CBRE Group, Inc. Reports Financial Results for Q4 and Full Year 2023
- Strong Q4 2023 results for CBRE with GAAP EPS rising to $1.55 and Core EPS to $1.38.
- Revenue increased by 9.2% in Q4 and 3.6% for FY 2023.
- Net income surged by 487.9% in Q4 but declined for the full year.
- Cash flow from operations rose by 4.8% in Q4 but decreased significantly for the year.
- CBRE expects mid-teens percentage growth in core earnings-per-share for 2024.
- FY 2023 saw a decline in both GAAP and Core EPS.
- Net income declined for the full year.
- Significant decrease in cash flow from operations for the year.
Insights
The reported increase in Q4 GAAP and Core EPS for CBRE Group, Inc. suggests a positive performance for the final quarter of 2023, contrasting with the annual decline in both GAAP and Core EPS. The surge in Q4 net income by nearly 488% is a significant turnaround from the previous year, potentially signaling operational efficiency or one-time gains that merit further examination. However, the annual figures show a substantial decrease in net income and EPS, which could reflect underlying challenges in the commercial real estate market that the company operates in.
Investors should be cautious about the decline in annual free cash flow by over 87%, as it indicates reduced liquidity and may impact the company's ability to invest in growth or return capital to shareholders. The stock repurchase program and in-fill acquisitions demonstrate a strategic use of capital, but the effectiveness of these actions in driving shareholder value in the context of declining annual earnings should be scrutinized.
The forecast for 2024 core earnings-per-share growth suggests management's confidence in the company's ability to rebound. However, it's important to consider the volatility of the commercial real estate market and external economic factors such as interest rates and debt availability that could impact this outlook.
The performance of the Advisory Services segment, which experienced a slight decrease in revenue, indicates resilience in a challenging environment. The segment's stable operating profit margins could be seen as a positive indicator of effective cost management. However, the Global Leasing and Capital Markets sub-segments show mixed results, with leasing remaining relatively flat and capital markets revenue declining, reflecting broader market trends in commercial real estate.
The Global Workplace Solutions (GWS) segment's revenue growth is noteworthy, particularly in facilities and project management. This growth may signal a shift in market demand towards services that support operational efficiency and cost management for businesses. The segment's consistent operating profit margin despite revenue growth could indicate scalability in service delivery.
For the Real Estate Investments (REI) segment, the substantial increase in operating profit is a highlight. The earlier-than-anticipated monetization of U.S. assets and the increase in assets under management indicate strategic asset management and investment timing. However, the revenue decline in this segment should be monitored for trends that may affect future profitability.
The reported financials of CBRE Group, Inc. reflect the broader economic headwinds faced by the commercial real estate sector, such as rising interest rates and a potential economic slowdown. The net leverage ratio of 0.71x is significantly lower than the debt covenant, indicating a strong balance sheet and financial stability, which provides the company with flexibility in uncertain economic times.
The decline in annual free cash flow is a critical metric that points to the company's operational cash generation capabilities. Given that free cash flow is essential for sustaining operations, paying debts and funding new investments, this sharp decline may raise concerns about the company's future cash position, especially in the face of economic downturns.
The company's liquidity position, with approximately $4.9 billion available, provides a buffer against short-term financial stress and enables strategic investments. However, the effective allocation of this liquidity will be crucial in navigating a potentially challenging market environment in 2024.
-
Q4 GAAP EPS rose to
$1.55 -
Q4 Core EPS rose to
$1.38
-
FY GAAP EPS declined to
$3.15 -
FY Core EPS declined to
$3.84
Consolidated Financial Results Overview
The following table presents highlights of CBRE performance (dollars in millions, except per share data; totals may not add due to rounding):
|
|
|
% Change |
|
|
% Change |
||||||||||||||||||||||
|
Q4 2023 |
Q4 2022 |
USD |
LC (1) |
FY 2023 |
FY 2022 |
USD |
LC (1) |
||||||||||||||||||||
Operating Results |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Revenue |
$ |
8,950 |
|
$ |
8,194 |
|
9.2 |
% |
7.7 |
% |
$ |
31,949 |
|
$ |
30,828 |
|
3.6 |
% |
4.1 |
% |
||||||||
Net revenue (2) |
|
5,187 |
|
|
4,975 |
|
4.3 |
% |
2.9 |
% |
|
18,276 |
|
|
18,777 |
|
(2.7 |
)% |
(2.2 |
)% |
||||||||
GAAP net income |
|
477 |
|
|
81 |
|
487.9 |
% |
503.9 |
% |
|
986 |
|
|
1,407 |
|
(30.0 |
)% |
(28.0 |
)% |
||||||||
GAAP EPS |
|
1.55 |
|
|
0.25 |
|
508.3 |
% |
524.8 |
% |
|
3.15 |
|
|
4.29 |
|
(26.6 |
)% |
(24.6 |
)% |
||||||||
Core adjusted net income (3) |
|
426 |
|
|
424 |
|
0.3 |
% |
3.2 |
% |
|
1,199 |
|
|
1,863 |
|
(35.6 |
)% |
(33.9 |
)% |
||||||||
Core EBITDA (4) |
|
737 |
|
|
668 |
|
10.4 |
% |
9.8 |
% |
|
2,209 |
|
|
2,924 |
|
(24.5 |
)% |
(23.7 |
)% |
||||||||
Core EPS (3) |
|
1.38 |
|
|
1.33 |
|
3.8 |
% |
6.8 |
% |
|
3.84 |
|
|
5.69 |
|
(32.5 |
)% |
(30.7 |
)% |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash Flow Results |
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash flow provided by operations |
$ |
853 |
|
$ |
814 |
|
4.8 |
% |
|
$ |
480 |
|
$ |
1,629 |
|
(70.5 |
)% |
|
||||||||||
Less: Capital expenditures |
|
94 |
|
|
99 |
|
(5.4 |
)% |
|
|
305 |
|
|
260 |
|
17.3 |
% |
|
||||||||||
Free cash flow (5) |
$ |
759 |
|
$ |
715 |
|
6.2 |
% |
|
$ |
175 |
|
$ |
1,369 |
|
(87.2 |
)% |
|
||||||||||
“We ended 2023 on a high note with fourth quarter year-over-year operating profit growth across all three of our business segments,” said Bob Sulentic, CBRE’s chair and chief executive officer.
“Even though 2023 was a difficult year for commercial real estate, we delivered the third-highest full-year earnings in CBRE’s history, as our resilient businesses(6) continued their strong growth. This partly offset market-driven revenue declines in businesses that are sensitive to interest rates and debt availability,” he continued.
For 2024, CBRE expects to achieve core earnings-per-share of
Advisory Services Segment
The following table presents highlights of the Advisory Services segment performance (dollars in millions; totals may not add due to rounding):
|
|
|
% Change |
|||||||||||
|
Q4 2023 |
Q4 2022 |
USD |
LC |
||||||||||
Revenue |
$ |
2,591 |
|
$ |
2,613 |
|
(0.9 |
)% |
(1.9 |
)% |
||||
Net revenue |
|
2,567 |
|
|
2,595 |
|
(1.0 |
)% |
(2.0 |
)% |
||||
Segment operating profit (7) |
|
502 |
|
|
500 |
|
0.4 |
% |
0.3 |
% |
||||
Segment operating profit on revenue margin (8) |
|
19.4 |
% |
|
19.1 |
% |
0.3 |
pts |
0.4 |
pts |
||||
Segment operating profit on net revenue margin (8) |
|
19.5 |
% |
|
19.3 |
% |
0.3 |
pts |
0.5 |
pts |
Note: all percent changes cited are vs. fourth-quarter 2022, except where noted.
Property Leasing
-
Global leasing revenue edged up
1% (flat local currency), slightly above expectations, driven by growth overseas. -
Leasing revenue grew
7% (1% local currency) inEurope ,Middle East &Africa (EMEA), paced by a handful of Continental European countries. -
Asia-Pacific (APAC) leasing revenue growth of2% (4% local currency) was led by robust increases inJapan andIndia . -
Americas leasing revenue was flat, as large office deals inCanada offset modestly lowerU.S. activity. - Globally, higher office leasing revenue offset a slight decline in industrial activity.
Capital Markets
-
Global sales revenue declined
19% (20% local currency), in line with expectations amid a challenging real estate capital markets environment. -
In the
Americas , sales revenue fell22% (same local currency), while EMEA declined16% (20% local currency) and APAC fell12% (10% local currency). - Sales revenue declines were less pronounced in industrial and retail than in multifamily and office, supported by healthier fundamentals.
-
Mortgage origination revenue rose
23% (same local currency), attributable to interest earnings on escrow balances.
Other Advisory Business Lines
-
Loan servicing revenue rose
6% (same local currency). The servicing portfolio increased to , up$410 billion 4% for the quarter and8% for the prior year. -
Property management net revenue increased
9% (7% local currency), reflecting fourth-quarter new account wins and expansions. -
Valuations revenue slipped
1% (3% local currency).
Global Workplace Solutions (GWS) Segment
The following table presents highlights of the GWS segment performance (dollars in millions; totals may not add due to rounding):
|
|
|
|
|
% Change |
|||||||||
|
Q4 2023 |
|
Q4 2022 |
|
USD |
|
LC |
|||||||
Revenue |
$ |
6,103 |
|
$ |
5,294 |
|
15.3 |
% |
13.6 |
% |
||||
Net revenue |
|
2,363 |
|
|
2,093 |
|
12.9 |
% |
11.2 |
% |
||||
Segment operating profit |
|
292 |
|
|
259 |
|
12.9 |
% |
11.2 |
% |
||||
Segment operating profit on revenue margin |
|
4.8 |
% |
|
4.9 |
% |
(0.1 |
pts) |
(0.1 |
pts) |
||||
Segment operating profit on net revenue margin |
|
12.4 |
% |
|
12.4 |
% |
— |
pts |
— |
pts |
Note: all percent changes cited are vs. fourth-quarter 2022, except where noted.
-
Facilities management net revenue increased
14% (13% local currency). This growth was driven by increased activity in the technology and financial services sectors within the Enterprise business and the continued robust growth of the Local business, notably in theU.S. -
Project management net revenue rose
11% (9% local currency), led by the continued expansion of Turner & Townsend’s large-scale program management work globally. - The pipeline going into 2024 remains elevated and significantly above year-earlier levels, notably driven by industrial & logistics and financial & professional services.
Real Estate Investments (REI) Segment
The following table presents highlights of the REI segment performance (dollars in millions):
|
|
|
|
|
|
|
% Change |
|||||||
|
Q4 2023 |
|
Q4 2022 |
|
USD |
|
LC |
|||||||
Revenue |
$ |
262 |
$ |
291 |
(9.9 |
)% |
(12.7 |
)% |
||||||
Segment operating profit |
|
68 |
|
17 |
295.9 |
% |
294.5 |
% |
Note: all percent changes cited are vs. fourth-quarter 2022, except where noted.
Real Estate Development
-
Global development operating profit (9) totaled
, compared with a$27.0 million U.K. -driven loss in last year’s fourth quarter. The current quarter result exceeded expectations, due to the earlier-than-anticipated monetization of severalU.S. assets. -
The in-process portfolio ended 2023 at
, up$15.8 billion from third-quarter 2023.$0.4 billion
Investment Management
-
Total revenue increased
11% (8% local currency), driven by higher incentive fees. Asset management fees rose4% (1% local currency). -
Operating profit surged
76% (72% local currency) to , reflecting the higher incentive fees and recurring asset management fees.$41.7 million -
Assets Under Management (AUM) totaled
, an increase of$147.5 billion from third-quarter 2023. The increase was primarily driven by favorable foreign currency movement, along with modest net capital inflows, which offset lower private asset values.$3.3 billion
Corporate and Other Segment
-
Non-core profit totaled
, primarily due to an improvement in the value of CBRE’s investment in Altus Power, Inc. (NYSE:AMPS), whose share price increased during the quarter.$76 million -
Core corporate operating loss increased by roughly
($16 million 15% ), with lower incentive compensation expense being outweighed by a change in the timing of certain expense recognition and cost transfers from the business segments.
Capital Allocation Overview
-
Free Cash Flow – During the fourth quarter, free cash flow was
. This reflected cash provided by operating activities of$759 million , less total capital expenditures of$853 million .(10)$94 million -
Stock Repurchase Program – The company repurchased approximately 0.3 million shares for
($19.6 million average price per share) during the fourth quarter. There was approximately$68.69 of capacity remaining under the company’s authorized stock repurchase program as of year-end 2023.$1.5 billion -
Acquisitions and Investments – During the fourth quarter, CBRE completed five in-fill acquisitions, four in Advisory Services and one in REI, totaling
in cash and non-cash consideration. The company’s planned acquisition of J&J Worldwide Services, announced on February 5, 2024, is expected to close in the coming months. CBRE will acquire J&J, a leading provider of engineering services, base support operations and facilities maintenance for the$111 million U.S. federal government, for in cash, plus a potential earn-out of up to$800 million , payable in 2027, subject to the acquired business meeting certain performance thresholds.$250 million
Leverage and Financing Overview
- Leverage – CBRE’s net leverage ratio (net debt (11) to trailing twelve-month Core EBITDA) was 0.71x as of December 31, 2023, which is substantially below the company’s primary debt covenant of 4.25x. The net leverage ratio is computed as follows (dollars in millions):
|
As of |
|||
|
December 31, 2023 |
|||
Total debt |
$ |
2,830 |
|
|
Less: Cash (12) |
|
1,265 |
|
|
Net debt (11) |
$ |
1,565 |
|
|
|
|
|||
Divided by: Trailing twelve-month Core EBITDA |
$ |
2,209 |
|
|
|
|
|||
Net leverage ratio |
0.71x |
-
Liquidity – As of year-end 2023, the company had approximately
of total liquidity, consisting of approximately$4.9 billion in cash, plus the ability to borrow an aggregate of approximately$1.3 billion under its revolving credit facilities, net of any outstanding letters of credit.$3.7 billion
Conference Call Details
The company’s fourth quarter earnings webcast and conference call will be held today, Thursday, February 15, 2024 at 8:30 a.m. Eastern Time. Investors are encouraged to access the webcast via this link or they can click this link beginning at 8:15 a.m. Eastern Time for automated access to the conference call.
Alternatively, investors may dial into the conference call using these operator-assisted phone numbers: 877.407.8037 (
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in
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 economic outlook, the company’s future growth momentum, operations 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, political and regulatory conditions and significant public health events, 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
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, 2022, our quarterly report on Form 10-Q for the quarterly period ended September 30, 2023, 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 “net revenue,” “core adjusted net income,” “core EBITDA,” “core EPS,” “business line operating profit (loss),” “segment operating profit on revenue margin,” “segment operating profit on net revenue margin,” “net debt” 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.
Note: We have not reconciled the (non-GAAP) core earnings per share forward-looking guidance included in this 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.
(1) |
Local currency percentage change is calculated by comparing current-period results at prior-period exchange rates versus prior-period results. |
|
(2) |
Net revenue is gross revenue less costs largely associated with subcontracted vendor work performed for clients. These costs are reimbursable by clients and generally have no margin. |
|
(3) |
Core adjusted net income and core earnings per diluted share (or core 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 and impact on non-controlling interest for such charges. Adjustments during the periods presented included non-cash depreciation and amortization expense related to certain assets attributable to acquisitions and restructuring activities, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, the impact of fair value adjustments to real estate assets acquired in the acquisition of Telford Homes plc in 2019 (the |
|
(4) |
Core EBITDA represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, asset impairments, adjustments related to certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, fair value adjustments to real estate assets acquired in the |
|
(5) |
Free cash flow is calculated as cash flow provided by operations, less capital expenditures (reflected in the investing section of the consolidated statement of cash flows). |
|
(6) |
Resilient businesses include the entire Global Workplace Solutions segment, loan servicing, valuation, property management, and recurring asset management fees in the investment management business. |
|
(7) |
Segment operating profit is the measure reported to the chief operating decision maker (CODM) for purposes of making decisions about allocating resources to each segment and assessing performance of each segment. Segment operating profit represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization and asset impairments, as well as adjustments related to the following: certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, fair value adjustments to real estate assets acquired in the |
|
(8) |
Segment operating profit on revenue and net revenue margins represent segment operating profit divided by revenue and net revenue, respectively. |
|
(9) |
Represents line of business profitability/losses, as adjusted. |
|
(10) |
For the three months ended December 31, 2023, the company incurred capital expenditures of |
|
(11) |
Net debt is calculated as total debt (excluding non-recourse debt) less cash and cash equivalents. |
|
(12) |
Cash represents cash and cash equivalents (excluding restricted cash). |
|
CBRE GROUP, INC. |
||||||||||||||||
OPERATING RESULTS |
||||||||||||||||
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
||||||||||||||||
(in millions, except share and per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue: |
|
|
|
|
||||||||||||
Net revenue |
$ |
5,187 |
|
$ |
4,975 |
|
$ |
18,276 |
|
$ |
18,777 |
|
||||
Pass through costs also recognized as revenue |
|
3,763 |
|
|
3,219 |
|
|
13,673 |
|
|
12,051 |
|
||||
Total revenue |
|
8,950 |
|
|
8,194 |
|
|
31,949 |
|
|
30,828 |
|
||||
|
|
|
|
|
||||||||||||
Costs and expenses: |
|
|
|
|
||||||||||||
Cost of revenue |
|
7,093 |
|
|
6,499 |
|
|
25,675 |
|
|
24,239 |
|
||||
Operating, administrative and other |
|
1,206 |
|
|
1,314 |
|
|
4,562 |
|
|
4,649 |
|
||||
Depreciation and amortization |
|
157 |
|
|
160 |
|
|
622 |
|
|
613 |
|
||||
Asset impairments |
|
— |
|
|
22 |
|
|
— |
|
|
59 |
|
||||
Total costs and expenses |
|
8,456 |
|
|
7,995 |
|
|
30,859 |
|
|
29,560 |
|
||||
|
|
|
|
|
||||||||||||
Gain on disposition of real estate |
|
10 |
|
|
44 |
|
|
27 |
|
|
244 |
|
||||
|
|
|
|
|
||||||||||||
Operating income |
|
504 |
|
|
244 |
|
|
1,117 |
|
|
1,512 |
|
||||
|
|
|
|
|
||||||||||||
Equity income (loss) from unconsolidated subsidiaries |
|
128 |
|
|
(167 |
) |
|
248 |
|
|
229 |
|
||||
Other income (loss) |
|
39 |
|
|
2 |
|
|
61 |
|
|
(12 |
) |
||||
Interest expense, net of interest income |
|
40 |
|
|
18 |
|
|
149 |
|
|
69 |
|
||||
Write-off of financing costs on extinguished debt |
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
||||
Income before provision for (benefit from) income taxes |
|
631 |
|
|
61 |
|
|
1,277 |
|
|
1,658 |
|
||||
Provision for (benefit from) income taxes |
|
136 |
|
|
(25 |
) |
|
250 |
|
|
234 |
|
||||
Net income |
|
495 |
|
|
86 |
|
|
1,027 |
|
|
1,424 |
|
||||
Less: Net income attributable to non-controlling interests |
|
18 |
|
|
5 |
|
|
41 |
|
|
17 |
|
||||
Net income attributable to CBRE Group, Inc. |
$ |
477 |
|
$ |
81 |
|
$ |
986 |
|
$ |
1,407 |
|
||||
|
|
|
|
|
||||||||||||
Basic income per share: |
|
|
|
|
||||||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
1.56 |
|
$ |
0.26 |
|
$ |
3.20 |
|
$ |
4.36 |
|
||||
Weighted average shares outstanding for basic income per share |
|
304,728,400 |
|
|
314,248,642 |
|
|
308,430,080 |
|
|
322,813,345 |
|
||||
|
|
|
|
|
||||||||||||
Diluted income per share: |
|
|
|
|
||||||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
1.55 |
|
$ |
0.25 |
|
$ |
3.15 |
|
$ |
4.29 |
|
||||
Weighted average shares outstanding for diluted income per share |
|
308,526,651 |
|
|
319,221,283 |
|
|
312,550,942 |
|
|
327,696,115 |
|
||||
|
|
|
|
|
||||||||||||
Core EBITDA |
$ |
737 |
|
$ |
668 |
|
$ |
2,209 |
|
$ |
2,924 |
|
||||
|
|
|
|
|
|
CBRE GROUP, INC. |
||||||||||||||||||||||||||||
SEGMENT RESULTS |
||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 |
||||||||||||||||||||||||||||
(in millions, totals may not add due to rounding) |
||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||
|
Three Months Ended December 31, 2023 |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Advisory Services |
|
Global Workplace Solutions |
|
Real Estate Investments |
|
Corporate (1) |
|
Total Core |
|
Other |
|
Total Consolidated |
|||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Net revenue |
$ |
2,567 |
|
$ |
2,363 |
|
$ |
262 |
|
$ |
(6 |
) |
$ |
5,187 |
|
$ |
— |
|
$ |
5,187 |
|
|||||||
Pass through costs also recognized as revenue |
|
23 |
|
|
3,740 |
|
|
— |
|
|
— |
|
|
3,763 |
|
|
— |
|
|
3,763 |
|
|||||||
Total revenue |
|
2,591 |
|
|
6,103 |
|
|
262 |
|
|
(6 |
) |
|
8,950 |
|
|
— |
|
|
8,950 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Cost of revenue |
|
1,533 |
|
|
5,502 |
|
|
53 |
|
|
4 |
|
|
7,093 |
|
|
— |
|
|
7,093 |
|
|||||||
Operating, administrative and other |
|
559 |
|
|
310 |
|
|
202 |
|
|
135 |
|
|
1,206 |
|
|
— |
|
|
1,206 |
|
|||||||
Depreciation and amortization |
|
73 |
|
|
66 |
|
|
3 |
|
|
15 |
|
|
157 |
|
|
— |
|
|
157 |
|
|||||||
Total costs and expenses |
|
2,165 |
|
|
5,878 |
|
|
258 |
|
|
154 |
|
|
8,456 |
|
|
— |
|
|
8,456 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gain on disposition of real estate |
|
— |
|
|
— |
|
|
10 |
|
|
— |
|
|
10 |
|
|
— |
|
|
10 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating income (loss) |
|
425 |
|
|
225 |
|
|
14 |
|
|
(160 |
) |
|
504 |
|
|
— |
|
|
504 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Equity income from unconsolidated subsidiaries |
|
1 |
|
|
— |
|
|
56 |
|
|
— |
|
|
57 |
|
|
70 |
|
|
128 |
|
|||||||
Other income (loss) |
|
31 |
|
|
(1 |
) |
|
— |
|
|
3 |
|
|
33 |
|
|
6 |
|
|
39 |
|
|||||||
Add-back: Depreciation and amortization |
|
73 |
|
|
66 |
|
|
3 |
|
|
15 |
|
|
157 |
|
|
— |
|
|
157 |
|
|||||||
Adjustments: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Integration and other costs related to acquisitions |
|
— |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|||||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
|
— |
|
|
— |
|
|
(5 |
) |
|
— |
|
|
(5 |
) |
|
— |
|
|
(5 |
) |
|||||||
Costs incurred related to legal entity restructuring |
|
— |
|
|
— |
|
|
— |
|
|
9 |
|
|
9 |
|
|
— |
|
|
9 |
|
|||||||
Costs associated with efficiency and cost-reduction initiatives |
|
5 |
|
|
— |
|
|
— |
|
|
8 |
|
|
14 |
|
|
— |
|
|
14 |
|
|||||||
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired |
|
(34 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(34 |
) |
|
— |
|
|
(34 |
) |
|||||||
Total segment operating profit (loss) |
$ |
502 |
|
$ |
292 |
|
$ |
68 |
|
$ |
(124 |
) |
|
$ |
76 |
|
$ |
813 |
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Core EBITDA |
|
|
|
|
$ |
737 |
|
|
|
_______________ |
||
(1) |
Includes elimination of inter-segment revenue. |
|
CBRE GROUP, INC. |
||||||||||||||||||||||||||||
SEGMENT RESULTS—(CONTINUED) |
||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, 2022 |
||||||||||||||||||||||||||||
(in millions, totals may not add due to rounding) |
||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||
|
|
Three Months Ended December 31, 2022 |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Advisory Services |
|
Global Workplace Solutions |
|
Real Estate Investments |
|
Corporate (1) |
|
Total Core |
|
Other |
|
Total Consolidated |
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Net revenue |
$ |
2,595 |
|
$ |
2,093 |
|
$ |
291 |
|
$ |
(3 |
) |
$ |
4,975 |
|
$ |
— |
|
$ |
4,975 |
|
|||||||
Pass through costs also recognized as revenue |
|
19 |
|
|
3,201 |
|
|
— |
|
|
— |
|
|
3,219 |
|
|
— |
|
|
3,219 |
|
|||||||
Total revenue |
|
2,613 |
|
|
5,294 |
|
|
291 |
|
|
(3 |
) |
|
8,194 |
|
|
— |
|
|
8,194 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Cost of revenue |
|
1,612 |
|
|
4,770 |
|
|
120 |
|
|
(3 |
) |
|
6,499 |
|
|
— |
|
|
6,499 |
|
|||||||
Operating, administrative and other |
|
545 |
|
|
304 |
|
|
335 |
|
|
131 |
|
|
1,314 |
|
|
— |
|
|
1,314 |
|
|||||||
Depreciation and amortization |
|
84 |
|
|
63 |
|
|
5 |
|
|
8 |
|
|
160 |
|
|
— |
|
|
160 |
|
|||||||
Asset impairments |
|
— |
|
|
— |
|
|
22 |
|
|
— |
|
|
22 |
|
|
— |
|
|
22 |
|
|||||||
Total costs and expenses |
|
2,240 |
|
|
5,137 |
|
|
481 |
|
|
136 |
|
|
7,994 |
|
|
— |
|
|
7,995 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gain on disposition of real estate |
|
— |
|
|
— |
|
|
44 |
|
|
— |
|
|
44 |
|
|
— |
|
|
44 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating income (loss) |
|
373 |
|
|
156 |
|
|
(147 |
) |
|
(139 |
) |
|
244 |
|
|
— |
|
|
244 |
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Equity loss from unconsolidated subsidiaries |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(167 |
) |
|
(167 |
) |
|||||||
Other income (loss) |
|
1 |
|
|
2 |
|
|
— |
|
|
(1 |
) |
|
2 |
|
|
— |
|
|
2 |
|
|||||||
Add-back: Depreciation and amortization |
|
84 |
|
|
63 |
|
|
5 |
|
|
8 |
|
|
160 |
|
|
— |
|
|
160 |
|
|||||||
Add-back: Asset impairments |
|
— |
|
|
— |
|
|
22 |
|
|
— |
|
|
22 |
|
|
— |
|
|
22 |
|
|||||||
Adjustments: |
|
|
|
|
|
|
|
|||||||||||||||||||||
Costs associated with efficiency and cost-reduction initiatives |
|
42 |
|
|
21 |
|
|
12 |
|
|
23 |
|
|
99 |
|
|
— |
|
|
99 |
|
|||||||
Integration and other costs related to acquisitions |
|
— |
|
|
17 |
|
|
— |
|
|
— |
|
|
17 |
|
|
— |
|
|
17 |
|
|||||||
Provision associated with Telford’s fire safety remediation efforts |
|
— |
|
|
— |
|
|
139 |
|
|
— |
|
|
139 |
|
|
— |
|
|
139 |
|
|||||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
|
— |
|
|
— |
|
|
(13 |
) |
|
— |
|
|
(13 |
) |
|
— |
|
|
(13 |
) |
|||||||
Impact of fair value adjustments to real estate assets acquired in the |
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|||||||
Costs incurred related to legal entity restructuring |
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
|
— |
|
|
1 |
|
|||||||
Total segment operating profit (loss) |
$ |
500 |
|
$ |
259 |
|
$ |
17 |
|
$ |
(108 |
) |
|
$ |
(167 |
) |
$ |
501 |
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Core EBITDA |
|
|
|
|
$ |
668 |
|
|
|
_____________ |
||
(1) |
Includes elimination of inter-segment revenue. |
|
CBRE GROUP, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(in millions) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
December 31, 2023 |
December 31, 2022 |
||||||
Assets: |
|
|
||||||
Cash and cash equivalents |
$ |
1,265 |
$ |
1,318 |
||||
Restricted cash |
|
106 |
|
87 |
||||
Receivables, net |
|
6,370 |
|
5,327 |
||||
Warehouse receivables (1) |
|
675 |
|
455 |
||||
Contract assets |
|
518 |
|
529 |
||||
Income taxes receivable |
|
237 |
|
134 |
||||
Property and equipment, net |
|
907 |
|
836 |
||||
Operating lease assets |
|
1,030 |
|
1,033 |
||||
Goodwill and other intangibles, net |
|
7,210 |
|
7,061 |
||||
Investments in unconsolidated subsidiaries |
|
1,374 |
|
1,318 |
||||
Other assets, net |
|
2,856 |
|
2,415 |
||||
|
|
|
||||||
Total assets |
$ |
22,548 |
$ |
20,513 |
||||
|
|
|
||||||
Liabilities: |
|
|
||||||
Current liabilities, excluding debt and operating lease liabilities |
$ |
7,310 |
$ |
6,915 |
||||
Warehouse lines of credit (which fund loans that |
|
666 |
|
448 |
||||
Revolving credit facility |
|
— |
|
178 |
||||
Senior term loans, net |
|
743 |
|
— |
||||
|
|
974 |
|
— |
||||
|
|
597 |
|
597 |
||||
|
|
490 |
|
489 |
||||
Current maturities of long term debt |
|
9 |
|
428 |
||||
Other debt |
|
16 |
|
43 |
||||
Operating lease liabilities |
|
1,331 |
|
1,310 |
||||
Other long-term liabilities |
|
1,345 |
|
1,499 |
||||
|
|
|
||||||
Total liabilities |
|
13,481 |
|
11,907 |
||||
|
|
|
||||||
Equity: |
|
|
||||||
CBRE Group, Inc. stockholders' equity |
|
8,267 |
|
7,853 |
||||
Non-controlling interests |
|
800 |
|
753 |
||||
|
|
|
||||||
Total equity |
|
9,067 |
|
8,606 |
||||
|
|
|
||||||
Total liabilities and equity |
$ |
22,548 |
$ |
20,513 |
_______________ |
||
(1) |
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 |
||||||||
(in millions) |
||||||||
(Unaudited) |
||||||||
|
|
|||||||
|
Twelve Months Ended December 31, |
|||||||
|
2023 |
|
2022 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
||||||
Net income |
$ |
1,027 |
|
$ |
1,424 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
||||||
Depreciation and amortization |
|
622 |
|
|
613 |
|
||
Amortization and write-off of financing costs on extinguished debt |
|
6 |
|
|
8 |
|
||
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets |
|
(102 |
) |
|
(203 |
) |
||
Gain associated with remeasuring our investment in a previously unconsolidated subsidiary to fair value as of the date we acquired the remaining interest |
|
(34 |
) |
|
— |
|
||
Gain on disposition of real estate assets |
|
(27 |
) |
|
— |
|
||
Asset impairments |
|
— |
|
|
59 |
|
||
Net realized and unrealized (gains) losses, primarily from investments |
|
(6 |
) |
|
30 |
|
||
Provision for doubtful accounts |
|
16 |
|
|
17 |
|
||
Net compensation expense for equity awards |
|
96 |
|
|
160 |
|
||
Equity income from unconsolidated subsidiaries |
|
(248 |
) |
|
(229 |
) |
||
Distribution of earnings from unconsolidated subsidiaries |
|
256 |
|
|
389 |
|
||
Proceeds from sale of mortgage loans |
|
9,714 |
|
|
14,527 |
|
||
Origination of mortgage loans |
|
(9,905 |
) |
|
(13,652 |
) |
||
Increase (decrease) in warehouse lines of credit |
|
218 |
|
|
(830 |
) |
||
Tenant concessions received |
|
12 |
|
|
12 |
|
||
Purchase of equity securities |
|
(15 |
) |
|
(28 |
) |
||
Proceeds from sale of equity securities |
|
14 |
|
|
30 |
|
||
Decrease in real estate under development |
|
81 |
|
|
95 |
|
||
Increase in receivables, prepaid expenses and other assets (including contract and lease assets) |
|
(860 |
) |
|
(503 |
) |
||
Increase in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities) |
|
22 |
|
|
64 |
|
||
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing |
|
(173 |
) |
|
(2 |
) |
||
Increase in net income taxes receivable/payable |
|
(97 |
) |
|
(133 |
) |
||
Other operating activities, net |
|
(137 |
) |
|
(219 |
) |
||
Net cash provided by operating activities |
|
480 |
|
|
1,629 |
|
||
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
||||||
Capital expenditures |
|
(305 |
) |
|
(260 |
) |
||
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired |
|
(203 |
) |
|
(173 |
) |
||
Contributions to unconsolidated subsidiaries |
|
(127 |
) |
|
(385 |
) |
||
Distributions from unconsolidated subsidiaries |
|
54 |
|
|
87 |
|
||
Acquisition and development of real estate assets |
|
(171 |
) |
|
— |
|
||
Proceeds from disposition of real estate assets |
|
77 |
|
|
— |
|
||
Investment in VTS |
|
— |
|
|
(101 |
) |
||
Other investing activities, net |
|
(6 |
) |
|
— |
|
||
Net cash used in investing activities |
|
(681 |
) |
|
(832 |
) |
||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
||||||
Proceeds from revolving credit facility |
|
4,006 |
|
|
1,833 |
|
||
Repayment of revolving credit facility |
|
(4,184 |
) |
|
(1,655 |
) |
||
Proceeds from senior term loans |
|
748 |
|
|
— |
|
||
Repayment of senior term loans |
|
(437 |
) |
|
— |
|
||
Proceeds from notes payable on real estate |
|
76 |
|
|
39 |
|
||
Repayment of notes payable on real estate |
|
(43 |
) |
|
(28 |
) |
||
Proceeds from issuance of |
|
975 |
|
|
— |
|
||
Repurchase of common stock |
|
(665 |
) |
|
(1,850 |
) |
||
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date) |
|
(145 |
) |
|
(34 |
) |
||
Units repurchased for payment of taxes on equity awards |
|
(72 |
) |
|
(38 |
) |
||
Non-controlling interest contributions |
|
6 |
|
|
2 |
|
||
Non-controlling interest distributions |
|
(42 |
) |
|
(1 |
) |
||
Other financing activities, net |
|
(69 |
) |
|
(34 |
) |
||
Net cash provided by (used in) financing activities |
|
154 |
|
|
(1,766 |
) |
||
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash |
|
13 |
|
|
(166 |
) |
||
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
(34 |
) |
|
(1,135 |
) |
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF YEAR |
|
1,405 |
|
|
2,540 |
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF YEAR |
$ |
1,371 |
|
$ |
1,405 |
|
||
|
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
||||||
Cash paid during the year for: |
|
|
||||||
Interest |
$ |
191 |
|
$ |
89 |
|
||
Income tax payments, net |
|
467 |
|
|
604 |
|
||
|
|
|
||||||
Non-cash investing and financing activities: |
|
|
||||||
Deferred and/or contingent consideration |
$ |
54 |
|
$ |
— |
|
||
Non-GAAP Financial Measures
The following measures are considered “non-GAAP financial measures” under SEC guidelines:
(i) |
Net revenue |
|
(ii) |
Core EBITDA |
|
(iii) |
Business line operating profit/loss |
|
(iv) |
Segment operating profit on revenue and net revenue margins |
|
(v) |
Free cash flow |
|
(vi) |
Net debt |
|
(vii) |
Core net income attributable to CBRE Group, Inc. stockholders, as adjusted (which we also refer to as “core adjusted net income”) |
|
(viii) |
Core EPS |
These measures are not recognized measurements under
Our management generally uses these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. The company believes 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 net revenue, net revenue is gross revenue less costs largely associated with subcontracted vendor work performed for clients. We believe that investors may find this measure useful to analyze the company’s overall financial performance because it excludes costs reimbursable by clients that generally have no margin, and as such provides greater visibility into the underlying performance of our business.
With respect to Core EBITDA, business line operating profit/loss, and segment operating profit on revenue and net 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, 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 Core 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 Core 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 segment operating profit and core 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.
With respect to core EBITDA, core EPS and core adjusted net income, the company believes that investors may find these measures useful to analyze the underlying performance of operations without the impact of strategic non-core equity investments (Altus Power, Inc. and certain other investments) that are not directly related to our business segments. These can be volatile and are often non-cash in nature.
Core net income attributable to CBRE Group, Inc. stockholders, as adjusted (or core adjusted net income), and core EPS, are calculated as follows (in millions, except share and per share data):
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||||||
|
|
|
|
|
||||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
477 |
|
$ |
81 |
|
$ |
986 |
|
$ |
1,407 |
|
||||
|
|
|
|
|
||||||||||||
Plus / minus: |
|
|
|
|
||||||||||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
|
(5 |
) |
|
(13 |
) |
|
(7 |
) |
|
(4 |
) |
||||
Impact of fair value adjustments to real estate assets acquired in the |
|
— |
|
|
(1 |
) |
|
— |
|
|
(5 |
) |
||||
Costs incurred related to legal entity restructuring |
|
9 |
|
|
1 |
|
|
13 |
|
|
13 |
|
||||
Integration and other costs related to acquisitions |
|
2 |
|
|
17 |
|
|
62 |
|
|
40 |
|
||||
Costs associated with efficiency and cost-reduction initiatives |
|
14 |
|
|
99 |
|
|
159 |
|
|
118 |
|
||||
Provision associated with Telford’s fire safety remediation efforts |
|
— |
|
|
139 |
|
|
— |
|
|
186 |
|
||||
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired |
|
(34 |
) |
|
— |
|
|
(34 |
) |
|
— |
|
||||
Net fair value adjustments on strategic non-core investments |
|
(76 |
) |
|
167 |
|
|
(32 |
) |
|
175 |
|
||||
Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions |
|
38 |
|
|
45 |
|
|
167 |
|
|
166 |
|
||||
Asset impairments |
|
— |
|
|
22 |
|
|
— |
|
|
59 |
|
||||
Write-off of financing costs on extinguished debt |
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
||||
Tax impact of adjusted items, tax benefit attributable to legal entity restructuring, and strategic non-core investments |
|
7 |
|
|
(117 |
) |
|
(82 |
) |
|
(254 |
) |
||||
Impact of adjustments on non-controlling interest |
|
(6 |
) |
|
(15 |
) |
|
(33 |
) |
|
(40 |
) |
||||
Core net income attributable to CBRE Group, Inc., as adjusted |
$ |
426 |
|
$ |
424 |
|
$ |
1,199 |
|
$ |
1,863 |
|
||||
|
|
|
|
|
||||||||||||
Core diluted income per share attributable to CBRE Group, Inc., as adjusted |
$ |
1.38 |
|
$ |
1.33 |
|
$ |
3.84 |
|
$ |
5.69 |
|
||||
|
|
|
|
|
||||||||||||
Weighted average shares outstanding for diluted income per share |
|
308,526,651 |
|
|
319,221,283 |
|
|
312,550,942 |
|
|
327,696,115 |
|
Core EBITDA is calculated as follows (in millions, totals may not add due to rounding):
|
Three Months Ended
|
|
Twelve Months Ended
|
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
|
|
|
|
||||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
477 |
|
$ |
81 |
|
$ |
986 |
|
$ |
1,407 |
|
||||
Net income attributable to non-controlling interests |
|
18 |
|
|
5 |
|
|
41 |
|
|
17 |
|
||||
Net income |
|
495 |
|
|
86 |
|
|
1,027 |
|
|
1,424 |
|
||||
|
|
|
|
|
||||||||||||
Adjustments: |
|
|
|
|
||||||||||||
Depreciation and amortization |
|
157 |
|
|
160 |
|
|
622 |
|
|
613 |
|
||||
Asset impairments |
|
— |
|
|
22 |
|
|
— |
|
|
59 |
|
||||
Interest expense, net of interest income |
|
40 |
|
|
18 |
|
|
149 |
|
|
69 |
|
||||
Write-off of financing costs on extinguished debt |
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
||||
Provision for (benefit from) income taxes |
|
136 |
|
|
(25 |
) |
|
250 |
|
|
234 |
|
||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
|
(5 |
) |
|
(13 |
) |
|
(7 |
) |
|
(4 |
) |
||||
Impact of fair value adjustments to real estate assets acquired in the |
|
— |
|
|
(1 |
) |
|
— |
|
|
(5 |
) |
||||
Costs incurred related to legal entity restructuring |
|
9 |
|
|
1 |
|
|
13 |
|
|
13 |
|
||||
Integration and other costs related to acquisitions |
|
2 |
|
|
17 |
|
|
62 |
|
|
40 |
|
||||
Costs associated with efficiency and cost-reduction initiatives |
|
14 |
|
|
99 |
|
|
159 |
|
|
118 |
|
||||
Provision associated with Telford’s fire safety remediation efforts |
|
— |
|
|
139 |
|
|
— |
|
|
186 |
|
||||
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired |
|
(34 |
) |
|
— |
|
|
(34 |
) |
|
— |
|
||||
Net fair value adjustments on strategic non-core investments |
|
(76 |
) |
|
167 |
|
|
(32 |
) |
|
175 |
|
||||
Core EBITDA |
$ |
737 |
|
$ |
668 |
|
$ |
2,209 |
|
$ |
2,924 |
|
Revenue includes client reimbursed pass-through costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients. Reimbursement related to subcontracted vendor work generally has no margin and has been excluded from net revenue. Reconciliations are shown below (dollars in millions):
|
Three Months Ended
|
|||||||
|
2023 |
2022 |
||||||
Consolidated |
|
|
||||||
Revenue |
$ |
8,950 |
$ |
8,194 |
||||
Less: Pass through costs also recognized as revenue |
|
3,763 |
|
3,219 |
||||
Net revenue |
$ |
5,187 |
$ |
4,975 |
|
Three Months Ended
|
|||||||
|
2023 |
|
2022 |
|||||
Property Management Revenue |
|
|
||||||
Revenue |
$ |
519 |
$ |
474 |
||||
Less: Pass through costs also recognized as revenue |
|
23 |
|
19 |
||||
Net revenue |
$ |
495 |
$ |
456 |
|
Three Months Ended
|
|||||||
|
2023 |
|
2022 |
|||||
GWS Revenue |
|
|
||||||
Revenue |
$ |
6,103 |
$ |
5,294 |
||||
Less: Pass through costs also recognized as revenue |
|
3,740 |
|
3,201 |
||||
Net revenue |
$ |
2,363 |
$ |
2,093 |
|
Three Months Ended
|
|||||||
|
2023 |
|
2022 |
|||||
Facilities Management Revenue |
|
|
||||||
Revenue |
$ |
3,995 |
$ |
3,908 |
||||
Less: Pass through costs also recognized as revenue |
|
2,479 |
|
2,580 |
||||
Net revenue |
$ |
1,516 |
$ |
1,329 |
|
Three Months Ended
|
|||||||
|
2023 |
|
2022 |
|||||
Project Management Revenue |
|
|
||||||
Revenue |
$ |
2,108 |
$ |
1,385 |
||||
Less: Pass through costs also recognized as revenue |
|
1,261 |
|
621 |
||||
Net revenue |
$ |
847 |
$ |
764 |
Below represents a reconciliation of REI business line operating profitability/loss to REI segment operating profit (in millions):
|
Three Months Ended
|
|||||||
Real Estate Investments |
2023 |
|
2022 |
|||||
Investment management operating profit |
$ |
42 |
|
$ |
24 |
|
||
Global real estate development operating profit (loss) |
|
27 |
|
|
(6 |
) |
||
Segment overhead (and related adjustments) |
|
(1 |
) |
|
(1 |
) |
||
Real estate investments segment operating profit |
$ |
68 |
|
$ |
17 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215789058/en/
Brad Burke - Investors
214.863.3100
Brad.Burke@cbre.com
Steve Iaco - Media
212.984.6535
Steven.Iaco@cbre.com
Source: CBRE Group, Inc.
FAQ
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