Exhibit 99.1
FOR IMMEDIATE RELEASE
|
For further
information:
|
|
|
|
Kenneth Kay
Sr. Executive Vice President and
Chief Financial Officer
310.606.4706
|
Steve Iaco
Sr. Managing Director of
Corporate Communications
212.984.835
|
Shelley Young
Director of
Investor Relations
212.984.6535
|
CB RICHARD ELLIS
GROUP, INC. REPORTS THIRD QUARTER 2005 EARNINGS PER SHARE UP 88% FROM 2004 AND
PROVIDES FULL YEAR GUIDANCE FOR 2005
Los Angeles, CA — November 1, 2005 — CB Richard Ellis Group, Inc. (NYSE:CBG) today
reported third quarter 2005 revenue of $744.2 million, up 29.4% over the third
quarter of 2004, and diluted earnings per share of $0.74 for the third quarter
of 2005, compared with $0.16 in the third quarter of last year. Excluding one-time charges, third quarter 2005
diluted earnings per share was $0.75, an increase of 88% from $0.40 for the
same quarter a year earlier.
Based on
continuing favorable trends across all of the Company’s business lines and
geographies, CB Richard Ellis raised its full year 2005 guidance for diluted
earnings per share to a range of $2.70 to $2.75, excluding one-time Insignia
related and debt buy-back charges.
Third Quarter Highlights
For the
third quarter of 2005, the Company generated revenue of $744.2 million, a 29.4%
increase over the $575.0 million posted in the third quarter of 2004. The Company reported third quarter net income
of $56.9 million, or $0.74 per diluted share, compared with net income of $11.9
million, or $0.16 per diluted share in the third quarter of 2004.
Excluding
one-time items, the Company would have earned net income1 of
$57.5 million, or $0.75 per diluted share in the third quarter of 2005,
compared with net income of $29.7 million, or $0.40 per diluted share in the
third quarter of 2004.
Revenue
The third
quarter revenue increase of 29.4% reflects improved performance across
virtually all of the Company’s business lines and geographies. A steady leasing market
recovery
combined with increased appraisal activities and continued investment sales
strength globally, fueled the double-digit growth.
EBITDA2
Earnings
Before Interest, Taxes, Depreciation, and Amortization (EBITDA) totaled $111.2
million for the third quarter of 2005, an increase of $49.3 million, or 79.8%,
from the same quarter last year. The
increased EBITDA reflects strength across the majority of the Company’s
business lines and continued cost control.
Also contributing to the year-over-year increase is the significant
reduction of Insignia acquisition-related costs.
Interest Expense
Interest expense totaled $13.8 million for
the third quarter of 2005, a decrease of $1.7 million, or 10.8%, compared with
the same quarter last year. The decrease
was primarily driven by the interest savings realized from the repayment of
higher interest rate debt throughout 2004 and 2005, predominantly the
repurchase of outstanding bonds in the open market.
During the third quarter of 2005, the Company
repurchased $4.5 million in aggregate principal amount of its outstanding 11¼% senior subordinated notes in the
open market at a premium of $0.5 million.
The year-to-date repurchases of $42.7 million will reduce annualized
interest expense by approximately $4.8 million.
Management’s Commentary
Compared with a year ago, the Company’s third
quarter investment sales revenues grew by 41% and leasing revenues advanced by
15%. “The third quarter saw a
continuation of trends that have been in place all year: robust investment
sales activity fueled by strong debt and equity capital flows into real estate,
and leasing markets that are steadily improving in step with the economy,” said
Brett White, President and Chief Executive Officer of CB Richard Ellis.
“Overseas, increased cross-border investment
activity has been a key factor in the continuing strength of most major
investment markets. Leasing markets throughout Asia continue to exhibit
strength, reflected in reduced vacancy and higher rents. In Europe, leasing demand has picked up
modestly in some major business centers including London and Madrid and a
broader-based recovery is expected in 2006,” Mr. White said.
“In this favorable market environment, the
breadth and depth of our global platform has enabled us to capture increased
market share and cross-sell more services to existing clients. We are well positioned for continued growth
due to the strength of our people and platform, and quality of our brand.”
Americas Region
Third quarter revenue for the Americas
region, including the U.S., Canada, Mexico and Latin America, increased 24.2%
to $516.7 million, compared with $416.1 million for the
third quarter of 2004. This increase was mainly attributable to
improved leasing activity, continued high volume of investment sales, increased
appraisal/valuation activities, and higher property and facilities management
fees.
Operating income for the Americas region
totaled $64.5 million for the third quarter of 2005, compared with $35.2
million for the third quarter of 2004.
The $29.3 million increase was driven by double-digit revenue growth, as
well as the lack of merger-related costs associated with the Insignia
acquisition, which impacted the prior-year quarter. Excluding the impact of one-time items,
operating income for the Americas region would have been $65.7 million for the
third quarter of 2005, an increase of $21.8 million, or 49.8%, as compared to
the third quarter of last year. The
Americas region’s EBITDA totaled $75.0 million for the third quarter of 2005,
an increase of $28.2 million, or 60.2%, from last year’s third quarter.
EMEA Region
Revenue for the EMEA region, mainly
consisting of operations in Europe, increased 42.8% to $149.6 million for the
third quarter of 2005, compared with $104.8 million for the third quarter of
2004. Operating income for the EMEA
segment totaled $26.7 million for the third quarter of 2005, compared with $4.0
million for the same period last year.
Excluding one-time items related to the Insignia acquisition, operating
income for this region would have been $26.9 million, an increase of $22.0
million, or 452.0%, as compared to the third quarter of 2004. EBITDA for the EMEA region totaled $28.9
million for the third quarter of 2005, an increase of $23.1 million, or 395.0%,
from last year’s third quarter. These
improvements were primarily driven by a continued strong investment sales
environment as well as improved leasing and appraisal activities.
Asia Pacific Region
In the Asia Pacific region, which includes
operations in Asia, Australia and New Zealand, revenue totaled $44.1 million
for the third quarter of 2005, an 18.1% increase from $37.3 million for the
third quarter of 2004. Operating income
for the Asia Pacific segment totaled $5.9 million for the third quarter of
2005, compared with $4.5 million for the same period last year, an increase of
29.5%. EBITDA for the Asia Pacific segment totaled $6.4 million for the current
quarter, an increase of $1.1 million, or 19.9%, from the third quarter of 2004.
The year-over-year third quarter improvement generally reflects increased
business activity throughout the region.
The Asia Pacific segment did not incur any one-time costs associated
with the Insignia acquisition or the initial public offering in the current or
prior year quarter.
Global Investment Management
Business
In the Global Investment Management segment,
which consists of investment management operations in the U.S., Europe and
Asia, revenue totaled $33.9 million for the third quarter of 2005, compared
with $16.7 million in the third quarter of 2004. This increase was mainly due to higher
incentive fees earned in France and the U.S.
Operating loss for this segment totaled $1.2 million for the third
quarter of 2005,
compared with operating income of $1.0
million for the same period last year.
EBITDA for the Global Investment Management segment totaled $0.8 million
for the third quarter of 2005, a decrease of $3.0 million from last year’s same
period results. These decreases were
attributable in part to higher incremental incentive compensation expense of
approximately $10.3 million accrued in the current year quarter for Global
Investment Management dedicated executives and team leaders in connection with
funds concluding over the next few years.
Only $0.5 million was accrued for this purpose in the third quarter of
2004. Revenues associated with these
expenses cannot be recognized until certain financial hurdles are met. In the fourth quarter of 2005, the Company
expects to recognize income from some of these funds, which should offset the
cumulative accrued incentive compensation expense to date. The Global
Investment Management segment did not incur any one-time costs associated with
the Insignia acquisition in the current or prior year quarter.
Additional Business Line
Highlights
The Company’s mortgage brokerage subsidiary,
CBRE Melody, continued to capitalize on investors’ healthy appetite for debt
financing. For the first nine months of
2005, mortgage originations increased 39% from a year earlier to $12.4
billion. Reflecting a continuing outsourcing
trend, the Company also expanded its relationships with several institutional
accounts in its Asset Services portfolio during the third quarter, including
AMB Property Corporation (with 32 million square feet now under management),
Dividend Capital (7 million square feet now under management) and DBSI —
Discovery Real Estate Services (4 million square feet now under
management). The Company also furthered
its representation of Corporate Services accounts, such as Burlington Northern
Santa Fe (more than 2 million square feet) and Regus Group (more than 6 million
square feet).
Nine-month Results
Nine-month revenue
increased by $387.7 million, or 24.7%, to $2.0 billion compared to the same
period last year. The Company reported
net income of $121.9 million, or $1.59 per diluted share, for the nine months
ended September 30, 2005 compared with a net loss of $1.7 million, or a loss of
$0.03 per diluted share, for the nine months ended September 30, 2004.
Excluding one-time
items, the Company would have earned net income of $130.0 million, or $1.70 per
diluted share, for the nine months ended September 30, 2005 compared to net
income of $49.5 million, or $0.71 per diluted share, for the same period in the
prior year.
EBITDA for the nine months ended September 30, 2005 was $267.9 million,
representing an increase of $157.0 million, or 141.6%, from $110.9 million for
the same period of 2004.
Guidance
As previously
mentioned, the Company is raising its full-year guidance for 2005. CB Richard Ellis expects to generate full
year revenue of approximately $2.8 billion, net income in the range of $207.0
million to $210.0 million, and diluted earnings per share in the range of $2.70
to $2.75, excluding residual one-time Insignia related and debt buy-back
charges totaling approximately $14 million (pre-tax), as well as any additional
one-time tax expense associated with the repatriation of offshore income under
the American Jobs Creation Act of 2004, should the Company elect to do so.
Looking forward to
2006, consistent with its previously disclosed growth objectives, the Company
estimates that it should generate revenue growth in the range of 7-9% with
corresponding EBITDA growth of 12-14% and diluted earnings per share growth
approximating 20%, excluding one-time items.
The Company plans to issue more specific guidance on 2006 as it
approaches year-end.
The Company’s
third-quarter earnings conference call will be held on Wednesday, November 2,
2005 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.
The direct dial-in number for the conference
call is 888-428-4480 (in the U.S.) and 612-288-0318 (outside the U.S.). A replay of the call will be available
beginning at 2:00 p.m. EST on November 2, 2005 and ending at 2:59 a.m. EST on
November 12, 2005. To access the replay, the dial-in number is 800-475-6701 (in
the U.S.) and 320-365-3844 (outside the U.S.)
The access code for the replay is 800534. A transcript of the call will be available on
the Company’s Investor Relations Web site.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a FORTUNE 1000 company
headquartered in Los Angeles, is the world’s largest commercial real estate
services firm (in terms of 2004 revenue). With approximately 13,500 employees, the
Company serves real estate owners, investors and occupiers through more than
200 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. Please visit our 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, including statements regarding our
growth momentum in 2005 and 2006; future operations; and future financial
performance. 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; interest rates; realization of values in
investment funds to offset incentive compensation expense related thereto; any
general economic recession domestically or internationally; general conditions
of financial liquidity for real estate transactions; our ability to leverage
our platform to sustain revenue growth; our ability to retain and incentivize
producers; and our ability to pay down debt.
Additional information concerning factors that
may influence CB Richard Ellis Group, Inc.’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 “Factors Affecting
Our Future Performance” and “Forward-Looking Statements” in CB Richard Ellis
Group, Inc.’s Form 10-K for the year ended December 31, 2004, filed March 15,
2005. Such filings are available
publicly and may be obtained off the company’s Web site at www.cbre.com or upon
request from the CB Richard Ellis Investor Relations Department at
investorrelations@cbre.com.
1A reconciliation of net income (loss) to net income, as adjusted for
one-time items, is provided in the exhibits to this release.
2The
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.”
CB RICHARD ELLIS GROUP, INC.
OPERATING RESULTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2005 AND 2004
(Dollars in thousands, except share data)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Revenue
|
|
$
|
744,198
|
|
$
|
574,999
|
|
$
|
1,954,627
|
|
$
|
1,566,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
380,943
|
|
300,711
|
|
987,680
|
|
797,544
|
|
|
Operating, administrative and other
|
|
255,706
|
|
213,226
|
|
720,657
|
|
643,016
|
|
|
Depreciation and amortization
|
|
11,665
|
|
12,340
|
|
32,853
|
|
40,001
|
|
|
Merger-related charges
|
|
—
|
|
4,040
|
|
—
|
|
25,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
95,884
|
|
44,682
|
|
213,437
|
|
60,772
|
|
|
Equity income from unconsolidated subsidiaries
|
|
3,628
|
|
4,826
|
|
21,648
|
|
10,120
|
|
|
Interest income
|
|
413
|
|
1,262
|
|
5,916
|
|
4,099
|
|
|
Interest expense
|
|
13,840
|
|
15,509
|
|
40,812
|
|
53,934
|
|
|
Loss on extinguishment of debt
|
|
624
|
|
17,066
|
|
7,386
|
|
21,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for income taxes
|
|
85,461
|
|
18,195
|
|
192,803
|
|
(18
|
)
|
|
Provision for income taxes
|
|
28,525
|
|
6,300
|
|
70,874
|
|
1,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
56,936
|
|
$
|
11,895
|
|
$
|
121,929
|
|
$
|
(1,708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share
|
|
$
|
0.77
|
|
$
|
0.17
|
|
$
|
1.65
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for basic income (loss) per share
|
|
74,177,337
|
|
71,446,359
|
|
73,834,169
|
|
66,006,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share
|
|
$
|
0.74
|
|
$
|
0.16
|
|
$
|
1.59
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for diluted income (loss) per
share
|
|
76,777,271
|
|
75,184,418
|
|
76,444,808
|
|
66,006,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
111,177
|
|
$
|
61,848
|
|
$
|
267,938
|
|
$
|
110,893
|
|
CB RICHARD ELLIS GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2005 AND 2004
(Dollars in thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
516,665
|
|
$
|
416,149
|
|
$
|
1,387,657
|
|
$
|
1,119,218
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
294,693
|
|
232,746
|
|
757,945
|
|
614,254
|
|
|
Operating, administrative and other
|
|
149,375
|
|
135,456
|
|
440,144
|
|
408,288
|
|
|
Depreciation and amortization
|
|
8,088
|
|
8,706
|
|
22,471
|
|
25,989
|
|
|
Merger-related charges
|
|
—
|
|
4,040
|
|
—
|
|
22,038
|
|
|
Operating income
|
|
$
|
64,509
|
|
$
|
35,201
|
|
$
|
167,097
|
|
$
|
48,649
|
|
|
EBITDA
|
|
$
|
75,049
|
|
$
|
46,857
|
|
$
|
198,344
|
|
$
|
80,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
149,574
|
|
$
|
104,762
|
|
$
|
374,823
|
|
$
|
292,897
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
64,499
|
|
49,413
|
|
169,204
|
|
133,001
|
|
|
Operating, administrative and other
|
|
55,861
|
|
49,464
|
|
160,852
|
|
147,849
|
|
|
Depreciation and amortization
|
|
2,543
|
|
1,908
|
|
7,357
|
|
9,880
|
|
|
Merger-related charges
|
|
—
|
|
—
|
|
—
|
|
3,205
|
|
|
Operating income (loss)
|
|
$
|
26,671
|
|
$
|
3,977
|
|
$
|
37,410
|
|
$
|
(1,038
|
)
|
|
EBITDA
|
|
$
|
28,891
|
|
$
|
5,836
|
|
$
|
44,139
|
|
$
|
8,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
44,090
|
|
$
|
37,342
|
|
$
|
121,249
|
|
$
|
100,612
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
21,751
|
|
18,552
|
|
60,531
|
|
50,289
|
|
|
Operating, administrative and other
|
|
15,907
|
|
13,659
|
|
45,108
|
|
39,146
|
|
|
Depreciation and amortization
|
|
572
|
|
605
|
|
1,720
|
|
1,855
|
|
|
Operating income
|
|
$
|
5,860
|
|
$
|
4,526
|
|
$
|
13,890
|
|
$
|
9,322
|
|
|
EBITDA
|
|
$
|
6,418
|
|
$
|
5,354
|
|
$
|
16,126
|
|
$
|
11,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Investment Management
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
33,869
|
|
$
|
16,746
|
|
$
|
70,898
|
|
$
|
54,180
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Operating, administrative and other
|
|
34,563
|
|
14,647
|
|
74,553
|
|
47,733
|
|
|
Depreciation and amortization
|
|
462
|
|
1,121
|
|
1,305
|
|
2,277
|
|
|
Merger-related charges
|
|
—
|
|
—
|
|
—
|
|
331
|
|
|
Operating (loss) income
|
|
$
|
(1,156
|
)
|
$
|
978
|
|
$
|
(4,960
|
)
|
$
|
3,839
|
|
|
EBITDA
|
|
$
|
819
|
|
$
|
3,801
|
|
$
|
9,329
|
|
$
|
10,048
|
|
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 (loss), 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,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Net income (loss)
|
|
$
|
56,936
|
|
$
|
11,895
|
|
$
|
121,929
|
|
$
|
(1,708
|
)
|
|
Amortization expense related to net revenue backlog acquired in the
Insignia acquisition, net of tax
|
|
—
|
|
1,731
|
|
—
|
|
6,586
|
|
|
Merger-related charges related to the Insignia acquisition, net of
tax
|
|
—
|
|
2,891
|
|
—
|
|
16,438
|
|
|
Integration costs related to the Insignia acquisition, net of tax
|
|
548
|
|
2,025
|
|
3,683
|
|
7,558
|
|
|
One-time compensation expense related to the initial public offering,
net of tax
|
|
—
|
|
204
|
|
—
|
|
9,641
|
|
|
Loss on extinguishment of debt, net of tax
|
|
(6
|
)
|
10,969
|
|
4,402
|
|
10,969
|
|
|
Net income, as adjusted
|
|
$
|
57,478
|
|
$
|
29,715
|
|
$
|
130,014
|
|
$
|
49,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share, as adjusted
|
|
$
|
0.75
|
|
$
|
0.40
|
|
$
|
1.70
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for diluted income per share, as
adjusted
|
|
76,777,271
|
|
75,184,418
|
|
76,444,808
|
|
69,663,899
|
(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 3,657,688 has been considered in determining the
dilutive earnings per share on an adjusted basis.
EBITDA
for the Company is calculated as follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Net income (loss)
|
|
$
|
56,936
|
|
$
|
11,895
|
|
$
|
121,929
|
|
$
|
(1,708
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
11,665
|
|
12,340
|
|
32,853
|
|
40,001
|
|
|
Interest expense
|
|
13,840
|
|
15,509
|
|
40,812
|
|
53,934
|
|
|
Loss on extinguishment of debt
|
|
624
|
|
17,066
|
|
7,386
|
|
21,075
|
|
|
Provision for income taxes
|
|
28,525
|
|
6,300
|
|
70,874
|
|
1,690
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
413
|
|
1,262
|
|
5,916
|
|
4,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
111,177
|
|
$
|
61,848
|
|
$
|
267,938
|
|
$
|
110,893
|
|
Operating income (loss), as
adjusted for one-time items is calculated as follows (dollars in thousands):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
64,509
|
|
$
|
35,201
|
|
$
|
167,097
|
|
$
|
48,649
|
|
|
Amortization expense relating to net revenue backlog acquired in the
Insignia acquisition
|
|
—
|
|
2,530
|
|
—
|
|
6,923
|
|
|
Merger-related charges related to the Insignia acquisition
|
|
—
|
|
4,040
|
|
—
|
|
22,038
|
|
|
Integration costs related to the Insignia acquisition
|
|
1,180
|
|
2,073
|
|
4,751
|
|
9,575
|
|
|
One-time compensation expense related to the initial public offering
|
|
—
|
|
—
|
|
—
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
$
|
65,689
|
|
$
|
43,844
|
|
$
|
171,848
|
|
$
|
102,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
26,671
|
|
$
|
3,977
|
|
$
|
37,410
|
|
$
|
(1,038
|
)
|
|
Amortization expense related to net revenue backlog acquired in the
Insignia acquisition
|
|
—
|
|
—
|
|
—
|
|
3,324
|
|
|
Merger-related charges related to the Insignia acquisition
|
|
—
|
|
—
|
|
—
|
|
3,205
|
|
|
Integration costs related to the Insignia acquisition
|
|
195
|
|
890
|
|
1,432
|
|
2,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
$
|
26,866
|
|
$
|
4,867
|
|
$
|
38,842
|
|
$
|
7,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Asia Pacific segment
did not incur any one-time costs associated with the Insignia acquisition or
the initial public offering.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Investment Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
$
|
(1,156
|
)
|
$
|
978
|
|
$
|
(4,960
|
)
|
$
|
3,839
|
|
|
Merger-related charges related to the Insignia acquisition
|
|
—
|
|
—
|
|
—
|
|
331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income, as adjusted
|
|
$
|
(1,156
|
)
|
$
|
978
|
|
$
|
(4,960
|
)
|
$
|
4,170
|
|
The Company does not
allocate net interest expense, loss on extinguishment of debt or provision 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,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
64,509
|
|
$
|
35,201
|
|
$
|
167,097
|
|
$
|
48,649
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
8,088
|
|
8,706
|
|
22,471
|
|
25,989
|
|
|
Equity income from unconsolidated subsidiaries
|
|
2,452
|
|
2,950
|
|
8,776
|
|
6,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
75,049
|
|
$
|
46,857
|
|
$
|
198,344
|
|
$
|
80,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
26,671
|
|
$
|
3,977
|
|
$
|
37,410
|
|
$
|
(1,038
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
2,543
|
|
1,908
|
|
7,357
|
|
9,880
|
|
|
Equity loss from unconsolidated subsidiaries
|
|
(323
|
)
|
(49
|
)
|
(628
|
)
|
(538
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
28,891
|
|
$
|
5,836
|
|
$
|
44,139
|
|
$
|
8,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
5,860
|
|
$
|
4,526
|
|
$
|
13,890
|
|
$
|
9,322
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
572
|
|
605
|
|
1,720
|
|
1,855
|
|
|
Equity (loss) income from unconsolidated subsidiaries
|
|
(14
|
)
|
223
|
|
516
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
6,418
|
|
$
|
5,354
|
|
$
|
16,126
|
|
$
|
11,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Investment Management
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
$
|
(1,156
|
)
|
$
|
978
|
|
$
|
(4,960
|
)
|
$
|
3,839
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
462
|
|
1,121
|
|
1,305
|
|
2,277
|
|
|
Equity income from unconsolidated subsidiaries
|
|
1,513
|
|
1,702
|
|
12,984
|
|
3,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
819
|
|
$
|
3,801
|
|
$
|
9,329
|
|
$
|
10,048
|
|
CB RICHARD ELLIS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2005
|
|
2004
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
284,571
|
|
$
|
256,896
|
|
|
Restricted cash
|
|
5,962
|
|
9,213
|
|
|
Receivables, net
|
|
355,882
|
|
394,062
|
|
|
Warehouse receivable (1)
|
|
146,480
|
|
138,233
|
|
|
Property and equipment, net
|
|
133,439
|
|
137,703
|
|
|
Goodwill and other intangibles, net
|
|
951,368
|
|
935,161
|
|
|
Deferred compensation assets
|
|
142,690
|
|
102,578
|
|
|
Other assets, net
|
|
360,309
|
|
297,790
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,380,701
|
|
$
|
2,271,636
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Current liabilities, excluding debt
|
|
$
|
622,109
|
|
$
|
637,165
|
|
|
Warehouse line of credit (1)
|
|
146,480
|
|
138,233
|
|
|
Senior secured term loan tranche B
|
|
268,200
|
|
277,050
|
|
|
11¼% senior subordinated notes
|
|
162,967
|
|
205,032
|
|
|
9¾% senior notes
|
|
130,000
|
|
130,000
|
|
|
Other debt (2)
|
|
48,983
|
|
22,492
|
|
|
Deferred compensation liability
|
|
166,463
|
|
160,281
|
|
|
Other long-term liabilities
|
|
126,025
|
|
135,510
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
1,671,227
|
|
1,705,763
|
|
|
|
|
|
|
|
|
|
Minority interest
|
|
6,568
|
|
5,925
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
702,906
|
|
559,948
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity
|
|
$
|
2,380,701
|
|
$
|
2,271,636
|
|
(1) Includes
Freddie MAC loan receivables and related non-recourse warehouse line of credit
of $146.5 million and $138.2 million at September 30, 2005 and December 31,
2004, respectively.
(2) Includes $29.2
million of non-recourse debt relating to an investment in Europe at September
30, 2005.