Exhibit 99.1

 

 

PRESS RELEASE

 

Corporate Headquarters

400 South Hope Street

25th Floor

Los Angeles, CA 90071

www.cbre.com

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

For further information:

 

 

Brad Burke

 

Steve Iaco

Investor Relations

 

Media Relations

215.921.7436

 

212.984.6535

 

CBRE GROUP, INC. REPORTS STRONG FINANCIAL RESULTS FOR

FULL-YEAR AND FOURTH-QUARTER 2017

2017 Full Year Highlights

GAAP EPS of $2.03, up 20%

Adjusted EPS of $2.71, up 18%

8th Consecutive Year of Double-Digit Adjusted EPS Growth

Revenue and Fee Revenue up 9% and 8%, respectively

Los Angeles, CA – February 8, 2018 — CBRE Group, Inc. (NYSE:CBG) today reported strong financial results for the year and fourth quarter ended December 31, 2017.

“Our fourth-quarter results capped another excellent year for CBRE,” said Bob Sulentic, the company’s president and chief executive officer. “Fee revenue was up 9% in local currency and adjusted earnings per share rose 6%. Our performance significantly exceeded the expectations we discussed on our third quarter earnings call, and was led by occupier outsourcing and leasing fee revenue growth of 17% and 11% respectively, in local currency.”

“Revenue and earnings for 2017 reached all-time highs, and we made important strategic gains across the company,” he added. 2017 marked the 8th consecutive year of double-digit adjusted earnings per share growth for CBRE.

Looking ahead to 2018, Mr. Sulentic said: “We regard the macro environment as a supportive backdrop for our business, and we continue to operate within an industry poised for long-term growth. This is due to the growing acceptance of outsourced commercial real estate services, the increasing capital allocation to commercial real estate as an institutional asset class, and the continuing consolidation of activity within our industry to the highest-quality, globally diversified market leaders.”

For full year 2018, CBRE expects to achieve adjusted earnings per share in the range of $3.00 to $3.15. This represents an increase of 13% at the midpoint of the range with 8% attributable to EBITDA growth and 5% attributable to the combined net effect of a lower expected tax rate due to U.S. corporate tax reform, interest savings and higher depreciation & amortization.

Full-Year 2017 Results

 

Revenue for full-year 2017 totaled $14.2 billion, an increase of 9% (same local currency1). Fee revenue2 increased 8% (same local currency) to $9.4 billion.

 

On a GAAP basis, net income increased 21% and earnings per diluted share increased 20% to $691.5 million and $2.03 per share, respectively. Adjusted net income3 rose 19% to $924.5 million, while adjusted earnings per share3 improved 18% to $2.71 per share.

 


CBRE Press Release

February 8, 2018

Page 2

 

Full-year 2017 adjustments to GAAP net income included a $143.4 million4, or $0.42 per share, net charge, attributable to the tax impact of the 2017 Tax Cuts and Jobs Act (the Tax Act).  This net charge is primarily comprised of a transition tax on accumulated foreign earnings, net of a tax benefit from the remeasurement of certain deferred tax assets and liabilities using the lower U.S. corporate income tax rate. Absent the non-recurring impact of the tax law changes, GAAP earnings per diluted share would have risen 45% for full-year 2017. Adjustments also included $112.9 million (pre-tax) of non-cash acquisition-related amortization and $27.4 million (pre-tax) of integration and other costs related to acquisitions. These costs were partially offset by $8.5 million (pre-tax) reversal of net carried interest incentive compensation and a net tax benefit of $42.1 million associated with the aforementioned pre-tax adjustments.

 

EBITDA5 increased 23% (same local currency) to $1.7 billion and adjusted EBITDA5 increased 10% (9% local currency) to $1.7 billion. Adjusted EBITDA margin on fee revenue increased 32 basis points to 18.2%.

Fourth-Quarter 2017 Results

 

Revenue for the fourth quarter totaled $4.3 billion, an increase of 13% (11% local currency). Fee revenue increased 11% (9% local currency) to $3.0 billion.

 

On a GAAP basis, net income decreased 36% and earnings per diluted share decreased 37% to $168.4 million and $0.49 per share, respectively. The declines in net income and earnings per diluted share were primarily attributable to the aforementioned impact of the Tax Act. Adjusted net income for the fourth quarter of 2017 rose 7% to $337.9 million, while adjusted earnings per share improved 6% to $0.99 per share.

 

The adjustments to GAAP net income for the fourth quarter of 2017 included a $143.4 million, or $0.42 per share, net charge attributable to the aforementioned impacts of The Tax Act. Absent the non-recurring impact of the tax law changes, GAAP earnings per diluted share would have risen 17% for the fourth quarter of 2017. Adjustments also included $30.4 million (pre-tax) of non-cash acquisition-related amortization and $4.4 million (pre-tax) of net carried interest incentive compensation expense. These costs were partially offset by a net tax benefit of $8.7 million associated with the aforementioned pre-tax adjustments.

 

EBITDA increased 10% (8% local currency) to $577.8 million and adjusted EBITDA increased 2% (1% local currency) to $582.2 million. Adjusted EBITDA margin on fee revenue decreased 170 basis points to 19.7%. The fourth quarter of 2016 represents a difficult comparison; note that the adjusted EBITDA margins on fee revenue for the fourth quarters of 2014, 2015, 2016, and 2017 were 17.2%, 16.3%, 19.9%, and 18.7%, respectively, in our regional services businesses. The fourth quarter of 2017 was also negatively impacted by the decline in adjusted EBITDA from Development Services.

 


CBRE Press Release

February 8, 2018

Page 3

Fourth-Quarter 2017 Segment Review

The following tables present highlights of CBRE segment performance during the fourth quarter of 2017 (dollars in thousands):

 

 

Americas

 

 

EMEA

 

 

APAC

 

 

 

 

 

 

% Change from Q4 2016

 

 

 

 

 

 

% Change from Q4 2016

 

 

 

 

 

 

% Change from Q4 2016

 

 

Q4 2017

 

 

USD

 

 

LC

 

 

Q4 2017

 

 

USD

 

 

LC

 

 

Q4 2017

 

 

USD

 

 

LC

 

Revenue

$

2,341,276

 

 

11%

 

 

12%

 

 

$

1,332,825

 

 

17%

 

 

9%

 

 

$

526,603

 

 

13%

 

 

11%

 

Fee revenue

 

1,688,991

 

 

9%

 

 

9%

 

 

 

780,705

 

 

16%

 

 

8%

 

 

 

349,445

 

 

8%

 

 

7%

 

EBITDA

 

324,796

 

 

13%

 

 

13%

 

 

 

132,133

 

 

36%

 

 

25%

 

 

 

69,338

 

 

2%

 

 

2%

 

Adjusted EBITDA

 

324,796

 

 

4%

 

 

4%

 

 

 

132,133

 

 

8%

 

 

-1%

 

 

 

69,338

 

 

 

 

-1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Investment Management

 

 

Development Services (6)

 

 

 

 

 

 

 

 

 

% Change from Q4 2016

 

 

 

 

 

 

% Change from Q4 2016

 

 

 

 

 

 

 

 

 

Q4 2017

 

 

USD

 

 

LC

 

 

Q4 2017

 

 

USD

 

 

LC

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

103,193

 

 

12%

 

 

7%

 

 

$

32,315

 

 

60%

 

 

60%

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

17,038

 

 

-29%

 

 

-34%

 

 

 

34,534

 

 

-28%

 

 

-28%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

21,402

 

 

44%

 

 

36%

 

 

 

34,534

 

 

-28%

 

 

-28%

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding the impact of all currency movement including hedging activity, adjusted EBITDA growth rates for the fourth quarter of 2017 were: 5% in the Americas, -1% in EMEA, -4% in APAC and 46% in Global Investment Management.

CBRE produced solid revenue growth in all three of its global regions in the fourth quarter of 2017.

 

APAC saw a 13% (11% local currency) revenue increase, supported by solid growth across the region, most notably in Australia, India, Japan and Singapore.

 

In the Americas, revenue increased 11% (12% local currency), with strong growth in Canada, Mexico and the United States.

 

EMEA revenue rose 17% (9% local currency), driven by Spain and the United Kingdom.

Revenue growth across CBRE’s global business lines was largely organic.

 

Global occupier outsourcing achieved growth of 19% (17% local currency) in revenue and 20% (17% local currency) in fee revenue. Acquisitions contributed 1% to the revenue growth rate and 2% to the fee revenue growth rate in the quarter.

 

o

Growth was broad-based across the three global regions, led by India, the United Kingdom and the United States.

 

Leasing revenue rose by double digits, increasing 13% (11% local currency).

 

o

APAC produced 17% (same local currency) leasing revenue growth, paced by Australia, Greater China and Japan.

 

o

Americas leasing revenue rose 12% (same local currency), with strong performance in Brazil, Canada and the United States.

 

o

EMEA leasing revenue rose 12% (3% local currency), led by France.

 

Revenue edged up 1% (down 1% local currency) for the capital markets businesses – property sales and commercial mortgage origination – on a combined basis.

 

Among the capital markets businesses, global property sales revenue was flat (down 2% local currency), consistent with the decline in market volumes globally.

 

o

EMEA remained robust with sales revenue up 29% (20% local currency). Several countries drove this outcome, including Germany, Italy, Netherlands, Spain and the United Kingdom.

 


CBRE Press Release

February 8, 2018

Page 4

 

o

APAC sales revenue fell 7% (down 8% local currency) compared with a very strong fourth quarter of 2016, when sales surged 42% (35% in local currency).

 

o

Americas sales revenue declined 8% (same local currency), as strong gains in Canada and Mexico were offset by lower activity in the United States, which saw revenue decrease in line with the decline in market volumes.

 

o

For the full year, CBRE’s U.S. investment sales market share rose 80 basis points to 17.0%, almost double the nearest competitor, according to Real Capital Analytics.

 

The other capital markets business, commercial mortgage origination, saw revenue increase 5% (same local currency). This is on top of the 36% growth achieved in the fourth quarter of 2016. Loan volume growth remained healthy, particularly with conduit lenders due to higher CMBS activity.

 

Recurring revenue from CBRE’s growing loan servicing portfolio increased 31% (30% local currency). At the end of the fourth quarter, the loan servicing portfolio totaled approximately $174 billion, up 20% from year-end 2016.

 

Property management services produced growth of 14% (12% local currency) for revenue and 16% (14% local currency) for fee revenue. Growth was strong worldwide, most notably in APAC.

 

Valuation revenue rose 3% (flat local currency).

 

CBRE’s Global Investment Management business produced adjusted EBITDA growth of 44% (36% local currency) in the fourth quarter.

 

o

In the Global Investment Management segment, assets under management (AUM) totaled $103.2 billion, up $4.9 billion from the third quarter of 2017. Favorable currency movement added approximately $600 million to AUM during the quarter.

 

As expected, adjusted EBITDA in the Development Services business declined 28% (same local currency) from the year-earlier fourth quarter due to the timing of asset sales, which were significantly higher in the fourth quarter of 2016.

 

o

In the Development Services segment, projects in process totaled $6.8 billion at year-end 2017, up almost $1.0 billion from the third quarter of 2017. The pipeline decreased $1.6 billion during the quarter, reflecting a higher-than-normal conversion of pipeline deals to in process activity.

CBRE also announced plans to call its $800 million of 5% bonds due in 2023 in March 2018, which will be funded with cash on hand and borrowings under its credit facility.

Conference Call Details

The company’s fourth quarter earnings conference call will be held today (Thursday, February 8, 2018) at 8:30 a.m. Eastern Time. A webcast, along with an associated slide presentation, will be accessible through the Investor Relations section of the company’s website at www.cbre.com/investorrelations.

The direct dial-in number for the conference call is 877-407-8037 for U.S. callers and 201-689-8037 for international callers. A replay of the call will be available starting at 1:00 p.m. Eastern Time on February 8, 2018, and ending at midnight Eastern Time on February 15, 2018. The dial-in number for the replay is 877‑660‑6853 for U.S. callers and 201-612-7415 for international callers. The access code for the replay is 13675166. A transcript of the call will be available on the company’s Investor Relations website at www.cbre.com/investorrelations.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

The information contained in, or accessible through, the company’s website is not incorporated into this press release.

 


CBRE Press Release

February 8, 2018

Page 5

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance (including adjusted earnings per share), currency movement, market share, and business outlook. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this press release. Any forward-looking statements speak only as of the date of this press release and, except to the extent required by applicable securities laws, the company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Factors that could cause results to differ materially include, but are not limited to: disruptions in general economic and business conditions, particularly in geographies where our business may be concentrated; volatility and disruption of the securities, capital and credit markets, interest rate increases, the cost and availability of capital for investment in real estate, clients’ willingness to make real estate or long-term contractual commitments and other factors affecting the value of real estate assets, inside and outside the United States; increases in unemployment and general slowdowns in commercial activity; trends in pricing and risk assumption for commercial real estate services; the effect of significant movements in average cap rates across different property types; a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect our revenues and operating performance; client actions to restrain project spending and reduce outsourced staffing levels; declines in lending activity of U.S. Government Sponsored Enterprises, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market; our ability to diversify our revenue model to offset cyclical economic trends in the commercial real estate industry; our ability to attract new user and investor clients; our ability to retain major clients and renew related contracts; our ability to leverage our global services platform to maximize and sustain long-term cash flow; our ability to maintain EBITDA and adjusted EBITDA margins that enable us to continue investing in our platform and client service offerings; our ability to control costs relative to revenue growth; economic volatility and market uncertainty globally related to uncertainty surrounding the implementation and effect of the United Kingdom’s referendum to leave the European Union, including uncertainty in relation to the legal and regulatory framework that would apply to the United Kingdom and its relationship with the remaining members of the European Union; foreign currency fluctuations; our ability to retain and incentivize key personnel; our ability to compete globally, or in specific geographic markets or business segments that are material to us; our ability to identify, acquire and integrate synergistic and accretive businesses; costs and potential future capital requirements relating to businesses we may acquire; integration challenges arising out of companies we may acquire; the ability of our Global Investment Management business to maintain and grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to do so; our ability to manage fluctuations in net earnings and cash flow, which could result from poor performance in our investment programs, including our participation as a principal in real estate investments; our leverage under our debt instruments as well as the limited restrictions therein on our ability to incur additional debt, and the potential increased borrowing costs to us from a credit-ratings downgrade; the ability of our wholly-owned subsidiary, CBRE Capital Markets, Inc., to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit; variations in historically customary seasonal patterns that cause our business not to perform as expected; litigation and its financial and reputational risks to us; our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms; liabilities under guarantees, or for construction defects, that we incur in our Development Services business; our and our employees’ ability to execute on, and adapt to, information technology strategies and trends; changes in domestic and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, currency controls and other trade control laws), particularly in Russia, Eastern Europe and the Middle East, due to the level of political instability in those regions; our ability to comply with laws and regulations related to our global operations, including real estate licensure, tax, labor and employment laws and regulations, as well as the anti-corruption laws and trade sanctions of the U.S. and other countries; our ability to maintain our effective tax rate at or below current levels; changes in applicable tax or accounting requirements, including the impact of any subsequent additional regulation and guidance associated with the Tax Cuts and Jobs Act signed into law by President Trump on December 22, 2017; and the effect of implementation of new accounting rules and standards.

 

Additional information concerning factors that may influence the company’s financial information is discussed under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Cautionary Note on Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2016 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, as well as in the company’s press releases and other periodic filings with the Securities and Exchange Commission (SEC). Such filings are available publicly and may be obtained on the company’s website at www.cbre.com or upon written request from CBRE’s Investor Relations Department at investorrelations@cbre.com.

 


CBRE Press Release

February 8, 2018

Page 6

Note – CBRE has not reconciled the (non-GAAP) adjusted earnings per share forward-looking guidance included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, carried interest incentive compensation and financing costs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

 

The terms “fee revenue,” “adjusted net income,” “adjusted earnings per share” (or adjusted EPS), “EBITDA” and “adjusted EBITDA,” all of which CBRE uses in this press release, are non-GAAP financial measures under SEC guidelines, and you should refer to the footnotes below as well as the “Non-GAAP Financial Measures” section in this press release for a further explanation of these measures. We have also included in that section reconciliations of these measures in specific periods to their most directly comparable financial measure calculated and presented in accordance with GAAP for those periods.

 

1  Local currency percentage change is calculated by comparing current-period results at prior-period exchange rates versus prior-period results.

 

2  Fee revenue is gross revenue less both client reimbursed costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients. Certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.

 

3  Adjusted net income and adjusted earnings per share (or adjusted EPS) exclude the effect of select charges from GAAP net income and GAAP earnings per diluted share as well as adjust the provision for income taxes for such charges. Adjustments during the periods presented included non-cash amortization expense related to certain intangible assets attributable to acquisitions, integration and other costs related to acquisitions, cost-elimination expenses and certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue. Adjustments also included the tax impact of U.S. tax reform.

 

4  In December 2017, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118), Income Tax Accounting Implications of the Tax Cuts and Jobs Act (Tax Act), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The net charge related to the Tax Act is based upon our reasonable estimates and interpretation of the Tax Act. We consider certain aspects of this charge to be provisional and the impact may change due to additional guidance that may be issued by the U.S. Government as well as ongoing analysis of our data and assumptions we have made. Our accounting for the effects of the Tax Act is expected to be completed within the measurement period provided by SAB 118.

 

5  EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of certain

carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, cash and non-cash charges related to acquisitions and certain cost-elimination expenses.

 

6  Revenue in the Development Services segment does not include equity income from unconsolidated subsidiaries and gain on disposition of real estate, net of non-controlling interest. EBITDA includes equity income from unconsolidated subsidiaries and gain on disposition of real estate, net of non-controlling interests, and the associated compensation expense.

 


 


CBRE Press Release

February 8, 2018

Page 7

CBRE GROUP, INC.

OPERATING RESULTS

FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2017 AND 2016

(Dollars in thousands, except share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue (1)

 

$

2,954,649

 

 

$

2,655,299

 

 

$

9,389,412

 

 

$

8,725,829

 

Pass through costs also recognized as revenue

 

 

1,381,563

 

 

 

1,168,532

 

 

 

4,820,196

 

 

 

4,345,760

 

Total revenue

 

 

4,336,212

 

 

 

3,823,831

 

 

 

14,209,608

 

 

 

13,071,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

2,974,208

 

 

 

2,603,098

 

 

 

9,893,226

 

 

 

9,123,727

 

Operating, administrative and other

 

 

835,151

 

 

 

770,972

 

 

 

2,858,654

 

 

 

2,781,310

 

Depreciation and amortization

 

 

109,100

 

 

 

96,940

 

 

 

406,114

 

 

 

366,927

 

Total costs and expenses

 

 

3,918,459

 

 

 

3,471,010

 

 

 

13,157,994

 

 

 

12,271,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate (2)

 

 

965

 

 

 

 

 

 

19,828

 

 

 

15,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

418,718

 

 

 

352,821

 

 

 

1,071,442

 

 

 

815,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from unconsolidated subsidiaries (2)

 

 

51,971

 

 

 

80,449

 

 

 

210,207

 

 

 

197,351

 

Other income (loss)

 

 

336

 

 

 

(3,765

)

 

 

9,405

 

 

 

4,688

 

Interest income

 

 

2,886

 

 

 

2,506

 

 

 

9,853

 

 

 

8,051

 

Interest expense

 

 

32,891

 

 

 

35,801

 

 

 

136,814

 

 

 

144,851

 

Income before provision for income taxes

 

 

441,020

 

 

 

396,210

 

 

 

1,164,093

 

 

 

880,726

 

Provision for income taxes

 

 

270,334

 

 

 

131,084

 

 

 

466,147

 

 

 

296,662

 

Net income

 

 

170,686

 

 

 

265,126

 

 

 

697,946

 

 

 

584,064

 

Less:  Net income attributable to non-controlling interests (2)

 

 

2,286

 

 

 

1,151

 

 

 

6,467

 

 

 

12,091

 

Net income attributable to CBRE Group, Inc.

 

$

168,400

 

 

$

263,975

 

 

$

691,479

 

 

$

571,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to CBRE Group, Inc.

 

$

0.50

 

 

$

0.78

 

 

$

2.05

 

 

$

1.71

 

Weighted average shares outstanding for basic income

   per share

 

 

338,777,028

 

 

 

336,843,925

 

 

 

337,658,017

 

 

 

335,414,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to CBRE Group, Inc.

 

$

0.49

 

 

$

0.78

 

 

$

2.03

 

 

$

1.69

 

Weighted average shares outstanding for diluted income

   per share

 

 

341,728,078

 

 

 

338,839,469

 

 

 

340,783,556

 

 

 

338,424,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

577,839

 

 

$

525,294

 

 

$

1,690,701

 

 

$

1,372,362

 

Adjusted EBITDA

 

$

582,203

 

 

$

568,485

 

 

$

1,709,534

 

 

$

1,561,003

 

 

 

(1)

Certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.

(2)

Equity income from unconsolidated subsidiaries and gain on disposition of real estate, less net income attributable to non-controlling interests, includes income of $45.9 million and $74.7 million for the three months ended December 31, 2017 and 2016, respectively, and $201.3 million and $181.7 million for the twelve months ended December 31, 2017 and 2016, respectively, attributable to Development Services but does not include significant related compensation expense (which is included in operating, administrative and other expenses). In the Development Services segment, related equity income from unconsolidated subsidiaries and gain on disposition of real estate, net of non-controlling interests, and the associated compensation expense, are all included in EBITDA.


 


CBRE Press Release

February 8, 2018

Page 8

CBRE GROUP, INC.

SEGMENT RESULTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

Development

 

 

 

 

 

 

 

Americas

 

 

EMEA

 

 

Asia Pacific

 

 

Management

 

 

Services

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue

 

$

1,688,991

 

 

$

780,705

 

 

$

349,445

 

 

$

103,193

 

 

$

32,315

 

 

$

2,954,649

 

Pass through costs also

   recognized as revenue

 

 

652,285

 

 

 

552,120

 

 

 

177,158

 

 

 

 

 

 

 

 

 

1,381,563

 

Total revenue

 

 

2,341,276

 

 

 

1,332,825

 

 

 

526,603

 

 

 

103,193

 

 

 

32,315

 

 

 

4,336,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

1,628,722

 

 

 

978,037

 

 

 

367,449

 

 

 

 

 

 

 

 

 

2,974,208

 

Operating, administrative

   and other

 

 

391,933

 

 

 

222,826

 

 

 

90,052

 

 

 

86,653

 

 

 

43,687

 

 

 

835,151

 

Depreciation and amortization

 

 

75,277

 

 

 

20,368

 

 

 

4,898

 

 

 

8,117

 

 

 

440

 

 

 

109,100

 

Total costs and expenses

 

 

2,095,932

 

 

 

1,221,231

 

 

 

462,399

 

 

 

94,770

 

 

 

44,127

 

 

 

3,918,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

965

 

 

 

965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

245,344

 

 

 

111,594

 

 

 

64,204

 

 

 

8,423

 

 

 

(10,847

)

 

 

418,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from

   unconsolidated subsidiaries

 

 

5,632

 

 

 

335

 

 

 

236

 

 

 

736

 

 

 

45,032

 

 

 

51,971

 

Other (loss) income

 

 

(1,457

)

 

 

5

 

 

 

 

 

 

1,788

 

 

 

 

 

 

336

 

Less: Net income attributable

  to non-controlling interests

 

 

 

 

 

169

 

 

 

 

 

 

2,026

 

 

 

91

 

 

 

2,286

 

Add-back: Depreciation and

   amortization

 

 

75,277

 

 

 

20,368

 

 

 

4,898

 

 

 

8,117

 

 

 

440

 

 

 

109,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

324,796

 

 

 

132,133

 

 

 

69,338

 

 

 

17,038

 

 

 

34,534

 

 

 

577,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried interest incentive

   compensation expense to

   align with the timing of

   associated revenue

 

 

 

 

 

 

 

 

 

 

 

4,364

 

 

 

 

 

 

4,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

324,796

 

 

$

132,133

 

 

$

69,338

 

 

$

21,402

 

 

$

34,534

 

 

$

582,203

 

 


 


CBRE Press Release

February 8, 2018

Page 9

CBRE GROUP, INC.

SEGMENT RESULTS—(CONTINUED)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2016

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

Development

 

 

 

 

 

 

 

Americas

 

 

EMEA

 

 

Asia Pacific

 

 

Management

 

 

Services

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue (1)

 

$

1,544,518

 

 

$

675,486

 

 

$

323,168

 

 

$

91,876

 

 

$

20,251

 

 

$

2,655,299

 

Pass through costs also

   recognized as revenue

 

 

558,351

 

 

 

466,792

 

 

 

143,389

 

 

 

 

 

 

 

 

 

1,168,532

 

Total revenue

 

 

2,102,869

 

 

 

1,142,278

 

 

 

466,557

 

 

 

91,876

 

 

 

20,251

 

 

 

3,823,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

1,455,136

 

 

 

832,055

 

 

 

315,907

 

 

 

 

 

 

 

 

 

2,603,098

 

Operating, administrative

   and other

 

 

363,342

 

 

 

212,637

 

 

 

83,115

 

 

 

64,734

 

 

 

47,144

 

 

 

770,972

 

Depreciation and amortization

 

 

67,766

 

 

 

15,988

 

 

 

4,847

 

 

 

7,801

 

 

 

538

 

 

 

96,940

 

Total costs and expenses

 

 

1,886,244

 

 

 

1,060,680

 

 

 

403,869

 

 

 

72,535

 

 

 

47,682

 

 

 

3,471,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

216,625

 

 

 

81,598

 

 

 

62,688

 

 

 

19,341

 

 

 

(27,431

)

 

 

352,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from

   unconsolidated subsidiaries

 

 

4,013

 

 

 

591

 

 

 

81

 

 

 

970

 

 

 

74,794

 

 

 

80,449

 

Other income (loss)

 

 

114

 

 

 

12

 

 

 

 

 

 

(3,891

)

 

 

 

 

 

(3,765

)

Less: Net income (loss)

   attributable to non-controlling

   interests

 

 

 

 

 

834

 

 

 

(123

)

 

 

367

 

 

 

73

 

 

 

1,151

 

Add-back: Depreciation and

   amortization

 

 

67,766

 

 

 

15,988

 

 

 

4,847

 

 

 

7,801

 

 

 

538

 

 

 

96,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

288,518

 

 

 

97,355

 

 

 

67,739

 

 

 

23,854

 

 

 

47,828

 

 

 

525,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried interest incentive

   compensation reversal to

   align with the timing of

   associated revenue

 

 

 

 

 

 

 

 

 

 

 

(9,032

)

 

 

 

 

 

(9,032

)

Integration and other costs

   related to acquisitions

 

 

25,169

 

 

 

25,451

 

 

 

1,603

 

 

 

 

 

 

 

 

 

52,223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

313,687

 

 

$

122,806

 

 

$

69,342

 

 

$

14,822

 

 

$

47,828

 

 

$

568,485

 

 

 

(1)

In 2017, we have changed the presentation of the operating results of one of our emerging businesses among our regional services reporting segments. Prior year amounts have been reclassified to conform with the current-year presentation. This change had no impact on our consolidated results. Additionally, certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.


 


CBRE Press Release

February 8, 2018

Page 10

CBRE GROUP, INC.

SEGMENT RESULTS—(CONTINUED)

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2017

(Dollars in thousands)

(Unaudited)

 

 

 

Twelve Months Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

Development

 

 

 

 

 

 

 

Americas

 

 

EMEA

 

 

Asia Pacific

 

 

Management

 

 

Services

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue

 

$

5,438,992

 

 

$

2,378,582

 

 

$

1,116,567

 

 

$

377,644

 

 

$

77,627

 

 

$

9,389,412

 

Pass through costs also

   recognized as revenue

 

 

2,421,247

 

 

 

1,786,207

 

 

 

612,742

 

 

 

 

 

 

 

 

 

4,820,196

 

Total revenue

 

 

7,860,239

 

 

 

4,164,789

 

 

 

1,729,309

 

 

 

377,644

 

 

 

77,627

 

 

 

14,209,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

5,476,929

 

 

 

3,180,830

 

 

 

1,235,467

 

 

 

 

 

 

 

 

 

9,893,226

 

Operating, administrative

   and other

 

 

1,405,411

 

 

 

689,432

 

 

 

318,757

 

 

 

285,831

 

 

 

159,223

 

 

 

2,858,654

 

Depreciation and amortization

 

 

289,338

 

 

 

72,322

 

 

 

18,258

 

 

 

24,123

 

 

 

2,073

 

 

 

406,114

 

Total costs and expenses

 

 

7,171,678

 

 

 

3,942,584

 

 

 

1,572,482

 

 

 

309,954

 

 

 

161,296

 

 

 

13,157,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,828

 

 

 

19,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

688,561

 

 

 

222,205

 

 

 

156,827

 

 

 

67,690

 

 

 

(63,841

)

 

 

1,071,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from

   unconsolidated subsidiaries

 

 

18,789

 

 

 

1,553

 

 

 

397

 

 

 

7,923

 

 

 

181,545

 

 

 

210,207

 

Other income (loss)

 

 

37

 

 

 

(67

)

 

 

 

 

 

9,435

 

 

 

 

 

 

9,405

 

Less: Net income attributable

   to non-controlling interests

 

 

 

 

 

64

 

 

 

 

 

 

6,280

 

 

 

123

 

 

 

6,467

 

Add-back: Depreciation and

   amortization

 

 

289,338

 

 

 

72,322

 

 

 

18,258

 

 

 

24,123

 

 

 

2,073

 

 

 

406,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

996,725

 

 

 

295,949

 

 

 

175,482

 

 

 

102,891

 

 

 

119,654

 

 

 

1,690,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried interest incentive

   compensation reversal to

   align with the timing of

   associated revenue

 

 

 

 

 

 

 

 

 

 

 

(8,518

)

 

 

 

 

 

(8,518

)

Integration and other costs

   related to acquisitions

 

 

17,139

 

 

 

9,794

 

 

 

418

 

 

 

 

 

 

 

 

 

27,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

1,013,864

 

 

$

305,743

 

 

$

175,900

 

 

$

94,373

 

 

$

119,654

 

 

$

1,709,534

 

 


 


CBRE Press Release

February 8, 2018

Page 11

CBRE GROUP, INC.

SEGMENT RESULTS—(CONTINUED)

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2016

(Dollars in thousands)

(Unaudited)

 

 

 

Twelve Months Ended December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

Development

 

 

 

 

 

 

 

Americas

 

 

EMEA

 

 

Asia Pacific

 

 

Management

 

 

Services

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue (1)

 

$

5,106,971

 

 

$

2,191,232

 

 

$

986,412

 

 

$

369,800

 

 

$

71,414

 

 

$

8,725,829

 

Pass through costs also

   recognized as revenue

 

 

2,139,488

 

 

 

1,693,364

 

 

 

512,908

 

 

 

 

 

 

 

 

 

4,345,760

 

Total revenue

 

 

7,246,459

 

 

 

3,884,596

 

 

 

1,499,320

 

 

 

369,800

 

 

 

71,414

 

 

 

13,071,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

5,049,774

 

 

 

3,001,724

 

 

 

1,072,229

 

 

 

 

 

 

 

 

 

9,123,727

 

Operating, administrative

   and other

 

 

1,357,781

 

 

 

686,079

 

 

 

301,097

 

 

 

297,194

 

 

 

139,159

 

 

 

2,781,310

 

Depreciation and amortization

 

 

254,118

 

 

 

66,619

 

 

 

17,810

 

 

 

25,911

 

 

 

2,469

 

 

 

366,927

 

Total costs and expenses

 

 

6,661,673

 

 

 

3,754,422

 

 

 

1,391,136

 

 

 

323,105

 

 

 

141,628

 

 

 

12,271,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,862

 

 

 

15,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

584,786

 

 

 

130,174

 

 

 

108,184

 

 

 

46,695

 

 

 

(54,352

)

 

 

815,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from

   unconsolidated subsidiaries

 

 

17,892

 

 

 

1,817

 

 

 

223

 

 

 

7,243

 

 

 

170,176

 

 

 

197,351

 

Other (loss) income

 

 

(90

)

 

 

22

 

 

 

 

 

 

4,756

 

 

 

 

 

 

4,688

 

Less: Net income attributable

   to non-controlling interests

 

 

 

 

 

476

 

 

 

85

 

 

 

7,174

 

 

 

4,356

 

 

 

12,091

 

Add-back: Depreciation and

   amortization

 

 

254,118

 

 

 

66,619

 

 

 

17,810

 

 

 

25,911

 

 

 

2,469

 

 

 

366,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

856,706

 

 

 

198,156

 

 

 

126,132

 

 

 

77,431

 

 

 

113,937

 

 

 

1,372,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried interest incentive

   compensation reversal to

   align with the timing of

   associated revenue

 

 

 

 

 

 

 

 

 

 

 

(15,558

)

 

 

 

 

 

(15,558

)

Integration and other costs

   related to acquisitions

 

 

71,376

 

 

 

47,852

 

 

 

6,515

 

 

 

 

 

 

 

 

 

125,743

 

Cost-elimination expenses

 

 

22,273

 

 

 

25,640

 

 

 

9,265

 

 

 

21,278

 

 

 

 

 

 

78,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

950,355

 

 

$

271,648

 

 

$

141,912

 

 

$

83,151

 

 

$

113,937

 

 

$

1,561,003

 

 

 

(1)

In 2017, we have changed the presentation of the operating results of one of our emerging businesses among our regional services reporting segments. Prior year amounts have been reclassified to conform with the current-year presentation. This change had no impact on our consolidated results. Additionally, certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.


 


CBRE Press Release

February 8, 2018

Page 12

Non-GAAP Financial Measures

The following measures are considered “non-GAAP financial measures” under SEC guidelines:

 

 

(i)

Fee revenue

 

(ii)

Net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as “adjusted net income”)

 

(iii)

Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted (which we also refer to as “adjusted earnings per share” or “adjusted EPS”)

 

(iv)

EBITDA and adjusted EBITDA

 

These measures are not recognized measurements under United States generally accepted accounting principles, or “GAAP.”  When analyzing our operating performance, investors should use them in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. Because not all companies use identical calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.

 

Our management generally uses these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. The company believes that these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. The company further uses certain of these measures, and believes that they are useful to investors, for purposes described below.

 

With respect to fee revenue:  the company believes that investors may find this measure useful to analyze the financial performance of our Occupier Outsourcing and Property Management business lines and our business generally.  Fee revenue excludes costs reimbursable by clients, and as such provides greater visibility into the underlying performance of our business.

 

With respect to adjusted net income, adjusted EPS, EBITDA and adjusted EBITDA:  the company believes that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the accounting effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions—and in the case of EBITDA and adjusted EBITDA—the effects of financings and income tax and the accounting effects of capital spending. All of these measures may vary for different companies for reasons unrelated to overall operating performance. In the case of EBITDA and adjusted EBITDA, these measures are not intended to be measures of free cash flow for our management’s discretionary use because they do not consider cash requirements such as tax and debt service payments. The EBITDA and adjusted EBITDA measures calculated herein may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which amounts are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments. The company also uses adjusted EBITDA and adjusted EPS as significant components when measuring our operating performance under our employee incentive compensation programs.


 


CBRE Press Release

February 8, 2018

Page 13

Net income attributable to CBRE Group, Inc., as adjusted (or adjusted net income), and diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted (or adjusted EPS), are calculated as follows (dollars in thousands, except share data):

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc.

 

$

168,400

 

 

$

263,975

 

 

$

691,479

 

 

$

571,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus / minus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash amortization expense related to certain intangible

   assets attributable to acquisitions

 

 

30,419

 

 

 

29,347

 

 

 

112,945

 

 

 

111,105

 

Carried interest incentive compensation expense (reversal)

   to align with the timing of associated revenue

 

 

4,364

 

 

 

(9,032

)

 

 

(8,518

)

 

 

(15,558

)

Integration and other costs related to acquisitions

 

 

 

 

 

52,223

 

 

 

27,351

 

 

 

125,743

 

Cost-elimination expenses (1)

 

 

 

 

 

 

 

 

 

 

 

78,456

 

Tax impact of adjusted items

 

 

(8,680

)

 

 

(21,766

)

 

 

(42,128

)

 

 

(93,181

)

Impact of U.S. tax reform

 

 

143,359

 

 

 

 

 

 

143,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc. shareholders,

   as adjusted

 

$

337,862

 

 

$

314,747

 

 

$

924,488

 

 

$

778,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share attributable to CBRE Group, Inc.

   shareholders, as adjusted

 

$

0.99

 

 

$

0.93

 

 

$

2.71

 

 

$

2.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted income

   per share

 

 

341,728,078

 

 

 

338,839,469

 

 

 

340,783,556

 

 

 

338,424,563

 

 

EBITDA and adjusted EBITDA, are calculated as follows (dollars in thousands):

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc.

 

$

168,400

 

 

$

263,975

 

 

$

691,479

 

 

$

571,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

109,100

 

 

 

96,940

 

 

 

406,114

 

 

 

366,927

 

Interest expense

 

 

32,891

 

 

 

35,801

 

 

 

136,814

 

 

 

144,851

 

Provision for income taxes

 

 

270,334

 

 

 

131,084

 

 

 

466,147

 

 

 

296,662

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

2,886

 

 

 

2,506

 

 

 

9,853

 

 

 

8,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

577,839

 

 

 

525,294

 

 

 

1,690,701

 

 

 

1,372,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried interest incentive compensation expense (reversal)

   to align with the timing of associated revenue

 

 

4,364

 

 

 

(9,032

)

 

 

(8,518

)

 

 

(15,558

)

Integration and other costs related to acquisitions

 

 

 

 

 

52,223

 

 

 

27,351

 

 

 

125,743

 

Cost-elimination expenses (1)

 

 

 

 

 

 

 

 

 

 

 

78,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

582,203

 

 

$

568,485

 

 

$

1,709,534

 

 

$

1,561,003

 

 

 

(1)

Represents cost-elimination expenses relating to a program initiated in the fourth quarter of 2015 and completed in the third quarter of 2016 to reduce the company’s global cost structure after several years of significant revenue and related cost growth. Cost-elimination expenses incurred during the twelve months ended December 31, 2016 consisted of $73.6 million of severance costs related to headcount reductions in connection with the program and $4.9 million of third-party contract termination costs.

 


CBRE Press Release

February 8, 2018

Page 14

Regional services businesses adjusted EBITDA margin on fee revenue is calculated as follows (dollars in thousands):

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional services businesses revenue

 

$

4,200,704

 

 

$

3,711,704

 

 

$

3,537,582

 

 

$

2,637,761

 

Less: Pass through costs also recognized as revenue

 

 

1,381,563

 

 

 

1,168,532

 

 

 

1,144,971

 

 

 

613,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional services businesses fee revenue

 

$

2,819,141

 

 

$

2,543,172

 

 

$

2,392,611

 

 

$

2,024,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional services businesses adjusted EBITDA

 

$

526,267

 

 

$

505,835

 

 

$

390,732

 

 

$

348,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional services businesses adjusted EBITDA margin

   on fee revenue

 

 

18.7

%

 

 

19.9

%

 

 

16.3

%

 

 

17.2

%

 

Revenue includes client reimbursed pass through costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients, both of which are excluded from fee revenue. Reconciliations are shown below (dollars in thousands):

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Occupier Outsourcing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue (1) (2)

 

$

729,218

 

 

$

608,541

 

 

$

2,523,264

 

 

$

2,273,228

 

Plus: Pass through costs also recognized as revenue

 

 

1,227,863

 

 

 

1,032,059

 

 

 

4,230,111

 

 

 

3,805,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue (2)

 

$

1,957,081

 

 

$

1,640,600

 

 

$

6,753,375

 

 

$

6,078,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue (2)

 

$

156,239

 

 

$

134,333

 

 

$

549,953

 

 

$

504,491

 

Plus: Pass through costs also recognized as revenue

 

 

153,700

 

 

 

136,473

 

 

 

590,085

 

 

 

540,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue (2)

 

$

309,939

 

 

$

270,806

 

 

$

1,140,038

 

 

$

1,044,915

 

 

 

(1)

Certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.

(2)

Excludes associated leasing and sales revenue.

 


 


CBRE Press Release

February 8, 2018

Page 15

CBRE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents (1)

 

$

751,774

 

 

$

762,576

 

Restricted cash

 

 

73,045

 

 

 

68,836

 

Receivables, net

 

 

3,207,285

 

 

 

2,605,602

 

Warehouse receivables (2)

 

 

928,038

 

 

 

1,276,047

 

Property and equipment, net

 

 

617,739

 

 

 

560,756

 

Goodwill and other intangibles, net

 

 

4,653,852

 

 

 

4,392,431

 

Investments in and advances to unconsolidated subsidiaries

 

 

238,001

 

 

 

232,238

 

Other assets, net

 

 

1,014,096

 

 

 

881,101

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

11,483,830

 

 

$

10,779,587

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Current liabilities, excluding debt

 

$

3,695,855

 

 

$

3,270,749

 

Warehouse lines of credit (which fund loans that U.S. Government Sponsored Entities

   have committed to purchase) (2)

 

 

910,766

 

 

 

1,254,653

 

Senior term loans, net

 

 

193,475

 

 

 

744,332

 

5.00% senior notes, net

 

 

791,733

 

 

 

790,405

 

4.875% senior notes, net

 

 

591,972

 

 

 

591,203

 

5.25% senior notes, net

 

 

422,423

 

 

 

422,183

 

Other debt

 

 

24

 

 

 

30

 

Other long-term liabilities

 

 

798,034

 

 

 

648,787

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

7,404,282

 

 

 

7,722,342

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

CBRE Group, Inc. stockholders' equity

 

 

4,019,430

 

 

 

3,014,487

 

Non-controlling interests

 

 

60,118

 

 

 

42,758

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

4,079,548

 

 

 

3,057,245

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

11,483,830

 

 

$

10,779,587

 

 

 

(1)

Includes $123.8 million and $73.3 million of cash in consolidated funds and other entities not available for company use as of December 31, 2017 and 2016, respectively.

(2)

Represents loan receivables, the majority of which are offset by borrowings under related warehouse line of credit facilities.