CBRE Group, Inc. Reports Financial Results for Q4 and Full Year 2020
CBRE Group reported Q4 and FY 2020 results with adjusted EPS hitting an all-time high. Q4 revenue fell 2.9% to $6.911 billion, while FY revenue decreased by 0.3% to $23.826 billion. GAAP EPS dropped 50.6% to $0.93. Adjusted EBITDA increased 9% in Q4 to $753 million, with a full-year adjusted EBITDA of $1.892 billion. The firm anticipates low double-digit adjusted EPS growth through 2025, despite ongoing challenges from Covid-19. Notable performance included a 49% rise in commercial mortgage revenue. The company maintains strong liquidity with $4.6 billion available.
- Adjusted EPS reached an all-time high at $1.45 for Q4, a 9.9% increase from last year.
- Adjusted EBITDA grew by 9% in Q4 to $753 million, indicating strong operational performance.
- Anticipating low double-digit adjusted EPS growth through 2025, suggesting future profitability.
- Commercial mortgage revenue surged by 49% year-over-year, reflecting strong market demand.
- GAAP EPS dropped 50.6% compared to Q4 2019, reflecting a significant decline in net income.
- Total revenue fell 2.9% in Q4 2020 and 0.3% for FY 2020, indicating slight overall contraction.
- Advisory services revenue decreased by 12.6% in Q4 due to Covid-19's impact on leasing activity.
CBRE Group, Inc. (NYSE:CBRE) today reported financial results for the fourth quarter and year ended December 31, 2020.
“We ended 2020 on a high note with adjusted earnings per share for the quarter reaching an all-time high and adjusted EBITDA growing by
“Our broad diversification across four key dimensions – property types, lines of business, geographic markets and clients – has served us well compared with prior downturns,” he continued. “Now we are exiting the worst of the Covid-19 crisis in great shape, with a leaner operating structure, significant financial capacity and a strategy squarely aimed at the many opportunities unfolding in our industry, including those with secular tailwinds. We’ve built our long-term plan on the assumption that office demand remains under pressure. Nevertheless, we still expect to achieve a minimum of low double-digit average annual adjusted earnings per share growth from this year through at least 2025, absent a recession, with meaningful upside potential from additional capital allocation.”
Consolidated Financial Results Overview
The following table presents highlights of CBRE performance (dollars in millions, except per share data):
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|||||||||||||
|
Q4 2020 |
|
Q4 2019 |
|
USD |
|
LC (1) |
|
FY 2020 |
|
FY 2019 |
|
USD |
|
LC (1) |
|||||||||
Operating Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenue |
$ |
6,911 |
|
|
$ |
7,119 |
|
|
( |
|
( |
|
$ |
23,826 |
|
|
$ |
23,894 |
|
|
( |
|
( |
|
Fee revenue (2) |
3,413 |
|
|
3,672 |
|
|
( |
|
( |
|
10,891 |
|
|
11,861 |
|
|
( |
|
( |
|||||
GAAP net income |
314 |
|
|
638 |
|
|
( |
|
( |
|
752 |
|
|
1,282 |
|
|
( |
|
( |
|||||
GAAP EPS |
$ |
0.93 |
|
|
$ |
1.87 |
|
|
( |
|
( |
|
$ |
2.22 |
|
|
$ |
3.77 |
|
|
( |
|
( |
|
Adjusted EBITDA (3) |
753 |
|
|
691 |
|
|
|
|
|
|
1,892 |
|
|
2,064 |
|
|
( |
|
( |
|||||
Adjusted net income (4) |
491 |
|
|
449 |
|
|
|
|
|
|
1,108 |
|
|
1,263 |
|
|
( |
|
( |
|||||
Adjusted EPS (4) |
$ |
1.45 |
|
|
$ |
1.32 |
|
|
|
|
|
|
$ |
3.27 |
|
|
$ |
3.71 |
|
|
( |
|
( |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash Flow Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flow from operations |
$ |
940 |
|
|
$ |
1,049 |
|
|
( |
|
|
|
$ |
1,831 |
|
|
$ |
1,223 |
|
|
|
|
|
|
Less: Capital expenditures |
76 |
|
|
97 |
|
|
( |
|
|
|
267 |
|
|
294 |
|
|
( |
|
|
|||||
Free cash flow (5) |
$ |
864 |
|
|
$ |
951 |
|
|
( |
|
|
|
$ |
1,564 |
|
|
$ |
930 |
|
|
|
|
|
|
Results for the quarter were negatively impacted by the Covid-19 pandemic, which continued to constrain sales and leasing activity. Additionally, GAAP net income and earnings per share reflect about
Advisory Services Segment
The following table presents highlights of the Advisory Services segment performance (dollars in millions):
|
|
|
|
|
% Change |
|||||||
|
Q4 2020 |
|
Q4 2019 |
|
USD |
|
LC |
|||||
Revenue |
$ |
2,460 |
|
|
$ |
2,815 |
|
|
( |
|
( |
|
Fee revenue |
2,218 |
|
|
2,548 |
|
|
( |
|
( |
|||
Adjusted EBITDA |
482 |
|
|
523 |
|
|
( |
|
( |
|||
Adjusted EBITDA on revenue margin (6) |
19.6 |
% |
|
18.6 |
% |
|
|
|
|
|||
Adjusted EBITDA on fee revenue margin (6) |
21.7 |
% |
|
20.5 |
% |
|
|
|
|
|||
In Advisory Services, the severe economic effects of the Covid-19 pandemic continued to constrain higher-margin lease and sales revenue, leading to lower adjusted EBITDA in the fourth quarter.
Large office occupiers continued to defer leasing decisions, resulting in a
Capital flows into commercial real estate improved from earlier in the year, but global market activity remained well below 2019 levels. Global property sales revenue declined
By contrast, commercial mortgage originations were robust, reflecting a surge in government agency lending. Commercial mortgage revenue rose
Revenue from loan servicing, which is performed for lenders on a contractual basis, jumped
Valuation also performed well with revenue up
Global Workplace Solutions (GWS) Segment
The following table presents highlights of the GWS segment performance (dollars in millions):
|
|
|
|
|
% Change |
|||||||
|
Q4 2020 |
|
Q4 2019 |
|
USD |
|
LC |
|||||
Revenue |
$ |
4,161 |
|
|
$ |
4,057 |
|
|
|
|
|
|
Fee revenue |
906 |
|
|
877 |
|
|
|
|
|
|||
Adjusted EBITDA |
161 |
|
|
125 |
|
|
|
|
|
|||
Adjusted EBITDA on revenue margin |
3.9 |
% |
|
3.1 |
% |
|
|
|
|
|||
Adjusted EBITDA on fee revenue margin |
17.8 |
% |
|
14.3 |
% |
|
|
|
|
|||
Despite the ongoing challenges from Covid-19, CBRE’s GWS segment achieved robust global adjusted EBITDA growth, driven by strong gains in Continental Europe and North Asia as well as cost-control actions.
Solid fee revenue growth was constrained by sharply lower transaction activity for GWS occupier clients. Facilities management, which accounted for
The segment’s overall margin expansion of approximately 350 basis points reflected the benefit of lower discretionary spending and structural changes to the cost base.
Real Estate Investments (REI) Segment
The following table presents highlights of the REI segment performance (dollars in millions):
|
|
|
|
|
% Change |
|||||||
|
Q4 2020 |
|
Q4 2019 |
|
USD |
|
LC |
|||||
Revenue |
$ |
289 |
|
|
$ |
247 |
|
|
|
|
|
|
Adjusted revenue (7) |
307 |
|
|
212 |
|
|
|
|
|
|||
Adjusted EBITDA (8) |
110 |
|
|
43 |
|
|
|
|
|
|||
The sharp increase in this segment’s adjusted EBITDA was driven by robust performance from both investment management and U.S. development activity.
Investment management revenue rose
Assets under management at year-end 2020 totaled
U.S. real estate development contributed
The in-process development portfolio ended 2020 at
Investment in the startup of the company’s flexible workspace business, Hana, contributed a loss of
On February 22, 2021, CBRE announced the acquisition of a
Adjustments to GAAP Net Income and Earnings Per Share
Adjustments to GAAP net income totaled
GAAP net income decreased
Capital Allocation Overview
-
Free Cash Flow – During the fourth quarter of 2020, free cash flow decreased
9% to approximately$864 million . This reflected cash flow from operating activities of$940 million , less total capital expenditures of$76 million . Net capital expenditures (of which a considerable portion during the period was discretionary) totaled$56.6 million .(9) -
Stock Repurchase Program – The company did not repurchase any of its stock during the fourth quarter of 2020, and has
$350 million of capacity remaining under its repurchase program. - Acquisitions – During the fourth quarter of 2020, the company acquired a provider of facilities and technical maintenance services in Australia.
Leverage and Financing Overview
- Leverage – The company’s net leverage ratio (net cash(10) to full year adjusted EBITDA) was (0.21x) as of December 31, 2020, 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, 2020 |
||||
|
|
||||
Total debt |
$ |
1,387 |
|
|
|
Less: Cash (11) |
1,793 |
|
|
||
Net cash |
$ |
(406 |
) |
|
|
|
|
||||
Divided by: full year adjusted EBITDA |
$ |
1,892 |
|
|
|
|
|
||||
Net leverage ratio |
(0.21x |
) |
|||
-
Liquidity – As of December 31, 2020, the company had approximately
$4.6 billion of total liquidity, consisting of approximately$1.8 billion in cash(11) plus the ability to borrow an aggregate of approximately$2.8 billion under its revolving credit facilities, net of any outstanding letters of credit.
Conference Call Details
The company’s fourth quarter earnings webcast and conference call will be held today (Tuesday, February 23, 2021) 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 (U.S.) or 201.689.8037 (International). A replay of the call will be available starting at 1:00 p.m. Eastern time on February 23, 2021. The replay is accessible by dialing 877.660.6853 (U.S.) or 201.612.7415 (International) and using the access code 13715077#. 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 Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company has more than 100,000 employees serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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 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 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 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; foreign currency fluctuations and changes in currency restrictions, trade sanctions and import/export and transfer pricing rules; 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 (GSEs); 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; 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; 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; negative publicity or harm to our brand and reputation; the failure by third parties to comply with service level agreements or regulatory or legal requirements; 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; 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; declines in lending activity of U.S. GSEs, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market; 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; 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; our ability to retain and incentivize key personnel; our ability to manage organizational challenges associated with our size; liabilities under guarantees, or for construction defects, that we incur in our development services business; variations in historically customary seasonal patterns that cause our business not to perform as expected; 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; 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; and any inability for us to implement and maintain effective internal controls over financial reporting.
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 most recent Annual Report on Form 10-K, 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,” “free cash flow” and “net cash” 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 – CBRE has not reconciled the (non-GAAP) adjusted earnings per share forward-looking guidance included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, carried interest incentive compensation and financing costs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
(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 depreciation and amortization, asset impairments, interest expense, net of interest income, write-off of financing costs on extinguished debt, and provision for income taxes. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of costs associated with transformation initiatives, costs associated with workforce optimization efforts, 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, carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, and costs associated with our 2019 segment reorganization, including cost-savings initiatives. |
|
(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 costs associated with transformation initiatives, non-cash depreciation and amortization expense related to certain assets attributable to acquisitions, certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, 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, asset impairments, costs primarily associated with our workforce optimization efforts in response to the Covid-19 pandemic, costs associated with our 2019 segment reorganization, including cost-savings initiatives, and write-off of financing costs on extinguished of debt. |
|
(5) |
Free cash flow is calculated as cash flow from operations, less capital expenditures (reflected in the investing section of the consolidated statement of cash flows). |
|
(6) |
Adjusted EBITDA on revenue and fee revenue margins represents adjusted EBITDA divided by revenue and fee revenue, respectively. |
|
(7) |
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. |
|
(8) |
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. |
|
(9) |
For the three months ended December 31, 2020, the company incurred capital expenditures of |
|
(10) |
Net cash is calculated as cash available for company use less total debt (excluding non-recourse debt). |
|
(11) |
Cash represents cash and cash equivalents (excluding restricted cash) and excludes |
CBRE GROUP, INC. OPERATING RESULTS FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019 (Dollars in thousands, except share and per share data) (Unaudited) |
|||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||||
Fee revenue |
$ |
3,413,043 |
|
|
$ |
3,672,173 |
|
|
|
$ |
10,890,911 |
|
|
$ |
11,860,845 |
|
|
Pass through costs also recognized as revenue |
3,497,458 |
|
|
3,447,234 |
|
|
|
12,935,284 |
|
|
12,033,246 |
|
|||||
Total revenue |
6,910,501 |
|
|
7,119,407 |
|
|
|
23,826,195 |
|
|
23,894,091 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||||
Cost of revenue |
5,370,830 |
|
|
5,533,853 |
|
|
|
19,047,620 |
|
|
18,689,013 |
|
|||||
Operating, administrative and other |
951,106 |
|
|
956,152 |
|
|
|
3,306,205 |
|
|
3,436,009 |
|
|||||
Depreciation and amortization |
143,825 |
|
|
115,362 |
|
|
|
501,728 |
|
|
439,224 |
|
|||||
Asset impairments |
13,505 |
|
|
750 |
|
|
|
88,676 |
|
|
89,787 |
|
|||||
Total costs and expenses |
6,479,266 |
|
|
6,606,117 |
|
|
|
22,944,229 |
|
|
22,654,033 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Gain on disposition of real estate (1) |
12,661 |
|
|
551 |
|
|
|
87,793 |
|
|
19,817 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Operating income |
443,896 |
|
|
513,841 |
|
|
|
969,759 |
|
|
1,259,875 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Equity income from unconsolidated subsidiaries (1) |
53,674 |
|
|
40,692 |
|
|
|
126,161 |
|
|
160,925 |
|
|||||
Other income |
4,420 |
|
|
2,744 |
|
|
|
17,394 |
|
|
28,907 |
|
|||||
Interest expense, net of interest income |
15,958 |
|
|
18,116 |
|
|
|
67,753 |
|
|
85,754 |
|
|||||
Write-off of financing costs on extinguished debt |
75,592 |
|
|
— |
|
|
|
75,592 |
|
|
2,608 |
|
|||||
Income before provision for income taxes |
410,440 |
|
|
539,161 |
|
|
|
969,969 |
|
|
1,361,345 |
|
|||||
Provision for (benefit of) income taxes |
95,054 |
|
|
(99,972 |
) |
|
|
214,101 |
|
|
69,895 |
|
|||||
Net income |
315,386 |
|
|
639,133 |
|
|
|
755,868 |
|
|
1,291,450 |
|
|||||
Less: Net income attributable to non-controlling interests (1) |
1,621 |
|
|
1,515 |
|
|
|
3,879 |
|
|
9,093 |
|
|||||
Net income attributable to CBRE Group, Inc. |
$ |
313,765 |
|
|
$ |
637,618 |
|
|
|
$ |
751,989 |
|
|
$ |
1,282,357 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share: |
|
|
|
|
|
|
|
||||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
0.94 |
|
|
$ |
1.90 |
|
|
|
$ |
2.24 |
|
|
$ |
3.82 |
|
|
Weighted average shares outstanding for basic income per share |
335,397,942 |
|
|
334,745,003 |
|
|
|
335,196,296 |
|
|
335,795,654 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Diluted income per share: |
|
|
|
|
|
|
|
||||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
0.93 |
|
|
$ |
1.87 |
|
|
|
$ |
2.22 |
|
|
$ |
3.77 |
|
|
Weighted average shares outstanding for diluted income per share |
338,799,615 |
|
|
340,333,005 |
|
|
|
338,392,210 |
|
|
340,522,871 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA |
$ |
752,966 |
|
|
$ |
690,629 |
|
|
|
$ |
1,892,385 |
|
|
$ |
2,063,783 |
|
|
(1) |
Equity income from unconsolidated subsidiaries and gain on disposition of real estate, less net income attributable to non-controlling interests, includes income of |
|
CBRE GROUP, INC. SEGMENT RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 (Dollars in thousands) (Unaudited) |
|||||||||||||||||||
|
Three Months Ended December 31, 2020 |
||||||||||||||||||
|
Advisory Services |
|
Global Workplace Solutions |
|
Real Estate Investments |
|
Consolidated |
||||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||||||
Fee revenue |
$ |
2,217,718 |
|
|
$ |
906,488 |
|
|
|
$ |
288,837 |
|
|
|
$ |
3,413,043 |
|
|
|
Pass through costs also recognized as revenue |
242,656 |
|
|
3,254,802 |
|
|
|
— |
|
|
|
3,497,458 |
|
|
|||||
Total revenue |
2,460,374 |
|
|
4,161,290 |
|
|
|
288,837 |
|
|
|
6,910,501 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||||||
Cost of revenue |
1,482,686 |
|
|
3,840,057 |
|
|
|
48,087 |
|
|
|
5,370,830 |
|
|
|||||
Operating, administrative and other |
579,944 |
|
|
182,052 |
|
|
|
189,110 |
|
|
|
951,106 |
|
|
|||||
Depreciation and amortization |
98,078 |
|
|
33,419 |
|
|
|
12,328 |
|
|
|
143,825 |
|
|
|||||
Asset impairments |
— |
|
|
— |
|
|
|
13,505 |
|
|
|
13,505 |
|
|
|||||
Total costs and expenses |
2,160,708 |
|
|
4,055,528 |
|
|
|
263,030 |
|
|
|
6,479,266 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Gain on disposition of real estate |
— |
|
|
— |
|
|
|
12,661 |
|
|
|
12,661 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Operating income |
299,666 |
|
|
105,762 |
|
|
|
38,468 |
|
|
|
443,896 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Equity income (loss) from unconsolidated subsidiaries |
1,476 |
|
|
(238 |
) |
|
|
52,436 |
|
|
|
53,674 |
|
|
|||||
Other income |
2,723 |
|
|
1,037 |
|
|
|
660 |
|
|
|
4,420 |
|
|
|||||
Less: Net income attributable to non-controlling interests |
276 |
|
|
— |
|
|
|
1,345 |
|
|
|
1,621 |
|
|
|||||
Add-back: Depreciation and amortization |
98,078 |
|
|
33,419 |
|
|
|
12,328 |
|
|
|
143,825 |
|
|
|||||
Add-back: Asset impairments |
— |
|
|
— |
|
|
|
13,505 |
|
|
|
13,505 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
EBITDA |
401,667 |
|
|
139,980 |
|
|
|
116,052 |
|
|
|
657,699 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||||||
Costs associated with transformation initiatives (1) |
75,726 |
|
|
21,066 |
|
|
|
2,982 |
|
|
|
99,774 |
|
|
|||||
Costs incurred related to legal entity restructuring |
4,367 |
|
|
— |
|
|
|
— |
|
|
|
4,367 |
|
|
|||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period |
— |
|
|
— |
|
|
|
2,309 |
|
|
|
2,309 |
|
|
|||||
Integration and other costs related to acquisitions |
— |
|
|
— |
|
|
|
212 |
|
|
|
212 |
|
|
|||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
— |
|
|
— |
|
|
|
(11,395 |
) |
|
|
(11,395 |
) |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA |
$ |
481,760 |
|
|
$ |
161,046 |
|
|
|
$ |
110,160 |
|
|
|
$ |
752,966 |
|
|
|
(1) |
During 2020, management began the implementation of certain transformation initiatives to enable the company to reduce costs, streamline operations and support future growth. The majority of expenses incurred were cash in nature and primarily related to employee separation benefits, lease termination costs and professional fees. |
|
CBRE GROUP, INC. SEGMENT RESULTS—(CONTINUED) FOR THE THREE MONTHS ENDED DECEMBER 31, 2019 (Dollars in thousands) (Unaudited) |
|||||||||||||||||||
|
Three Months Ended December 31, 2019 |
||||||||||||||||||
|
Advisory Services |
|
Global Workplace Solutions |
|
Real Estate Investments |
|
Consolidated |
||||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||||||
Fee revenue |
$ |
2,548,122 |
|
|
|
$ |
877,498 |
|
|
|
$ |
246,553 |
|
|
|
$ |
3,672,173 |
|
|
Pass through costs also recognized as revenue |
267,274 |
|
|
|
3,179,960 |
|
|
|
— |
|
|
|
3,447,234 |
|
|||||
Total revenue |
2,815,396 |
|
|
|
4,057,458 |
|
|
|
246,553 |
|
|
|
7,119,407 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||||||
Cost of revenue |
1,702,642 |
|
|
|
3,746,216 |
|
|
|
84,995 |
|
|
|
5,533,853 |
|
|||||
Operating, administrative and other |
597,747 |
|
|
|
185,653 |
|
|
|
172,752 |
|
|
|
956,152 |
|
|||||
Depreciation and amortization |
79,085 |
|
|
|
31,943 |
|
|
|
4,334 |
|
|
|
115,362 |
|
|||||
Asset impairments |
— |
|
|
|
— |
|
|
|
750 |
|
|
|
750 |
|
|||||
Total costs and expenses |
2,379,474 |
|
|
|
3,963,812 |
|
|
|
262,831 |
|
|
|
6,606,117 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Gain on disposition of real estate |
— |
|
|
|
— |
|
|
|
551 |
|
|
|
551 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss) |
435,922 |
|
|
|
93,646 |
|
|
|
(15,727 |
) |
|
|
513,841 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Equity (loss) income from unconsolidated subsidiaries |
(533 |
) |
|
|
(572 |
) |
|
|
41,797 |
|
|
|
40,692 |
|
|||||
Other income |
2,110 |
|
|
|
61 |
|
|
|
573 |
|
|
|
2,744 |
|
|||||
Less: Net income attributable to non-controlling interests |
551 |
|
|
|
— |
|
|
|
964 |
|
|
|
1,515 |
|
|||||
Add-back: Depreciation and amortization |
79,085 |
|
|
|
31,943 |
|
|
|
4,334 |
|
|
|
115,362 |
|
|||||
Add-back: Asset impairments |
— |
|
|
|
— |
|
|
|
750 |
|
|
|
750 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
EBITDA |
516,033 |
|
|
|
125,078 |
|
|
|
30,763 |
|
|
|
671,874 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period |
— |
|
|
|
— |
|
|
|
9,301 |
|
|
|
9,301 |
|
|||||
Costs associated with our reorganization, including cost-savings initiatives |
6,899 |
|
|
|
— |
|
|
|
— |
|
|
|
6,899 |
|
|||||
Integration and other costs related to acquisitions |
— |
|
|
|
— |
|
|
|
1,738 |
|
|
|
1,738 |
|
|||||
Carried interest incentive compensation expense to align with the timing of associated revenue |
— |
|
|
|
— |
|
|
|
817 |
|
|
|
817 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA |
$ |
522,932 |
|
|
|
$ |
125,078 |
|
|
|
$ |
42,619 |
|
|
|
$ |
690,629 |
|
|
CBRE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) |
||||||||
|
December 31, 2020 |
|
December 31, 2019 |
|||||
Assets: |
|
|
|
|||||
Cash and cash equivalents (1) |
$ |
1,896,188 |
|
|
$ |
971,781 |
|
|
Restricted cash |
143,059 |
|
|
121,964 |
|
|||
Receivables, net |
4,394,954 |
|
|
4,466,674 |
|
|||
Warehouse receivables (2) |
1,411,170 |
|
|
993,058 |
|
|||
Contract assets |
471,827 |
|
|
529,772 |
|
|||
Income taxes receivable |
137,311 |
|
|
233,051 |
|
|||
Property and equipment, net |
815,009 |
|
|
836,206 |
|
|||
Operating lease assets |
1,020,352 |
|
|
997,966 |
|
|||
Goodwill and other intangibles, net |
5,189,522 |
|
|
5,133,039 |
|
|||
Investments in unconsolidated subsidiaries |
452,365 |
|
|
426,711 |
|
|||
Investments held in trust - special purpose acquisition company |
402,501 |
|
|
— |
|
|||
Other assets, net |
1,704,885 |
|
|
1,486,974 |
|
|||
|
|
|
|
|||||
Total assets |
$ |
18,039,143 |
|
|
$ |
16,197,196 |
|
|
|
|
|
|
|||||
Liabilities: |
|
|
|
|||||
Current liabilities, excluding debt and operating lease liabilities |
$ |
5,544,649 |
|
|
$ |
5,283,615 |
|
|
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) (2) |
1,383,964 |
|
|
977,175 |
|
|||
Senior term loans, net |
785,678 |
|
|
744,590 |
|
|||
|
594,524 |
|
|
593,631 |
|
|||
|
— |
|
|
422,977 |
|
|||
Other debt |
6,844 |
|
|
7,045 |
|
|||
Operating lease liabilities |
1,325,321 |
|
|
1,226,421 |
|
|||
Other long-term liabilities |
892,503 |
|
|
668,630 |
|
|||
|
|
|
|
|||||
Total liabilities |
10,533,483 |
|
|
9,924,084 |
|
|||
|
|
|
|
|||||
Non-controlling interest subject to possible redemption - special purpose acquisition company |
385,573 |
|
|
— |
|
|||
|
|
|
|
|||||
Equity: |
|
|
|
|||||
CBRE Group, Inc. stockholders’ equity |
7,078,326 |
|
|
6,232,693 |
|
|||
Non-controlling interests |
41,761 |
|
|
40,419 |
|
|||
|
|
|
|
|||||
Total equity |
7,120,087 |
|
|
6,273,112 |
|
|||
|
|
|
|
|||||
Total liabilities and equity |
$ |
18,039,143 |
|
|
$ |
16,197,196 |
|
|
(1) |
Includes |
|
(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) |
||||||||||
|
Twelve Months Ended December 31, |
|||||||||
|
2020 |
|
2019 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|||||||
Net income |
$ |
755,868 |
|
|
|
$ |
1,291,450 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||||
Depreciation and amortization |
501,728 |
|
|
|
439,224 |
|
|
|||
Amortization and write-off of financing costs on extinguished debt |
82,705 |
|
|
|
8,662 |
|
|
|||
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets |
(297,980 |
) |
|
|
(246,690 |
) |
|
|||
Asset impairments |
88,676 |
|
|
|
89,787 |
|
|
|||
Net realized and unrealized gains, primarily from investments |
(17,394 |
) |
|
|
(28,907 |
) |
|
|||
Provision for doubtful accounts |
44,366 |
|
|
|
20,373 |
|
|
|||
Net compensation expense for equity awards |
60,391 |
|
|
|
127,738 |
|
|
|||
Equity income from unconsolidated subsidiaries |
(126,161 |
) |
|
|
(160,925 |
) |
|
|||
Distribution of earnings from unconsolidated subsidiaries |
155,975 |
|
|
|
199,011 |
|
|
|||
Proceeds from sale of mortgage loans |
20,937,521 |
|
|
|
19,805,060 |
|
|
|||
Origination of mortgage loans |
(21,268,114 |
) |
|
|
(19,389,979 |
) |
|
|||
Increase (decrease) in warehouse lines of credit |
406,789 |
|
|
|
(351,586 |
) |
|
|||
Tenant concessions received |
48,030 |
|
|
|
21,249 |
|
|
|||
Purchase of equity securities |
(11,113 |
) |
|
|
(83,001 |
) |
|
|||
Proceeds from sale of equity securities |
13,741 |
|
|
|
46,949 |
|
|
|||
(Increase) decrease in real estate under development |
(105,619 |
) |
|
|
31,420 |
|
|
|||
Decrease (increase) in receivables, prepaid expenses and other assets (including contract and lease assets) |
371,009 |
|
|
|
(821,134 |
) |
|
|||
Increase in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities) |
105,491 |
|
|
|
306,677 |
|
|
|||
(Decrease) increase in compensation and employee benefits payable and accrued bonus and profit sharing |
(100,142 |
) |
|
|
244,895 |
|
|
|||
Decrease (increase) in net income taxes receivable/payable |
173,648 |
|
|
|
(274,436 |
) |
|
|||
Other operating activities, net |
11,364 |
|
|
|
(52,457 |
) |
|
|||
Net cash provided by operating activities |
1,830,779 |
|
|
|
1,223,380 |
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|||||||
Capital expenditures |
(266,575 |
) |
|
|
(293,514 |
) |
|
|||
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired |
(27,848 |
) |
|
|
(355,926 |
) |
|
|||
Contributions to unconsolidated subsidiaries |
(146,409 |
) |
|
|
(105,947 |
) |
|
|||
Distributions from unconsolidated subsidiaries |
88,731 |
|
|
|
33,289 |
|
|
|||
Other investing activities, net |
10,516 |
|
|
|
1,074 |
|
|
|||
Net cash used in investing activities |
(341,585 |
) |
|
|
(721,024 |
) |
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|||||||
Proceeds from senior term loans and revolving credit facility |
835,671 |
|
|
|
3,909,000 |
|
|
|||
Repayment of senior term loans and revolving credit facility |
(835,671 |
) |
|
|
(3,909,000 |
) |
|
|||
Repayment of |
(499,652 |
) |
|
|
— |
|
|
|||
Repayment of debt assumed in acquisition of Telford Homes |
— |
|
|
|
(110,687 |
) |
|
|||
Establishment of trust account for special purpose acquisition company |
(402,500 |
) |
|
|
— |
|
|
|||
Sale of non-controlling interest - special purpose acquisition company |
393,661 |
|
|
|
— |
|
|
|||
Proceeds from notes payable on real estate |
90,552 |
|
|
|
6,694 |
|
|
|||
Repayment of notes payable on real estate |
(24,704 |
) |
|
|
— |
|
|
|||
Repurchase of common stock |
(50,028 |
) |
|
|
(145,137 |
) |
|
|||
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date) |
(44,700 |
) |
|
|
(42,147 |
) |
|
|||
Units repurchased for payment of taxes on equity awards |
(43,835 |
) |
|
|
(18,426 |
) |
|
|||
Non-controlling interest contributions |
2,173 |
|
|
|
46,612 |
|
|
|||
Non-controlling interest distributions |
(4,330 |
) |
|
|
(3,957 |
) |
|
|||
Other financing activities, net |
(41,893 |
) |
|
|
(4,901 |
) |
|
|||
Net cash used in financing activities |
(625,256 |
) |
|
|
(271,949 |
) |
|
|||
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash |
81,564 |
|
|
|
(606 |
) |
|
|||
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
945,502 |
|
|
|
229,801 |
|
|
|||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF YEAR |
1,093,745 |
|
|
|
863,944 |
|
|
|||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF YEAR |
$ |
2,039,247 |
|
|
|
$ |
1,093,745 |
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|||||||
Cash paid during the period for: |
|
|
|
|||||||
Interest |
$ |
67,463 |
|
|
|
$ |
86,666 |
|
|
|
Income tax payments, net |
$ |
51,681 |
|
|
|
$ |
365,065 |
|
|
|
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. stockholders, as adjusted (which we also refer to as “adjusted net income”) |
||||
(iv) |
Diluted income per share attributable to CBRE Group, Inc. stockholders, 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 |
||||
(vii) |
Net cash |
These measures are not recognized measurements under United States generally accepted accounting principles (GAAP). When analyzing our operating performance, investors should use these measures 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 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 in general. 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 cash, the company believes that investors use this measure when calculating the company’s net leverage ratio.
Net income attributable to CBRE Group, Inc. stockholders, as adjusted (or adjusted net income), and diluted income per share attributable to CBRE Group, Inc. stockholders, as adjusted (or adjusted EPS), are calculated as follows (dollars in thousands, except share and per share data):
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
313,765 |
|
|
|
$ |
637,618 |
|
|
|
$ |
751,989 |
|
|
|
$ |
1,282,357 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Plus / minus: |
|
|
|
|
|
|
|
|||||||||||||
Costs associated with transformation initiatives (1) |
99,774 |
|
|
|
— |
|
|
|
155,148 |
|
|
|
— |
|
|
|||||
Asset impairments |
13,505 |
|
|
|
750 |
|
|
|
88,676 |
|
|
|
89,787 |
|
|
|||||
Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions |
18,734 |
|
|
|
19,851 |
|
|
|
76,015 |
|
|
|
81,005 |
|
|
|||||
Write-off of financing costs on extinguished debt |
75,592 |
|
|
|
— |
|
|
|
75,592 |
|
|
|
2,608 |
|
|
|||||
Costs associated with workforce optimization efforts (2) |
— |
|
|
|
— |
|
|
|
37,594 |
|
|
|
— |
|
|
|||||
Depreciation expense related to transformation initiatives |
20,692 |
|
|
|
— |
|
|
|
20,692 |
|
|
|
— |
|
|
|||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period |
2,309 |
|
|
|
9,301 |
|
|
|
11,598 |
|
|
|
9,301 |
|
|
|||||
Costs incurred related to legal entity restructuring |
4,367 |
|
|
|
6,899 |
|
|
|
9,362 |
|
|
|
6,899 |
|
|
|||||
Integration and other costs related to acquisitions |
212 |
|
|
|
1,738 |
|
|
|
1,756 |
|
|
|
15,292 |
|
|
|||||
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
(11,395 |
) |
|
|
817 |
|
|
|
(22,912 |
) |
|
|
13,101 |
|
|
|||||
Tax impact of adjusted items and tax benefit attributable to outside basis difference recognized as a result of a legal entity restructuring |
(46,836 |
) |
|
|
(228,420 |
) |
|
|
(97,880 |
) |
|
|
(286,945 |
) |
|
|||||
Costs associated with our reorganization, including cost-savings initiatives (3) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
49,565 |
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to CBRE Group, Inc., as adjusted |
$ |
490,719 |
|
|
|
$ |
448,554 |
|
|
|
$ |
1,107,630 |
|
|
|
$ |
1,262,970 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Diluted net income per share attributable to CBRE Group, Inc., as adjusted |
$ |
1.45 |
|
|
|
$ |
1.32 |
|
|
|
$ |
3.27 |
|
|
|
$ |
3.71 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average shares outstanding for diluted income per share |
338,799,615 |
|
|
340,333,005 |
|
|
338,392,210 |
|
|
340,522,871 |
|
|||||||||
(1) |
During 2020, management began the implementation of certain transformation initiatives to enable the company to reduce costs, streamline operations and support future growth. The majority of expenses incurred were cash in nature and primarily related to employee separation benefits, lease termination costs and professional fees. |
|
(2) |
Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort and were included in the “Operating, administrative and other” line in the accompanying consolidated statements of operations for the year ended December 31, 2020. Of the total costs, |
|
(3) |
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 is calculated as follows (dollars in thousands):
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
313,765 |
|
|
|
$ |
637,618 |
|
|
|
$ |
751,989 |
|
|
|
$ |
1,282,357 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Add: |
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization |
143,825 |
|
|
|
115,362 |
|
|
|
501,728 |
|
|
|
439,224 |
|
|||||
Asset impairments |
13,505 |
|
|
|
750 |
|
|
|
88,676 |
|
|
|
89,787 |
|
|||||
Write-off of financing costs on extinguished debt |
75,592 |
|
|
|
— |
|
|
|
75,592 |
|
|
|
2,608 |
|
|||||
Interest expense, net of interest income |
15,958 |
|
|
|
18,116 |
|
|
|
67,753 |
|
|
|
85,754 |
|
|||||
Provision for (benefit of) income taxes |
95,054 |
|
|
|
(99,972 |
) |
|
|
214,101 |
|
|
|
69,895 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
EBITDA |
657,699 |
|
|
|
671,874 |
|
|
|
1,699,839 |
|
|
|
1,969,625 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||||||
Costs associated with transformation initiatives (1) |
99,774 |
|
|
|
— |
|
|
|
155,148 |
|
|
|
— |
|
|||||
Costs associated with workforce optimization efforts (2) |
— |
|
|
|
— |
|
|
|
37,594 |
|
|
|
— |
|
|||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period |
2,309 |
|
|
|
9,301 |
|
|
|
11,598 |
|
|
|
9,301 |
|
|||||
Costs incurred related to legal entity restructuring |
4,367 |
|
|
|
6,899 |
|
|
|
9,362 |
|
|
|
6,899 |
|
|||||
Integration and other costs related to acquisitions |
212 |
|
|
|
1,738 |
|
|
|
1,756 |
|
|
|
15,292 |
|
|||||
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
(11,395 |
) |
|
|
817 |
|
|
|
(22,912 |
) |
|
|
13,101 |
|
|||||
Costs associated with our reorganization, including cost-savings initiatives (3) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
49,565 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA |
$ |
752,966 |
|
|
|
$ |
690,629 |
|
|
|
$ |
1,892,385 |
|
|
|
$ |
2,063,783 |
|
|
(1) |
During 2020, management began the implementation of certain transformation initiatives to enable the company to reduce costs, streamline operations and support future growth. The majority of expenses incurred were cash in nature and primarily related to employee separation benefits, lease termination costs and professional fees. |
|
(2) |
Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort and were included in the “Operating, administrative and other” line in the accompanying consolidated statements of operations for the year ended December 31, 2020. Of the total costs, |
|
(3) |
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 December 31, |
|||||||
|
2020 |
|
2019 |
|||||
Property and Advisory Project Management |
|
|
|
|||||
Fee revenue |
$ |
338,121 |
|
|
$ |
353,379 |
|
|
Plus: Pass through costs also recognized as revenue |
242,656 |
|
|
267,274 |
|
|||
Revenue |
$ |
580,777 |
|
|
$ |
620,653 |
|
|
|
Three Months Ended December 31, |
|||||||
|
2020 |
|
2019 |
|||||
GWS Facilities Management Revenue |
|
|
|
|||||
Fee revenue |
$ |
759,200 |
|
|
$ |
707,803 |
|
|
Plus: Pass through costs also recognized as revenue |
2,818,559 |
|
|
2,770,037 |
|
|||
Revenue |
$ |
3,577,759 |
|
|
$ |
3,477,840 |
|
|
|
Three Months Ended December 31, |
|||||||
|
2020 |
|
2019 |
|||||
GWS Project Management Revenue |
|
|
|
|||||
Fee revenue |
$ |
122,417 |
|
|
$ |
114,152 |
|
|
Plus: Pass through costs also recognized as revenue |
422,128 |
|
|
389,594 |
|
|||
Revenue |
$ |
544,545 |
|
|
$ |
503,746 |
|
|
Real Estate Investments adjusted revenue is computed as follows (dollars in thousands):
|
Three Months Ended December 31, |
||||||||
|
2020 |
|
2019 |
||||||
Real Estate Investments |
|
|
|
||||||
Total revenue |
$ |
288,837 |
|
|
$ |
246,553 |
|
|
|
Adjustments: |
|
|
|
||||||
Less: Cost of revenue |
48,087 |
|
|
84,995 |
|
|
|||
Add: Gain on disposition of real estate |
12,661 |
|
|
551 |
|
|
|||
Add: Equity income from unconsolidated subsidiaries |
52,436 |
|
|
41,797 |
|
|
|||
Less: Net income attributable to non-controlling interests |
1,345 |
|
|
964 |
|
|
|||
Add: Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period |
2,309 |
|
|
9,301 |
|
|
|||
Net adjustments |
17,974 |
|
|
(34,310 |
) |
|
|||
Total adjusted revenue |
$ |
306,811 |
|
|
$ |
212,243 |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210223005387/en/
FAQ
What were CBRE's Q4 2020 earnings results?
How did CBRE's revenue perform in FY 2020?
What is CBRE's outlook for adjusted EPS growth?
How did Covid-19 impact CBRE’s financial results?
What was CBRE's liquidity status at the end of 2020?
