Slide 1: CBRE Group, Inc. Third Quarter 2012 Earnings Conference Call
CBRE Group, Inc. Third Quarter 2012 Earnings Conference Call October 30, 2012
Slide 2: Forward Looking Statements
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 sh
Slide 3: Conference Call Participants
Conference Call Participants Brett White Chief Executive Officer Bob Sulentic President Gil Borok Chief Financial Officer Nick Kormeluk Investor Relations
Slide 4: Business Overview
Business Overview Highlights: Total Company revenue increased 1% (5% in local currency) to $1.6 billion in Q3 2012 versus Q3 2011 The Americas achieved 4% overall revenue growth in Q3 2012 versus Q3 2011 Outsourcing revenue grew 7% (11% in local currency) in Q3 2012 versus Q3 2011 and set new quarte
Slide 5: Selected Assignments Across Regions
UNITED STATES IndCor Properties CBRE was selected by IndCor Properties, Inc., a portfolio company of the Blackstone Group, to manage 8.7M SF. The portfolio consists of industrial properties in seven markets in the southwest and southeast. EUROPE Valad CBRE was selected to exclusively market three in
Slide 6: Q3 2012 Performance Overview
Q3 2012 Performance Overview Q3 2012 Q3 2011 Revenue $1,557.1 million $1,534.5 million Net Income1 GAAP $39.7 million Adjusted $83.6 million GAAP $63.8 million Adjusted $77.7 million EPS1,2 GAAP $0.12 Adjusted $0.26 GAAP $0.20 Adjusted $0.24 EBITDA $163.6 million $179.0 million Normalized EBITDA3 $1
Slide 7: Revenue Breakdown 3rd Quarter 2012
Revenue Breakdown 3rd Quarter 2012 Includes revenue from discontinued operations of $2.4 million for the nine months ended September 30, 2011. Contains recurring revenue aggregating approximately 62% of total revenue. 36% 29% 15% 7% 6% 5% 1% 1% ($ in millions) 2012 2011 USD Local Currency 2012 2011
Slide 8: Outsourcing
Outsourcing CAGR 13% 1. Represents combined data for CBRE and TCC; does not include joint ventures and affiliates. Q3 2012 Wins 25 new 26 renewals 16 expansions Highlights: 67 contracts signed in Q3 2012, the highest Company total ever 25 new contracts and 16 expansions in Q3 2012 set new quarterly
Slide 9: US Market Statistics
US Market Statistics Source: CBRE Econometric Advisors (EA) Outlooks Q4 2012 preliminary US Vacancy US Absorption Trends (in millions of square feet) 3Q11 2Q12 3Q12 4Q12 F 4Q13F 2010 2011 2012F 2013F 3Q11 3Q12 Office 16.2% 15.7% 15.5% 15.5% 14.7% 20.2 26.4 25.6 39.6 3.1 8.2 Industrial 13.7% 13.2% 13
Slide 10: Sales, Leasing and Outsourcing Revenue - Americas
Sales, Leasing and Outsourcing Revenue - Americas 14% 2% (5%) (2%) ($ in millions) Outsourcing Sales Leasing 12% 13% Total Q3 2012 revenue was up 4% 2011 2012
Slide 11: Sales, Leasing and Outsourcing Revenue - EMEA
Sales, Leasing and Outsourcing Revenue - EMEA (8%) or (1%) in local currency (17%) or (11%) in local currency (17%) or (10%) in local currency ($ in millions) Outsourcing Sales Leasing (3%) or 5% in local currency Total Q3 2012 revenue was down 17% or 9% in local currency (24%) or (18%) in local cur
Slide 12: Sales, Leasing and Outsourcing Revenue – Asia Pacific
Sales, Leasing and Outsourcing Revenue – Asia Pacific (11%) or (9%) in local currency (1%) or 1% in local currency ($ in millions) Outsourcing Sales Leasing 6% or 13% in local currency Total Q3 2012 revenue was down 4% but up 2% in local currency (6%) or (2%) in local currency (12%) or (9%) in local
Slide 13: Development Services
Development Services Highlights: $82.1 million of co-investments at the end of Q3 2012 $15.7 million in recourse debt to CBRE and repayment guarantees at the end of Q3 2012 In Process figures include Long-Term Operating Assets (LTOA) of $1.6 billion for 3Q 12, $1.5 billion for 4Q 11, $1.6 billion fo
Slide 14: Global Investment Management
Global Investment Management ($ in billions) ($ in millions) CAGR 20% CAGR 24% Includes revenue from discontinued operations of $5.5 million for the twelve months ended December 31, 2011. Includes revenue from discontinued operations of $2.4 million for the nine months ended September 30, 2011. Inte
Slide 15: Global Investment Management Pro-forma Normalized EBITDA
Global Investment Management Pro-forma Normalized EBITDA For the three months ended September 30, 2012 and 2011, the Company recorded net carried interest compensation expense pertaining to future periods of $1.6 million and $7.4 million, respectively. For the nine months ended September 30, 2012 an
Slide 16: Mandatory Amortization and Maturity Schedule
Mandatory Amortization and Maturity Schedule $ millions $700.0 million revolver facility matures in May 2015. As of September 30, 2012, the outstanding revolver balance was $72.7 million. As of September 30, 2012 1 Global Cash Revolver Available 1,319 17 71 76 373 424 458 378 370 350 - 250.0 500.0 7
Slide 17: Capitalization
Capitalization Excludes $66.9 million and $208.1 million of cash in consolidated funds and other entities not available for Company use at September 30, 2012 and December 31, 2011, respectively. Net of original issue discount of $9.9 million and $11.0 million at September 30, 2012 and December 31, 2
Slide 18: Business Outlook
Business Outlook We believe that the cyclical recovery in commercial real estate is continuing despite the pause in Q3 2012 Outsourcing is expected to deliver solid, consistent growth Transaction activity should follow confidence levels with regard to global economic recovery and employment growth I
Slide 19: GAAP Reconciliation Tables
GAAP Reconciliation Tables CBRE
Slide 20: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income ($ in millions) 2012 2011 Normalized EBITDA 195.3 $ 194.8 $ Adjustments: Cost containment expenses 17.5 - Integration and other costs related to acquisitions 14.2 9.9 Write-down of impaired assets - 5.9 EBITDA 163.6 179.0 Add: Interest inco
Slide 21: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation of Net Income to Net Income, As Adjusted ($ in millions, except for per share data) 2012 2011 Net income attributable to CBRE Group, Inc. 39.7 $ 63.8 $ Non-amortizable intangible asset impairment, net of tax 15.0 Cost containment expenses, net of tax 13.5 - Integration and other costs