Slide 1: Second Quarter 2013: Earnings Conference Call
CBRE GROUP, INC. Second Quarter 2013: Earnings Conference Call July 25, 2013
Slide 2: Forward-Looking Statements
This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance and business outlook. These statements should be considered as estim
Slide 3: Conference Call Participants
CONFERENCE CALL PARTICIPANTS Bob Sulentic PRESIDENT AND CHIEF EXECUTIVE OFFICER Gil Borok CHIEF FINANCIAL OFFICER Cal Frese AMERICAS CHIEF EXECUTIVE OFFICER Nick Kormeluk INVESTOR RELATIONS
Slide 4: Q2 2013 Highlights
Total revenue increased 9% to $1.75 billion Asia Pacific led the regions with 16% revenue growth Americas revenue rose 10% EMEA revenue continued to improve with a 9% increase Capital Markets-based businesses again performed very well Property Sales revenue rose 20%, with strong growth in Asia Pacif
Slide 5: Q2 2013 Performance Overview
Q2 2013 PERFORMANCE OVERVIEW Revenue1 Net Income2 EPS2,3 EBITDA4 Normalized EBITDA4,5 Normalized EBITDA Margin5,6 Q2 2013 $1,747.0 M GAAP $69.9 M Adjusted $101.8 M GAAP $0.21 Adjusted $0.31 $240.5 M $243.1 M 13.9% Q2 2012 $1,601.1 M GAAP $75.9 M Adjusted $88.0 M GAAP $0.23 Adjusted $0.27 $211.8 M $2
Slide 6: Revenue Breakdown
REVENUE BREAKDOWN 1. Includes revenue from discontinued operations of $4.9 million and $8.9 million for the three and six months ended June 30, 2013, respectively. 2. Contains recurring revenue aggregating approximately 61% and 62% of total revenue for the three and six months ended June 30, 2013, r
Slide 7: U.S. Market Statistics
U.S. VACANCY U.S. ABSORPTION TRENDS (in millions of square feet) 2Q12 1Q13 2Q13 4Q13F 4Q14F 2011 2012 2013F 2014F 2Q12 2Q13 Office 15.8% 15.4% 15.2% 15.1% 14.3% 25.3 28.9 25.9 40.1 12.7 9.8 Industrial 13.1% 12.3% 12.0% 11.8% 11.5% 127.4 131.9 160.5 101.0 24.2 45.1 Retail 12.9% 12.5% 12.2% 11.6% 10.6
Slide 8: Americas Revenue: Major Components
Total Q2 2013 revenue up 10% AMERICAS REVENUE: MAJOR COMPONENTS 15% YTD Q2 5% 10% 19% Q2 5% 9% SALES LEASING ($ in millions) PROPERTY, FACILITIES & PROJECT MANAGEMENT
Slide 9: Diversification: Americas Revenue 2006 vs. TTM Q2 2013
DIVERSIFICATION GCS Leasing Sales Commercial Mortgage Brokerage Appraisal & Valuation 2006 TTM Q2 2013 AMERICAS REVENUE 2006 VS. TTM Q2 2013 Other Asset Services 39% 7% 34% 7% 7% 5% 1% 31% 28% 17% 12% 7% 4% 1%
Slide 10: Americas Global Corporate Services (GCS)
AMERICAS GLOBAL CORPORATE SERVICES (GCS) 2013 WINS PERCENT OF TTM Q2 2013 AMERICAS REVENUE 1. Does not include transaction commission revenue associated with GCS activities. GCS1 KEY SERVICES Transaction Management Project Management Facilities Management Consulting Global Q2 YTD New 22 44 Expansion
Slide 11: Americas Asset Services
Philadelphia Los Angeles Atlanta Cincinnati San Diego 2.0M SF 1.2M SF 800,000 SF 537,000 SF 387,000 SF AMERICAS ASSET SERVICES PERCENT OF TTM Q2 2013 AMERICAS REVENUE Asset Services KEY STRATEGIC ACCOUNTS PREMIER PROPERTY ASSIGNMENTS Philadelphia Navy Yard Burbank Town Center Three Ravinia Chiquita
Slide 12: Americas Leasing
AMERICAS LEASING PERCENT OF TTM Q2 2013 AMERICAS REVENUE Leasing KEY FACTS YTD Q2 2013 TRANSACTIONS Approximately 2,400+1 leasing professionals in the Americas Tailored service delivery by property type and industry/market specialization $53.9 billion Americas lease transactions in 2012 $38.7 billio
Slide 13: Americas Capital Markets
New York, NY Multiple US Markets Multiple US Markets São Paulo, Brazil Charlotte, NC Goldman Sachs/ Meraas Capital Goldman Sachs/ Greystar UBS Global Asset Management Eztec Childress Klein Properties (Seller) Starwood Capital (Buyer) $1.36 Billion (40% interest) $1.0 Billion $450 Million $275 Millio
Slide 14: EMEA Revenue: Major Components
Total Q2 2013 revenue up 9% in USD or 10% local currency EMEA REVENUE: MAJOR COMPONENTS SALES LEASING ($ in millions) 15% or 16% local currency 4% or 5% local currency 19% or 20% local currency YTD Q2 PROPERTY, FACILITIES & PROJECT MANAGEMENT (1%) or 1% local currency 3% or 4% local currency 22% or
Slide 15: Asia Pacific Revenue: Major Components
Total Q2 2013 revenue up 16% in USD or 20% local currency ASIA PACIFIC REVENUE: MAJOR COMPONENTS 61% or 67% in local currency (5%) or (1%) in local currency 8% or 12% in local currency YTD Q2 62% or 67% in local currency (1%) or 3% in local currency 8% or 12% in local currency Q2 SALES LEASING ($ in
Slide 16: Development Services
DEVELOPMENT SERVICES 1. In Process figures include Long-Term Operating Assets (LTOA) of $1.0 billion for 2Q 13, $1.2 billion for 4Q 12, $1.5 billion for 4Q 11, $1.6 billion for 4Q 10, $1.4 billion for 4Q 09 and $0.4 billion for 4Q 08. LTOA are projects that have achieved a stabilized level of occupa
Slide 17: Global Investment Management
GLOBAL INVESTMENT MANAGEMENT Includes revenue from discontinued operations of $0.8 million and $5.5 million for the twelve months ended December 31, 2012 and 2011, respectively. Includes revenue from discontinued operations of $0.8 million and $1.5 million for the three and six months ended June 30,
Slide 18: Pro-forma Normalized EBITDA: Global Investment Management
Pro-forma Normalized EBITDA GLOBAL INVESTMENT MANAGEMENT As of June 30, 2013, the Company maintained a cumulative remaining accrual of carried interest compensation expense of approximately $47 million, which pertains to anticipated future carried interest revenue. During the three months ended June
Slide 19: Mandatory Amortization and Maturity Schedule
As of June 30, 2013 MANDATORY AMORTIZATION AND MATURITY SCHEDULE $ in millions $1,200.0 million revolver facility matures in March 2018. As of June 30, 2013, the outstanding revolver balance was $140.3 million. 1 Global Cash Available Revolver 1,424 20 40 40 68 255 221 2 352 198 800 - 250.0 500.0 75
Slide 20: Capitalization
CAPITALIZATION Excludes $109.9 million and $94.6 million of cash in consolidated funds and other entities not available for Company use at June 30, 2013 and December 31, 2012, respectively. Net of original issue discount of $9.5 million at December 31, 2012. Represents notes payable on real estate i
Slide 21: Business Outlook: 2013 Expectations
At mid-year, performance generally is unfolding consistent with expectations Expect continued slow macro recovery Brand and well-balanced business give us confidence in the current environment Anticipate full year revenue growth in the mid to high single digits Property sales expected to remain stro
Slide 22: GAAP Reconciliation Tables
GAAP RECONCILIATION TABLES CBRE
Slide 23: Reconciliation of Net Income to Net Income, As Adjusted
RECONCILIATION OF NET INCOME TO NET INCOME, AS ADJUSTED 1. Carried interest incentive compensation is related to a fund that began recording carried interest expense in Q2 2013. ($ in millions, except for per share data) 2013 2012 Net income attributable to CBRE Group, Inc. 69.9 $ 75.9 $ Write-off o
Slide 24: Reconciliation of Normalized EBITDA to EBITDA to Net Income
RECONCILIATION OF NORMALIZED EBITDA TO EBITDA TO NET INCOME 1. Includes EBITDA related to discontinued operations of $3.0 million for the three months ended June 30, 2013. 2. Carried interest incentive compensation is related to a fund that began recording carried interest expense in Q2 2013. 3. Inc