CBRE Group, Inc. Reports Financial Results for Second-Quarter 2021
CBRE Group, Inc. (NYSE:CBRE) reported robust Q2 2021 results with revenues of $6.46 billion, a 20% increase from the previous year, driven by diversified business efforts. Net income surged to $443 million, representing a 440% year-over-year rise. Adjusted EBITDA grew by 169% to $718 million. The company announced plans to acquire a 60% stake in Turner & Townsend for $1.3 billion, enhancing its growth profile. Free cash flow reached $375 million, up 363% year-over-year. With a net leverage ratio of -0.07x, CBRE maintains strong liquidity of $4.8 billion.
- Revenue increased by 20% year-over-year to $6.46 billion.
- Net income soared to $443 million, up 440% year-over-year.
- Adjusted EBITDA grew by 169% to $718 million.
- Free cash flow reached $375 million, a 363% increase compared to Q2 2020.
- Successful acquisition of a 60% stake in Turner & Townsend for $1.3 billion expected to close Q4 2021.
- None.
CBRE Group, Inc. (NYSE:CBRE) today reported financial results for the second quarter ended June 30, 2021.
“As our results for the second quarter demonstrate, CBRE continues to benefit from the multi-year efforts to diversify our business. The commercial real estate market has offered up significant opportunity to diversify across asset type, business lines, client type and geography. We have moved decisively to capitalize on this opportunity and are making investments and driving organic growth initiatives that will continue this trend,” said Bob Sulentic, president and chief executive officer of CBRE. “Our agreement to acquire a majority interest in Turner & Townsend is an excellent example. Turner & Townsend has a great brand and management team, operating in sectors with favorable long-term growth profiles that will advance diversification across the four dimensions of our business.”
“Our growth in the second quarter was strong, even compared with prior peak-year performance in 2019. Adjusted EBITDA grew at a better than
Consolidated Financial Results Overview
The following table presents highlights of CBRE performance (in millions, except per share data):
|
|
|
|
|
% Change |
||||||||
|
Q2 2021 |
|
Q2 2020 |
|
USD |
|
LC (1) |
||||||
Operating Results |
|
|
|
|
|
|
|
||||||
Revenue |
$ |
6,459 |
|
|
$ |
5,381 |
|
|
20.0 |
% |
|
15.5 |
% |
Net revenue (2) |
3,912 |
|
|
2,988 |
|
|
30.9 |
% |
|
25.8 |
% |
||
GAAP net income |
443 |
|
|
82 |
|
|
440.5 |
% |
|
413.9 |
% |
||
GAAP EPS |
$ |
1.30 |
|
|
$ |
0.24 |
|
|
437.1 |
% |
|
410.7 |
% |
Adjusted EBITDA (3) |
718 |
|
|
267 |
|
|
168.7 |
% |
|
159.1 |
% |
||
Adjusted net income (4) |
463 |
|
|
118 |
|
|
293.1 |
% |
|
273.7 |
% |
||
Adjusted EPS (4) |
$ |
1.36 |
|
|
$ |
0.35 |
|
|
290.6 |
% |
|
271.3 |
% |
|
|
|
|
|
|
|
|
||||||
Cash Flow Results |
|
|
|
|
|
|
|
||||||
Cash flow from operations |
$ |
421 |
|
|
$ |
153 |
|
|
175.0 |
% |
|
|
|
Less: Capital expenditures |
46 |
|
|
72 |
|
|
(35.5) |
% |
|
|
|||
Free cash flow (5) |
$ |
375 |
|
|
$ |
81 |
|
|
363.1 |
% |
|
|
|
Advisory Services Segment
The following table presents highlights of the Advisory Services segment performance (in millions):
|
|
|
|
|
% Change |
||||||||
|
Q2 2021 |
|
Q2 2020 |
|
USD |
|
LC |
||||||
Revenue |
$ |
2,137 |
|
|
$ |
1,454 |
|
|
46.9 |
% |
|
41.7 |
% |
Net revenue |
2,135 |
|
|
1,450 |
|
|
47.3 |
% |
|
42.0 |
% |
||
Segment operating profit (6) |
464 |
|
|
202 |
|
|
129.7 |
% |
|
122.3 |
% |
||
Segment operating profit on revenue margin (7) |
21.7 |
% |
|
13.9 |
% |
|
7.8 |
% |
|
7.9 |
% |
||
Segment operating profit on net revenue margin (7) |
21.7 |
% |
|
13.9 |
% |
|
7.8 |
% |
|
7.9 |
% |
||
The Advisory Services segment rebounded strongly compared with second-quarter 2020, when the Covid pandemic suppressed business activity around the world. Second-quarter 2021 performance was very strong globally, with significantly higher revenue across all lines of business. This revenue growth, coupled with cost actions taken in 2020 and approximately
Capital markets activity led the segment’s recovery. Global property sales revenue surged
Commercial mortgage origination revenue also improved significantly, rising
Leasing revenue rose
Revenue growth from other Advisory Services business lines was also strong. Loan servicing revenue increased
Global Workplace Solutions (GWS) Segment
The following table presents highlights of the GWS segment performance (in millions):
|
|
|
|
|
% Change |
||||||||
|
Q2 2021 |
|
Q2 2020 |
|
USD |
|
LC |
||||||
Revenue |
$ |
4,083 |
|
|
$ |
3,770 |
|
|
8.3 |
% |
|
4.2 |
% |
Net revenue |
1,538 |
|
|
1,381 |
|
|
11.3 |
% |
|
7.0 |
% |
||
Segment operating profit |
170 |
|
|
127 |
|
|
33.5 |
% |
|
26.8 |
% |
||
Segment operating profit on revenue margin |
4.2 |
% |
|
3.4 |
% |
|
0.8 |
% |
|
0.7 |
% |
||
Segment operating profit on net revenue margin |
11.1 |
% |
|
9.2 |
% |
|
1.8 |
% |
|
1.7 |
% |
||
The GWS segment posted solid revenue and segment operating profit growth across its global business base.
Facilities management, which is largely contractual, saw net revenue rise
The new business pipeline continues to have strong representation across client and property types that are benefiting from secular shifts accelerated by Covid, such as life sciences, technology and logistics companies, as well as growing demand for data center management.
Strong revenue growth, combined with ongoing prudent cost management, led to a robust increase in segment operating profit. The segment’s overall margin on net revenue expanded over 180 basis points. The prior-year second quarter also included approximately
On July 27, 2021, CBRE announced an agreement to acquire a
Real Estate Investments (REI) Segment
The following table presents highlights of the REI segment performance (in millions):
|
|
|
|
|
% Change |
||||||
|
Q2 2021 |
|
Q2 2020 |
|
USD |
|
LC |
||||
Revenue |
$ |
243 |
|
|
$ |
162 |
|
|
|
|
|
Adjusted revenue (8) |
385 |
|
|
154 |
|
|
|
|
|
||
Segment operating profit (9) |
153 |
|
|
25 |
|
|
|
|
|
||
Strong performance in both development services and investment management spurred elevated REI segment operating profit growth.
U.S. real estate development operating profit (10) surged to nearly
The in-process development portfolio ended the quarter at
Investment management revenue surged
Assets under management ended the quarter at
Hana, the company’s startup flexible workspace business, completed its integration with Industrious National Management Company LLC (Industrious), during the second quarter. CBRE retains financial responsibility for four legacy Hana units, which will be reported in the Real Estate Investments segment. The financial impact of the company’s Industrious investment will be reported within the Advisory Services segment.
Corporate and Other Segment
Corporate segment expense, which primarily reflects overhead costs, declined to
Adjustments to GAAP Net Income and Earnings Per Share
Adjustments to GAAP net income totaled
GAAP net income increased
Capital Allocation Overview
-
Free Cash Flow – During the second quarter of 2021, free cash flow increased
362% to approximately$375 million . This reflected cash from operating activities of$421 million , less total capital expenditures of$46.3 million . Net capital expenditures (of which a considerable portion during the period was discretionary) totaled$35.1 million . (11) -
Stock Repurchase Program – The company repurchased
$24.1 million of its stock during the second quarter of 2021. There was$261.7 million of capacity remaining under the company’s authorized stock repurchase program as of June 30, 2021. -
Acquisitions and Investments – During the second quarter of 2021, as previously mentioned, the company purchased an incremental interest in Industrious, bringing its current ownership stake to
40% . In addition, the company acquired a technical facilities services firm based in Denmark; an infrastructure and development services firm based in Australia, and a gaming sector advisory firm based in Las Vegas.
Leverage and Financing Overview
- Leverage – The company’s net leverage ratio (net cash (12) to trailing twelve-month adjusted EBITDA) was (0.07x) as of June 30, 2021, 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 |
||
|
June 30, 2021 |
||
Total debt |
$ |
1,861 |
|
Less: Cash (13) |
2,029 |
|
|
Net cash (12) |
$ |
(168) |
|
|
|
||
Divided by: Trailing twelve month adjusted EBITDA |
$ |
2,404 |
|
|
|
||
Net leverage ratio |
(0.07x) |
||
-
Liquidity – As of June 30, 2021, the company had approximately
$4.8 billion of total liquidity, consisting of approximately$2.0 billion in cash, plus the ability to borrow an aggregate of approximately$2.8 billion under its revolving credit facilities, net of any outstanding letters of credit. On July 9, 2021, the revolving credit facility was increased by$350.0 million to$3.15 billion .
Conference Call Details
The company’s second quarter earnings webcast and conference call will be held today Thursday, July 29, 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 July 29, 2021. The replay is accessible by dialing 877.660.6853 (U.S.) or 201.612.7415 (International) and using the access code: 13721289#. 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 as well as the completion of the Turner & Townsend acquisition. 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; and the effect of implementation of new accounting rules and standards or the impairment of our goodwill and intangible assets; and the satisfaction of the Turner & Townsend acquisition’s closing conditions.
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, 2020, our quarterly report on Form 10-Q for the quarterly period ended March 31, 2021, 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,” “adjusted revenue,” “adjusted net income,” “adjusted earnings per share” (or adjusted EPS), “adjusted EBITDA,” “business line operating profit,” “segment operating profit on revenue margin,” “segment operating profit on net revenue margin” and “free cash flow,” all of which CBRE uses in this press release, are non-GAAP financial measures under SEC guidelines, and you should refer to the footnotes below as well as the “Non-GAAP Financial Measures” section in this press release for a further explanation of these measures. We have also included in that section reconciliations of these measures in specific periods to their most directly comparable financial measure calculated and presented in accordance with GAAP for those periods.
Totals may not sum in tables in millions included in this release due to rounding.
(1) |
Local currency percentage change is calculated by comparing current-period results at prior-period exchange rates versus prior-period results. |
|
(2) |
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) |
Adjusted EBITDA represents earnings 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 Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization efforts and integration and other costs related to acquisitions. |
|
(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 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, costs associated with workforce optimization efforts, and asset impairments. |
|
(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) |
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 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 acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization efforts and integration and other costs related to acquisitions. Prior period results have been recast to conform to this definition. |
|
(7) |
Segment operating profit on revenue and net revenue margins represent segment operating profit divided by revenue and net revenue, respectively. |
|
(8) |
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. |
|
(9) |
Segment operating profit 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. |
|
(10) |
Represents line of business profitability/losses, as adjusted |
|
(11) |
For the three months ended June 30, 2021, the company incurred capital expenditures of |
|
(12) |
Net cash is calculated as cash available for company use less total debt (excluding non-recourse debt). |
|
(13) |
Cash represents cash and cash equivalents (excluding restricted cash) and excludes |
CBRE GROUP, INC. OPERATING RESULTS FOR THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (in thousands, except share and per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Net revenue |
$ |
3,911,693 |
|
|
$ |
2,987,673 |
|
|
7,270,677 |
|
|
6,418,903 |
|
||
Pass through costs also recognized as revenue |
2,546,920 |
|
|
2,393,711 |
|
|
5,126,815 |
|
|
4,851,649 |
|
||||
Total revenue |
6,458,613 |
|
|
5,381,384 |
|
|
12,397,492 |
|
|
11,270,552 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
5,016,759 |
|
|
4,399,537 |
|
|
9,736,305 |
|
|
9,112,211 |
|
||||
Operating, administrative and other |
957,216 |
|
|
770,806 |
|
|
1,785,543 |
|
|
1,560,872 |
|
||||
Depreciation and amortization |
119,085 |
|
|
116,384 |
|
|
241,163 |
|
|
230,178 |
|
||||
Asset impairment |
— |
|
|
— |
|
|
— |
|
|
75,171 |
|
||||
Total costs and expenses |
6,093,060 |
|
|
5,286,727 |
|
|
11,763,011 |
|
|
10,978,432 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on disposition of real estate (1) |
929 |
|
|
(492) |
|
|
1,085 |
|
|
22,335 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income |
366,482 |
|
|
94,165 |
|
|
635,566 |
|
|
314,455 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Equity income from unconsolidated subsidiaries (1) |
212,132 |
|
|
19,480 |
|
|
295,726 |
|
|
40,111 |
|
||||
Other income |
12,045 |
|
|
5,220 |
|
|
14,777 |
|
|
5,027 |
|
||||
Interest expense, net of interest income |
13,772 |
|
|
17,950 |
|
|
23,878 |
|
|
33,966 |
|
||||
Income before provision for income taxes |
576,887 |
|
|
100,915 |
|
|
922,191 |
|
|
325,627 |
|
||||
Provision for income taxes |
133,445 |
|
|
18,803 |
|
|
209,772 |
|
|
69,985 |
|
||||
Net income |
443,442 |
|
|
82,112 |
|
|
712,419 |
|
|
255,642 |
|
||||
Less: Net income attributable to non-controlling interests (1) |
805 |
|
|
215 |
|
|
3,580 |
|
|
1,550 |
|
||||
Net income attributable to CBRE Group, Inc. |
$ |
442,637 |
|
|
$ |
81,897 |
|
|
$ |
708,839 |
|
|
$ |
254,092 |
|
|
|
|
|
|
|
|
|
||||||||
Basic income per share: |
|
|
|
|
|
|
|
||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
1.32 |
|
|
$ |
0.24 |
|
|
$ |
2.11 |
|
|
$ |
0.76 |
|
Weighted average shares outstanding for basic income per share |
335,643,233 |
|
|
335,126,126 |
|
|
335,751,530 |
|
|
335,048,115 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted income per share: |
|
|
|
|
|
|
|
||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
1.30 |
|
|
$ |
0.24 |
|
|
$ |
2.09 |
|
|
$ |
0.75 |
|
Weighted average shares outstanding for diluted income per share |
339,502,871 |
|
|
337,361,419 |
|
|
339,541,354 |
|
|
338,549,805 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
$ |
718,371 |
|
|
$ |
267,304 |
|
|
$ |
1,209,515 |
|
|
$ |
697,655 |
|
_______________
| (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 JUNE 30, 2021 (in thousands) (Unaudited) |
||||||||||||||||||||||
|
Three Months Ended June 30, 2021 |
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Advisory
|
|
Global
|
|
Real Estate
|
|
Corporate,
|
|
Consolidated |
|||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|||||||||||||
Net revenue |
$ |
2,135,119 |
|
|
$ |
1,537,668 |
|
|
$ |
243,363 |
|
|
|
$ |
(4,457 |
) |
|
|
$ |
3,911,693 |
|
|
Pass through costs also recognized as revenue |
1,866 |
|
|
2,545,054 |
|
|
— |
|
|
|
— |
|
|
|
2,546,920 |
|
|
|||||
Total revenue |
2,136,985 |
|
|
4,082,722 |
|
|
243,363 |
|
|
|
(4,457 |
) |
|
|
6,458,613 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of revenue |
1,231,819 |
|
|
3,729,624 |
|
|
56,970 |
|
|
|
(1,654 |
) |
|
|
5,016,759 |
|
|
|||||
Operating, administrative and other |
443,611 |
|
|
193,284 |
|
|
235,275 |
|
|
|
85,046 |
|
|
|
957,216 |
|
|
|||||
Depreciation and amortization |
74,169 |
|
|
32,547 |
|
|
5,523 |
|
|
|
6,846 |
|
|
|
119,085 |
|
|
|||||
Total costs and expenses |
1,749,599 |
|
|
3,955,455 |
|
|
297,768 |
|
|
|
90,238 |
|
|
|
6,093,060 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gain on disposition of real estate |
— |
|
|
— |
|
|
929 |
|
|
|
— |
|
|
|
929 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
387,386 |
|
|
127,267 |
|
|
(53,476 |
) |
|
|
(94,695 |
) |
|
|
366,482 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity income from unconsolidated subsidiaries |
2,149 |
|
|
416 |
|
|
198,173 |
|
|
|
11,394 |
|
|
|
212,132 |
|
|
|||||
Other income |
801 |
|
|
1,805 |
|
|
2,525 |
|
|
|
6,914 |
|
|
|
12,045 |
|
|
|||||
Less: Net income attributable to non-controlling interests |
208 |
|
|
17 |
|
|
580 |
|
|
|
— |
|
|
|
805 |
|
|
|||||
Add-back: Depreciation and amortization |
74,169 |
|
|
32,547 |
|
|
5,523 |
|
|
|
6,846 |
|
|
|
119,085 |
|
|
|||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||||||
Integration and other costs related to acquisitions |
— |
|
|
8,134 |
|
|
— |
|
|
|
— |
|
|
|
8,134 |
|
|
|||||
Carried interest incentive compensation expense to align with the timing of associated revenue |
— |
|
|
— |
|
|
1,672 |
|
|
|
— |
|
|
|
1,672 |
|
|
|||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
— |
|
|
— |
|
|
(374 |
) |
|
|
— |
|
|
|
(374 |
) |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment operating profit (loss) |
$ |
464,297 |
|
|
$ |
170,152 |
|
|
$ |
153,463 |
|
|
|
$ |
(69,541 |
) |
|
|
|
|||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
$ |
718,371 |
|
|
||||||||||
_______________
| (1) | Includes elimination of inter-segment revenue. |
CBRE GROUP, INC. SEGMENT RESULTS—(CONTINUED) FOR THE THREE MONTHS ENDED JUNE 30, 2020 (in thousands) (Unaudited) |
|||||||||||||||||||||||
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Advisory
|
|
Global
|
|
Real Estate
|
|
Corporate,
|
|
Consolidated |
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||||||
Net revenue |
$ |
1,449,911 |
|
|
$ |
1,381,043 |
|
|
|
$ |
161,611 |
|
|
|
$ |
(4,892 |
) |
|
|
$ |
2,987,673 |
|
|
Pass through costs also recognized as revenue |
4,321 |
|
|
2,389,390 |
|
|
|
— |
|
|
|
— |
|
|
|
2,393,711 |
|
|
|||||
Total revenue |
1,454,232 |
|
|
3,770,433 |
|
|
|
161,611 |
|
|
|
(4,892 |
) |
|
|
5,381,384 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue |
889,740 |
|
|
3,483,401 |
|
|
|
30,021 |
|
|
|
(3,625 |
) |
|
|
4,399,537 |
|
|
|||||
Operating, administrative and other |
376,335 |
|
|
163,944 |
|
|
|
127,618 |
|
|
|
102,909 |
|
|
|
770,806 |
|
|
|||||
Depreciation and amortization |
72,218 |
|
|
32,475 |
|
|
|
4,693 |
|
|
|
6,998 |
|
|
|
116,384 |
|
|
|||||
Total costs and expenses |
1,338,293 |
|
|
3,679,820 |
|
|
|
162,332 |
|
|
|
106,282 |
|
|
|
5,286,727 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loss on disposition of real estate |
— |
|
|
— |
|
|
|
(492 |
) |
|
|
— |
|
|
|
(492 |
) |
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income (loss) |
115,939 |
|
|
90,613 |
|
|
|
(1,213 |
) |
|
|
(111,174 |
) |
|
|
94,165 |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity income (loss) from unconsolidated subsidiaries |
1,293 |
|
|
(401 |
) |
|
|
21,296 |
|
|
|
(2,708 |
) |
|
|
19,480 |
|
|
|||||
Other income (loss) |
185 |
|
|
(54 |
) |
|
|
735 |
|
|
|
4,354 |
|
|
|
5,220 |
|
|
|||||
Less: Net income attributable to non-controlling interests |
182 |
|
|
21 |
|
|
|
12 |
|
|
|
— |
|
|
|
215 |
|
|
|||||
Add-back: Depreciation and amortization |
72,218 |
|
|
32,475 |
|
|
|
4,693 |
|
|
|
6,998 |
|
|
|
116,384 |
|
|
|||||
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs associated with workforce optimization efforts (2) |
12,659 |
|
|
4,878 |
|
|
|
5,172 |
|
|
|
14,885 |
|
|
|
37,594 |
|
|
|||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
— |
|
|
— |
|
|
|
1,247 |
|
|
|
— |
|
|
|
1,247 |
|
|
|||||
Costs incurred related to legal entity restructuring |
— |
|
|
— |
|
|
|
— |
|
|
|
693 |
|
|
|
693 |
|
|
|||||
Integration and other costs related to acquisitions |
— |
|
|
— |
|
|
|
236 |
|
|
|
— |
|
|
|
236 |
|
|
|||||
Carried interest incentive compensation reversal to align with the timing of associated revenue |
— |
|
|
— |
|
|
|
(7,500 |
) |
|
|
— |
|
|
|
(7,500 |
) |
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Segment operating profit (loss) |
$ |
202,112 |
|
|
$ |
127,490 |
|
|
|
$ |
24,654 |
|
|
|
$ |
(86,952 |
) |
|
|
|
|||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
$ |
267,304 |
|
|
|||||||||||
_______________
(1) |
Includes elimination of inter-segment revenue. |
|
(2) |
Primarily represents costs incurred related to workforce optimization initiated and executed in 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. Of the total costs, |
CBRE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) |
|||||||
|
June 30,
|
|
December 31,
|
||||
Assets: |
|
|
|
||||
Cash and cash equivalents (1) |
$ |
2,142,820 |
|
|
$ |
1,896,188 |
|
Restricted cash |
113,989 |
|
|
143,059 |
|
||
Receivables, net |
4,426,189 |
|
|
4,394,954 |
|
||
Warehouse receivables (2) |
1,117,677 |
|
|
1,411,170 |
|
||
Contract assets |
460,914 |
|
|
471,827 |
|
||
Income taxes receivable |
133,704 |
|
|
137,311 |
|
||
Property and equipment, net |
741,946 |
|
|
815,009 |
|
||
Operating lease assets |
1,001,608 |
|
|
1,020,352 |
|
||
Goodwill and other intangibles, net |
5,237,277 |
|
|
5,189,522 |
|
||
Investments in unconsolidated subsidiaries |
747,608 |
|
|
452,365 |
|
||
Investments held in trust - special purpose acquisition company |
402,511 |
|
|
402,501 |
|
||
Other assets, net |
1,932,109 |
|
|
1,704,885 |
|
||
|
|
|
|
||||
Total assets |
$ |
18,458,352 |
|
|
$ |
18,039,143 |
|
|
|
|
|
||||
Liabilities: |
|
|
|
||||
Current liabilities, excluding debt and operating lease liabilities |
$ |
5,072,204 |
|
|
$ |
5,544,649 |
|
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) (2) |
1,102,156 |
|
|
1,383,964 |
|
||
Senior term loans, net |
771,765 |
|
|
785,678 |
|
||
|
594,988 |
|
|
594,524 |
|
||
|
487,562 |
|
|
— |
|
||
Other debt |
6,754 |
|
|
6,844 |
|
||
Operating lease liabilities |
1,288,378 |
|
|
1,325,321 |
|
||
Other long-term liabilities |
1,011,358 |
|
|
892,503 |
|
||
|
|
|
|
||||
Total liabilities |
10,335,165 |
|
|
10,533,483 |
|
||
|
|
|
|
||||
Non-controlling interest subject to possible redemption - special purpose acquisition company |
402,511 |
|
|
385,573 |
|
||
|
|
|
|
||||
Equity: |
|
|
|
||||
CBRE Group, Inc. stockholders' equity |
7,679,521 |
|
|
7,078,326 |
|
||
Non-controlling interests |
41,155 |
|
|
41,761 |
|
||
|
|
|
|
||||
Total equity |
7,720,676 |
|
|
7,120,087 |
|
||
|
|
|
|
||||
Total liabilities and equity |
$ |
18,458,352 |
|
|
$ |
18,039,143 |
|
(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 (in thousands) (Unaudited) |
|||||||||
|
Six Months Ended June 30, |
||||||||
|
2021 |
|
2020 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||||
Net income |
$ |
712,419 |
|
|
|
$ |
255,642 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||||
Depreciation and amortization |
241,163 |
|
|
|
230,178 |
|
|
||
Amortization of financing costs |
3,317 |
|
|
|
3,082 |
|
|
||
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets |
(132,004 |
) |
|
|
(105,697 |
) |
|
||
Asset impairments |
— |
|
|
|
75,171 |
|
|
||
Net realized and unrealized gains, primarily from investments |
(14,777 |
) |
|
|
(5,027 |
) |
|
||
Provision for doubtful accounts |
12,789 |
|
|
|
29,923 |
|
|
||
Net compensation expense for equity awards |
85,233 |
|
|
|
19,704 |
|
|
||
Equity income from unconsolidated subsidiaries |
(295,726 |
) |
|
|
(40,111 |
) |
|
||
Distribution of earnings from unconsolidated subsidiaries |
232,627 |
|
|
|
52,664 |
|
|
||
Proceeds from sale of mortgage loans |
7,902,512 |
|
|
|
7,421,127 |
|
|
||
Origination of mortgage loans |
(7,578,056 |
) |
|
|
(7,162,747 |
) |
|
||
Decrease in warehouse lines of credit |
(281,808 |
) |
|
|
(223,281 |
) |
|
||
Tenant concessions received |
12,874 |
|
|
|
23,384 |
|
|
||
Purchase of equity securities |
(3,896 |
) |
|
|
(6,627 |
) |
|
||
Proceeds from sale of equity securities |
5,488 |
|
|
|
8,909 |
|
|
||
(Increase) decrease in real estate under development |
(27,894 |
) |
|
|
701 |
|
|
||
(Increase) decrease in receivables, prepaid expenses and other assets (including contract and lease assets) |
(100,368 |
) |
|
|
276,065 |
|
|
||
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities) |
(275,591 |
) |
|
|
(112,173 |
) |
|
||
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing |
(359,365 |
) |
|
|
(816,621 |
) |
|
||
Decrease in net income taxes receivable/payable |
83,325 |
|
|
|
125,361 |
|
|
||
Other operating activities, net |
4,856 |
|
|
|
(25,473 |
) |
|
||
Net cash provided by operating activities |
227,118 |
|
|
|
24,154 |
|
|
||
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||||
Capital expenditures |
(75,944 |
) |
|
|
(134,149 |
) |
|
||
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired |
(57,920 |
) |
|
|
(25,911 |
) |
|
||
Contributions to unconsolidated subsidiaries |
(245,714 |
) |
|
|
(51,168 |
) |
|
||
Distributions from unconsolidated subsidiaries |
36,207 |
|
|
|
63,972 |
|
|
||
Other investing activities, net |
(1,120 |
) |
|
|
11,314 |
|
|
||
Net cash used in investing activities |
(344,491 |
) |
|
|
(135,942 |
) |
|
||
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||||
Proceeds from revolving credit facility |
— |
|
|
|
835,671 |
|
|
||
Repayment of revolving credit facility |
— |
|
|
|
(384,671 |
) |
|
||
Proceeds from notes payable on real estate |
48,548 |
|
|
|
22,705 |
|
|
||
Proceeds from issuance of |
492,255 |
|
|
|
— |
|
|
||
Repurchase of common stock |
(88,275 |
) |
|
|
(50,028 |
) |
|
||
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date) |
(3,421 |
) |
|
|
(6,839 |
) |
|
||
Units repurchased for payment of taxes on equity awards |
(36,275 |
) |
|
|
(37,358 |
) |
|
||
Non-controlling interest contributions |
527 |
|
|
|
1,428 |
|
|
||
Non-controlling interest distributions |
(3,377 |
) |
|
|
(1,092 |
) |
|
||
Other financing activities, net |
(30,958 |
) |
|
|
(20,944 |
) |
|
||
Net cash provided by financing activities |
379,024 |
|
|
|
358,872 |
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash |
(44,089 |
) |
|
|
(27,095 |
) |
|
||
|
|
|
|
||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
217,562 |
|
|
|
219,989 |
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD |
2,039,247 |
|
|
|
1,093,745 |
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD |
$ |
2,256,809 |
|
|
|
$ |
1,313,734 |
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
||||||
Cash paid during the period for: |
|
|
|
||||||
Interest |
$ |
16,212 |
|
|
|
$ |
31,145 |
|
|
Income tax payments (refunds), net |
$ |
131,156 |
|
|
|
$ |
(53,829 |
) |
|
Non-GAAP Financial Measures
The following measures are considered “non-GAAP financial measures” under SEC guidelines:
| (i) | Net 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. shareholders, as adjusted (which we also refer to as “adjusted earnings per diluted share” or “adjusted EPS”) |
|
| (v) | Adjusted EBITDA |
|
| (vi) | Business line operating profit/loss |
|
| (vii) | Segment operating profit on revenue and net revenue margins |
|
| (viii) | Free cash flow |
|
| (ix) | 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 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. Prior to 2021, the company utilized fee revenue to analyze the overall financial performance. This metric excluded additional reimbursed costs, primarily related to employees dedicated to clients, some of which included minimal margin.
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, business line operating profit, 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—and in the case of adjusted EBITDA, business line operating profit and segment operating profit on revenue and net 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, segment operating profit 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 (in thousands, except share and per share data):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
442,637 |
|
|
|
$ |
81,897 |
|
|
|
$ |
708,839 |
|
|
|
$ |
254,092 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Plus / minus: |
|
|
|
|
|
|
|
||||||||||||
Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions |
17,238 |
|
|
|
18,457 |
|
|
|
35,668 |
|
|
|
38,507 |
|
|
||||
Integration and other costs related to acquisitions |
8,134 |
|
|
|
236 |
|
|
|
8,134 |
|
|
|
1,019 |
|
|
||||
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
1,672 |
|
|
|
(7,500 |
) |
|
|
17,004 |
|
|
|
(15,284 |
) |
|
||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
(374 |
) |
|
|
1,247 |
|
|
|
725 |
|
|
|
7,000 |
|
|
||||
Costs incurred related to legal entity restructuring |
— |
|
|
|
693 |
|
|
|
— |
|
|
|
3,934 |
|
|
||||
Asset impairments |
— |
|
|
|
— |
|
|
|
— |
|
|
|
75,171 |
|
|
||||
Costs associated with workforce optimization efforts (1) |
— |
|
|
|
37,594 |
|
|
|
— |
|
|
|
37,594 |
|
|
||||
Tax impact of adjusted items |
(6,457 |
) |
|
|
(14,877 |
) |
|
|
(14,928 |
) |
|
|
(30,175 |
) |
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to CBRE Group, Inc., as adjusted |
$ |
462,850 |
|
|
|
$ |
117,747 |
|
|
|
$ |
755,442 |
|
|
|
$ |
371,858 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted income per share attributable to CBRE Group, Inc., as adjusted |
$ |
1.36 |
|
|
|
$ |
0.35 |
|
|
|
$ |
2.22 |
|
|
|
$ |
1.10 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding for diluted income per share |
339,502,871 |
|
|
337,361,419 |
|
|
339,541,354 |
|
|
338,549,805 |
|
||||||||
_______________
| (1) |
Primarily represents costs incurred related to workforce optimization initiated and executed in 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. Of the total costs, |
Adjusted EBITDA is calculated as follows (in thousands):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
2020 |
||||||||
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to CBRE Group, Inc. |
$ |
442,637 |
|
|
|
$ |
81,897 |
|
|
|
$ |
708,839 |
|
|
$ |
254,092 |
|
|
|
|
|
|
|
|
|
||||||||||
Add: |
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
119,085 |
|
|
|
116,384 |
|
|
|
241,163 |
|
|
230,178 |
|
||||
Asset impairment |
— |
|
|
|
— |
|
|
|
— |
|
|
75,171 |
|
||||
Interest expense, net of interest income |
13,772 |
|
|
|
17,950 |
|
|
|
23,878 |
|
|
33,966 |
|
||||
Provision for income taxes |
133,445 |
|
|
|
18,803 |
|
|
|
209,772 |
|
|
69,985 |
|
||||
Integration and other costs related to acquisitions |
8,134 |
|
|
|
236 |
|
|
|
8,134 |
|
|
1,019 |
|
||||
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
1,672 |
|
|
|
(7,500 |
) |
|
|
17,004 |
|
|
(15,284 |
) |
||||
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
(374 |
) |
|
|
1,247 |
|
|
|
725 |
|
|
7,000 |
|
||||
Costs incurred related to legal entity restructuring |
— |
|
|
|
693 |
|
|
|
— |
|
|
3,934 |
|
||||
Costs associated with workforce optimization efforts (1) |
— |
|
|
|
37,594 |
|
|
|
— |
|
|
37,594 |
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA |
$ |
718,371 |
|
|
|
$ |
267,304 |
|
|
|
$ |
1,209,515 |
|
|
$ |
697,655 |
|
_______________
| (1) | 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 |
Adjusted EBITDA for the trailing twelve months ended June 30, 2021 is calculated as follows (in thousands):
|
Trailing
Twelve Months Ended
|
||
|
|
||
Net income attributable to CBRE Group, Inc. |
$ |
1,206,736 |
|
|
|
||
Add: |
|
||
Depreciation and amortization |
512,713 |
|
|
Asset impairments |
13,505 |
|
|
Interest expense, net of interest income |
57,665 |
|
|
Write-off of financing costs on extinguished debt |
75,592 |
|
|
Provision for income taxes |
353,888 |
|
|
Costs associated with transformation initiatives (1) |
155,148 |
|
|
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
5,323 |
|
|
Costs incurred related to legal entity restructuring |
5,428 |
|
|
Integration and other costs related to acquisitions |
8,871 |
|
|
Carried interest incentive compensation expense to align with the timing of associated revenue |
9,376 |
|
|
|
|
||
Adjusted EBITDA |
$ |
2,404,245 |
|
_______________
| (1) | Commencing during the quarter ended September 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. |
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 (in thousands):
|
Three Months Ended June 30, |
||||||
|
2021 |
|
2020 |
||||
Property Management Revenue |
|
|
|
||||
Net revenue |
$ |
421,378 |
|
|
$ |
395,789 |
|
Plus: Pass through costs also recognized as revenue |
1,866 |
|
|
4,321 |
|
||
Revenue |
$ |
423,244 |
|
|
$ |
400,110 |
|
|
Three Months Ended June 30, |
||||||
|
2021 |
|
2020 |
||||
Facilities Management Revenue |
|
|
|
||||
Net revenue |
$ |
1,199,657 |
|
|
$ |
1,087,657 |
|
Plus: Pass through costs also recognized as revenue |
2,236,097 |
|
|
2,209,382 |
|
||
Revenue |
$ |
3,435,754 |
|
|
$ |
3,297,039 |
|
|
Three Months Ended June 30, |
||||||
|
2021 |
|
2020 |
||||
Project Management Revenue |
|
|
|
||||
Net revenue |
$ |
338,011 |
|
|
$ |
293,386 |
|
Plus: Pass through costs also recognized as revenue |
308,957 |
|
|
180,008 |
|
||
Revenue |
$ |
646,968 |
|
|
$ |
473,394 |
|
Real Estate Investments adjusted revenue is computed as follows (in thousands):
|
Three Months Ended June 30, |
||||||
|
2021 |
|
2020 |
|
|||
Real Estate Investments |
|
|
|
||||
Total Revenue |
$ |
243,363 |
|
|
$ |
161,611 |
|
|
|
|
|
||||
Adjustments: |
|
|
|
||||
Less: Cost of revenue |
56,970 |
|
|
30,021 |
|
||
Add: Gain (loss) on disposition of real estate |
929 |
|
|
(492 |
) |
||
Add: Equity income from unconsolidated subsidiaries |
198,173 |
|
|
21,296 |
|
||
Less: Net income attributable to non-controlling interests |
580 |
|
|
12 |
|
||
Add: Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period |
(374 |
) |
|
1,247 |
|
||
Net adjustments |
$ |
141,178 |
|
|
$ |
(7,982) |
|
|
|
|
|
||||
Total adjusted revenue |
$ |
384,541 |
|
|
$ |
153,629 |
|
Below represents a reconciliation of REI business line operating profitability to REI segment operating profit (in thousands):
|
Three Months Ended June 30, |
||||||
Real Estate Investments |
2021 |
|
2020 |
||||
Investment management operating profit |
$ |
44,746 |
|
|
$ |
32,528 |
|
Development operating profit (loss) |
119,717 |
|
|
(418 |
) |
||
Hana and segment overhead operating (loss) profit |
(11,000 |
) |
|
(7,456 |
) |
||
Real estate investments segment operating profit |
$ |
153,463 |
|
|
$ |
24,654 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005259/en/
FAQ
What were CBRE's Q2 2021 revenue figures?
How much did CBRE earn in net income for Q2 2021?
What is CBRE's adjusted EBITDA for Q2 2021?
What acquisition did CBRE announce in July 2021?
What is the current liquidity position of CBRE as of June 30, 2021?
