acquisition as well as of other companies we may
acquire (including our ability to close the GWS acquisition and the
timing of that closing), and our ability to achieve expected cost
synergies relating to those acquisitions; our and our employees’
ability to execute on, and adapt to, information technology
strategies and trends ; the ability of our Global Investment
Management business to maintain and grow assets under management
and achieve desired investment returns for our investors, and any
potential related litigation, liabilities or reputational harm
possible if we fail to do so; our ability to manage fluctuations in
net earnings and cash flow, which could result from poor
performance in our investment programs, including our participation
as a principal in real estate investments; our leverage and our
ability to perform under our credit facilities, indentures and
other debt instruments, including additional debt that we may incur
in connection with the acquisition of the GWS business; our
exposure to liabilities in connection with real estate advisory and
property management activities and our ability to procure
sufficient insurance coverage on acceptable terms; liabilities
under guarantees, or for construction defects, that we incur in our
Development Services business; the ability of CBRE Capital Markets
to periodically amend, or replace, on satisfactory terms, the
agreements for its warehouse lines of credit; our ability to
compete globally, or in specific geographic markets or business
segments that are material to us; changes in tax laws in the United
States or in other jurisdictions in which our business may be
concentrated that reduce or eliminate deductions or other tax
benefits we receive; our ability to maintain our effective tax rate
at or below current levels; our ability to comply with laws and
regulations related to our global operations, including real estate
licensure, labor and employment laws and regulations, as well as
the anti-corruption laws and trade sanctions of the U.S. and other
countries; and the effect of implementation of new accounting rules
and standards.
Additional information concerning factors that may influence the
Company's financial information is discussed under “Risk Factors”,
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”, “Quantitative and Qualitative Disclosures
About Market Risk” and “Cautionary Note on Forward-Looking
Statements” in both our Annual Report on Form 10-K for the year
ended December 31, 2014 and our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2015, as well as in the Company’s press
releases and other periodic filings with the Securities and
Exchange Commission (the SEC). Such filings are available publicly
and may be obtained on the Company’s website at www.cbre.com or
upon written request from the CBRE Investor Relations Department at
investorrelations@cbre.com.
Note – CBRE has not reconciled the (non-GAAP) adjusted earnings
per share guidance included in this release to the most directly
comparable GAAP measure because this cannot be done without
unreasonable effort.
The terms “fee revenue,” “adjusted net income,” “adjusted
earnings per share” (or adjusted EPS), “EBITDA” and “Normalized
EBITDA,” all of which CBRE uses in this press release, are non-GAAP
financial measures under SEC guidelines, and you should refer to
the footnotes below as well as the “Non-GAAP Financial Measures”
section in this press release for a further explanation of these
measures. We have also included in that section reconciliations of
these measures in specific periods to their most directly
comparable financial measure calculated and presented in accordance
with U.S. GAAP for those periods.
1 Local currency percentage change is calculated by comparing
current period results at prior period exchange rates versus prior
period results.
2 Fee revenue excludes both client reimbursed costs largely
associated with employees that are dedicated to client facilities
and subcontracted vendor work performed for clients.
3 Adjusted net income and adjusted earnings per share (or
adjusted EPS) exclude the effect of selected charges from U.S. GAAP
net income and U.S. GAAP earnings per diluted share. Selected
charges during the periods presented included the write-off of
financing costs, amortization expense related to certain intangible
assets attributable to acquisitions, integration and other costs
related to acquisitions and certain carried-interest incentive
compensation expense.
4 EBITDA represents earnings before net interest expense,
write-off of financing costs, income taxes, depreciation and
amortization. Amounts shown for Normalized EBITDA further remove
(from EBITDA) the impact of certain cash and non-cash charges
related to acquisitions and certain carried-interest incentive
compensation expense.
CBRE GROUP, INC.
OPERATING RESULTS
FOR THE THREE AND SIX MONTHS ENDED JUNE
30, 2015 AND 2014
(Dollars in thousands, except share
data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014 Revenue $ 2,390,506 $ 2,126,806 $
4,443,009 $ 3,987,648 Costs and expenses: Cost of services
1,487,974 1,314,473 2,778,751 2,475,933 Operating, administrative
and other 610,158 566,202 1,141,933 1,094,597 Depreciation and
amortization 70,605 63,295 140,451
128,498 Total costs and expenses 2,168,737 1,943,970
4,061,135 3,699,028 Gain on disposition of real estate
6,986 23,170 6,986 29,867
Operating income 228,755 206,006 388,860 318,487 Equity
income from unconsolidated subsidiaries 6,693 9,264 22,144 24,264
Other (loss) income (1,069 ) 6,364 18 11,165 Interest income 1,402
1,146 3,699 2,723 Interest expense 26,154 28,470 52,368 56,485
Write-off of financing costs – – 2,685
– Income before provision for income taxes 209,627 194,310
359,668 300,154 Provision for income taxes 76,474
64,111 133,377 102,013 Net income 133,153
130,199 226,291 198,141 Less: Net income attributable to
non-controlling interests 8,124 24,735
8,325 25,014 Net income attributable to CBRE Group, Inc. $
125,029 $ 105,464 $ 217,966 $ 173,127 Basic
income per share: Net income per share attributable to CBRE Group,
Inc. $ 0.38 $ 0.32 $ 0.66 $ 0.52 Weighted average
shares outstanding for basic income per share 331,999,935
330,133,061 331,988,489 330,084,525
Diluted income per share: Net income per share attributable
to CBRE Group, Inc. $ 0.37 $ 0.32 $ 0.65 $ 0.52
Weighted average shares outstanding for diluted income per share
336,154,524 333,918,620 335,926,626
333,634,342 EBITDA $ 296,860 $ 260,194
$ 543,148 $ 457,400
CBRE GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND SIX MONTHS ENDED JUNE
30, 2015 AND 2014
(Dollars in thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014
Americas
Revenue $ 1,434,489 $ 1,235,720 $ 2,662,105 $ 2,257,401 Costs and
expenses: Cost of services 924,509 802,311 1,711,626 1,462,581
Operating, administrative and other 312,471 270,477 570,633 511,144
Depreciation and amortization 44,591 35,187
87,541 69,345 Operating income $
152,918 $ 127,745 $ 292,305 $ 214,331
EBITDA $ 203,411 $ 169,404 $ 390,732 $ 295,166
EMEA
Revenue $ 585,714 $ 510,987 $ 1,079,738 $ 1,029,666 Costs and
expenses: Cost of services 400,947 360,190 763,450 731,737
Operating, administrative and other 137,628 123,571 262,523 248,104
Depreciation and amortization 14,607 15,319
29,399 32,782 Operating income $ 32,532
$ 11,907 $ 24,366 $ 17,043 EBITDA $
47,810 $ 27,369 $ 55,388 $ 50,734
Asia
Pacific
Revenue $ 261,828 $ 241,214 $ 470,194 $ 436,857 Costs and expenses:
Cost of services 162,518 151,972 303,675 281,615 Operating,
administrative and other 71,190 65,487 127,849 123,236 Depreciation
and amortization 3,783 3,371 7,629
6,439 Operating income $ 24,337 $ 20,384
$ 31,041 $ 25,567 EBITDA $ 28,154 $
23,765 $ 38,704 $ 32,006
Global Investment
Management
Revenue $ 94,053 $ 126,314 $ 204,277 $ 238,777 Costs and expenses:
Operating, administrative and other 74,334 93,960 148,252 178,958
Depreciation and amortization 7,061 8,452 14,672 17,818 Gain on
disposition of real estate – 23,028 –
23,028 Operating income $ 12,658 $ 46,930
$ 41,353 $ 65,029 EBITDA $ 16,304 $
38,129 $ 51,184 $ 66,392
Development
Services
Revenue $ 14,422 $ 12,571 $ 26,695 $ 24,947
Costs and expenses:
Operating, administrative and other
14,535 12,707 32,676 33,155 Depreciation and amortization 563 966
1,210 2,114 Gain on disposition of real estate 6,986
142 6,986 6,839 Operating income
(loss) $ 6,310 $ (960 ) $ (205 ) $ (3,483 ) EBITDA $ 1,181 $
1,527 $ 7,140 $ 13,102
Non-GAAP Financial
Measures
As noted above, the following measures are considered “non-GAAP
financial measures” under SEC guidelines:
(i) Fee revenue
(ii) Net income attributable to CBRE Group, Inc., as adjusted
(which we also refer to as “adjusted net income”) (iii) Diluted
income per share attributable to CBRE Group, Inc. shareholders, as
adjusted (which we also refer to as “adjusted earnings per share”
or “adjusted EPS”) (iv) EBITDA and EBITDA, as adjusted (the latter
of which we also refer to as “Normalized EBITDA”)
None of these measures is a recognized measurement under U.S.
generally accepted accounting principles, or U.S. GAAP, and when
analyzing our operating performance, readers should use them in
addition to, and not as an alternative for, their most directly
comparable financial measure calculated and presented in accordance
with U.S. GAAP. Because not all companies use identical
calculations, our presentation of these measures may not be
comparable to similarly titled measures of other companies.
Our management generally uses these non-GAAP financial measures
to evaluate operating performance and for other discretionary
purposes, and the Company believes that these measures provide a
more complete understanding of ongoing operations, enhance
comparability of current results to prior periods and may be useful
for investors to analyze our financial performance because they
eliminate the impact of selected charges that may obscure trends in
the underlying performance of our business. The Company further
uses certain of these measures, and believes that they are useful
to investors, for purposes described below.
With respect to fee revenue: The Company believes that investors
may find this measure useful to analyze the financial performance
of our Global Corporate Services (GCS) and Asset Services business
lines and our business generally because it excludes costs
reimbursable by clients, and as such provides greater visibility
into the underlying performance of our business.
With respect to adjusted net income, adjusted EPS, EBITDA and
Normalized EBITDA: The Company believes that investors may find
these measures useful in evaluating our operating performance
compared to that of other companies in our industry because their
calculations generally eliminate the accounting effects of
acquisitions, which would include impairment charges of goodwill
and intangibles created from acquisitions, and – in the case of
EBITDA and Normalized EBITDA – the effects of financings and income
tax and the accounting effects of capital spending. All of these
measures may vary for different companies for reasons unrelated to
overall operating performance. In the case of EBITDA and Normalized
EBITDA, these measures are not intended to be measures of free cash
flow for our management’s discretionary use because they do not
consider cash requirements such as tax and debt service payments.
The EBITDA and Normalized EBITDA measures calculated herein may
also differ from the amounts calculated under similarly titled
definitions in our credit facilities and debt instruments, which
amounts are further adjusted to reflect certain other cash and
non-cash charges and are used by us to determine compliance with
financial covenants therein and our ability to engage in certain
activities, such as incurring additional debt and making certain
restricted payments. The Company also uses Normalized EBITDA and
adjusted EPS as significant components when measuring our operating
performance under our employee incentive compensation programs.
Fee revenue is calculated as follows (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014
Consolidated
Revenue $ 2,390,506 $ 2,126,806 $ 4,443,009 $ 3,987,648 Less:
Client reimbursed costs largely associated with employees that are
dedicated to client facilities and subcontracted vendor work
performed for clients 610,283 535,082
1,207,646 1,067,576 Fee revenue $ 1,780,223 $ 1,591,724 $
3,235,363 $ 2,920,072
Global Corporate
Services
Revenue (excluding related transaction revenue) $ 745,773 $ 682,501
Less: Client reimbursed costs largely associated with employees
that are dedicated to client facilities and subcontracted vendor
work performed for clients 477,042 428,582 Fee
revenue (excluding related transaction revenue) $ 268,731 $ 253,919
Asset
Services
Revenue (excluding related transaction revenue) $ 254,650 $ 210,444
Less: Client reimbursed costs largely associated with employees
that are dedicated to client facilities and subcontracted vendor
work performed for clients 133,241 106,500 Fee
revenue (excluding related transaction revenue) $ 121,409 $ 103,944
Americas
Revenue $ 1,434,489 $ 1,235,720 Less: Client reimbursed costs
largely associated with employees that are dedicated to client
facilities and subcontracted vendor work performed for clients
371,976 334,629 Fee revenue $ 1,062,513 $ 901,091
EMEA
Revenue $ 585,714 $ 510,987 Less: Client reimbursed costs largely
associated with employees that are dedicated to client facilities
and subcontracted vendor work performed for clients 176,578
153,154 Fee revenue $ 409,136 $ 357,833
Asia
Pacific
Revenue $ 261,828 $ 241,214 Less: Client reimbursed costs largely
associated with employees that are dedicated to client facilities
and subcontracted vendor work performed for clients 61,729
47,299 Fee revenue $ 200,099 $ 193,915
Net income attributable to CBRE Group, Inc., as adjusted (or
adjusted net income), and adjusted diluted net income per share
attributable to CBRE Group, Inc. shareholders, as adjusted (or
adjusted EPS), are calculated as follows (dollars in thousands,
except per share data):
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014 Net income attributable to CBRE
Group, Inc. $ 125,029 $ 105,464 $ 217,966 $ 173,127
Adjustments: Amortization expense related to certain intangible
assets attributable to acquisitions, net of tax 10,766 11,681
21,875 25,440 Integration and other costs related to acquisitions,
net of tax 2,926 – 4,886 – Carried interest incentive compensation,
net of tax 1,291 1,564 (400 ) 2,516 Write-off of financing costs,
net of tax – – 1,638 – Net income
attributable to CBRE Group, Inc., as adjusted $ 140,012 $ 118,709 $
245,965 $ 201,083 Diluted income per share
attributable to CBRE Group, Inc. shareholders, as adjusted $ 0.42 $
0.36 $ 0.73 $ 0.60 Weighted average shares
outstanding for diluted income per share 336,154,524
333,918,620 335,926,626 333,634,342
EBITDA and EBITDA, as adjusted (or Normalized EBITDA) are
calculated as follows (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014 Net income attributable to CBRE
Group, Inc. $ 125,029 $ 105,464 $ 217,966 $ 173,127 Add:
Depreciation and amortization 70,605 63,295 140,451 128,498
Interest expense 26,154 28,470 52,368 56,485 Write-off of financing
costs – – 2,685 – Provision for income taxes 76,474 64,111 133,377
102,013 Less: Interest income 1,402 1,146
3,699 2,723 EBITDA 296,860 260,194
543,148 457,400 Adjustments: Integration and other
acquisition related costs 4,805 – 8,018 –
Carried interest incentive compensation to
match current period revenue
2,115 2,567 (657 ) 4,130 EBITDA,
as adjusted $ 303,780 $ 262,761 $ 550,509 $ 461,530
EBITDA and EBITDA, as adjusted (or Normalized EBITDA) for
segments are calculated as follows (dollars in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014 2015
2014
Americas
Net income attributable to CBRE Group, Inc. $ 96,857 $ 92,304 $
192,059 $ 162,770 Adjustments: Depreciation and amortization 44,591
35,187 87,541 69,345 Interest expense (income), net 4,247 (226 )
7,793 8,960 Write-off of financing costs – – 2,685 – Royalty and
management service expense (income) 2,370 (2,843 ) 2,478 (3,707 )
Provision for income taxes 55,346 44,982
98,176 57,798 EBITDA 203,411
169,404 390,732 295,166 Integration and other costs related
to acquisitions 4,195 – 7,408
– EBITDA, as adjusted $ 207,606 $
169,404 $ 398,140 $ 295,166
EMEA
Net income (loss) attributable to CBRE Group, Inc. $ 19,929 $
(6,967 ) $ 1,443 $ (13,957 ) Adjustments: Depreciation and
amortization 14,607 15,319 29,399 32,782 Interest expense, net
11,375 17,184 22,822 24,343 Royalty and management service income
(4,975 ) (3,070 ) (6,192 ) (6,955 ) Provision for income taxes
6,874 4,903 7,916
14,521 EBITDA $ 47,810 $ 27,369 $ 55,388 $ 50,734
Integration and other costs related to acquisitions 30
– 30 – EBITDA, as
adjusted $ 47,840 $ 27,369 $ 55,418 $ 50,734
Asia
Pacific
Net income attributable to CBRE Group, Inc. $ 10,949 $ 8,246 $
13,608 $ 4,002 Adjustments: Depreciation and amortization 3,783
3,371 7,629 6,439 Interest expense, net 991 768 1,889 1,103 Royalty
and management service expense 1,586 4,623 1,649 8,262 Provision
for income taxes 10,845 6,757
13,929 12,200 EBITDA $ 28,154 $ 23,765 $
38,704 $ 32,006 Integration and other costs related to
acquisitions 580 – 580
– EBITDA, as adjusted $ 28,734 $ 23,765
$ 39,284 $ 32,006
Global Investment
Management
Net (loss) income attributable to CBRE Group, Inc. $ (2,688 ) $
12,234 $ 8,020 $ 15,062 Adjustments: Depreciation and amortization
7,061 8,452 14,672 17,818 Interest expense, net 7,818 8,745 15,502
17,586 Royalty and management service expense 1,019 1,290 2,065
2,400 Provision for income taxes 3,094 7,408
10,925 13,526 EBITDA 16,304
38,129 51,184 66,392 Carried interest incentive compensation
2,115 2,567 (657 ) 4,130
EBITDA, as adjusted $ 18,419 $ 40,696 $ 50,527
$ 70,522
Development
Services
Net (loss) income attributable to CBRE Group, Inc. $ (18 ) $ (353 )
$ 2,836 $ 5,250 Adjustments: Depreciation and amortization 563 966
1,210 2,114 Interest expense, net 321 853 663 1,770 Provision for
income taxes 315 61 2,431
3,968 EBITDA $ 1,181 $ 1,527 $ 7,140
$ 13,102
CBRE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
(Unaudited)
June 30, December 31, 2015 2014
Assets: Cash and cash equivalents1 $ 336,422 $ 740,884 Restricted
cash 66,011 28,090 Receivables, net 1,604,620 1,736,229 Warehouse
receivables2 750,816 506,294 Property and equipment, net 484,032
497,926 Real estate assets3 36,984 45,604 Goodwill and other
intangibles, net 3,119,921 3,136,181 Investments in and advances to
unconsolidated subsidiaries 222,539 218,280 Other assets, net
838,914 737,617 Total assets $ 7,460,259 $ 7,647,105
Liabilities: Current liabilities, excluding debt $ 1,834,768
$ 2,303,948 Warehouse lines of credit2 743,592 501,185 Revolving
credit facility – 4,840 5.00% senior notes 800,000 800,000 Senior
secured term loans 496,875 645,613 5.25% senior notes 426,774
426,813 Other debt 2,296 2,808 Notes payable on real estate4 24,819
42,843 Other long-term liabilities 627,607 617,657
Total liabilities 4,956,731 5,345,707 Equity:
CBRE Group, Inc. stockholders’ equity 2,459,592 2,259,830
Non-controlling interests 43,936 41,568 Total equity
2,503,528 2,301,398 Total liabilities and equity $
7,460,259 $ 7,647,105
(1)
Includes $58.4 million and $58.0 million
of cash in consolidated funds and other entities not available for
Company use as of June 30, 2015 and December 31, 2014,
respectively.
(2)
Represents loan receivables, the majority
of which are offset by related warehouse lines of credit
facilities.
(3)
Includes real estate and other assets held
for sale, real estate under development and real estate held for
investment.
(4)
Represents notes payable on real estate
(none of which is recourse to the Company).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150729005534/en/
CBRE Group, Inc.Steve IacoSenior Managing DirectorInvestor
Relations & Corporate Communications212-984-6535
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