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Press Release Details

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CBRE Group, Inc. Reports Financial Results for First-Quarter 2020

May 07, 2020

LOS ANGELES--(BUSINESS WIRE)-- CBRE Group, Inc. (NYSE:CBRE) today reported financial results for the first quarter ended March 31, 2020.

“We had a strong start to the year before the impact of Covid-19 emerged in late March,” said Bob Sulentic, CBRE’s president & chief executive officer. “Our results were driven by strong performance in the Advisory Services segment, particularly property sales in continental Europe and Japan. A modest decrease in adjusted EBITDA and adjusted earnings per share for the business as a whole was driven by our Real Estate Investments segment, where we experienced a $27 million decline in our co-investments in the public real estate securities portfolio.”

Commenting on the market environment in light of the Covid-19 pandemic, Mr. Sulentic said: “The coming quarters will no doubt be challenging for our industry. In light of how suddenly and severely economic growth has collapsed, we are taking actions to mitigate the impact across every part of our business.

“However, the steps we have taken over the past decade to strengthen CBRE have prepared us well for the current environment. Compared with the Global Financial Crisis, we have a stronger market position across business lines, a more diversified and contractual revenue base, a significantly stronger balance sheet with more than $3 billion of liquidity and a leadership team that is far better equipped to manage our cost structure. We believe that the decisions we make as we manage through the impacts of Covid-19 will position CBRE to emerge from this unprecedented time stronger than before.”

Consolidated Financial Results Overview

The following table presents highlights of CBRE performance (dollars in millions, except per share data):

 

 

 

 

 

 

% Change

 

 

Q1 2020

 

Q1 2019

 

USD

 

LC (1)

Operating Results

 

 

 

 

 

 

 

 

Revenue

 

$

5,889

 

 

$

5,136

 

 

14.7

%

 

15.4

%

Fee revenue (2)

 

 

2,693

 

 

 

2,429

 

 

10.9

%

 

11.6

%

GAAP net income

 

 

172

 

 

 

164

 

 

4.7

%

 

5.2

%

GAAP EPS

 

$

0.51

 

 

$

0.48

 

 

4.9

%

 

5.3

%

Adjusted EBITDA (3)

 

 

430

 

 

 

450

 

 

(4.4

%)

 

(4.1

%)

Adjusted net income (4)

 

 

254

 

 

 

268

 

 

(5.0

%)

 

(4.7

%)

Adjusted EPS (4)

 

$

0.75

 

 

$

0.79

 

 

(4.9

%)

 

(4.6

%)

 

 

 

 

 

 

 

 

 

Cash Flow Results

 

 

 

 

 

 

 

 

Cash used by operations

 

$

(136

)

 

$

(393

)

 

65.3

%

 

 

Less: Capital expenditures

 

 

62

 

 

 

57

 

 

(9.2

%)

 

 

Free cash flow (5)

 

$

(199

)

 

$

(450

)

 

55.8

%

 

 

Advisory Services Segment

The following table presents highlights of the Advisory Services segment performance (dollars in millions):

 

 

 

 

 

 

% Change

 

 

Q1 2020

 

Q1 2019

 

USD

 

LC

Revenue

 

$

1,932

 

 

$

1,834

 

 

5.3

%

 

6.1

%

Fee revenue

 

 

1,674

 

 

 

1,602

 

 

4.5

%

 

5.2

%

Adjusted EBITDA

 

 

293

 

 

 

264

 

 

10.9

%

 

11.1

%

Adjusted EBITDA on revenue margin

 

 

15.2

%

 

 

14.4

%

 

0.8

%

 

0.7

%

Adjusted EBITDA on fee revenue margin

 

 

17.5

%

 

 

16.5

%

 

1.0

%

 

0.9

%

Growth in Advisory Services revenue was led by global property sales, which rose 12% (same local currency). Sales revenue reached an all-time high for the company for any first quarter. This reflected continued strong capital flows to commercial real estate in the opening weeks of 2020. Robust growth was achieved in North Asia with particular strength in Japan and several European countries, notably France, Germany and Ireland. In the United States, sales revenue rose 3% from the first quarter of 2019.

Commercial mortgage origination revenue rose 2% (same local currency). Banks, life insurance companies, debt funds and other capital sources were highly active during the quarter, reflecting the healthy debt financing environment prior to the Covid-19-induced market dislocations.

Global capital markets revenue, which combines property sales and commercial mortgage origination, rose 9% (10% local currency) for the quarter.

Loan servicing revenue rose 23% (same local currency), as the portfolio increased 19% from a year ago to $240 billion.

In advisory leasing, where we saw impact from Covid-19 in late March, revenue dipped 2% (same local currency), which compares with robust growth in last year’s first quarter, when advisory leasing revenue surged 20% (22% local currency). Globally, current-quarter advisory leasing was paced by strong double-digit gains in India and the United Kingdom. U.S. leasing edged down 2%, a small decline compared with 28% growth in last year’s first quarter.

Valuation revenue rose 7% (8% local currency), while property management and advisory project management posted increases of 9% (10% local currency) for revenue and 7% (9% local currency) for fee revenue.

Global Workplace Solutions (GWS) Segment

The following table presents highlights of the GWS segment performance (dollars in millions):

 

 

 

 

 

 

% Change

 

 

Q1 2020

 

Q1 2019

 

USD

 

LC

Revenue

 

$

3,746

 

 

$

3,166

 

 

18.3

%

 

19.0

%

Fee revenue

 

 

808

 

 

 

692

 

 

16.7

%

 

17.3

%

Adjusted EBITDA

 

 

99

 

 

 

100

 

 

(0.4

%)

 

0.1

%

Adjusted EBITDA on revenue margin

 

 

2.7

%

 

 

3.1

%

 

(0.5

%)

 

(0.5

%)

Adjusted EBITDA on fee revenue margin

 

 

12.3

%

 

 

14.4

%

 

(2.1

%)

 

(2.1

%)

CBRE’s global scale and capabilities enable the company to capture a significant share of the expanding market for real estate outsourcing services. In the first quarter, this was reflected in 18% (19% local currency) revenue growth and 17% (same local currency) fee revenue growth in the first quarter, with particularly strong increases in global facilities management and project management. Revenue growth was notably strong in Continental Europe, the United Kingdom and the United States.

The new business pipeline also remained robust with notable demand from the media and technology and transportation/logistics sectors. The company continued to secure new business at a high win rate, with notable new clients in the transportation/logistics and life sciences sectors. It also had its biggest quarter ever for renewing expiring contracts, with a renewal rate again above 90%.

Flat adjusted EBITDA for the quarter reflected the writedown of a contract settlement with a customer that decided to perform certain facilities activities in-house.

Real Estate Investments (REI) Segment

The following table presents highlights of the REI segment performance (dollars in millions):

 

 

 

 

 

 

% Change

 

 

Q1 2020

 

Q1 2019

 

USD

 

LC

Revenue

 

$

211

 

$

135

 

56.4

%

 

57.1

%

Adjusted revenue (6)

 

 

203

 

 

221

 

(8.0

%)

 

(7.6

%)

Adjusted EBITDA (7)

 

 

38

 

 

87

 

(55.6

%)

 

(55.5

%)

The decline in this segment’s adjusted EBITDA was driven by a $27 million decline in co-investments in the investment management business’s public securities portfolio, reflecting heightened equity market volatility, as well as fewer development asset sales than in last year’s particularly strong first quarter. Some late-quarter deal delays reflected the early impact of Covid-19. These were partially offset by higher asset management fees, carried interest revenue, contributions from the Telford Homes business, acquired in October 2019, and lower-than-expected losses associated with the start-up of the company’s enterprise-focused flexible workspace business, Hana.

  • Investment Management: Investment management revenue was $121.7 million during the first quarter, an increase of 14% (15% local currency), largely fueled by higher carried interest, which totaled $18.3 million for the period. Aside from carried interest, this business’s revenue is highly recurring in nature. Assets under management (AUM) totaled $108.1 billion at the end of the first quarter, a decrease of $4.8 billion, or $2.6 billion in local currency, from year-end 2019. The decrease reflected valuation declines and net outflows in the public securities portfolio as well as negative foreign currency movement.
  • Development: The in-process portfolio reached a record level in first-quarter 2020, increasing by $900 million from year-end 2019 to $13.9 billion. The pipeline was unchanged during the quarter at $5.8 billion. Telford Homes contributed $1.1 billion to the in-process total and $1.4 billion to the pipeline total. More than half of the in-process development is attributable to fee-development and built-to-suit projects.
  • Flexible Workspace (Hana): Net investment in the start-up of Hana totaled $9.1 million for the first quarter, modestly lower than expected. Hana has opened five facilities (Dallas, London (three units) and Southern California) and executed agreements for five additional units (New York City, Northern Virginia, Northern New Jersey, Philadelphia and Manchester, UK). These units total nearly 500,000 square feet in aggregate, with a strong focus on meeting the needs of large enterprises that want to make flexible space an element of their occupancy portfolio and are primarily comprised of private workspaces.

Adjustments to GAAP Net Income and Earnings Per Share

First-quarter 2020 adjustments increased GAAP net income by a net amount of $81.9 million. This includes $105.0 million of positive pre-tax adjustments, primarily related to asset impairments, which were due partly to the impact of Covid-19 on our business, non-cash acquisition-related depreciation and amortization and the impact of fair value adjustments to real estate assets acquired in the Telford Homes acquisition that were sold in the first quarter, offset by a reversal of carried interest incentive compensation to align with the timing of associated carried-interest revenue, and a $15.3 million net tax adjustment associated with the aforementioned pre-tax adjustments.

Adjusted net income and adjusted earnings per share decreased 5% (same local currency) to $254.1 million and $0.75, respectively, compared with the prior-year period. This was primarily a result of significantly lower adjusted EBITDA in the Real Estate Investments segment compared with first-quarter 2019, reflecting the $27 million decline in co-investments in the public securities portfolio within the investment management business and fewer development asset sales.

Capital Allocation Overview

  • Stock Repurchase Program – During the first quarter of 2020, the company repurchased a total of 1.1 million shares of its common stock for $50.0 million at an average price of $47.62 per share. The company has $350.0 million of stock repurchase capacity under its authorized repurchase program remaining as of today.
  • Capital Expenditures – During the first quarter of 2020 net capital expenditures totaled $48.9 million(8), which included a significant allocation for technology-related investments and $10.6 million for the continued rollout of Hana.
  • Acquisitions – During the first quarter of 2020, the company spent $32.1 million on in-fill acquisitions, including leading local facilities management firms in Spain and Italy, a U.S. firm that helps companies reduce telecommunications costs and a leading provider of workplace technology project management, consulting and procurement services for occupiers across the United States.

Leverage and Financing Overview

  • Leverage The company’s net leverage ratio (net debt(9) to trailing twelve-month adjusted EBITDA) was 0.59x as of March 31, 2020, which is 3.66x below the company’s primary debt covenant of 4.25x. The net leverage ratio is computed as follows (dollars in millions):

 

 

As of
March 31, 2020

 

 

 

 

Total debt

 

$

1,762

Less: Cash (10)

 

 

560

Net debt

 

$

1,202

 

 

 

 

Divided by: Trailing twelve month adjusted EBITDA

 

$

2,044

 

 

 

 

Net leverage ratio

 

 

0.59x

  • Liquidity As of March 31, 2020, the company had $3.4 billion of total liquidity, consisting of $560 million in cash(10) plus the ability to borrow an aggregate of $2.8 billion under its revolving credit facilities, net of any outstanding letters of credit.

     

2020 Business Outlook

In light of the uncertain operating environment caused by Covid-19, CBRE has withdrawn the 2020 earnings guidance that was provided on February 27, 2020. The company will provide qualitative commentary on today’s earnings conference call.

Conference Call Details

The company’s first quarter earnings conference call will be held today (Thursday, May 7, 2020) 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 https://ir.cbre.com.

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 May 7, 2020 and will be available for one week following the event. 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 137017355#. A transcript of the call will be available on the company’s Investor Relations website at https://ir.cbre.com.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), 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 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 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. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website at https://ir.cbre.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange filings and public conference calls and webcasts.

Safe Harbor and Footnotes

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 the company’s future growth momentum, operations, market share, business outlook, capital deployment, acquisition integration and 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 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, political and regulatory conditions, particularly in geographies or industry sectors where our business may be concentrated; volatility or adverse developments in the securities, capital or credit markets, interest rate increases and conditions affecting the value of real estate assets, inside and outside the United States; poor performance of real estate investments or other conditions that negatively impact clients’ willingness to make real estate or long-term contractual commitments and the cost and availability of capital for investment in real estate; disruptions to business, market and operational conditions related to the Covid-19 pandemic and the impact of government rules and regulations intended to mitigate the effects of this pandemic, including, without limitation, rules and regulations that impact us as a loan originator and servicer for U.S. Government Sponsored Enterprises; foreign currency fluctuations and changes in currency restrictions, trade sanctions and import-export and transfer pricing rules; changes in U.S. and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, tariffs, currency controls and other trade control laws), particularly in Asia, Africa, Russia, Eastern Europe and the Middle East, due to the level of political instability in those regions; 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 accretive businesses; costs and potential future capital requirements relating to businesses we may acquire; integration challenges arising out of companies we may acquire; our ability to retain and incentivize key personnel; our ability to manage organizational challenges associated with our size; negative publicity or harm to our brand and reputation; increases in unemployment and general slowdowns in commercial activity; trends in pricing and risk assumption for commercial real estate services; the effect of significant changes in capitalization 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 further 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 continue investing in our platform and client service offerings; our ability to maintain expense discipline; the emergence of disruptive business models and technologies; the ability of our 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 indirect 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; cybersecurity threats or other threats to our information technology networks, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; 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; changes in applicable tax or accounting requirements; any inability for us to implement and maintain effective internal controls over financial reporting; and the effect of implementation of new accounting rules and standards or the impairment of our goodwill and intangible assets.

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, 2019, our Quarterly Report on Form 10-Q for the quarter ended March 30, 2020, 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.

The terms “fee revenue,” “adjusted revenue,” “adjusted net income,” “adjusted earnings per share” (or adjusted EPS), “adjusted EBITDA,” “adjusted EBITDA on revenue margin,” “adjusted EBITDA on fee revenue margin” and “free cash flow,” 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.

Totals may not sum in tables in millions included in this release due to rounding.

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.

3 EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation, amortization and asset impairments. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, integration and other costs related to acquisitions, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, and costs associated with our reorganization, including cost-savings initiatives. Adjusted EBITDA on revenue and fee revenue margins represents adjusted EBITDA divided by revenue and fee revenue, respectively.

4 Adjusted net income and adjusted earnings per diluted share (or adjusted EPS) exclude the effect of select items 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 asset impairments, non-cash depreciation and amortization expense related to certain assets attributable to acquisitions, the impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, integration and other costs related to acquisitions, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, costs associated with our segment reorganization, including cost-savings initiatives, and write-off of financing costs on extinguished debt.

5 Free cash flow is calculated as cash (used by) flow from operations, less capital expenditures (reflected in the investing section of the consolidated statement of cash flows).

6 Adjusted revenue for the Real Estate Investments segment reflects revenue for this segment, less the direct cost of revenue, along with equity income from unconsolidated subsidiaries and gain on disposition of real estate, net of non-controlling interests. Adjusted revenue also removes the impact of fair value adjustments to real estate assets acquired in the Telford acquisition (purchase accounting) that were sold in the period.

7 Adjusted EBITDA in the Real Estate Investments segment includes equity income from unconsolidated subsidiaries and gain on disposition of real estate, net of non-controlling interests, and the associated compensation expense.

8 For the three months ended March 31, 2020, the company incurred capital expenditures of $62.2 million (reflected in the investing section of the consolidated statement of cash flows) and received tenant concessions from landlords of $13.3 million (reflected in the operating section of the consolidated statement of cash flows).

9 Net debt is calculated as total debt (excluding non-recourse debt) less cash available for company use.

10 Cash represents cash and cash equivalents (excluding restricted cash), but excludes $68.4 million of cash in consolidated funds and other entities not available for company use at March 31, 2020.

CBRE GROUP, INC.

OPERATING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(Dollars in thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

March 31,

 

 

2020

 

2019

Revenue:

 

 

 

 

 

 

Fee revenue

 

$

2,693,292

 

$

2,428,725

Pass through costs also recognized as revenue

 

 

3,195,876

 

 

2,706,785

Total revenue

 

 

5,889,168

 

 

5,135,510

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

Cost of revenue

 

 

4,712,674

 

 

4,022,034

Operating, administrative and other

 

 

790,066

 

 

792,876

Depreciation and amortization

 

 

113,794

 

 

105,823

Asset impairments

 

 

75,171

 

 

89,037

Total costs and expenses

 

 

5,691,705

 

 

5,009,770

 

 

 

 

 

 

 

Gain on disposition of real estate (1)

 

 

22,827

 

 

19,247

 

 

 

 

 

 

 

Operating income

 

 

220,290

 

 

144,987

 

 

 

 

 

 

 

Equity income from unconsolidated subsidiaries (1)

 

 

20,631

 

 

72,664

Other (loss) income

 

 

(193

)

 

20,853

Interest expense, net of interest income

 

 

16,016

 

 

21,192

Write-off of financing costs on extinguished debt

 

 

 

 

2,608

Income before provision for income taxes

 

 

224,712

 

 

214,704

Provision for income taxes

 

 

51,182

 

 

43,878

Net income

 

 

173,530

 

 

170,826

Less: Net income attributable to non-controlling interests (1)

 

 

1,335

 

 

6,417

Net income attributable to CBRE Group, Inc.

 

$

172,195

 

$

164,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share:

 

 

 

 

 

 

Net income per share attributable to CBRE Group, Inc.

 

$

0.51

 

$

0.49

Weighted average shares outstanding for basic income per share

 

 

334,969,826

 

 

336,020,431

 

 

 

 

 

 

 

Diluted income per share:

 

 

 

 

 

 

Net income per share attributable to CBRE Group, Inc.

 

$

0.51

 

$

0.48

Weighted average shares outstanding for diluted income per share

 

 

339,737,911

 

 

340,158,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

430,351

 

$

450,032

________________________

(1)

Equity income from unconsolidated subsidiaries and gain on disposition of real estate, less net income (loss) attributable to non-controlling interests, includes income of $40.6 million and $85.3 million for the three months ended March 31, 2020 and 2019, respectively, attributable to Real Estate Investments but does not include significant related compensation expense (which is included in operating, administrative and other expenses). In the Real Estate Investments 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 adjusted EBITDA.

CBRE GROUP, INC.

SEGMENT RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

Services

 

 

Global Workplace

Solutions

 

 

Real Estate

Investments

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue

 

$

1,674,260

 

 

$

807,562

 

 

$

211,470

 

 

$

2,693,292

 

Pass through costs also recognized as Revenue

 

 

257,264

 

 

 

2,938,612

 

 

 

 

 

 

3,195,876

 

Total revenue

 

 

1,931,524

 

 

 

3,746,174

 

 

 

211,470

 

 

 

5,889,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

1,158,009

 

 

 

3,499,616

 

 

 

55,049

 

 

 

4,712,674

 

Operating, administrative and other

 

 

487,463

 

 

 

147,821

 

 

 

154,782

 

 

 

790,066

 

Depreciation and amortization

 

 

78,952

 

 

 

30,398

 

 

 

4,444

 

 

 

113,794

 

Asset impairments

 

 

 

 

 

50,171

 

 

 

25,000

 

 

 

75,171

 

Total costs and expenses

 

 

1,724,424

 

 

 

3,728,006

 

 

 

239,275

 

 

 

5,691,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

22,827

 

 

 

22,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

207,100

 

 

 

18,168

 

 

 

(4,978

)

 

 

220,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from unconsolidated Subsidiaries

 

 

1,337

 

 

 

392

 

 

 

18,902

 

 

 

20,631

 

Other income (loss)

 

 

2,277

 

 

 

169

 

 

 

(2,639

)

 

 

(193

)

Less: Net income attributable to non-controlling interests

 

 

253

 

 

 

 

 

 

1,082

 

 

 

1,335

 

Add-back: Depreciation and amortization

 

 

78,952

 

 

 

30,398

 

 

 

4,444

 

 

 

113,794

 

Add-back: Asset impairments

 

 

 

 

 

50,171

 

 

 

25,000

 

 

 

75,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

289,413

 

 

 

99,298

 

 

 

39,647

 

 

 

428,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period

 

 

 

 

 

 

 

 

5,753

 

 

 

5,753

 

Costs incurred related to legal entity restructuring

 

 

3,241

 

 

 

 

 

 

 

 

 

3,241

 

Integration and other costs related to acquisitions

 

 

 

 

 

 

 

 

783

 

 

 

783

 

Carried interest incentive compensation reversal to align with the timing of associated revenue

 

 

 

 

 

 

 

 

(7,784

)

 

 

(7,784

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

292,654

 

 

$

99,298

 

 

$

38,399

 

 

$

430,351

 

CBRE GROUP, INC.

SEGMENT RESULTS—(CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2019

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

Services

 

 

Global Workplace

Solutions

 

 

Real Estate

Investments

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee revenue

 

$

1,601,637

 

 

$

691,895

 

 

$

135,193

 

 

$

2,428,725

 

Pass through costs also recognized as Revenue

 

 

232,765

 

 

 

2,474,020

 

 

 

 

 

 

2,706,785

 

Total revenue

 

 

1,834,402

 

 

 

3,165,915

 

 

 

135,193

 

 

 

5,135,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

1,083,099

 

 

 

2,938,935

 

 

 

 

 

 

4,022,034

 

Operating, administrative and other

 

 

496,618

 

 

 

135,472

 

 

 

160,786

 

 

 

792,876

 

Depreciation and amortization

 

 

71,647

 

 

 

29,483

 

 

 

4,693

 

 

 

105,823

 

Asset impairments

 

 

 

 

 

 

 

 

89,037

 

 

 

89,037

 

Total costs and expenses

 

 

1,651,364

 

 

 

3,103,890

 

 

 

254,516

 

 

 

5,009,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of real estate

 

 

 

 

 

 

 

 

19,247

 

 

 

19,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

183,038

 

 

 

62,025

 

 

 

(100,076

)

 

 

144,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income (loss) from unconsolidated Subsidiaries

 

 

675

 

 

 

(833

)

 

 

72,822

 

 

 

72,664

 

Other income (loss)

 

 

1,679

 

 

 

(16

)

 

 

19,190

 

 

 

20,853

 

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

 

 

(145

)

 

 

(158

)

 

 

6,720

 

 

 

6,417

 

Add-back: Depreciation and amortization

 

 

71,647

 

 

 

29,483

 

 

 

4,693

 

 

 

105,823

 

Add-back: Asset impairments

 

 

 

 

 

 

 

 

89,037

 

 

 

89,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

257,184

 

 

 

90,817

 

 

 

78,946

 

 

 

426,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs associated with our reorganization, including cost-savings initiatives (1)

 

 

6,666

 

 

 

8,862

 

 

 

221

 

 

 

15,749

 

Carried interest incentive compensation expense to align with the timing of associated revenue

 

 

 

 

 

 

 

 

7,336

 

 

 

7,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

263,850

 

 

$

99,679

 

 

$

86,503

 

 

$

450,032

 

________________________

(1)

Primarily represents severance costs related to headcount reductions in connection with our reorganization announced in the third quarter of 2018 that became effective January 1, 2019.

CBRE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

2020

 

 

2019

Assets:

 

 

 

 

 

 

 

Cash and cash equivalents (1)

 

$

628,451

 

 

$

971,781

Restricted cash

 

 

104,244

 

 

 

121,964

Receivables, net

 

 

4,262,264

 

 

 

4,466,674

Warehouse receivables (2)

 

 

1,273,259

 

 

 

993,058

Contract assets

 

 

530,661

 

 

 

529,772

Income taxes receivable

 

 

117,663

 

 

 

233,051

Property and equipment, net

 

 

800,869

 

 

 

836,206

Operating lease assets

 

 

997,793

 

 

 

997,966

Goodwill and other intangibles, net

 

 

5,013,544

 

 

 

5,133,039

Investments in and advances to unconsolidated subsidiaries

 

 

422,910

 

 

 

426,711

Other assets, net

 

 

1,528,606

 

 

 

1,486,974

 

 

 

 

 

 

 

 

Total assets

 

$

15,680,264

 

 

$

16,197,196

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Current liabilities, excluding debt and operating lease liabilities

 

$

4,615,686

 

 

$

5,283,615

Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) (2)

 

 

1,258,832

 

 

 

977,175

Senior term loans, net

 

 

737,615

 

 

 

744,590

4.875% senior notes, net

 

 

593,850

 

 

 

593,631

5.25% senior notes, net

 

 

423,053

 

 

 

422,977

Other debt

 

 

7,749

 

 

 

7,045

Operating lease liabilities

 

 

1,228,867

 

 

 

1,226,421

Other long-term liabilities

 

 

645,065

 

 

 

668,630

 

 

 

 

 

 

 

 

Total liabilities

 

 

9,510,717

 

 

 

9,924,084

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

CBRE Group, Inc. stockholders' equity

 

 

6,129,343

 

 

 

6,232,693

Non-controlling interests

 

 

40,204

 

 

 

40,419

 

 

 

 

 

 

 

 

Total equity

 

 

6,169,547

 

 

 

6,273,112

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

15,680,264

 

 

$

16,197,196

________________________

(1)

Includes $68.4 million and $70.5 million of cash in consolidated funds and other entities not available for company use as of March 31, 2020 and December 31, 2019, respectively.

(2)

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

CBRE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

173,530

 

 

$

170,826

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

113,794

 

 

 

105,823

 

Amortization and write-off of financing costs on extinguished debt

 

 

1,501

 

 

 

4,175

 

Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets

 

 

(52,373

)

 

 

(53,517

)

Asset impairments

 

 

75,171

 

 

 

89,037

 

Net realized and unrealized losses (gains), primarily from investments

 

 

193

 

 

 

(20,853

)

Net compensation (reversal) expense for equity awards

 

 

(1,239

)

 

 

29,271

 

Equity income from unconsolidated subsidiaries

 

 

(20,631

)

 

 

(72,664

)

Distribution of earnings from unconsolidated subsidiaries

 

 

29,185

 

 

 

77,158

 

Proceeds from sale of mortgage loans

 

 

3,595,631

 

 

 

4,453,797

 

Origination of mortgage loans

 

 

(3,859,407

)

 

 

(4,646,348

)

Increase in warehouse lines of credit

 

 

281,657

 

 

 

232,446

 

Tenant concessions received

 

 

13,292

 

 

 

3,464

 

Purchase of equity securities

 

 

(3,559

)

 

 

(62,117

)

Proceeds from sale of equity securities

 

 

4,925

 

 

 

25,730

 

Decrease (increase) in real estate under development

 

 

7,742

 

 

 

(3,356

)

Decrease (increase) in receivables, prepaid expenses and other assets (including contract and lease assets)

 

 

52,796

 

 

 

(168,862

)

Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities)

 

 

(34,597

)

 

 

(33,982

)

Decrease in compensation and employee benefits payable and accrued bonus and profit sharing

 

 

(605,950

)

 

 

(510,405

)

Decrease (increase) in net income taxes receivable/payable

 

 

108,609

 

 

 

(11,344

)

Other

 

 

(16,551

)

 

 

(854

)

Net cash used in operating activities

 

 

(136,281

)

 

 

(392,575

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(62,241

)

 

 

(56,979

)

Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired

 

 

(25,897

)

 

 

(2,142

)

Contributions to unconsolidated subsidiaries

 

 

(32,155

)

 

 

(23,562

)

Distributions from unconsolidated subsidiaries

 

 

18,994

 

 

 

5,974

 

Other

 

 

9,068

 

 

 

2,771

 

Net cash used in investing activities

 

 

(92,231

)

 

 

(73,938

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from senior term loans

 

 

 

 

 

300,000

 

Repayment of senior term loans

 

 

 

 

 

(300,000

)

Proceeds from revolving credit facility

 

 

331,671

 

 

 

507,000

 

Repayment of revolving credit facility

 

 

(331,701

)

 

 

(171,000

)

Repurchase of common stock

 

 

(50,028

)

 

 

(45,088

)

Acquisition of businesses (cash paid for acquisitions more than

three months after purchase date)

 

 

(6,230

)

 

 

(17,185

)

Units repurchased for payment of taxes on equity awards

 

 

(36,873

)

 

 

(9,186

)

Non-controlling interest contributions

 

 

622

 

 

 

40,774

 

Non-controlling interest distributions

 

 

(497

)

 

 

(1,347

)

Other financing activities, net

 

 

(869

)

 

 

(3,940

)

Net cash (used in) provided by financing activities

 

 

(93,905

)

 

 

300,028

 

Effect of currency exchange rate changes on cash and cash equivalents and restricted cash

 

 

(38,633

)

 

 

(9,791

)

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(361,050

)

 

 

(176,276

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD

 

 

1,093,745

 

 

 

863,944

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD

 

$

732,695

 

 

$

687,668

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest, net

 

$

27,290

 

 

$

33,606

 

Income tax (refunds) payments, net

 

$

(55,897

)

 

$

54,241

 

 

Non-GAAP Financial Measures

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

(i)

Fee revenue

 

(ii)

Adjusted revenue for the Real Estate Investments segment

 

(iii)

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

(iv)

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

(v)

Adjusted EBITDA and adjusted EBITDA on revenue and fee revenue margins

 

(vi)

Free cash flow

 

(vi)

Net debt

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 Global Workplace Solutions and Property and Advisory Project 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 revenue: the company believes that investors may find this measure useful to analyze the financial performance of our Real Estate Investments segment because it is more reflective of this segment’s total operations.

With respect to adjusted net income, adjusted EPS, adjusted EBITDA and adjusted EBITDA on revenue and fee revenue margins: 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 adjusted EBITDA and adjusted EBITDA on revenue and fee revenue margins—the effects of financings and income tax and the accounting effects of capital spending. All of these measures and adjusted revenue may vary for different companies for reasons unrelated to overall operating performance. In the case of adjusted EBITDA, this measure is not intended to be a measure of free cash flow for our management’s discretionary use because it does not consider cash requirements such as tax and debt service payments. The adjusted EBITDA measure 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. The company also uses adjusted EBITDA and adjusted EPS as significant components when measuring our operating performance under our employee incentive compensation programs.

With respect to free cash flow: the company believes that investors may find this measure useful to analyze the cash flow generated from operations after accounting for cash outflows to support operations and capital expenditures.

With respect to net debt: the company believes that investors use this measure when calculating the company’s net leverage ratio.

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 and per share data):

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc.

 

$

172,195

 

 

$

164,409

 

 

 

 

 

 

 

 

 

 

Plus / minus:

 

 

 

 

 

 

 

 

Asset impairments

 

 

75,171

 

 

 

89,037

 

Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions

 

 

20,050

 

 

 

22,226

 

Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period

 

 

5,753

 

 

 

 

Costs incurred related to legal entity restructuring

 

 

3,241

 

 

 

 

Integration and other costs related to acquisitions

 

 

783

 

 

 

 

Carried interest incentive compensation (reversal) expense to align with the timing of associated revenue

 

 

(7,784

)

 

 

7,336

 

Costs associated with our reorganization, including cost-savings initiatives (1)

 

 

 

 

 

15,749

 

Write-off of financing costs on extinguished debt

 

 

 

 

 

2,608

 

Tax impact of adjusted items

 

 

(15,298

)

 

 

(33,848

)

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc. shareholders, as adjusted

 

$

254,111

 

 

$

267,517

 

 

 

 

 

 

 

 

 

 

Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted

 

$

0.75

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted income per share

 

 

339,737,911

 

 

 

340,158,399

 

Adjusted EBITDA is calculated as follows (dollars in thousands):

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc.

 

$

172,195

 

 

$

164,409

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

113,794

 

 

 

105,823

 

Asset impairments

 

 

75,171

 

 

 

89,037

 

Interest expense, net of interest income

 

 

16,016

 

 

 

21,192

 

Write-off of financing costs on extinguished debt

 

 

 

 

 

2,608

 

Provision for income taxes

 

 

51,182

 

 

 

43,878

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

428,358

 

 

 

426,947

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period

 

 

5,753

 

 

 

 

Costs incurred related to legal entity restructuring

 

 

3,241

 

 

 

 

Integration and other costs related to acquisitions

 

 

783

 

 

 

 

Carried interest incentive compensation (reversal) expense to align with the timing of associated revenue

 

 

(7,784

)

 

 

7,336

 

Costs associated with our reorganization, including cost-savings initiatives (1)

 

 

 

 

 

15,749

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

430,351

 

 

$

450,032

 

________________________

(1)

Primarily represents severance costs related to headcount reductions in connection with our reorganization announced in the third quarter of 2018 that became effective January 1, 2019.

Adjusted EBITDA for the trailing twelve months ended March 31, 2020 is calculated as follows (dollars in thousands):

 

 

Trailing

Twelve Months Ended

March 31, 2020

 

 

 

 

 

 

Net income attributable to CBRE Group, Inc.

 

$

1,290,143

 

 

 

 

 

 

Add:

 

 

 

 

Depreciation and amortization

 

 

447,195

 

Asset impairments

 

 

75,921

 

Interest expense, net of interest income

 

 

80,578

 

Provision for income taxes

 

 

77,199

 

 

 

 

 

 

EBITDA

 

 

1,971,036

 

 

 

 

 

 

Adjustments:

 

 

 

 

Costs associated with our reorganization, including cost-savings initiatives (1)

 

 

33,816

 

Integration and other costs related to acquisitions

 

 

16,075

 

Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period

 

 

15,054

 

Costs incurred related to legal entity restructuring

 

 

10,140

 

Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue

 

 

(2,019

)

 

 

 

 

 

Adjusted EBITDA

 

$

2,044,102

 

________________________

(1)

Primarily represents severance costs related to headcount reductions in connection with our reorganization announced in the third quarter of 2018 that became effective January 1, 2019.

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

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Property and Advisory Project Management

 

 

 

 

 

 

 

 

Fee revenue

 

$

308,679

 

 

$

288,119

 

Plus: Pass through costs also recognized as revenue

 

 

257,264

 

 

 

232,765

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

565,943

 

 

$

520,884

 

Real Estate Investments adjusted revenue is computed as follows (dollars in thousands):

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Real Estate Investments

 

 

 

 

 

 

 

 

Total revenue

 

$

211,470

 

 

$

135,193

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

Less: Cost of revenue

 

 

55,049

 

 

 

 

Add: Gain on disposition of real estate

 

 

22,827

 

 

 

19,247

 

Add: Equity income from unconsolidated subsidiaries

 

 

18,902

 

 

 

72,822

 

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

 

 

1,082

 

 

 

6,720

 

Add: Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period

 

 

5,753

 

 

 

 

Net adjustments

 

 

(8,649

)

 

 

85,349

 

 

 

 

 

 

 

 

 

 

Total adjusted revenue

 

$

202,821

 

 

$

220,542

 

 

 

 

 

 

 

 

 

 

 

For further information:
Kristyn Farahmand
Investors
214.863.3145

Steve Iaco
Media
212.984.6535

Source: CBRE Group, Inc.

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