cbg-10q_20170331.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

The number of shares of Class A common stock outstanding at April 30, 2017 was 337,874,535.

	March 31,			December 31,
	2017			2016
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	533,281		$	762,576
Restricted cash		59,046			68,836
Receivables, less allowance for doubtful accounts of $40,286 and $39,469 at March 31, 2017 and December 31, 2016, respectively		2,499,115			2,605,602
Warehouse receivables		685,133			1,276,047
Income taxes receivable		55,438			45,626
Prepaid expenses		212,336			184,107
Other current assets		201,111			179,656
Total Current Assets		4,245,460			5,122,450
Property and equipment, net		551,633			560,756
Goodwill		3,019,585			2,981,392
Other intangible assets, net of accumulated amortization of $825,419 and $771,673 at March 31, 2017 and December 31, 2016, respectively		1,403,262			1,411,039
Investments in unconsolidated subsidiaries		242,486			232,238
Deferred tax assets, net		94,653			105,324
Other assets, net		370,033			366,388
Total Assets	$	9,927,112		$	10,779,587
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	1,320,584		$	1,446,438
Compensation and employee benefits payable		719,967			772,922
Accrued bonus and profit sharing		467,717			890,321
Income taxes payable		109,894			58,351
Short-term borrowings:
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Entities have committed to purchase)		671,453			1,254,653
Revolving credit facility		120,000			-
Other		16			16
Total short-term borrowings		791,469			1,254,669
Current maturities of long-term debt		12			11
Other current liabilities		63,537			102,717
Total Current Liabilities		3,473,180			4,525,429
Long-term debt, net of current maturities		2,549,258			2,548,126
Deferred tax liabilities, net		78,142			70,719
Non-current tax liabilities		40,770			54,042
Other liabilities		527,523			524,026
Total Liabilities		6,668,873			7,722,342
Commitments and contingencies		—			—
Equity:
CBRE Group, Inc. Stockholders’ Equity:
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 337,874,535 and 337,279,449 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively		3,379			3,373
Additional paid-in capital		1,159,294			1,145,226
Accumulated earnings		2,786,503			2,656,906
Accumulated other comprehensive loss		(737,231	)		(791,018	)
Total CBRE Group, Inc. Stockholders’ Equity		3,211,945			3,014,487
Non-controlling interests		46,294			42,758
Total Equity		3,258,239			3,057,245
Total Liabilities and Equity	$	9,927,112		$	10,779,587

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

	Three Months Ended
	March 31,
	2017		2016
Revenue	$	2,981,204	$	2,846,734
Costs and expenses:
Cost of services		2,087,079		2,013,613
Operating, administrative and other		606,231		643,366
Depreciation and amortization		94,037		86,994
Total costs and expenses		2,787,347		2,743,973
Gain on disposition of real estate		1,385		4,819
Operating income		195,242		107,580
Equity income from unconsolidated subsidiaries		15,018		57,301
Other income		4,115		3,215
Interest income		2,411		1,459
Interest expense		34,010		34,790
Income before provision for income taxes		182,776		134,765
Provision for income taxes		51,273		50,125
Net income		131,503		84,640
Less: Net income attributable to non-controlling interests		1,906		2,473
Net income attributable to CBRE Group, Inc.	$	129,597	$	82,167
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	0.38	$	0.25
Weighted average shares outstanding for basic income per share		336,907,836		333,992,935
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	0.38	$	0.24
Weighted average shares outstanding for diluted income per share		339,690,579		337,506,232

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

	Three Months Ended
	March 31,
	2017			2016
Net income	$	131,503		$	84,640
Other comprehensive income:
Foreign currency translation gain		51,089			16,594
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax		1,508			1,743
Unrealized gains (losses) on interest rate swaps, net of tax		294			(2,909	)
Unrealized holding gains (losses) on available for sale securities, net of tax		923			(929	)
Other, net		(6	)		(57	)
Total other comprehensive income		53,808			14,442
Comprehensive income		185,311			99,082
Less: Comprehensive income attributable to non-controlling interests		1,927			2,595
Comprehensive income attributable to CBRE Group, Inc.	$	183,384		$	96,487

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

	Three Months Ended
	March 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	131,503		$	84,640
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		94,037			86,994
Amortization of financing costs		2,439			2,648
Gain on sale of loans, servicing rights and other assets		(37,939	)		(29,010	)
Net realized and unrealized gain from investments		(4,115	)		(3,215	)
Equity income from unconsolidated subsidiaries		(15,018	)		(57,301	)
(Recovery of) provision for doubtful accounts		(928	)		3,420
Compensation expense for equity awards		15,411			12,594
Distribution of earnings from unconsolidated subsidiaries		3,206			11,017
Tenant concessions received		3,776			1,755
Purchase of trading securities		(22,986	)		(20,815	)
Proceeds from sale of trading securities		15,270			22,688
Decrease in receivables		146,191			145,976
Increase in prepaid expenses and other assets		(50,164	)		(29,731	)
Decrease in accounts payable and accrued expenses		(133,231	)		(148,316	)
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing		(491,251	)		(385,314	)
Decrease (increase) in income taxes receivable/payable		13,193			(34,159	)
(Decrease) increase in other liabilities		(7,876	)		8,195
Other operating activities, net		(3,548	)		(706	)
Net cash used in operating activities		(342,030	)		(328,640	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(23,735	)		(33,468	)
Acquisition of businesses (other than Global Workplace Solutions (GWS)), including net assets acquired, intangibles and goodwill		(21,204	)		(3,298	)
Acquisition of GWS, including net assets acquired, intangibles and goodwill		-			(21,900	)
Contributions to unconsolidated subsidiaries		(14,567	)		(10,923	)
Distributions from unconsolidated subsidiaries		15,995			55,571
Proceeds from the sale of servicing rights and other assets		11,365			5,603
Decrease in restricted cash		10,463			9,771
Purchase of available for sale securities		(7,289	)		(7,716	)
Proceeds from the sale of available for sale securities		7,220			9,969
Other investing activities, net		1,227			(2,303	)
Net cash (used in) provided by investing activities		(20,525	)		1,306
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior term loans		-			(5,625	)
Proceeds from revolving credit facility		266,000			565,000
Repayment of revolving credit facility		(146,000	)		(285,000	)
Repayment of notes payable on real estate held for investment		(435	)		-
Proceeds from notes payable on real estate held for sale and under development		1,711			12,427
Repayment of notes payable on real estate held for sale and under development		(2,744	)		(4,102	)
Units repurchased for payment of taxes on equity awards		(1,900	)		(4,252	)
Non-controlling interest contributions		1,574			27
Non-controlling interest distributions		(744	)		(1,138	)
Payment of financing costs		-			(4,787	)
Other financing activities, net		308			(236	)
Net cash provided by financing activities		117,770			272,314
Effect of currency exchange rate changes on cash and cash equivalents		15,490			3,846
NET DECREASE IN CASH AND CASH EQUIVALENTS		(229,295	)		(51,174	)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD		762,576			540,403
CASH AND CASH EQUIVALENTS, AT END OF PERIOD	$	533,281		$	489,229
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	52,027		$	54,205
Income taxes, net	$	37,333		$	82,978

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

	CBRE Group, Inc. Shareholders
	Class A		Additional								Non-
	common		paid-in			Accumulated		Accumulated other			controlling
	stock		capital			earnings		comprehensive loss			interests			Total
Balance at December 31, 2016	$	3,373	$	1,145,226		$	2,656,906	$	(791,018	)	$	42,758		$	3,057,245
Net income		—		—			129,597		—			1,906			131,503
Compensation expense for equity awards		—		15,411			—		—			—			15,411
Units repurchased for payment of taxes on equity awards		—		(1,900	)		—		—			—			(1,900	)
Foreign currency translation gain		—		—			—		51,068			21			51,089
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax		—		—			—		1,508			—			1,508
Unrealized gains on interest rate swaps, net of tax		—		—			—		294			—			294
Unrealized holding gains on available for sale securities, net of tax		—		—			—		923			—			923
Contributions from non-controlling interests		—		—			—		—			1,574			1,574
Distributions to non-controlling interests		—		—			—		—			(744	)		(744	)
Other		6		557			—		(6	)		779			1,336
Balance at March 31, 2017	$	3,379	$	1,159,294		$	2,786,503	$	(737,231	)	$	46,294		$	3,258,239

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

Readers of this Quarterly Report on Form 10-Q (Quarterly Report) should refer to the audited financial statements and notes to consolidated financial statements of CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as the “company,” “we,” “us” and “our”), for the year ended December 31, 2016, which are included in our 2016 Annual Report on Form 10-K (2016 Annual Report), filed with the United States Securities and Exchange Commission (SEC) and also available on our website (www.cbre.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Significant Accounting Policies, in the notes to consolidated financial statements in our 2016 Annual Report for further discussion of our significant accounting policies and estimates.

The accompanying consolidated financial statements have been prepared in accordance with the rules applicable to quarterly reports on Form 10-Q and include all information and footnotes required for interim financial statement presentation, but do not include all disclosures required under accounting principles generally accepted in the United States (GAAP) for annual financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments, except as otherwise noted) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, and reported amounts of revenue and expenses. Such estimates include the value of goodwill, intangibles and other long-lived assets, real estate assets, accounts receivable, investments in unconsolidated subsidiaries and assumptions used in the calculation of income taxes, retirement and other post-employment benefits, among others. These estimates and assumptions are based on our best judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the current economic environment, and adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2017.

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in one of the parties to a derivative contract (through novation) that is part of a hedge accounting relationship does not, by itself, require designation of that relationship, as long as all other hedge accounting criteria continue to be met. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2016, with early adoption permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-07, “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU eliminates the requirement for an investor to retroactively apply the equity method when its increase in ownership interest (or degree of influence) in an investee triggers equity method accounting. ASU 2016-07 should be applied prospectively upon its effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. This ASU is effective for all entities for interim and annual periods in fiscal years beginning after December 15, 2016, with early application permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control.” This ASU changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In December 2016, the FASB issued ASU 2016-19, “Technical Corrections and Improvements.” This ASU amends a number of Topics in the FASB Accounting Standards Codification (ASC). The ASU is part of an ongoing FASB project to facilitate Codification updates for non-substantive technical corrections, clarifications, and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost to most entities. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU clarifies the definition of a business, affecting all companies and other reporting organizations that must determine whether they have acquired or sold a business. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We elected to early adopt the provisions of ASU 2017-01 during the first quarter of 2017. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

The FASB has recently issued five ASUs related to revenue recognition (“new revenue recognition guidance”), all of which will become effective for the company on January 1, 2018. The ASUs issued are: (1) in May 2014, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606);” (2) in March 2016, ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net);” (3) in April 2016, ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;” (4) in May 2016, ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-scope Improvements and Practical Expedients;” and (5) in December 2016, ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers.” ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance under GAAP. This ASU permits the use of either the retrospective or cumulative effect transition method. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. ASU 2016-10 clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. ASU 2016-12 clarifies guidance in certain narrow areas and adds some practical expedients. ASU 2016-20 also clarifies guidance in certain narrow areas and adds optional exemptions to certain disclosure requirements.

We plan to adopt the new revenue recognition guidance in the first quarter of 2018 and are evaluating the application of a transition method. We continue to evaluate the impact that adoption of these updates will have on our consolidated financial statements and related disclosures. Based on our initial assessment, the impact of the application of the new revenue recognition guidance will likely result in an acceleration of some revenues that are based, in part, on future contingent events. For example, some brokerage revenues from leasing commissions in various countries where we operate will get recognized earlier. Under current GAAP, a portion of these commissions are deferred until a future contingency is resolved (e.g. tenant move-in or payment of first month’s rent). Under the new revenue guidance, CBRE’s performance obligation will be typically satisfied at lease signing and therefore the portion of the commission that is contingent on a future event will likely be recognized earlier if deemed not subject to significant reversal. We are currently evaluating the impact of principal versus agent guidance in relation to third-party costs which are billed to clients in association with facilities management services and the impact on our consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU will significantly change the income statement impact of equity investments and the recognition of changes in fair value of financial liabilities when the fair value option is elected. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is not permitted, except for the provisions related to the recognition of changes in fair value of financial liabilities when the fair value option is elected. We do not believe the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This ASU requires lessees to recognize most leases on the balance sheet as liabilities, with corresponding right-of-use assets. For income statement recognition purposes, leases will be classified as either a finance or operating lease in a manner similar to the requirements under the current lease accounting literature, but without relying upon the bright-line tests. This ASU is effective for annual periods in fiscal years beginning after December 15, 2018 and mandates a modified retrospective transition method for all entities. We plan to adopt ASU 2016-02 in the first quarter of 2019 and are currently evaluating the magnitude of its impact on our consolidated financial statements by reviewing our existing lease contracts and service contracts that may include embedded leases.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2016-15 will have on our consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This ASU requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. At this point in time, we do not believe the adoption of ASU 2016-16 will have a material impact on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We do not believe the adoption of ASU 2016-18 will have a material impact on our consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU eliminates Step 2 from the goodwill impairment test. This ASU also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2017-04 will have on our goodwill assessment process, but do not believe the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements and related disclosures.

In February 2017, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This ASU clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and also defines the term in substance nonfinancial asset. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We are evaluating the effect that ASU 2017-05 will have on our consolidated financial statements and related disclosures.

In March 2017, the FASB issued ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.” This ASU requires the premium to be amortized to the earliest call date. This ASU does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2017-08 will have on our consolidated financial statements and related disclosures.

We hold variable interests in certain VIEs in our Global Investment Management and Development Services segments which are not consolidated as it was determined that we are not the primary beneficiary. Our involvement with these entities is in the form of equity co-investments and fee arrangements.

As of March 31, 2017 and December 31, 2016, our maximum exposure to loss related to the VIEs which are not consolidated was as follows (dollars in thousands):

The “Fair Value Measurements and Disclosures” topic (Topic 820) of the FASB ASC defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

There were no significant transfers in or out of Level 1 and Level 2 during the three months ended March 31, 2017 and 2016. There have been no significant changes to the valuation techniques and inputs used to develop the recurring fair value measurements from those disclosed in our 2016 Annual Report.

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 (dollars in thousands):

	As of March 31, 2017
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	8,973	$	—	$	—	$	8,973
Debt securities issued by U.S. federal agencies		—		4,830		—		4,830
Corporate debt securities		—		17,407		—		17,407
Asset-backed securities		—		1,842		—		1,842
Collateralized mortgage obligations		—		983		—		983
Total debt securities		8,973		25,062		—		34,035
Equity securities		24,540		—		—		24,540
Total available for sale securities		33,513		25,062		—		58,575
Trading securities		64,423		—		—		64,423
Warehouse receivables		—		685,133		—		685,133
Foreign currency exchange forward contracts		—		1,352		—		1,352
Total assets at fair value	$	97,936	$	711,547	$	—	$	809,483
Liabilities
Interest rate swaps	$	—	$	10,341	$	—	$	10,341
Securities sold, not yet purchased		4,111		—		—		4,111
Total liabilities at fair value	$	4,111	$	10,341	$	—	$	14,452

	As of December 31, 2016
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	8,485	$	—	$	—	$	8,485
Debt securities issued by U.S. federal agencies		—		5,046		—		5,046
Corporate debt securities		—		17,094		—		17,094
Asset-backed securities		—		2,695		—		2,695
Collateralized mortgage obligations		—		1,010		—		1,010
Total debt securities		8,485		25,845		—		34,330
Equity securities		22,744		—		—		22,744
Total available for sale securities		31,229		25,845		—		57,074
Trading securities		52,629		—		—		52,629
Warehouse receivables		—		1,276,047		—		1,276,047
Foreign currency exchange forward contracts		—		1,471		—		1,471
Total assets at fair value	$	83,858	$	1,303,363	$	—	$	1,387,221
Liabilities

Delaware		94-3391143
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

400 South Hope Street, 25th Floor Los Angeles, California		90071
(Address of principal executive offices)		(Zip Code)

(213) 613-3333		Not applicable
(Registrant's telephone number, including area code)		(Former name, former address and former fiscal year, if changed since last report)

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets at March 31, 2017 (Unaudited) and December 31, 2016	1

	Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (Unaudited)	2

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016 (Unaudited)	3

	Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (Unaudited)	4

	Consolidated Statement of Equity for the three months ended March 31, 2017 (Unaudited)	5

	Notes to Consolidated Financial Statements (Unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	43

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 5.	Other Information	44

Item 6.	Exhibits	44

Signatures		48

	March 31,		December 31,
	2017		2016
Investments in unconsolidated subsidiaries	$	31,651	$	31,041
Other current assets		3,403		3,314
Co-investment commitments		164		168
Maximum exposure to loss	$	35,218	$	34,523

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐