CBRE Group, Inc. Reports Financial Results for Second-Quarter 2024
CBRE Group (NYSE: CBRE) reported its Q2 2024 financial results, highlighting a 9% revenue increase and an 11% net revenue rise. The company witnessed a 14% increase in Resilient Business net revenue, driven by Turner's 18% growth. Advisory transaction revenue, including leasing and capital markets, grew 5%, with US leasing revenue up 13% and mortgage origination fees up 20%. However, GAAP EPS declined 34% to $0.42, and Core EPS fell 2% to $0.81. Free cash flow improved by nearly $300 million, with an annual forecast of over $1 billion. Segment-wise, Global Workplace Solutions net revenue rose 15.5%, while Real Estate Investments revenue saw a 9.2% decline. The company made capital investments worth $1.3 billion YTD and repurchased 0.6 million shares. Despite challenges, CBRE increased its full-year Core EPS outlook to $4.70-$4.90.
CBRE Group (NYSE: CBRE) ha riportato i risultati finanziari del secondo trimestre 2024, evidenziando un aumento del 9% dei ricavi e un aumento dell'11% del ricavo netto. L'azienda ha registrato un aumento del 14% del ricavo netto del Business Resiliente, sostenuto dalla crescita del 18% di Turner. I ricavi da transazioni di consulenza, inclusi leasing e mercati di capitali, sono aumentati del 5%, con i ricavi da leasing negli Stati Uniti in crescita del 13% e le commissioni di origine dei mutui aumentate del 20%. Tuttavia, l'EPS GAAP è diminuito del 34% a $0,42, e l'EPS Core è sceso del 2% a $0,81. Il flusso di cassa libero è migliorato di quasi $300 milioni, con una previsione annuale di oltre $1 miliardo. Per segmenti, il ricavo netto delle Soluzioni Globali per il Lavoro è aumentato del 15,5%, mentre il ricavo degli Investimenti Immobiliari ha visto una diminuzione del 9,2%. L'azienda ha effettuato investimenti in capitale per un valore di $1,3 miliardi dall'inizio dell'anno e ha riacquistato 0,6 milioni di azioni. Nonostante le sfide, CBRE ha innalzato le sue previsioni sull'EPS Core per l'intero anno a $4,70-$4,90.
CBRE Group (NYSE: CBRE) reportó sus resultados financieros del segundo trimestre de 2024, destacando un aumento del 9% en los ingresos y un incremento del 11% en los ingresos netos. La compañía experimentó un aumento del 14% en los ingresos netos del negocio resiliente, impulsado por el crecimiento del 18% de Turner. Los ingresos por transacciones de asesoría, incluyendo arrendamientos y mercados de capital, crecieron un 5%, con los ingresos por arrendamientos en EE. UU. aumentando un 13% y las comisiones por originación de hipotecas aumentando un 20%. Sin embargo, el EPS GAAP cayó un 34% a $0,42, y el EPS Core disminuyó un 2% a $0,81. El flujo de caja libre mejoró en casi $300 millones, con una previsión anual de más de $1 mil millones. Por segmentos, los ingresos netos de Soluciones Globales para el Lugar de Trabajo aumentaron un 15,5%, mientras que los ingresos de Inversiones Inmobiliarias vieron una caída del 9,2%. La empresa realizó inversiones de capital por valor de $1,3 mil millones hasta la fecha y recompró 0,6 millones de acciones. A pesar de los desafíos, CBRE aumentó su pronóstico de EPS Core para el año completo a $4,70-$4,90.
CBRE 그룹 (NYSE: CBRE)는 2024년 2분기 재무 결과를 발표하며 9%의 수익 증가와 11%의 순수익 상승을 강조했습니다. 회사는 비즈니스 회복력 순수익이 14% 증가했으며, 이는 터너의 18% 성장에 힘입은 것입니다. 자문 거래 수익, 임대 및 자본 시장을 포함하여 5% 증가했으며, 미국 임대 수익은 13% 상승하고 주택 담보 대출 수수료는 20% 증가했습니다. 그러나 GAAP EPS는 34% 감소하여 $0.42에 달했으며, Core EPS는 2% 감소하여 $0.81에 도달했습니다. 자유현금흐름은 거의 $300백만 달러 개선되었으며, 연간 예측은 $1억 달러 이상입니다. 세분화된 결과로, 글로벌 직장 솔루션 순 수익은 15.5% 증가한 반면, 부동산 투자 수익은 9.2% 감소했습니다. 회사는 지금까지 $13억 달러의 자본 투자와 60만 주의 자사주 매입을 실시했습니다. 도전 과제가 있음에도 불구하고, CBRE는 연간 Core EPS 전망을 $4.70-$4.90으로 상향 조정했습니다.
CBRE Group (NYSE: CBRE) a annoncé ses résultats financiers du deuxième trimestre 2024, mettant en évidence une augmentation de 9% des revenus et une hausse de 11% du revenu net. L'entreprise a observé une augmentation de 14% du revenu net de l'activité résiliente, soutenue par la croissance de 18% de Turner. Les revenus des transactions de conseil, y compris la location et les marchés de capitaux, ont augmenté de 5%, avec des revenus locatifs aux États-Unis en hausse de 13% et les frais d'origine hypothécaire augmentant de 20%. Cependant, le BPA GAAP a diminué de 34% à 0,42 $ et le BPA Core a chuté de 2% à 0,81 $. Le flux de trésorerie disponible s'est amélioré de près de 300 millions de dollars, avec une prévision annuelle de plus d'un milliard de dollars. Par segment, le revenu net des Solutions de Travail Globales a augmenté de 15,5%, tandis que les revenus des Investissements Immobiliers ont vu une baisse de 9,2%. L'entreprise a réalisé des investissements en capital d'une valeur de 1,3 milliard de dollars depuis le début de l'année et a racheté 0,6 million d'actions. Malgré les défis, CBRE a relevé sa prévision de BPA Core pour l'année entière à 4,70 $ - 4,90 $.
CBRE Group (NYSE: CBRE) hat seine finanziellen Ergebnisse für das 2. Quartal 2024 veröffentlicht und hebt einen Umsatzanstieg von 9% sowie eine Steigerung des Nettoumsatzes um 11% hervor. Das Unternehmen verzeichnete einen Anstieg des Nettoumsatzes im Resilient Business um 14%, angetrieben durch ein Wachstum von 18% bei Turner. Die Einnahmen aus Beratungsaufträgen, einschließlich Vermietung und Kapitalmärkten, stiegen um 5%, wobei die Mieteinnahmen in den USA um 13% und die Hypothekenbeschaffungsgebühren um 20% zunahmen. Der GAAP EPS fiel jedoch um 34% auf $0,42, und der Core EPS sank um 2% auf $0,81. Der freie Cashflow verbesserte sich um fast $300 Millionen, mit einer Jahresprognose von über $1 Milliarde. Segmentweise stieg der Nettoumsatz der Global Workplace Solutions um 15,5%, während die Einnahmen aus Immobilieninvestitionen um 9,2% zurückgingen. Das Unternehmen tätigte bisher Investitionen in Höhe von $1,3 Milliarden und kaufte 0,6 Millionen Aktien zurück. Trotz der Herausforderungen erhöhte CBRE seine Prognose für den Core EPS für das Gesamtjahr auf $4,70-$4,90.
- Revenue up 9%, net revenue up 11%
- Resilient Business net revenue increased 14%
- Advisory transaction revenue (leasing and capital markets) grew 5%
- US leasing revenue up 13%
- Mortgage origination fees up 20%
- Free cash flow improved by nearly $300 million
- Increased full-year Core EPS outlook to $4.70-$4.90
- Global Workplace Solutions net revenue rose 15.5%
- GAAP EPS down 34% to $0.42
- Core EPS down 2% to $0.81
- Real Estate Investments revenue declined 9.2%
- GAAP net income declined 35.5%
CBRE Group's Q2 2024 results demonstrate resilience in a challenging market environment. The company reported 9% revenue growth to
Key positives include:
- Strong performance in Resilient Business net revenue, up
14% - Robust growth in U.S. leasing revenue (
13% ) and mortgage origination fees (20% ) - Improved cash flow, with free cash flow reaching
$220 million - Increased full-year Core EPS outlook to
$4.70 -$4.90
However, challenges persist in property sales, with global sales revenue declining
CBRE's financial position remains strong, with a net leverage ratio of 1.58x, well below its primary debt covenant. The company's
CBRE's Q2 results offer valuable insights into the current state of the commercial real estate market. The
The stabilization in property sales is a positive sign, with the global decline narrowing to
The
The growth in CBRE's loan servicing portfolio to over
Overall, CBRE's results paint a picture of a commercial real estate market that's adapting to new realities, with certain sectors and geographies showing resilience while others continue to face headwinds.
Key Highlights:
-
Revenue up
9% ; net revenue up11% -
Resilient Business(1) net revenue increased
14% , bolstered by Turner & Townsend’s18% growth -
Advisory transaction revenue - leasing and capital markets - rose
5% , supported by growth of13% inU.S. leasing revenue and20% in mortgage origination fees -
GAAP EPS down
34% to ; Core EPS down$0.42 2% to$0.81 -
Deployed
of capital year-to-date across M&A and REI co-investments$1.3 billion -
Both net cash flow from operations and free cash flow improved by approximately
; free cash flow conversion was nearly$300 million 90% -
Now expect slightly over
of free cash flow for the full year$1 billion -
Increased full-year Core EPS outlook to a range of
to$4.70 – up from$4.90 to$4.25 $4.65
“CBRE had a successful second quarter for three reasons. First, revenue, profitability and cash flow exceeded our expectations, with outperformance across all three business segments. Second, we made several sizable capital investments consistent with our strategy to invest in cyclically resilient or secularly favored elements of our business. And third, we made quick, material progress on the cost challenges we identified last quarter,” said Bob Sulentic, chair and chief executive officer of CBRE.
Consolidated Financial Results Overview
The following table presents highlights of CBRE performance (dollars in millions, except per share data; totals may not add due to rounding):
|
|
|
|
|
% Change |
||||||||
|
Q2 2024 |
|
Q2 2023 |
|
USD |
|
LC (2) |
||||||
Operating Results |
|
|
|
|
|
|
|
||||||
Revenue |
$ |
8,391 |
|
$ |
7,720 |
|
|
8.7 |
% |
|
9.4 |
% |
|
Net revenue (3) |
|
4,971 |
|
|
|
4,478 |
|
|
11.0 |
% |
|
11.7 |
% |
GAAP net income |
|
130 |
|
|
|
201 |
|
|
(35.5 |
)% |
|
(31.8 |
)% |
GAAP EPS |
|
0.42 |
|
|
|
0.64 |
|
|
(34.2 |
)% |
|
(30.4 |
)% |
Core adjusted net income (4) |
|
248 |
|
|
|
258 |
|
|
(3.8 |
)% |
|
(1.0 |
)% |
Core EBITDA (5) |
|
505 |
|
|
|
504 |
|
|
0.3 |
% |
|
1.7 |
% |
Core EPS (4) |
|
0.81 |
|
|
|
0.82 |
|
|
(1.9 |
)% |
|
1.0 |
% |
|
|
|
|
|
|
|
|
||||||
Cash Flow Results |
|
|
|
|
|
|
|
||||||
Cash flow provided by (used in) operations |
$ |
287 |
|
|
$ |
(11 |
) |
|
N/M |
|
|
|
|
Less: Capital expenditures |
|
67 |
|
|
|
75 |
|
|
(10.6 |
)% |
|
|
|
Free cash flow (6) |
$ |
220 |
|
|
$ |
(86 |
) |
|
N/M |
|
|
|
Advisory Services Segment
The following table presents highlights of the Advisory Services segment performance (dollars in millions; totals may not add due to rounding):
|
|
|
|
|
% Change |
||||||||
|
Q2 2024 |
|
Q2 2023 |
|
USD |
|
LC |
||||||
Revenue |
$ |
2,218 |
|
|
$ |
2,042 |
|
|
8.6 |
% |
|
9.3 |
% |
Net revenue |
|
2,195 |
|
|
|
2,021 |
|
|
8.6 |
% |
|
9.3 |
% |
Segment operating profit (7) |
|
344 |
|
|
|
315 |
|
|
9.2 |
% |
|
10.4 |
% |
Segment operating profit on revenue margin (8) |
|
15.5 |
% |
|
|
15.5 |
% |
|
— pts |
|
0.1 pts |
||
Segment operating profit on net revenue margin (8) |
|
15.7 |
% |
|
|
15.6 |
% |
|
0.1 pts |
|
0.2 pts |
Note: all percent changes cited are vs. second-quarter 2023, except where noted.
Property Leasing
-
Global leasing revenue rose
9% (same local currency), exceeding expectations. -
Growth was driven by the
Americas , with leasing revenue up12% (13% local currency), including13% inthe United States . -
Asia-Pacific (APAC) leasing revenue rose3% (7% local currency), with solid growth across most of the region. -
In
Europe , theMiddle East &Africa (EMEA), leasing revenue fell3% (4% local currency) with growth inthe Netherlands ,Poland andSpain offset by weakness elsewhere in the region. -
Globally, office leasing once again increased by double digits, led by
the United States .New York office leasing was a key driver in the quarter. -
U.S. leasing showed continued momentum in July.
Capital Markets
-
Property sales revenue began to stabilize. Global sales revenue declined
3% (2% local currency), less pronounced than expected. -
EMEA once again paced global activity with sales revenue up
3% (same local currency), led by double-digit growth in theUnited Kingdom , where property values have largely reset. -
In contrast, sales revenue fell
4% (same local currency) in theAmericas and5% (up1% local currency) in APAC.Greater China ,India andSingapore showed solid growth in the quarter. - Among property types, industrial and multifamily sales showed global growth.
-
Mortgage origination revenue jumped
38% (same local currency), led by a20% increase in loan origination fees reflecting refinancing activity with debt funds, as well as higher interest earnings on escrow balances.
Other Advisory Business Lines
-
Loan servicing revenue rose
7% (6% local currency). The servicing portfolio increased to more than , up$425 billion 3% for the quarter and7% from a year ago. -
Property management net revenue increased
16% (same local currency), fueled by the onboarding of the Brookfield 65 million sq. ft.U.S. office portfolio. -
Valuations revenue edged up
2% (3% local currency). Growth was strongest in Continental Europe.
Global Workplace Solutions (GWS) Segment
The following table presents highlights of the GWS segment performance (dollars in millions; totals may not add due to rounding):
|
|
|
|
|
% Change |
||||||||
|
Q2 2024 |
|
Q2 2023 |
|
USD |
|
LC |
||||||
Revenue |
$ |
5,944 |
|
|
$ |
5,426 |
|
|
9.5 |
% |
|
10.3 |
% |
Net revenue |
|
2,547 |
|
|
|
2,205 |
|
|
15.5 |
% |
|
16.3 |
% |
Segment operating profit |
|
258 |
|
|
|
233 |
|
|
10.8 |
% |
|
12.0 |
% |
Segment operating profit on revenue margin |
|
4.3 |
% |
|
|
4.3 |
% |
|
— pts |
|
0.1 pts |
||
Segment operating profit on net revenue margin |
|
10.1 |
% |
|
|
10.6 |
% |
|
(0.4 pts) |
|
(0.4 pts) |
Note: all percent changes cited are vs. second-quarter 2023, except where noted.
-
Facilities management net revenue increased
18% (19% local currency), paced by strength in the Local business. Organic net revenue, which excludes contributions from companies acquired since July 1, 2023, was also up by double digits. -
Project management net revenue rose
11% (12% local currency), with continued strong growth from Turner & Townsend. - Net operating margin improved 20 basis points compared with first-quarter 2024 reflecting the early benefit of recent cost actions but was below the prior-year second quarter level.
Real Estate Investments (REI) Segment
The following table presents highlights of the REI segment performance (dollars in millions):
|
|
|
|
|
% Change |
||||||||
|
Q2 2024 |
|
Q2 2023 |
|
USD |
|
LC |
||||||
Revenue |
$ |
232 |
|
$ |
256 |
|
(9.2 |
)% |
|
(9.2 |
)% |
||
Segment operating profit |
|
10 |
|
|
|
33 |
|
|
(69.8 |
)% |
|
(68.4 |
)% |
Note: all percent changes cited are vs. second-quarter 2023, except where noted.
Investment Management
-
Total revenue slipped
2% (1% local currency). -
Operating profit increased
4% (5% local currency) to approximately , largely due to higher co-investment returns.$39 million -
Assets Under Management (AUM) totaled
, a decrease of$142.5 billion from first-quarter 2024. The decrease was primarily driven by lower asset values as well as adverse foreign currency movement.$1.5 billion
Real Estate Development
-
Global development operating loss(9) totaled approximately
. As expected, asset sales activity was limited in the period.$26 million -
The in-process portfolio ended second-quarter 2024 at
, unchanged from first-quarter 2024. The pipeline increased$18.8 billion during the quarter to$0.3 billion .$13.1 billion
Corporate and Other Segment
-
Non-core operating loss totaled
, primarily due to the lower value of the company’s investment in Altus Power, Inc. (NYSE:AMPS), reflecting a decline in its share price during the quarter.$13 million -
Core corporate operating loss increased by approximately
, primarily due to a resetting of incentive compensation, which had been reduced in last year’s second quarter.$29 million
Capital Allocation Overview
-
Free Cash Flow – During the second quarter of 2024, free cash flow was
. This reflected cash provided by operating activities of$220 million , adjusted for total capital expenditures of$287 million .(10) Cash flow conversion improved to$67 million 64% on a trailing 12-month basis, the third consecutive increase. -
Stock Repurchase Program – The company repurchased approximately 0.6 million shares for
($48.4 million average price per share) during the second quarter. There was approximately$87.25 of capacity remaining under the company’s authorized stock repurchase program as of June 30, 2024.$1.4 billion -
Acquisitions and Investments – During the second quarter, CBRE made acquisitions totaling approximately
in cash and non-cash consideration, primarily for Direct Line Global, a leading provider of technical facilities management services for data center owners and operators. Direct Line Global serves the world’s largest global technology companies across the hyperscale, co-location and enterprise markets. CBRE also acquired a provider of local facilities management technical services in$290.9 million Canada .
During the quarter, CBRE also announced plans to combine its project management business with its Turner & Townsend subsidiary. The combined business, which will be reported as a separate business segment beginning in 2025, will create a premier project, program and cost management business with more than 20,000 employees serving clients in over 60 countries.
Leverage and Financing Overview
- Leverage – CBRE’s net leverage ratio (net debt(11) to trailing twelve-month core EBITDA) was 1.58x as of June 30, 2024, 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, 2024 |
||
Total debt |
$ |
4,247 |
|
Less: Cash (12) |
|
928 |
|
Net debt (11) |
$ |
3,319 |
|
|
|
||
Divided by: Trailing twelve-month Core EBITDA |
$ |
2,103 |
|
|
|
||
Net leverage ratio |
1.58x |
-
Liquidity – As of June 30, 2024, the company had approximately
of total liquidity, consisting of$3.7 billion in cash, plus the ability to borrow an aggregate of approximately$927.7 million under its revolving credit facilities, net of any outstanding letters of credit.$2.7 billion
Conference Call Details
The company’s second quarter earnings webcast and conference call will be held today, Thursday, July 25, 2024 at 8:30 a.m. Eastern Time. Investors are encouraged to access the webcast via this link or they can click this link beginning at 8:15 a.m. Eastern Time for automated access to the conference call.
Alternatively, investors may dial into the conference call using these operator-assisted phone numbers: 877.407.8037 (
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in
Safe Harbor and Footnotes
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the economic outlook, the company’s future growth momentum, operations and business outlook. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this press release. Any forward-looking statements speak only as of the date of this press release and, except to the extent required by applicable securities laws, the company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Factors that could cause results to differ materially include, but are not limited to: disruptions in general economic, political and regulatory conditions and significant public health events, particularly in geographies or industry sectors where our business may be concentrated; volatility or adverse developments in the securities, capital or credit markets, interest rate increases and conditions affecting the value of real estate assets, inside and outside
Additional information concerning factors that may influence the company’s financial information is discussed under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Cautionary Note on Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2023, our latest quarterly report on Form 10-Q, as well as in the company’s press releases and other periodic filings with the Securities and Exchange Commission (SEC). Such filings are available publicly and may be obtained on the company’s website at www.cbre.com or upon written request from CBRE’s Investor Relations Department at investorrelations@cbre.com.
The terms “net revenue,” “core adjusted net income,” “core EBITDA,” “core EPS,” “business line operating profit (loss),” “segment operating profit on revenue margin,” “segment operating profit on net revenue margin,” “net debt” and “free cash flow,” all of which CBRE uses in this press release, are non-GAAP financial measures under SEC guidelines, and you should refer to the footnotes below as well as the “Non-GAAP Financial Measures” section in this press release for a further explanation of these measures. We have also included in that section reconciliations of these measures in specific periods to their most directly comparable financial measure calculated and presented in accordance with GAAP for those periods.
Totals may not sum in tables in millions included in this release due to rounding.
Note: We have not reconciled the (non-GAAP) core earnings per share forward-looking guidance included in this release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, carried interest incentive compensation and financing costs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
(1) |
Net revenue from Resilient Businesses includes facilities management, project management, property management, loan servicing, valuations and investment management business fees. Net revenue from Transactional Businesses includes sales, leasing, mortgage origination, carried interest and incentive fees in the investment management business, and development fees. |
|
(2) |
Local currency percentage change is calculated by comparing current-period results at prior-period exchange rates versus prior-period results. |
|
(3) |
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. |
|
(4) |
Core adjusted net income and core earnings per diluted share (or core EPS) exclude the effect of select items from GAAP net income and GAAP earnings per diluted share as well as adjust the provision for (benefit from) income taxes and impact on non-controlling interest for such charges. Adjustments during the periods presented included non-cash depreciation and amortization expense related to certain assets attributable to acquisitions and restructuring activities, interest expense related to indirect tax settlement, certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, costs incurred related to legal entity restructuring, write-off of financing costs on extinguished debt, integration and other costs related to acquisitions, asset impairments, costs associated with efficiency and cost-reduction initiatives, and charges related to indirect tax settlement. It also removes the fair value changes and related tax impact of certain strategic non-core non-controlling equity investments that are not directly related to our business segments (including venture capital “VC” related investments). |
|
(5) |
Core EBITDA represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, asset impairments, adjustments related to certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, costs incurred related to legal entity restructuring, integration and other costs related to acquisitions, costs associated with efficiency and cost-reduction initiatives, charges related to indirect tax settlement. It also removes the fair value changes, on a pre-tax basis, of certain strategic non-core non-controlling equity investments that are not directly related to our business segments (including venture capital “VC” related investments). |
|
(6) |
Free cash flow is calculated as cash flow provided by operations, less capital expenditures (reflected in the investing section of the consolidated statement of cash flows). |
|
(7) |
Segment operating profit (loss) is the measure reported to the chief operating decision maker (CODM) for purposes of making decisions about allocating resources to each segment and assessing performance of each segment. Segment operating profit represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization and asset impairments, as well as adjustments related to the following: certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, costs incurred related to legal entity restructuring, integration and other costs related to acquisitions, costs associated with efficiency and cost-reduction initiatives, and charges related to indirect tax settlement. |
|
(8) |
Segment operating profit on revenue and net revenue margins represent segment operating profit divided by revenue and net revenue, respectively. |
|
(9) |
Represents line of business profitability/losses, as adjusted. |
|
(10) |
For the three months ended June 30, 2024, the company incurred capital expenditures of |
|
(11) |
Net debt is calculated as total debt (excluding non-recourse debt) less cash and cash equivalents. |
|
(12) |
Cash represents cash and cash equivalents (excluding restricted cash). |
CBRE GROUP, INC. |
|||||||||||||||
OPERATING RESULTS |
|||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 |
|||||||||||||||
(in millions, except share and per share data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Net revenue |
$ |
4,971 |
|
|
$ |
4,478 |
|
|
$ |
9,415 |
|
|
$ |
8,658 |
|
Pass-through costs also recognized as revenue |
|
3,420 |
|
|
|
3,242 |
|
|
|
6,911 |
|
|
|
6,473 |
|
Total revenue |
|
8,391 |
|
|
|
7,720 |
|
|
|
16,326 |
|
|
|
15,131 |
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
6,793 |
|
|
|
6,179 |
|
|
|
13,268 |
|
|
|
12,186 |
|
Operating, administrative and other |
|
1,191 |
|
|
|
1,089 |
|
|
|
2,302 |
|
|
|
2,297 |
|
Depreciation and amortization |
|
161 |
|
|
|
155 |
|
|
|
319 |
|
|
|
316 |
|
Total costs and expenses |
|
8,145 |
|
|
|
7,423 |
|
|
|
15,889 |
|
|
|
14,799 |
|
|
|
|
|
|
|
|
|
||||||||
Gain on disposition of real estate |
|
— |
|
|
|
9 |
|
|
|
13 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
246 |
|
|
|
306 |
|
|
|
450 |
|
|
|
344 |
|
|
|
|
|
|
|
|
|
||||||||
Equity (loss) income from unconsolidated subsidiaries |
|
(15 |
) |
|
|
(8 |
) |
|
|
(73 |
) |
|
|
134 |
|
Other income |
|
6 |
|
|
|
6 |
|
|
|
15 |
|
|
|
8 |
|
Interest expense, net of interest income |
|
63 |
|
|
|
43 |
|
|
|
99 |
|
|
|
71 |
|
Income before provision for income taxes |
|
174 |
|
|
|
261 |
|
|
|
293 |
|
|
|
415 |
|
Provision for income taxes |
|
32 |
|
|
|
55 |
|
|
|
3 |
|
|
|
84 |
|
Net income |
|
142 |
|
|
|
206 |
|
|
|
290 |
|
|
|
331 |
|
Less: Net income attributable to non-controlling interests |
|
12 |
|
|
|
5 |
|
|
|
34 |
|
|
|
13 |
|
Net income attributable to CBRE Group, Inc. |
$ |
130 |
|
|
$ |
201 |
|
|
$ |
256 |
|
|
$ |
318 |
|
|
|
|
|
|
|
|
|
||||||||
Basic income per share: |
|
|
|
|
|
|
|
||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
0.42 |
|
|
$ |
0.65 |
|
|
$ |
0.84 |
|
|
$ |
1.02 |
|
Weighted average shares outstanding for basic income per share |
|
306,745,116 |
|
|
|
310,857,203 |
|
|
|
306,276,871 |
|
|
|
310,662,324 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted income per share: |
|
|
|
|
|
|
|
||||||||
Net income per share attributable to CBRE Group, Inc. |
$ |
0.42 |
|
|
$ |
0.64 |
|
|
$ |
0.83 |
|
|
$ |
1.01 |
|
Weighted average shares outstanding for diluted income per share |
|
308,035,211 |
|
|
|
314,282,247 |
|
|
|
308,269,040 |
|
|
|
314,821,615 |
|
|
|
|
|
|
|
|
|
||||||||
Core EBITDA |
$ |
505 |
|
|
$ |
504 |
|
|
$ |
930 |
|
|
$ |
1,036 |
|
CBRE GROUP, INC. |
|||||||||||||||||||||||||||
SEGMENT RESULTS |
|||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2024 |
|||||||||||||||||||||||||||
(in millions, totals may not add due to rounding) |
|||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
|
Three Months Ended June 30, 2024 |
||||||||||||||||||||||||||
|
Advisory
|
|
Global
|
|
Real Estate
|
|
Corporate (1) |
|
Total Core |
|
Other |
|
Total
|
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net revenue |
$ |
2,195 |
|
$ |
2,547 |
|
|
$ |
232 |
|
|
$ |
(3 |
) |
|
$ |
4,971 |
|
|
$ |
— |
|
|
$ |
4,971 |
|
|
Pass-through costs also recognized as revenue |
|
23 |
|
|
|
3,397 |
|
|
|
— |
|
|
|
— |
|
|
|
3,420 |
|
|
|
— |
|
|
|
3,420 |
|
Total revenue |
|
2,218 |
|
|
|
5,944 |
|
|
|
232 |
|
|
|
(3 |
) |
|
|
8,391 |
|
|
|
— |
|
|
|
8,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue |
|
1,359 |
|
|
|
5,377 |
|
|
|
57 |
|
|
|
— |
|
|
|
6,793 |
|
|
|
— |
|
|
|
6,793 |
|
Operating, administrative and other |
|
515 |
|
|
|
354 |
|
|
|
169 |
|
|
|
153 |
|
|
|
1,191 |
|
|
|
— |
|
|
|
1,191 |
|
Depreciation and amortization |
|
63 |
|
|
|
81 |
|
|
|
3 |
|
|
|
14 |
|
|
|
161 |
|
|
|
— |
|
|
|
161 |
|
Total costs and expenses |
|
1,937 |
|
|
|
5,812 |
|
|
|
229 |
|
|
|
167 |
|
|
|
8,145 |
|
|
|
— |
|
|
|
8,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income (loss) |
|
281 |
|
|
|
132 |
|
|
|
3 |
|
|
|
(170 |
) |
|
|
246 |
|
|
|
— |
|
|
|
246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity income (loss) from unconsolidated subsidiaries |
|
— |
|
|
|
3 |
|
|
|
4 |
|
|
|
— |
|
|
|
7 |
|
|
|
(22 |
) |
|
|
(15 |
) |
Other (loss) income |
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
9 |
|
|
|
6 |
|
Add-back: Depreciation and amortization |
|
63 |
|
|
|
81 |
|
|
|
3 |
|
|
|
14 |
|
|
|
161 |
|
|
|
— |
|
|
|
161 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs associated with efficiency and cost-reduction initiatives |
|
— |
|
|
|
30 |
|
|
|
— |
|
|
|
37 |
|
|
|
67 |
|
|
|
— |
|
|
|
67 |
|
Charges related to indirect tax settlement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Carried interest incentive compensation expense to align with the timing of associated revenue |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Integration and other costs related to acquisitions |
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total segment operating profit (loss) |
$ |
344 |
|
|
$ |
258 |
|
|
$ |
10 |
|
|
$ |
(107 |
) |
|
|
|
$ |
(13 |
) |
|
$ |
492 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Core EBITDA |
|
|
|
|
|
|
|
|
$ |
505 |
|
|
|
|
|
_______________ |
||
(1) |
Includes elimination of inter-segment revenue. |
CBRE GROUP, INC. |
|||||||||||||||||||||||||||
SEGMENT RESULTS—(CONTINUED) |
|||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2023 |
|||||||||||||||||||||||||||
(in millions, totals may not add due to rounding) |
|||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
|
Three Months Ended June 30, 2023 |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Advisory
|
|
Global
|
|
Real Estate
|
|
Corporate (1) |
|
Total Core |
|
Other |
|
Total
|
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net revenue |
$ |
2,021 |
|
$ |
2,205 |
|
$ |
256 |
|
|
$ |
(4 |
) |
|
$ |
4,478 |
|
|
$ |
— |
|
|
$ |
4,478 |
|
||
Pass-through costs also recognized as revenue |
|
21 |
|
|
|
3,221 |
|
|
|
— |
|
|
|
— |
|
|
|
3,242 |
|
|
|
— |
|
|
|
3,242 |
|
Total revenue |
|
2,042 |
|
|
|
5,426 |
|
|
|
256 |
|
|
|
(4 |
) |
|
|
7,720 |
|
|
|
— |
|
|
|
7,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue |
|
1,234 |
|
|
|
4,897 |
|
|
|
51 |
|
|
|
(3 |
) |
|
|
6,179 |
|
|
|
— |
|
|
|
6,179 |
|
Operating, administrative and other |
|
498 |
|
|
|
307 |
|
|
|
177 |
|
|
|
107 |
|
|
|
1,089 |
|
|
|
— |
|
|
|
1,089 |
|
Depreciation and amortization |
|
72 |
|
|
|
65 |
|
|
|
3 |
|
|
|
15 |
|
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
Total costs and expenses |
|
1,804 |
|
|
|
5,269 |
|
|
|
231 |
|
|
|
119 |
|
|
|
7,423 |
|
|
|
— |
|
|
|
7,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gain on disposition of real estate |
|
— |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income (loss) |
|
238 |
|
|
|
157 |
|
|
|
34 |
|
|
|
(123 |
) |
|
|
306 |
|
|
|
— |
|
|
|
306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity income (loss) from unconsolidated subsidiaries |
|
1 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(8 |
) |
Other income (loss) |
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
|
3 |
|
|
|
7 |
|
|
|
(1 |
) |
|
|
6 |
|
Add-back: Depreciation and amortization |
|
72 |
|
|
|
65 |
|
|
|
3 |
|
|
|
15 |
|
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Costs associated with efficiency and cost-reduction initiatives |
|
2 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
Integration and other costs related to acquisitions |
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
28 |
|
|
|
36 |
|
|
|
— |
|
|
|
36 |
|
Carried interest incentive compensation reversal to align with the timing of associated revenue |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total segment operating profit (loss) |
$ |
315 |
|
|
$ |
233 |
|
|
$ |
33 |
|
|
$ |
(77 |
) |
|
|
|
$ |
(7 |
) |
|
$ |
497 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Core EBITDA |
|
|
|
|
|
|
|
|
$ |
504 |
|
|
|
|
|
_______________ |
||
(1) |
Includes elimination of inter-segment revenue. |
CBRE GROUP, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in millions) |
|||||||
(Unaudited) |
|||||||
|
June 30, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
928 |
|
|
$ |
1,265 |
|
Restricted cash |
|
105 |
|
|
|
106 |
|
Receivables, net |
|
6,304 |
|
|
|
6,370 |
|
Warehouse receivables (1) |
|
973 |
|
|
|
675 |
|
Contract assets |
|
454 |
|
|
|
443 |
|
Prepaid expenses |
|
342 |
|
|
|
333 |
|
Income taxes receivable |
|
190 |
|
|
|
159 |
|
Other current assets |
|
357 |
|
|
|
315 |
|
Total Current Assets |
|
9,653 |
|
|
|
9,666 |
|
Property and equipment, net |
|
895 |
|
|
|
907 |
|
Goodwill |
|
5,667 |
|
|
|
5,129 |
|
Other intangible assets, net |
|
2,385 |
|
|
|
2,081 |
|
Operating lease assets |
|
1,032 |
|
|
|
1,030 |
|
Investments in unconsolidated subsidiaries |
|
1,309 |
|
|
|
1,374 |
|
Non-current contract assets |
|
92 |
|
|
|
75 |
|
Real estate under development |
|
380 |
|
|
|
300 |
|
Non-current income taxes receivable |
|
77 |
|
|
|
78 |
|
Deferred tax assets, net |
|
338 |
|
|
|
361 |
|
Other assets, net |
|
1,634 |
|
|
|
1,547 |
|
Total Assets |
$ |
23,462 |
|
|
$ |
22,548 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
3,568 |
|
|
$ |
3,562 |
|
Compensation and employee benefits payable |
|
1,230 |
|
|
|
1,459 |
|
Accrued bonus and profit sharing |
|
974 |
|
|
|
1,556 |
|
Operating lease liabilities |
|
244 |
|
|
|
242 |
|
Contract liabilities |
|
311 |
|
|
|
298 |
|
Income taxes payable |
|
128 |
|
|
|
217 |
|
Warehouse lines of credit (which fund loans that |
|
961 |
|
|
|
666 |
|
Revolving credit facility |
|
940 |
|
|
|
— |
|
Other short-term borrowings |
|
7 |
|
|
|
16 |
|
Current maturities of long-term debt |
|
28 |
|
|
|
9 |
|
Other current liabilities |
|
238 |
|
|
|
218 |
|
Total Current Liabilities |
|
8,629 |
|
|
|
8,243 |
|
Long-term debt, net of current maturities |
|
3,272 |
|
|
|
2,804 |
|
Non-current operating lease liabilities |
|
1,091 |
|
|
|
1,089 |
|
Non-current income taxes payable |
|
— |
|
|
|
30 |
|
Non-current tax liabilities |
|
148 |
|
|
|
157 |
|
Deferred tax liabilities, net |
|
248 |
|
|
|
255 |
|
Other liabilities |
|
885 |
|
|
|
903 |
|
Total Liabilities |
|
14,273 |
|
|
|
13,481 |
|
Equity: |
|
|
|
||||
CBRE Group, Inc. Stockholders’ Equity: |
|
|
|
||||
Class A common stock |
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
— |
|
|
|
— |
|
Accumulated earnings |
|
9,384 |
|
|
|
9,188 |
|
Accumulated other comprehensive loss |
|
(1,031 |
) |
|
|
(924 |
) |
Total CBRE Group, Inc. Stockholders’ Equity |
|
8,356 |
|
|
|
8,267 |
|
Non-controlling interests |
|
833 |
|
|
|
800 |
|
Total Equity |
|
9,189 |
|
|
|
9,067 |
|
Total Liabilities and Equity |
$ |
23,462 |
|
|
$ |
22,548 |
|
(1) |
Represents loan receivables, the majority of which are offset by borrowings under related warehouse line of credit facilities. |
CBRE GROUP, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in millions) |
|||||||
(Unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net income |
$ |
290 |
|
|
$ |
331 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
319 |
|
|
|
316 |
|
Amortization of financing costs |
|
3 |
|
|
|
2 |
|
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets |
|
(60 |
) |
|
|
(45 |
) |
Gain on disposition of real estate assets |
|
(13 |
) |
|
|
— |
|
Net realized and unrealized gains, primarily from investments |
|
(2 |
) |
|
|
(3 |
) |
Provision for doubtful accounts |
|
9 |
|
|
|
6 |
|
Net compensation expense for equity awards |
|
69 |
|
|
|
39 |
|
Equity loss (income) from unconsolidated subsidiaries |
|
73 |
|
|
|
(134 |
) |
Distribution of earnings from unconsolidated subsidiaries |
|
30 |
|
|
|
183 |
|
Proceeds from sale of mortgage loans |
|
4,129 |
|
|
|
4,356 |
|
Origination of mortgage loans |
|
(4,408 |
) |
|
|
(4,894 |
) |
Increase in warehouse lines of credit |
|
295 |
|
|
|
549 |
|
Tenant concessions received |
|
13 |
|
|
|
7 |
|
Purchase of equity securities |
|
(28 |
) |
|
|
(8 |
) |
Proceeds from sale of equity securities |
|
46 |
|
|
|
8 |
|
Increase in real estate under development |
|
(6 |
) |
|
|
(37 |
) |
Decrease (increase) in receivables, prepaid expenses and other assets (including contract and lease assets) |
|
110 |
|
|
|
(101 |
) |
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities) |
|
(77 |
) |
|
|
(313 |
) |
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing |
|
(788 |
) |
|
|
(811 |
) |
Increase in net income taxes receivable/payable |
|
(153 |
) |
|
|
(157 |
) |
Other operating activities, net |
|
(56 |
) |
|
|
(50 |
) |
Net cash used in operating activities |
|
(205 |
) |
|
|
(756 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
|
(135 |
) |
|
|
(135 |
) |
Acquisition of businesses, including net assets acquired and goodwill, net of cash acquired |
|
(1,051 |
) |
|
|
(166 |
) |
Contributions to unconsolidated subsidiaries |
|
(73 |
) |
|
|
(60 |
) |
Distributions from unconsolidated subsidiaries |
|
29 |
|
|
|
21 |
|
Acquisition and development of real estate assets |
|
(136 |
) |
|
|
— |
|
Proceeds from disposition of real estate assets |
|
6 |
|
|
|
— |
|
Other investing activities, net |
|
53 |
|
|
|
(30 |
) |
Net cash used in investing activities |
|
(1,307 |
) |
|
|
(370 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from revolving credit facility |
|
2,505 |
|
|
|
3,206 |
|
Repayment of revolving credit facility |
|
(1,565 |
) |
|
|
(2,801 |
) |
Proceeds from notes payable on real estate |
|
12 |
|
|
|
— |
|
Proceeds from issuance of |
|
495 |
|
|
|
— |
|
Proceeds from issuance of |
|
— |
|
|
|
975 |
|
Repurchase of common stock |
|
(47 |
) |
|
|
(130 |
) |
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date) |
|
(16 |
) |
|
|
(68 |
) |
Units repurchased for payment of taxes on equity awards |
|
(97 |
) |
|
|
(50 |
) |
Non-controlling interest contributions |
|
17 |
|
|
|
2 |
|
Non-controlling interest distributions |
|
(30 |
) |
|
|
(1 |
) |
Other financing activities, net |
|
(32 |
) |
|
|
(58 |
) |
Net cash provided by financing activities |
|
1,242 |
|
|
|
1,075 |
|
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash |
|
(68 |
) |
|
|
3 |
|
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
(338 |
) |
|
|
(48 |
) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD |
|
1,371 |
|
|
|
1,405 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD |
$ |
1,033 |
|
|
$ |
1,357 |
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
||||
Cash paid during the period for: |
|
|
|
||||
Interest |
$ |
170 |
|
|
$ |
91 |
|
Income tax payments, net |
$ |
244 |
|
|
$ |
303 |
|
Non-cash investing and financing activities: |
|
|
|
||||
Deferred and/or contingent consideration |
$ |
15 |
|
|
$ |
— |
|
Non-GAAP Financial Measures
The following measures are considered “non-GAAP financial measures” under SEC guidelines:
(i) |
Net revenue |
|
(ii) |
Core EBITDA |
|
(iii) |
Business line operating profit/loss |
|
(iv) |
Segment operating profit on revenue and net revenue margins |
|
(v) |
Free cash flow |
|
(vi) |
Net debt |
|
(vii) |
Core net income attributable to CBRE Group, Inc. stockholders, as adjusted (which we also refer to as “core adjusted net income”) |
|
(viii) |
Core EPS |
These measures are not recognized measurements under
Our management generally uses these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. The company believes these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. The company further uses certain of these measures, and believes that they are useful to investors, for purposes described below.
With respect to net revenue, net revenue is gross revenue less costs largely associated with subcontracted vendor work performed for clients. We believe that investors may find this measure useful to analyze the company’s overall financial performance because it excludes costs reimbursable by clients that generally have no margin, and as such provides greater visibility into the underlying performance of our business.
With respect to Core EBITDA, business line operating profit/loss, and segment operating profit on revenue and net revenue margins, the company believes that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the accounting effects of strategic acquisitions, which would include impairment charges of goodwill and intangibles created from such acquisitions, the effects of financings and income tax and the accounting effects of capital spending. All of these measures may vary for different companies for reasons unrelated to overall operating performance. In the case of Core EBITDA, this measure is not intended to be a measure of free cash flow for our management’s discretionary use because it does not consider cash requirements such as tax and debt service payments. The Core EBITDA measure calculated herein may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which amounts are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt. The company also uses segment operating profit and core EPS as significant components when measuring our operating performance under our employee incentive compensation programs.
With respect to free cash flow, the company believes that investors may find this measure useful to analyze the cash flow generated from operations after accounting for cash outflows to support operations and capital expenditures. With respect to net debt, the company believes that investors use this measure when calculating the company’s net leverage ratio.
With respect to core EBITDA, core EPS and core adjusted net income, the company believes that investors may find these measures useful to analyze the underlying performance of operations without the impact of strategic non-core equity investments (Altus Power, Inc. and certain other investments) that are not directly related to our business segments. These can be volatile and are often non-cash in nature.
Core net income attributable to CBRE Group, Inc. stockholders, as adjusted (or core adjusted net income), and core EPS, are calculated as follows (in millions, except share and per share data):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to CBRE Group, Inc. |
$ |
130 |
|
|
$ |
201 |
|
|
$ |
256 |
|
|
$ |
318 |
|
|
|
|
|
|
|
|
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||
Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions and restructuring activities |
|
47 |
|
|
|
40 |
|
|
|
87 |
|
|
|
90 |
|
Interest expense related to indirect tax settlement |
|
8 |
|
|
|
— |
|
|
|
8 |
|
|
|
— |
|
Impact of adjustments on non-controlling interest |
|
(6 |
) |
|
|
(8 |
) |
|
|
(6 |
) |
|
|
(18 |
) |
Net fair value adjustments on strategic non-core investments |
|
13 |
|
|
|
7 |
|
|
|
84 |
|
|
|
33 |
|
Costs associated with efficiency and cost-reduction initiatives |
|
67 |
|
|
|
3 |
|
|
|
97 |
|
|
|
141 |
|
Charges related to indirect tax settlement |
|
13 |
|
|
|
— |
|
|
|
13 |
|
|
|
— |
|
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
|
1 |
|
|
|
(1 |
) |
|
|
15 |
|
|
|
6 |
|
Costs incurred related to legal entity restructuring |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Integration and other costs related to acquisitions (1) |
|
13 |
|
|
|
36 |
|
|
|
8 |
|
|
|
54 |
|
Tax impact of adjusted items and strategic non-core investments |
|
(38 |
) |
|
|
(20 |
) |
|
|
(75 |
) |
|
|
(76 |
) |
|
|
|
|
|
|
|
|
||||||||
Core net income attributable to CBRE Group, Inc., as adjusted |
$ |
248 |
|
|
$ |
258 |
|
|
$ |
489 |
|
|
$ |
548 |
|
|
|
|
|
|
|
|
|
||||||||
Core diluted income per share attributable to CBRE Group, Inc., as adjusted |
$ |
0.81 |
|
|
$ |
0.82 |
|
|
$ |
1.59 |
|
|
$ |
1.74 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding for diluted income per share |
|
308,035,211 |
|
|
|
314,282,247 |
|
|
|
308,269,040 |
|
|
|
314,821,615 |
|
Core EBITDA is calculated as follows (in millions, totals may not add due to rounding):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to CBRE Group, Inc. |
$ |
130 |
|
$ |
201 |
|
|
$ |
256 |
|
$ |
318 |
|||
Net income attributable to non-controlling interests |
|
12 |
|
|
|
5 |
|
|
|
34 |
|
|
|
13 |
|
Net income |
|
142 |
|
|
|
206 |
|
|
|
290 |
|
|
|
331 |
|
|
|
|
|
|
|
|
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
161 |
|
|
|
155 |
|
|
|
319 |
|
|
|
316 |
|
Interest expense, net of interest income |
|
63 |
|
|
|
43 |
|
|
|
99 |
|
|
|
71 |
|
Provision for income taxes |
|
32 |
|
|
|
55 |
|
|
|
3 |
|
|
|
84 |
|
Costs associated with efficiency and cost-reduction initiatives |
|
67 |
|
|
|
3 |
|
|
|
97 |
|
|
|
141 |
|
Charges related to indirect tax settlement |
|
13 |
|
|
|
— |
|
|
|
13 |
|
|
|
— |
|
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue |
|
1 |
|
|
|
(1 |
) |
|
|
15 |
|
|
|
6 |
|
Costs incurred related to legal entity restructuring |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Integration and other costs related to acquisitions (1) |
|
13 |
|
|
|
36 |
|
|
|
8 |
|
|
|
54 |
|
Net fair value adjustments on strategic non-core investments |
|
13 |
|
|
|
7 |
|
|
|
84 |
|
|
|
33 |
|
Core EBITDA |
$ |
505 |
|
|
$ |
504 |
|
|
$ |
930 |
|
|
$ |
1,036 |
|
(1) |
During the first quarter of 2024, we incurred integration and other costs related to acquisitions of |
Core EBITDA for the trailing twelve months ended June 30, 2024 is calculated as follows (in millions):
|
Trailing
|
||
|
|
||
Net income attributable to CBRE Group, Inc. |
$ |
924 |
|
Net income attributable to non-controlling interests |
|
62 |
|
Net income |
|
986 |
|
|
|
||
Adjustments: |
|
||
Depreciation and amortization |
|
625 |
|
Interest expense, net of interest income |
|
177 |
|
Provision for income taxes |
|
169 |
|
Costs incurred related to legal entity restructuring |
|
15 |
|
Integration and other costs related to acquisitions (1) |
|
16 |
|
Carried interest incentive compensation expense to align with the timing of associated revenue |
|
2 |
|
Costs associated with efficiency and cost-reduction initiatives |
|
115 |
|
Charges related to indirect tax settlement |
|
13 |
|
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired |
|
(34 |
) |
Net fair value adjustments on strategic non-core investments |
|
19 |
|
|
|
||
Core EBITDA |
$ |
2,103 |
|
_______________ |
||
(1) |
During the first quarter of 2024, we incurred integration and other costs related to acquisitions of |
Revenue includes client reimbursed pass-through costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients. Reimbursement related to subcontracted vendor work generally has no margin and has been excluded from net revenue. Reconciliations are shown below (dollars in millions):
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Consolidated |
|
|
|
||||
Revenue |
$ |
8,391 |
|
$ |
7,720 |
||
Less: Pass-through costs also recognized as revenue |
|
3,420 |
|
|
|
3,242 |
|
Net revenue |
$ |
4,971 |
|
|
$ |
4,478 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Property Management Revenue |
|
|
|
||||
Revenue |
$ |
555 |
|
$ |
481 |
||
Less: Pass-through costs also recognized as revenue |
|
23 |
|
|
|
21 |
|
Net revenue |
$ |
532 |
|
|
$ |
460 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
GWS Revenue |
|
|
|
||||
Revenue |
$ |
5,944 |
|
$ |
5,426 |
||
Less: Pass-through costs also recognized as revenue |
|
3,397 |
|
|
|
3,221 |
|
Net revenue |
$ |
2,547 |
|
|
$ |
2,205 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Facilities Management Revenue |
|
|
|
||||
Revenue |
$ |
4,127 |
|
$ |
3,686 |
||
Less: Pass-through costs also recognized as revenue |
|
2,430 |
|
|
|
2,247 |
|
Net revenue |
$ |
1,697 |
|
|
$ |
1,439 |
|
|
|
Three Months
|
||
|
|
|
2024 |
|
Facilities Management Revenue from acquisitions since July 1, 2023 |
|
|
||
Revenue |
|
$ |
106 |
|
Less: Pass-through costs also recognized as revenue |
|
|
8 |
|
Net revenue |
|
$ |
98 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Project Management Revenue |
|
|
|
||||
Revenue |
$ |
1,817 |
|
$ |
1,740 |
||
Less: Pass-through costs also recognized as revenue |
|
967 |
|
|
|
974 |
|
Net revenue |
$ |
850 |
|
|
$ |
766 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Turner & Townsend |
|
|
|
||||
Revenue |
$ |
528 |
|
$ |
442 |
||
Less: Pass-through costs also recognized as revenue |
|
84 |
|
|
|
65 |
|
Net revenue |
$ |
444 |
|
|
$ |
377 |
|
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net revenue from Resilient Business lines (1) |
|
|
|
||||
Revenue |
$ |
6,898 |
|
$ |
6,302 |
||
Less: Pass-through costs also recognized as revenue |
|
3,420 |
|
|
|
3,242 |
|
Net revenue |
$ |
3,478 |
|
|
$ |
3,060 |
|
Below represents a reconciliation of REI business line operating profitability/loss to REI segment operating profit (in millions):
|
Three Months Ended June 30, |
||||||
Real Estate Investments |
|
2024 |
|
|
|
2023 |
|
Investment management operating profit |
$ |
39 |
|
|
$ |
38 |
|
Global real estate development operating loss |
|
(26 |
) |
|
|
(9 |
) |
Segment overhead (and related adjustments) |
|
(3 |
) |
|
|
4 |
|
Real estate investments segment operating profit |
$ |
10 |
|
|
$ |
33 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240725574112/en/
Chandni Luthra - Investors
212.984.8113
Chandni.Luthra@cbre.com
Steve Iaco - Media
212.984.6535
Steven.Iaco@cbre.com
Source: CBRE Group, Inc.
FAQ
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