Slide 1: 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, business outlook and adjusted earnings per share expectations, incl
Slide 2: Conference Call Participants
Conference Call Participants Bob Sulentic President and Chief Executive Officer Gil Borok Deputy Chief Financial Officer and Chief Accounting officer Jim Groch Chief Financial Officer Steve Iaco Investor Relations and corporate communications
Slide 3: Q3 2015 Highlights
28% increase in adjusted Earnings Per Share Closed Global Workplace Solutions acquisition on September 1st Large strategic acquisitions have helped to transform CBRE into a more resilient business People and platform initiatives continue to create value for clients and shareholders Q3 2015 HIGHLIGHT
Slide 4: Q3 2015 Performance Overview
Q3 2015 Performance Overview Revenue Fee Revenue1 EBITDA Normalized EBITDA2 Fee Revenue Margin3 Net Income4 EPS4,5 Q3 2015 $ 2,713 M $ 1,940 M $ 327 M $ 345 M 17.8% GAAP $ 149 M Adjusted $ 172 M GAAP $ 0.44 Adjusted $ 0.51 Q3 2014 $ 2,275 M $ 1,698 M $ 293 M $ 292 M 17.2% GAAP $ 107 M Adjusted $ 133
Slide 5: Global Workplace Solutions Acquisition Update
Expected run-rate cost synergies increased to $50 million from $35 million Approximately $30 million expected to be realized in 2016 Remaining run-rate savings largely expected by year-end 2017 Still expect acquisition to be materially accretive to 2016 adjusted EPS Now expect high-single-digit rath
Slide 6: Q3 2015 Business Line Revenue
Revenue ($ in millions) Contractual Revenue Sources Leasing Capital Markets Other Occupier Outsourcing1 Asset Services1 Investment Management Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total Gross Revenue Q3 2015 $996 $ 254 $ 114 $ 124 $ 616 $ 448 $ 125 $ 14 $ 22
Slide 7: Q3 2015 Region Highlights
Q3 2015 Region Highlights (% Increase in Local Currency) Business Overview Americas EMEA Asia Pacific Fee Revenue ▲18% Ex. GWS ▲14% Normalized EBITDA ▲18% Fee Revenue ▲29% Ex. GWS ▲19% Normalized EBITDA ▲70% Fee Revenue ▲22% Ex. GWS ▲17% Normalized EBITDA ▲54%
Slide 8: Occupier Outsourcing Highlights Q3 2015
Q3 YTD Q3 New 34 97 Expansions 36 87 Renewals 31 58 Occupier outsourcing Adopted Global Workplace Solutions name Most total contracts signed in any quarter YTD Q3 client expansions surpass any previous full-year total 9 total contracts signed in health care sector 2015 TOTAL CONTRACTS Facilities Man
Slide 9: Global Investment Management
Global Investment management CAPITAL RAISED1 ASSETS UNDER MANAGEMENT (AUM) ($ in billions) ($ in billions) Financial results Revenue Rental Carried Interest Asset Management Acquisition, Disposition & Incentive Capital to deploy: approx. $5.7 billion3 Co-Investment: $138.9 million3 ($ in millions) Q
Slide 10: Development Services
Revenue Pro-forma Revenue3 Development Services 1 $144.0 million of co-investments at the end of Q3 2015 $15.3 million in repayment guarantees on outstanding debt balances at the end of Q3 2015 Financial results PROJECTS IN PROCESS/PIPELINE ($ in billions) ($ in millions) 2 See slide 14 for footnote
Slide 11: Key Takeaways
key takeaways Continued strong performance across all geographic regions and lines of business Integration of acquired Global Workplace Solutions business off to a great start In light of our strategic and financial momentum, we are raising our guidance for full-year 2015 Now expect to achieve adjus
Slide 12: Supplemental Slides and GAAP Reconciliation Tables
Supplemental slides and GAAP Reconciliation tables
Slide 13: Footnotes
Footnotes Slide 5 Fee revenue is gross revenue less both client reimbursed costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients. Normalized EBITDA excludes (from EBITDA) certain carried interest incentive compensation exp
Slide 14: Mandatory Amortization and Maturity Schedule
Mandatory Amortization and Maturity Schedule ($ in millions) $2,600 million revolving credit facility and Term Loan A mature in January 2020. As of September 30, 2015, the revolving credit facility balance was $401 million. In August 2015, CBRE Services, Inc. issued $600 million in aggregate princip
Slide 15: Capitalization
Capitalization Excludes $69.6 million of cash in consolidated funds and other entities not available for Company use at September 30, 2015. In the third quarter of 2015, the Company elected to early adopt the provisions of Accounting Standards Update (ASU) 2015-03, “Interest-Imputation of Interest (
Slide 16: Americas Revenue
($ in millions) Occupier Outsourcing & Asset Services1 Leasing Sales Gross Fee2 Q3 2015 $ 636 $ 213 $ 440 $ 288 USD3 ▲24% ▲31% ▲6% ▲14% Local Currency3 ▲26% ▲33% ▲8% ▲16% Local Currency ex. GWS3 ▲9% ▲8% ▲8% ▲16% Occupier Outsourcing and Asset Services revenue excludes associated leasing and sales re
Slide 17: EMEA Revenue
($ in millions) Occupier Outsourcing & Asset Services1 Leasing Sales Gross Fee2 Q3 2015 $498 $ 218 $ 103 $ 89 USD3 ▲45% ▲32% ▲6% ▲ 7% Local Currency3 ▲57% ▲44% ▲ 22% ▲ 22% Local Currency ex. GWS3 ▲21% ▲19% ▲ 22% ▲ 22% EMEA revenue Q3 2015 fee revenue up 16% in USD or 29% in local currency Occupier O
Slide 18: Asia Pacific Revenue
($ in millions) Occupier Outsourcing & Asset Services1 Leasing Sales Gross Fee2 Q3 2015 $ 114 $ 44 $ 71 $ 71 USD3 ▲37% ▲24% ▲3% ▲3% Local Currency3 ▲48% ▲37% ▲ 19% ▲24% Local Currency ex. GWS3 ▲16% ▲6% ▲ 19% ▲24% Asia Pacific revenue Q3 2015 fee revenue up 5% in USD or 22% in local currency Occupier
Slide 19: U.S. Market Statistics
U.S. VACANCY U.S. ABSORPTION TRENDS (in MSF) 3Q14 3Q15 4Q15 F 4Q16F 3Q14 3Q15 2014 2015F Office 14.2% 13.4% 13.4% 12.7% 16.7 13.1 54.8 56.4 Industrial 10.5% 9.6% 9.7% 9.5% 64.0 55.6 249.7 174.3 Retail 11.6% 11.1% 10.8% 9.3% 8.2 4.3 28.6 31.9 U.S. Market Statistics Source: CBRE Econometric Advisors (
Slide 20: Other Financial Metrics
Other Financial metrics Three Months Ended September 30, ($ in millions) 2015 2014 Depreciation $ 35.0 $ 31.9 Normalized amortization 1 23.2 19.1 Net interest expense 29.5 26.2 Normalized income taxes 85.2 82.4 Normalized income tax rate 33.2% 38.3% Projected full-year normalized income tax rate of
Slide 21: Non-GAAP Financial Measures
Non-Gaap financial measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: (i) Fee revenue (ii) Net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as “adjusted net income”) (iii) Diluted income per share attributable to CBRE Gr
Slide 22: Reconciliation of Gross Revenue to Fee Revenue
Three Months Ended September 30, ($ in millions) 2015 2014 Occupier Outsourcing revenue 1 $ 996.1 $ 700.8 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 641.9 456.2 Occupier Outsourcing fee revenue 1
Slide 23: Reconciliation of Gross Revenue to Fee Revenue by Segment
Three Months Ended September 30, ($ in millions) 2015 2014 Americas revenue $ 1,556.6 $ 1,325.9 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 422.9 350.7 Americas fee revenue $ 1,133.7 $ 975.2 EMEA r
Slide 24: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Three Months Ended September 30, ($ in millions) 2015 2014 Normalized EBITDA $ 344.6 $ 292.2 Adjustments: Integration and other costs related to acquisitions 16.9 - Carried interest incentive compensation expense (reversal) 1 1.1 (0.7) EBITDA $ 326.6 292.9 Add: Interest income 1.1 1.6 Less: Deprecia
Slide 25: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Three Months Ended September 30, ($ in millions, except per share amounts) 2015 2014 Net income attributable to CBRE Group, Inc. $ 149.1 $ 107.1 Integration and other costs related to acquisitions, net of tax 13.1 - Amortization expense related to certain intangible assets attributable to acquisitio
Slide 26: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE Three Months Ended September 30, (Sin milions, except per share amounts) 2015 2014 Net income attributable to CBRE Group, Inc $s 1494 107.4 Integration and other costs related to acquisitions, net of tax 13.4 : ‘Amor