Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Q4 2004 Earnings Presentation
25 slides from Cbre's earnings presentation, Feb 3, 2005
Slide 1: Fourth Quarter 2004 Financial Results
Fourth Quarter 2004 Financial Results Investor Conference Call February 3, 2005 CBRE
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. These statements should be considered as estimates only and actual results may ultimately differ from these estimates. Except to the
Slide 3: Conference Call Participants
onference Call Participants Ray Wirta - Chief Executive Officer Brett White — President Ken Kay — Senior Executive Vice President and Chief Financial Officer Shelley Young — Director of Investor Relations CBRE 2 CE RICHARD ELS
Slide 4: Fourth quarter and year-to-date 2004 revenue growth highlights
= Fourth quarter and year-to-date 2004 revenue growth of 29% and 45%, respectively = Strong investment properties sales and improved leasing fundamentals in 2004 = Net income, as adjusted for one-time items, of $117.9 million in 2004 versus $36.8 million in 2003, an increase of 220% = Diluted earnin
Slide 5: Q4 2004 Performance: Overview
@4 2004 Performance: Overview — Revenue totaled $798.2 million, 29% higher than the prior year quarter — 9th straight quarter of double-digit year over year organic revenue growth — Netincome totaled $66.4 million, as compared to a net loss of $10.1 million for the same quarter last year + Excluding
Slide 6: Q4 2004 Performance: Overview
@4 2004 Performance: Overview — GAAP EPS of $0.88 vs. Adjusted EPS of $0.90' — Operating income totaled $110.2 million, $91.1 million higher than the same quarter last year + Operating Income, excluding merger-related charges and integration costs, totaled $115.6 million for 2004 as compared to $74.
Slide 7: Q4 Financial Results
@4 Financial Results in millions) 2004 2003_% Change Revenue 798.2 6213 2) Cost of Services 406.2 3119 20 Operating, Admin. & Other 2669 34.1 14 Depreciation & Amortization 149 391 -62 Merger-Related Charges = 174 -100) Operating Incomerloss 110.2 19.1 an One Time Charges: Merger-Related Charges - 1
Slide 8: Year Financial Results
Yea 2003 Incl. Gin millions) 2004 _Reported'_% Change Insignia’ _% Change Revenue 2,365.1 1,630.1 45 1,948.8 21 Cost of Senices 1,203.8 796.4 51 968.9 24 Operating, Admin. & Other 909.8 6784 4 826.9 10 Depreciation & Amortization 9 92.6 Pal 102.0 46 Menger-Related Charges 25.6 36.8 -30 36.8 -30 Oper
Slide 9: 2004 Revenue Breakdown
2004 Revenue Breakd Quarter ended December 31, ‘Year-to-date Decentber 34, nv $ milions) 2003 Incl, 200s 2003 _% Change 2004 Reported Insignia? % Change Iivestrent Sales 2836 1743 3 ord 6126 8888 a2 Leasing ag 3000 8 93 g92 «= 80.4 Property and Facilities Management e241 461 13 196914361780 6 ‘Appra
Slide 10: Operating Income Margins
erating Income Margins compensation expense 164 aa a24 104 et e+ a4 24 o4 ‘4th Quarter Fully ear 2003 inet signa Na ce 2008 120 aa 2004 145 04 2008 incl. Insignia & 2003 m 2004 Notes 9 Continued margin improvement due to: = Robust revenue growth = Productivity improvements = Operating feverage Opera
Slide 11: Q4 2004 Earnings Per Share Dynamics
@4 2004 Earnings Per Share Dyna Excluding One Time Charges’ $0.02 (80.02) sooo EE) En $0.88 SRABERS insignia Amortization of Tax aduatments Adjusted EFS integration —Insighiarevenue relatingto. harass backlog insignia mergerteated charges, IPO-and ‘edingulshment 41. AIIEPS information is based upon
Slide 12: 2004 Earnings Per Share Dynamics
igs Per Share Dyna Excluding One Time Charges' $0.13 $1.65 GAAP EPS Insignia Amortization of insignia Coats of PO "AdiatH EPS infegration nsigriarevenue mergerrelsted extinguishment Costs charges backiag charges of dabt related tothe IPO 41. AIIEPS information is based upon diluted shares. CBRE 4 CB
Slide 13: Consolidated Balance Sheets
onsolidated Balance Sheets (Unaucited) Asof 1213112003__Variance Total assets (Sin millions) 1213112004 Assets Cash and cash equivalents 2569 Restricted cash 92 Receivables, net 394.1 Warehouse receivable! 138.2 Property and equiment, net 1377 Goodwill and other intagible assets, net 935.1 Deferred
Slide 14: Consolidated Balance Sheets (cont.)
‘onsolidated Balance Sheets (cont. (Unaudited) As of (Sin millions) 1213112004 _12/3112003_ Variance Liabilities Current liabilities, excluding debt 637.2 552.0 85.2 ‘Warehouse line of creait! 138.2 230.8 92.6) Senior secured term loan tranche B 2TTA 297.6 (20.4) 11% senior subordinated notes 205.0
Slide 15: Capitalization
Capitalization As of % (8 in millions) 12/31/2004 _12/31/2003_ Change Cash 2569 1639 87 Revolver 3 : E Tranche 6 loan a4 2978 7 Other debt! 25 99.2 43 99% senior notes 1300 200.0 35 11'% senior subordinated notes? 205.0 226.2 E) Total CB Richard Ellis Senices debt 6B 7629 47 16% senior notes E 35 10
Slide 16: 2004 Normalized Internal Cash Flow
2004 Normalized Internal Cash Flo mmo » Strong cash flow generation 180 10 » Low capital intensity » 2004 capital expenditures exclude $12.0 million related to the integration of Insignia 0 Net income, as adjusted (2) Intemal Cash Flow (a) Reconciliation of forecast net income to net income, as agju
Slide 17: 2005 Guidance
2005 Guidance: = Revenue growth of approximately 8% = Net income within the range of $149 to $156 million = Earnings per share growth of approximately 18% to 24% resulting in a guidance range of $1.95 to $2.05! 41. Excluding residual one-time Insignia and debt buy-back charges of approximately 515 m
Slide 18: Q4 2004 Segment Performance
@4 2004 Segment Performance CBRE Revenue ‘Adjusted Opersting neon” in $ milions| q >) som | zoe | % | 2om | 2000 | .%* cha cha ameicas | sai | arzz | 20% | o20 | a2 | ao emes | 1908 | sane | 19% | ozs | 210 | 6 oe soa | aes | s2% | a2 | 52 77% obal Investment | 338 | 245 | 62% | tio | 82 | ata" Mana
Slide 19: CBRE Recent Wins
CBRE Recent Wins Americas * Alean — Providing transaction management services for facilities in 60 countries with total portfalio estimated at approximately 30 million square feet * Berkshire Realty Holdings — Disposed of a national apartment portfolio comprised at 38 properties with a combined valu
Slide 20: Favorable Trends
Favorable Trends = Robustinvestment sales market in the U.S. despite measured increases in short. term interest rates in the second half of 2004 = Strong investment sales activity is expected to continue into 2005 = Increased corporate confidence and sustained employment growth have bolstered U.S. l
Slide 21: Record Performance
= Record Performance v Strong revenue, EBITDA, net income and earnings per share in the fourth quarter and full year 2004 = Macro Trends v Continued strength in investment property sales market and higher capital allocations to real estate v Further improvement in the global leasing market fueled by
Slide 22: Appendix
Appendix CBRE
Slide 23: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation of Net Income to Net Income, As Adjusted 2004 Results Corry v0 (a) Intangible asset amortization expense related to Insignia net revenue backlog (b) Insignia merger and integration related costs eo 185 (c) One-time IPO related compensation expense (d) Costs of extinguishment of debt r
Slide 24: EBITDA Reconciliation
(In 0008) Net incorne (lass) Add: Depreciation and amortization Interest expense Loss on extinguishment of debt Provision (benefit) for income taxes Less Interest income EBITDA 5 Three Months Ended Twelve Months Ended December 31 December 31 2004 2003 2004 2003 66433 § © (10084) 64725 § @4704) 14 B5
Slide 25: Searchable text section of graphics shown above
Searchable text section of graphics shown above Fou rth Quarter 2004 Financial Results [GRAPHIC] Investor Conference Call February 3, 2005 [LOGO] For ward Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform
CB Richard Ellis Group — Q4 2004 Earnings Presentation on 6ix