Slide 1: Fourth Quarter 2014: Earnings Conference Call
CBRE GROUP, INC. Fourth Quarter 2014: Earnings Conference Call February 4, 2015
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 DEPUTY CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER Jim Groch CHIEF FINANCIAL OFFICER AND GLOBAL DIRECTOR OF CORPORATE DEVELOPMENT Steve Iaco INVESTOR RELATIONS AND CORPORATE COMMUNICATIONS
Slide 4: Full Year 2014 Global Results
FULL YEAR 2014 GLOBAL RESULTS See slide 17 for footnotes. Revenue Normalized EBITDA1 Adjusted EPS2 $9.0 billion $1.2 billion $1.68
Slide 5: Full Year 2014 Performance Overview
FULL YEAR 2014 PERFORMANCE OVERVIEW Revenue EBITDA Normalized EBITDA4 Net Income1 EPS1,2 2014 $ 9,050 M $ 1,142 M $ 1,166 M GAAP $ 485 M Adjusted $ 561 M GAAP $ 1.45 Adjusted $ 1.68 20133 $ 7,194 M $ 983 M $ 1,022 M GAAP $ 317 M Adjusted $ 474 M GAAP $ 0.95 Adjusted $ 1.43 Change from 2013 26% 16% 1
Slide 6: Full Year 2014 Business Line Revenue
Revenue ($ in millions) Contractual Revenue Sources Leasing Capital Markets Other Global Corporate Services and Asset Services1 Investment Management Appraisal & Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total 2014 $ 3,714 $ 469 $ 461 $ 2,369 $ 1,527 $ 376 $ 50
Slide 7: Q4 2014 Performance Overview
Q4 2014 PERFORMANCE OVERVIEW Revenue EBITDA Normalized EBITDA4 Net Income1 EPS1,2 Q4 2014 $ 2,787 M $ 392 M $ 412 M GAAP $ 204 M Adjusted $ 227 M GAAP $ 0.61 Adjusted $ 0.68 Q4 20133 $ 2,234 M $ 358 M $ 393 M GAAP $ 115 M Adjusted $ 221 M GAAP $ 0.34 Adjusted $ 0.67 Change from Q4 2013 25% 9% 5% 3%5
Slide 8: Q4 2014 Business Line Revenue
Revenue ($ in millions) Contractual Revenue Sources Leasing Capital Markets Other Global Corporate Services and Asset Services1 Investment Management Appraisal & Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total Q4 2014 $ 1,008 $ 125 $ 142 $ 819 $ 520 $ 129 $ 17 $
Slide 9: Americas Revenue
($ in millions) Global Corporate Services and Asset Services1 Leasing Sales Q4 2014 $ 545.9 $ 579.8 $ 309.0 USD2 16% 24% 14% Local Currency2 17% 25% 15% Full Year 2014 $ 2,013.8 $ 1,677.0 $ 934.5 USD3 14% 18% 15% Local Currency3 15% 19% 16% Global Corporate Services (GCS) and Asset Services revenue
Slide 10: EMEA Revenue
($ in millions) Global Corporate Services and Asset Services1 Leasing Sales Q4 2014 $ 371.6 $ 147.2 $ 142.1 USD2 193% (4% ex. Norland) 15% 16% Local Currency2 201% (11% ex. Norland) 22% 23% Full Year 2014 $ 1,368.1 $ 408.4 $ 351.7 USD3 232% (21% ex. Norland) 11% 28% Local Currency3 230% (19% ex. Nor
Slide 11: Asia Pacific Revenue
($ in millions) Global Corporate Services and Asset Services1 Leasing Sales Q4 2014 $ 84.2 $ 91.7 $ 68.2 USD2 15% 9% 5% Local Currency2 19% 15% 13% Full Year 2014 $ 318.7 $ 282.8 $ 239.8 USD3 11% 7% 19% Local Currency3 16% 11% 25% ASIA PACIFIC REVENUE Total Q4 2014 revenue up 8% in USD or 14% in loc
Slide 12: Global Corporate Services
Q4 Full Year New 37 107 Expansions 15 65 Renewals 11 58 GLOBAL CORPORATE SERVICES Record number of new clients in Q4 and full year 2014 3 new public sector clients in Q4 6 new clients in EMEA in Q4 Strong expansions in client relationships 9 expansions in Americas in Q4 4 expansions in Asia Pacific
Slide 13: Global Investment Management
Full Year Q4 Full Year Q4 GLOBAL INVESTMENT MANAGEMENT 4 CAPITAL RAISED1 ASSETS UNDER MANAGEMENT (AUM) ($ in billions) ($ in billions) FINANCIAL RESULTS Revenue Rental Carried Interest Asset Management Acquisition, Disposition & Incentive Capital to deploy: $5.9 billion5 Co-Investment: $150.4 millio
Slide 14: Development Services
Full Year Q4 Q4 Revenue Pro-forma Revenue4 3 3 DEVELOPMENT SERVICES 1 $118.8 million of co-investments at the end of Q4 2014 $10.1 million in repayment guarantees on outstanding debt balances at the end of Q4 2014 FINANCIAL RESULTS PROJECTS IN PROCESS/PIPELINE ($ in billions) ($ in millions) 3 3 2 S
Slide 15: Supplemental Slides and GAAP Reconciliation Tables
SUPPLEMENTAL SLIDES AND GAAP RECONCILIATION TABLES
Slide 16: Footnotes
FOOTNOTES Slide 4 Normalized EBITDA excludes certain carried interest incentive compensation expense, cost containment expenses and integration and other costs related to acquisitions. Adjusted EPS excludes certain carried interest incentive compensation expense, amortization expense related to cert
Slide 17: U.S. Market Statistics
U.S. MARKET STATISTICS U.S. VACANCY U.S. ABSORPTION TRENDS (in MSF) 4Q13 4Q14 1Q15F 4Q15F 4Q13 4Q14 2013 2014 2015F Office 14.9% 13.9% 13.9% 13.9% 13.9 15.2 36.0 52.5 34.2 Industrial 11.2% 10.3% 10.3% 10.0% 75.5 64.4 241.2 224.1 163.2 Retail 11.5% 11.4% 11.1% 9.9% 10.4 8.3 28.9 31.6 50.0 Source: CBR
Slide 18: Mandatory Amortization and Maturity Schedule
As of December 31, 20141 MANDATORY AMORTIZATION AND MATURITY SCHEDULE ($ in millions) $1,200.0 million revolver facility matures in March 2018. As of December 31, 2014, the outstanding revolver balance was $4.8 million. Pro-forma gives effect to a revolver facility of $2,600 million and a new term l
Slide 19: Capitalization
CAPITALIZATION Excludes $58.0 million of cash in consolidated funds and other entities not available for Company use at December 31, 2014. Excludes $501.2 million of aggregate warehouse facilities outstanding at December 31, 2014. Excludes non-recourse notes payable on real estate of $42.8 million a
Slide 20: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Three Months Ended December 31, Twelve Months Ended December 31, ($ in millions) 2014 2013 2014 2013 Normalized EBITDA $ 412.4 $ 392.7 $ 1,166.1 $ 1,022.3 Adjustments: Carried interest incentive compensation expense 1 20.4 5.7 23.8 9.2 Cost containment expenses - 17.6 - 17.6 Integration and other co
Slide 21: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Three Months Ended December 31, Twelve Months Ended December 31, ($ in millions, except per share amounts) 2014 2013 2014 2013 Net income attributable to CBRE Group, Inc. $ 204.3 $ 114.6 $ 484.5 $ 316.5 Carried-interest incentive compensation expense pertaining to future periods, net of tax 1 12.3 3