Slide 1: Fourth Quarter 2012 Earnings Conference Call
CBRE Group, Inc. Fourth Quarter 2012 Earnings Conference Call February 6, 2013
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 Bob Sulentic PRESIDENT AND CHIEF EXECUTIVE OFFICER Gil Borok CHIEF FINANCIAL OFFICER Bill Concannon CHIEF EXECUTIVE OFFICER, GLOBAL CORPORATE SERVICES Nick Kormeluk INVESTOR RELATIONS
Slide 4: Business Overview: 2012 Full Year Highlights
Business Overview 2012 FULL YEAR HIGHLIGHTS Revenue rose 10% to $6.5 billion, driven by investment management, capital markets and outsourcing Highest annual revenue in company history Normalized EBITDA grew 14% to $918.4 million and normalized EBITDA margin increased 50 basis points to 14.1% Normal
Slide 5: Business Overview: Q4 2012 Highlights
Business Overview Q4 2012 HIGHLIGHTS Total revenue increased 14% Solid growth across major service lines and all geographies Investment sales revenue grew 22% globally Especially strong growth in the Americas Resilient performance in EMEA Global outsourcing revenue grew 13% Double digit growth in al
Slide 6: Notable Transactions and Assignments
WASHINGTON, D.C Arnold & Porter GERMANY AXA Investment Managers SA and Norges Bank Investment Management CBRE arranged a 375,000 SF lease for Arnold & Porter LLP, one of D.C.’s largest law firms. Arnold & Porter pre-leased 81% of Boston Properties’ newest development, 601 Massachusetts Avenue (slate
Slide 7: Global Corporate Services
Global Corporate Services 1. Represents combined data for CBRE and Trammell Crow Company (TCC); includes properties managed by Asset Services; does not include joint ventures and affiliates. 2012 Q4 89* new 19 new 95* renewals 21 renewals 56* expansions 21* expansions 240 total contracts is the high
Slide 8: Global Corporate Services Macro Trends
Global Corporate Services Macro Trends *McKinsey Report estimated Global Real Estate outsourcing market size to be ~$50B Clients Continue to Shift Towards CRE Centralization Clients Continue to Rationalize Supply Chain Activities New Markets & Sectors are Emerging CRE Market Size Holds Potential for
Slide 9: Q4 2012 Performance Overview
Q4 2012 Performance Overview 1. Includes revenue from discontinued operations of $5.7 million and $4.4 million for the three months ended December 31, 2012 and 2011, respectively. 2. Adjusted net income and adjusted EPS exclude amortization expense related to customer relationships resulting from th
Slide 10: Full Year 2012 Performance Overview
Full Year 2012 Performance Overview 1. Includes revenue from discontinued operations of $5.7 million and $6.7 million for the twelve months ended December 31, 2012 and 2011, respectively. 2. Adjusted net income and adjusted EPS exclude amortization expense related to customer relationships resulting
Slide 11: Revenue Breakdown: 4th Quarter 2012
Revenue Breakdown 1. Includes revenue from discontinued operations of $5.7 million and $4.4 million for the three months ended December 31, 2012 and 2011, respectively. 2. 2. Contains recurring revenue aggregating approximately 55% of total revenue for the three months ended December 31, 2012. 4TH Q
Slide 12: Full Year 2012 Revenue Breakdown
FULL YEAR 2012 Revenue Breakdown 1. Includes revenue from discontinued operations of $5.7 million and $6.7 million for the twelve months ended December 31, 2012 and 2011, respectively. 2. Contains recurring revenue aggregating approximately 59% of total revenue for the twelve months ended December 3
Slide 13: US Market Statistics
US Market Statistics Source: CBRE Econometric Advisors (EA) Outlooks 1Q 2013 preliminary Starting in Q2 2011 retail was expanded to include strip centers, neighborhood centers and community centers US Vacancy US Absorption Trends (in millions of square feet) 4Q11 3Q12 4Q12 4Q13 F 4Q14F 2011 2012 201
Slide 14: Sales, Leasing and Outsourcing Revenue: Americas
Sales, Leasing and Outsourcing Revenue: Americas Total Q4 2012 revenue was up 16% SALES LEASING OUTSOURCING ($ in millions) 32% Q4 FULL YEAR 20% 7% 4% 13% 12% 2011 2012
Slide 15: Sales, Leasing and Outsourcing Revenue: EMEA
Sales, Leasing and Outsourcing Revenue: EMEA 0% or 4% in local currency (12%) or (7%) in local currency 13% or 14% in local currency 3% or 9% in local currency 0% or 1% in local currency 17% or 20% in local currency SALES LEASING OUTSOURCING ($ in millions) Total Q4 2012 revenue was up 7% or 8% in l
Slide 16: Sales, Leasing and Outsourcing Revenue: Asia Pacific
Sales, Leasing and Outsourcing Revenue: Asia Pacific (8%) or (7%) in local currency 2% or 3% in local currency 8% or 13% in local currency (1%) or (3%) in local currency 7% and 7% in local currency 13% or 14% in local currency SALES LEASING OUTSOURCING ($ in millions) Total Q4 2012 revenue was up 7%
Slide 17: Development Services
Development Services 1. In Process figures include Long-Term Operating Assets (LTOA) of $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 both 4Q 08 and 4Q 07. LTOA are projects that have achieved a stabilized level of occupancy or ha
Slide 18: Global Investment Management
Global Investment Management 1. Includes revenue from discontinued operations of $0.8 million for both the three and twelve months ended December 31, 2012. 2. Includes revenue from discontinued operations of $3.1 million and $5.5 million for the three and twelve months ended December 31, 2011, respe
Slide 19: Global Investment Management
Global Investment Management Performance of combined legacy and ING REIM businesses in line with expectations CBRE Strategic Partners (SP) US Value 6 fund closed with $1.1 billion of equity commitments, exceeding expectations CBRE’s co-investments totaled $211.5 million at the end of Q4 2012 ASSETS
Slide 20: Global Investment Management Pro-forma Normalized EBITDA
Global Investment Management Pro-forma Normalized EBITDA For the three months ended December 31, 2012 and 2011, the Company recorded net carried interest compensation expense pertaining to future periods of $6.0 million and $10.5 million, respectively. For the twelve months ended December 31, 2012 a
Slide 21: Mandatory Amortization and Maturity Schedule
Mandatory Amortization and Maturity Schedule $ in millions $700.0 million revolver facility matures in May 2015. As of December 31, 2012, the outstanding revolver balance was $73.0 million. As of December 31, 2012 1 Global Cash Revolver Available 1 , 607 71 76 373 424 458 378 370 350 - 250 . 0 500 .
Slide 22: Capitalization
Capitalization Excludes $94.6 million and $208.1 million of cash in consolidated funds and other entities not available for Company use at December 31, 2012 and December 31, 2011, respectively. Net of original issue discount of $9.5 million and $11.0 million at December 31, 2012 and December 31, 201
Slide 23: Business Outlook
Business Outlook We expect 2013 to be the fourth year in a slow commercial real estate recovery Overall revenue is expected to grow in the mid to high single digits Leasing revenue expected to strengthen modestly in the second half Investment sales revenue should increase in line with improving fund
Slide 24: GAAP Reconciliation Tables
GAAP Reconciliation Tables CBRE
Slide 25: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income ($ in millions) 2012 2011 2012 2011 Normalized EBITDA 351.7 $ 314.9 $ 918.4 $ 802.6 $ Adjustments: Integration and other costs related to acquisitions 6.0 45.1 39.2 68.8 Cost containment expenses - 31.1 17.6 31.1 Write-down of impaired asse
Slide 26: 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 2012 2011 Net income attributable to CBRE Group, Inc. 173.0 $ 79.8 $ 315.6 $ 239.2 $ Integration and other costs related to acquisitions, net of tax 4.5 42.8 29.9 59.6 Amortization expense re