Exhibit 99
|
PRESS RELEASE
|
Corporate Headquarters
|
|
|
865 South Figueroa
Street
|
|
|
Suite 3400
|
|
|
Los Angeles, CA 90017
|
|
|
www.cbre.com
|
FOR IMMEDIATE RELEASE ¾
November 3, 2004
|
For further information:
|
|
|
|
|
|
Kenneth Kay
|
|
Steve Iaco
|
|
Shelley Young
|
|
Sr. Executive Vice President and Chief Financial
Officer
213.438.4833
|
|
Sr. Managing Director of Corporate Communications
212.984.6535
|
|
Director of Investor Relations
212.984.8359
|
CB Richard Ellis Group, Inc. Reports Strong Third
Quarter 2004 Results
and Revises Full Year 2004 Guidance
Los Angeles, CA - November 3, 2004 — CB Richard Ellis Group, Inc. (NYSE:CBG) today reported revenue of $575.0
million and net income of $11.9 million, or $0.16 per diluted share, for the
third quarter of 2004. For the same
period last year, the Company reported revenue of $423.4 million and a net loss
of $28.4 million, or $0.49 net loss per diluted share.
Excluding one-time items primarily related to
the early repayment of debt and the July 2003 acquisition of Insignia
Financial Group, the Company would have earned net income of
$29.7 million(1), or
$0.40 per diluted share, compared with earnings of $2.3 million, or $0.04 per
diluted share, in the third quarter of 2003.
Revenue
Total revenue
increased 35.8% to $575.0 million compared with $423.4 million for the third
quarter of 2003. Generally improved U.S.
economic conditions coupled with market share gains fueled organic revenue
growth of approximately 24% as sales, leasing and consulting fees rose sharply
from the year-earlier quarter.
Additionally, revenue growth was aided by full-quarter contributions
from the Insignia acquisition(2).
EBITDA(3)
Earnings Before Interest, Taxes, Depreciation, and Amortization
(EBITDA) totaled $61.8 million for the third quarter ended September 30,
2004, an increase of $41.1 million, or
198.6%, from the same period last year.
The increase was driven primarily by strong revenue growth as well as
lower merger-related costs, which significantly impacted third quarter 2003
results. The third quarter of 2004
reflected final merger-related costs of $4.0 million primarily related to a
facility vacated during the quarter.
Interest
Expense and Loss on Extinguishment of Debt
In line with the Company’s strategy to reduce debt, in July of
2004 the Company used the remaining net proceeds received from its initial
public offering to pay down a portion of its high interest rate debt, including
$70.0 million in aggregate principal amount of its 9¾% senior notes due 2010
and $38.3 million in aggregate principal amount of its 16% senior notes due
2011. Premium costs associated with the
repayments as well as the related write-off of unamortized deferred financing
costs and unamortized discount resulted in a $17.1 million loss on
extinguishment of debt in the current quarter. During the third quarter of
2003, the Company incurred a $6.8 million loss on extinguishment of debt
related to the write-off of unamortized deferred financing fees associated with
a prior credit facility, which was replaced in conjunction with the Insignia
acquisition.
Interest expense totaled $14.9 million for the current year quarter, a
decrease of $6.1 million, or 29.0%, compared to the same period last year. The decrease was driven by the interest
savings as a result of debt repayments during the fourth quarter of 2003 and
throughout 2004. The Company expects to
achieve annual cash interest savings in 2005 of approximately $16.0 million as
a result of its de-leveraging efforts in 2004.
Management’s
Commentary
“Our third quarter results
demonstrate the power of our global real estate services platform and validate
our growth strategy,” said Ray Wirta, chief executive officer of CB Richard
Ellis.
“Our strong performance was fueled by double-digit organic revenue
growth, improved market fundamentals in the U.S. and overseas and the Insignia
acquisition. U.S. investment activity
remains at record levels, despite modestly higher interest rates, as more
capital sources are attracted to real estate.
We have captured a market-leading share of this investment
activity. U.S. office leasing markets
continue to recover steadily, with positive absorption and falling vacancy
levels becoming the norm in many large cities.
Demand for office space has been on a definite upswing as business
confidence has been restored.
“In Europe, we have benefited from the recovery of major office
markets, as well as the robust investment market, particularly in London and
Paris where we hold significant market share following the Insignia
acquisition. Absorption of office space
has picked up sharply in London and this has historically been a leading
indicator for office markets across the region.
In Asia Pacific, we have achieved notable market share gains, supported
by an improved economic and market climate and the strength of our global
platform.
“Historically, the fourth
quarter is our strongest period and we have particularly good momentum going
into it this year,” Mr. Wirta added.
Americas
Region
Third quarter revenue for the Americas region, including the U.S.,
Canada, Mexico and South America, increased 31.0% to $425.2 million, compared
with $324.5 million for the third quarter of 2003. This increase was primarily related to
stronger sales, leasing and consulting activity in the U.S. coupled with incremental
contributions from Insignia. Organic revenue growth in the Americas region was
approximately 25% in the quarter.
Operating income for the Americas region totaled $35.8 million for the
third quarter of 2004, compared with an operating loss of $11.9 million for the
third quarter of 2003. The $47.7 million
increase was primarily driven by the aforementioned revenue growth as well as
lower amortization expense related to Insignia net revenue backlog(4) and lower
merger-related costs incurred in the current quarter. Excluding the impact of all one-time items,
operating income for this region would have been $44.5 million for the third
quarter of 2004, an increase of $18.8 million, or 73.0%, as compared to the third
quarter of last year. The Americas
region’s EBITDA totaled $49.2 million for the third quarter of 2004, an
increase of $30.5 million from last year’s third quarter.
Europe, Middle East and Africa (EMEA) Region
Revenue for the EMEA region, mainly consisting of operations in Europe,
increased 58.5% to $110.0 million for the third quarter of 2004, compared with
$69.4 million for the third quarter of 2003.
Organic revenue growth in the EMEA region was approximately 20% in the
quarter. Operating income for the EMEA
region totaled $4.6 million for the current quarter, compared with an operating
loss of $13.8 million for the same quarter last year. Excluding one-time items, operating income
for this region would have been $5.5 million, which represents an increase of
$6.1 million as compared to the third quarter of 2003. EBITDA for the EMEA region totaled $6.6
million for the third quarter of 2004, an increase of $8.7 million from last
year’s same period results. The
year-over-year improvement primarily reflects organic growth, particularly in
London, as well as contributions from the Insignia operations.
Asia Pacific Region
In the Asia Pacific
region, which includes operations in Asia, Australia and New Zealand, revenue
totaled $39.8 million for the third quarter of 2004, an increase of 35% (all
organic) from $29.5 million for the third quarter of 2003. Operating income for the Asia Pacific segment
totaled $4.2 million for the third quarter ended September 30, 2004,
compared with $3.1 million for the same period last year. EBITDA for the Asia
Pacific segment totaled $6.1 million for the third quarter of 2004, an increase
of $2.0 million from last year’s same period results. The improved results
reflect the Company’s success in increasing market share in Australia and
Japan. The Asia Pacific segment did not
incur any one-time costs associated with the Insignia acquisition or the
initial public
offering.
Business Line Performance
CB Richard Ellis’ business
lines enter the fourth quarter, historically the Company’s strongest, with good
momentum. During the third quarter of
2004, the Company has gained a number of corporate clients, including General
Motors, Pfizer, Regions Bank and renewed a 14-year relationship with Kodak. CBRE/L.J. Melody, the Company’s mortgage
brokerage business, is expected to achieve new record volume this year with
mortgage originations totaling $8.9 billion through the third quarter, which is
28% ahead of 2003’s pace. The investment
management business completed $900 million of transactions in the third
quarter. Assets under management now exceed approximately $15.0 billion and
continued asset growth is expected. The
Company’s valuation business, which it believes is the world’s largest, is also
on track for a record year.
Nine-month
Results
Nine-month revenue increased 55.3% to $1.6
billion, compared with the same period last year. Organic revenue growth was approximately 18%
for the nine months. The Company posted
a net loss of $1.7 million, or $0.03 per diluted share, for the nine months
ended September 30, 2004 compared with a net loss of $24.6 million, or
$0.52 per diluted share, for the same period last year.
Excluding one-time items, the Company would
have earned net income of $49.5 million(1), or $0.71 per diluted share, for the nine months ended September 30,
2004. This represents an increase of
$40.5 million, approximately 450%, or $0.52 per diluted share, as compared with
the same period in 2003.
EBITDA for the nine
months ended September 30, 2004 was $110.9 million, representing an
increase of $41.4 million, or 59.7%, from last year’s same period, despite the
inclusion of $52.3 million of merger-related charges, integration costs and
one-time compensation expense in the current year versus only $23.2 million of
merger-related and integration charges in the prior year.
2004 Guidance
The Company expects to achieve full year
revenue of approximately $2.2 billion.
The Company has revised its full year earnings guidance and expects to
achieve diluted earnings per share in the range of $0.76 to $0.81.
The Company has also
revised its estimate of full year 2004
one-time costs to be approximately $85 million (or $53 million after-tax),
comprised of:
• $13 million (or $8 million after-tax) of
intangible asset amortization expense related to Insignia net revenue backlog;
• $40 million (or $25 million after-tax) of
Insignia merger and integration related costs;
• $15 million (or $9 million after-tax) of one-time
compensation expense; and
• $17 million (or $11 million after-tax) of
one-time premium costs and write-offs associated with the repayment of debt
with the net proceeds from the initial public offering.
Excluding these one-time items, the Company
anticipates full year 2004 diluted earnings per share will be in the range of
$1.50 to $1.55 per share.
The Company’s third-quarter earnings
conference call will be held on Thursday, November 4, 2004 at 10:30 a.m.
EST. A live Webcast will be accessible
through the Investor Relations section of the Company’s Web site at
www.cbre.com.
To access the call, dial 888-428-4469 (US)
and 651-224-7497 (outside the US) and use access code 750437. A replay of the
call will be available at 800-475-6701 (US) and 320-365-3844 (outside the US)
beginning at 2:00 p.m. EST on November 4, 2004 and ending at 2:59 a.m. EST
on November 11, 2004. The access code for the replay is 750437. A transcript of the call will be available on
the Investor Relations section of the Web site.
About CB Richard Ellis
Headquartered
in Los Angeles, CB Richard Ellis is the world’s largest commercial real estate
services firm (in terms of 2003 revenue). With approximately 13,500 employees,
the company serves real estate owners, investors and occupiers through more
than 220 offices worldwide (excluding affiliate and partner offices). The
company’s core services include property sales, leasing and management;
corporate services; facilities and project management; mortgage banking;
investment management; appraisal and valuation; research; and consulting. For more information, visit the company’s Web
site at www.cbre.com.
This release contains forward-looking statements within the meaning of
the ‘‘safe harbor’’ provisions of the Private Securities Litigation Reform Act
of 1995. 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:
commercial real estate vacancy levels; employment conditions and their effect
on vacancy rates; property values; rental rates; any general economic recession
domestically or internationally; and general conditions of financial liquidity
for real estate transactions.
Additional
information concerning factors that may influence CB Richard Ellis Group’s
financial information can be found in its press releases as well as its
periodic filings with the Securities and Exchange Commission. In this regard, risk factors are specifically
discussed under the headings “Risks Related to Our Business” and “Forward-Looking
Statements” in CB Richard Ellis Group’s Form 10-K/A for the year ended December 31,
2003, filed June 28, 2004. Such
filings are available publicly and may be
obtained
off the company’s website at www.cbre.com or upon request from the CB Richard
Ellis Investor Relations Department at investorrelations@cbre.com.
(1) A
reconciliation of net income to net income, as adjusted for one-time items, is
provided in the exhibits to this release.
(2) The
operating results for 2004 include the operations of Insignia. However, the operating results from January 1
to July 23, 2003 do not include the operations of Insignia, as the
Insignia acquisition occurred on July 23, 2003. As such, our consolidated financial
statements after the Insignia acquisition are not directly comparable to our
consolidated financial statements prior to the Insignia acquisition.
(3)
The Company’s management believes that EBITDA is useful in evaluating its
performance compared to that of other companies in its industry because the
calculation of EBITDA generally eliminates the effects of financing and income
taxes and the accounting effects of capital spending and acquisitions, which
items may vary for different companies for reasons unrelated to overall
operating performance. As a result, the
Company’s management uses EBITDA as a measure to evaluate the performance of
various business lines and for other discretionary purposes, including as a
significant component when measuring its performance under its employee
incentive programs.
However, EBITDA is not a
recognized measurement under U.S. generally accepted accounting principles
(GAAP), and when analyzing the Company’s operating performance, readers should
use EBITDA in addition to, and not as an alternative for, operating income
(loss) and net income (loss), each as determined in accordance with GAAP. Because not all companies use identical
calculations, the Company’s presentation of EBITDA may not be comparable to
similarly titled measures of other companies.
Furthermore, EBITDA is not intended to be a measure of free cash flow
for management’s discretionary use, as it does not consider certain cash
requirements such as tax and debt service payments. The amounts shown for EBITDA also differ from
the amounts calculated under similarly titled definitions in the Company’s debt
instruments, which are further adjusted to reflect certain other cash and
non-cash charges and are used to determine compliance with financial covenants
and the Company’s ability to engage in certain activities, such as incurring
additional debt and making certain restricted payments.
For a reconciliation of EBITDA
with the most comparable financial measures calculated and presented in
accordance with GAAP, see the section of this press release titled “Non-GAAP
Financial Measures.”
(4) The intangible asset amortization pertains to the net revenue
backlog acquired in the Insignia transaction.
Net income cannot be recognized from purchased backlog; hence this
amortization expense offsets that portion of operating income that was
generated from the Insignia backlog acquired.
CB RICHARD ELLIS GROUP, INC.
OPERATING RESULTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2004 AND 2003
(Dollars in thousands, except share data)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
574,999
|
|
$
|
423,376
|
|
$
|
1,566,907
|
|
$
|
1,008,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
300,711
|
|
207,820
|
|
797,544
|
|
484,485
|
|
|
Operating,
administrative and other
|
|
213,226
|
|
180,676
|
|
643,016
|
|
444,272
|
|
|
Depreciation
and amortization
|
|
12,340
|
|
41,071
|
|
40,001
|
|
53,571
|
|
|
Merger-related
charges
|
|
4,040
|
|
16,485
|
|
25,574
|
|
19,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
44,682
|
|
(22,676
|
)
|
60,772
|
|
6,694
|
|
|
Equity
income from unconsolidated subsidiaries
|
|
4,826
|
|
2,318
|
|
10,120
|
|
9,182
|
|
|
Interest
income
|
|
672
|
|
1,373
|
|
2,303
|
|
2,624
|
|
|
Interest
expense
|
|
14,919
|
|
21,000
|
|
52,138
|
|
51,739
|
|
|
Loss on
extinguishment of debt
|
|
17,066
|
|
6,840
|
|
21,075
|
|
6,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before provision (benefit) for income taxes
|
|
18,195
|
|
(46,825
|
)
|
(18
|
)
|
(40,079
|
)
|
|
Provision
(benefit) for income taxes
|
|
6,300
|
|
(18,380
|
)
|
1,690
|
|
(15,459
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
11,895
|
|
$
|
(28,445
|
)
|
$
|
(1,708
|
)
|
$
|
(24,620
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income
(loss) per share
|
|
$
|
0.17
|
|
$
|
(0.49
|
)
|
$
|
(0.03
|
)
|
$
|
(0.52
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding for basic income (loss) per share
|
|
71,446,359
|
|
57,486,405
|
|
66,006,231
|
|
46,995,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
income (loss) per share
|
|
$
|
0.16
|
|
$
|
(0.49
|
)
|
$
|
(0.03
|
)
|
$
|
(0.52
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding for diluted income (loss) per share
|
|
75,184,418
|
|
57,486,405
|
|
66,006,231
|
|
46,995,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
61,848
|
|
$
|
20,713
|
|
$
|
110,893
|
|
$
|
69,447
|
|
CB RICHARD ELLIS GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Dollars in thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
425,194
|
|
$
|
324,508
|
|
$
|
1,148,577
|
|
$
|
766,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
232,746
|
|
165,013
|
|
614,254
|
|
380,942
|
|
|
Operating,
administrative and other
|
|
143,526
|
|
129,170
|
|
435,117
|
|
316,352
|
|
|
Depreciation
and amortization
|
|
9,045
|
|
28,086
|
|
27,007
|
|
37,277
|
|
|
Merger-related
charges
|
|
4,040
|
|
14,153
|
|
22,037
|
|
15,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
35,837
|
|
$
|
(11,914
|
)
|
$
|
50,162
|
|
$
|
16,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
49,184
|
|
$
|
18,708
|
|
$
|
86,770
|
|
$
|
63,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
110,000
|
|
$
|
69,390
|
|
$
|
310,511
|
|
$
|
167,020
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
49,413
|
|
30,401
|
|
133,001
|
|
70,782
|
|
|
Operating,
administrative and other
|
|
53,938
|
|
38,466
|
|
162,740
|
|
91,615
|
|
|
Depreciation
and amortization
|
|
2,000
|
|
12,035
|
|
10,093
|
|
13,856
|
|
|
Merger-related
charges
|
|
—
|
|
2,332
|
|
3,537
|
|
3,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
4,649
|
|
$
|
(13,844
|
)
|
$
|
1,140
|
|
$
|
(13,137
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
6,589
|
|
$
|
(2,062
|
)
|
$
|
10,956
|
|
$
|
358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
39,805
|
|
$
|
29,478
|
|
$
|
107,819
|
|
$
|
74,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
18,552
|
|
12,406
|
|
50,289
|
|
32,761
|
|
|
Operating,
administrative and other
|
|
15,762
|
|
13,040
|
|
45,159
|
|
36,305
|
|
|
Depreciation
and amortization
|
|
1,295
|
|
950
|
|
2,901
|
|
2,438
|
|
|
Operating
income
|
|
$
|
4,196
|
|
$
|
3,082
|
|
$
|
9,470
|
|
$
|
3,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
6,075
|
|
$
|
4,067
|
|
$
|
13,167
|
|
$
|
5,900
|
|
Non-GAAP Financial Measures
The following measures are considered “non-GAAP
financial measures” under SEC guidelines:
(i) Net
income, as adjusted for one-time items
(ii) Diluted
earnings per share, as adjusted for one-time items
(iii) EBITDA
(iv) Operating
income, as adjusted for one-time items
The Company believes that these non-GAAP
financial measures provide a more complete understanding of ongoing operations
and enhance comparability of current results to prior periods as well as
presenting the effects of one-time items in all periods presented. The Company believes that investors may find
it useful to see these non-GAAP financial measures to analyze financial
performance without the impact of one-time items that may obscure trends in the
underlying performance of its business.
Net income, as adjusted for one-time items
and diluted earnings per share, as adjusted for one-time items are calculated
as follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
11,895
|
|
$
|
(28,445
|
)
|
$
|
(1,708
|
)
|
$
|
(24,620
|
)
|
|
Amortization
expense related to net revenue backlog acquired in the Insignia acquisition,
net of tax
|
|
1,731
|
|
19,205
|
|
6,586
|
|
19,205
|
|
|
Merger-related
charges related to the Insignia acquisition, net of tax
|
|
2,891
|
|
9,466
|
|
16,438
|
|
12,269
|
|
|
Integration
costs related to the Insignia acquisition, net of tax
|
|
2,025
|
|
2,122
|
|
7,558
|
|
2,122
|
|
|
One-time
compensation expense related to the initial public offering, net of tax
|
|
204
|
|
—
|
|
9,641
|
|
—
|
|
|
Loss on
extinguishment of debt related to the initial public offering, net of tax
|
|
10,969
|
|
—
|
|
10,969
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income,
as adjusted
|
|
$
|
29,715
|
|
$
|
2,348
|
|
$
|
49,484
|
|
$
|
8,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
income per share, as adjusted
|
|
$
|
0.40
|
|
$
|
0.04
|
|
$
|
0.71
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding for diluted income per share, as adjusted
|
|
75,184,418
|
|
58,424,788
|
(1)
|
69,663,899
|
(1)
|
47,838,454
|
(1)
|
(1) With adjustments to
arrive at “Net income, as adjusted,” a net loss translates into a net income
position on an adjusted basis. Accordingly, the weighted average impact of
the dilutive effect of potential common shares of 938,383, 3,657,668 and 843,090 have been
considered in determining the dilutive earnings per share on a adjusted basis for the three months ended September 30,
2003 and the nine months ended September 30, 2004 and 2003, respectively.
EBITDA for the Company is calculated as
follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
Net income
(loss)
|
|
$
|
11,895
|
|
$
|
(28,445
|
)
|
$
|
(1,708
|
)
|
$
|
(24,620
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
12,340
|
|
41,071
|
|
40,001
|
|
53,571
|
|
|
Interest
expense
|
|
14,919
|
|
21,000
|
|
52,138
|
|
51,739
|
|
|
Loss on
extinguishment of debt
|
|
17,066
|
|
6,840
|
|
21,075
|
|
6,840
|
|
|
Provision
(benefit) for income taxes
|
|
6,300
|
|
(18,380
|
)
|
1,690
|
|
(15,459
|
)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
672
|
|
1,373
|
|
2,303
|
|
2,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
61,848
|
|
$
|
20,713
|
|
$
|
110,893
|
|
$
|
69,447
|
|
Operating income, as adjusted for one-time
items is calculated as follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
35,837
|
|
$
|
(11,914
|
)
|
$
|
50,162
|
|
$
|
16,533
|
|
|
Amortization
expense relating to net revenue backlog acquired in the Insignia acquisition
|
|
2,530
|
|
20,559
|
|
6,923
|
|
20,559
|
|
|
Merger-related
charges related to the Insignia Acquisition
|
|
4,040
|
|
14,153
|
|
22,037
|
|
15,891
|
|
|
Integration
costs related to the Insignia Acquisition
|
|
2,073
|
|
2,909
|
|
9,575
|
|
2,909
|
|
|
One-time
compensation expense related to the initial public offering
|
|
—
|
|
—
|
|
15,000
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income, as adjusted
|
|
$
|
44,480
|
|
$
|
25,707
|
|
$
|
103,697
|
|
$
|
55,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
4,649
|
|
$
|
(13,844
|
)
|
$
|
1,140
|
|
$
|
(13,137
|
)
|
|
Amortization
expense related to net revenue backlog acquired in the Insignia acquisition
|
|
—
|
|
10,426
|
|
3,324
|
|
10,426
|
|
|
Merger-related
charges related to the Insignia acquisition
|
|
—
|
|
2,332
|
|
3,537
|
|
3,904
|
|
|
Integration
costs related to the Insignia acquisition
|
|
890
|
|
514
|
|
2,183
|
|
514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss), as adjusted
|
|
$
|
5,539
|
|
$
|
(572
|
)
|
$
|
10,184
|
|
$
|
1,707
|
|
Asia Pacific
The Asia Pacific segment did not incur any one-time costs associated
with the Insignia acquisition or the initial pubic offering.
The Company does not allocate net interest expense
or provision (benefit) for income taxes among its segments. Accordingly, EBITDA for segments is
calculated as follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2004
|
|
2003
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
35,837
|
|
$
|
(11,914
|
)
|
$
|
50,162
|
|
$
|
16,533
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
9,045
|
|
28,086
|
|
27,007
|
|
37,277
|
|
|
Equity
income from unconsolidated subsidiaries
|
|
4,302
|
|
2,536
|
|
9,601
|
|
9,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
49,184
|
|
$
|
18,708
|
|
$
|
86,770
|
|
$
|
63,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
$
|
4,649
|
|
$
|
(13,844
|
)
|
$
|
1,140
|
|
$
|
(13,137
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
2,000
|
|
12,035
|
|
10,093
|
|
13,856
|
|
|
Equity loss
from unconsolidated subsidiaries
|
|
(60
|
)
|
(253
|
)
|
(277
|
)
|
(361
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
6,589
|
|
$
|
(2,062
|
)
|
$
|
10,956
|
|
$
|
358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
4,196
|
|
$
|
3,082
|
|
$
|
9,470
|
|
$
|
3,298
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
1,295
|
|
950
|
|
2,901
|
|
2,438
|
|
|
Equity
income from unconsolidated subsidiaries
|
|
584
|
|
35
|
|
796
|
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
6,075
|
|
$
|
4,067
|
|
$
|
13,167
|
|
$
|
5,900
|
|
CB RICHARD ELLIS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
|
|
|
September 30,
2004
|
|
December 31,
2003
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
147,925
|
|
$
|
163,881
|
|
|
Restricted cash
|
|
10,614
|
|
14,899
|
|
|
Warehouse receivable (1)
|
|
111,840
|
|
230,790
|
|
|
Other current assets
|
|
405,022
|
|
429,412
|
|
|
Property and equipment,
net
|
|
128,076
|
|
113,569
|
|
|
Goodwill and other
intangibles, net
|
|
948,018
|
|
951,289
|
|
|
Deferred compensation
assets
|
|
79,461
|
|
76,389
|
|
|
Other assets, net
|
|
176,391
|
|
233,252
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,007,347
|
|
$
|
2,213,481
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Current liabilities,
excluding debt
|
|
$
|
483,418
|
|
$
|
551,995
|
|
|
Warehouse line of credit
(1)
|
|
111,840
|
|
230,790
|
|
|
Senior secured term loan
tranche B
|
|
280,000
|
|
297,500
|
|
|
11¼% senior subordinated
notes
|
|
204,972
|
|
226,173
|
|
|
9¾% senior notes
|
|
130,000
|
|
200,000
|
|
|
16% senior notes
|
|
—
|
|
35,472
|
|
|
Other debt (2)
|
|
28,494
|
|
82,907
|
|
|
Deferred compensation
liability
|
|
146,709
|
|
138,037
|
|
|
Other long-term
liabilities
|
|
136,999
|
|
111,022
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
1,522,432
|
|
1,873,896
|
|
|
|
|
|
|
|
|
|
Minority interest
|
|
6,667
|
|
6,656
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
478,248
|
|
332,929
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity
|
|
$
|
2,007,347
|
|
$
|
2,213,481
|
|
(1) Includes Freddie MAC loan receivables and related non-recourse
warehouse line of credit of $111.8 million and $230.8 million at September 30, 2004 and December 31,
2003, respectively.
(2) Includes non-recourse debt relating to a building in Japan of $43.7
million at December 31, 2003.