Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Q3 2007 Earnings Presentation
30 slides from Cbre's earnings presentation, Oct 30, 2007
Slide 1: Third Quarter 2007 Earnings Conference Call
CB Richard Ellis Group, Inc. Third Quarter 2007 Earnings Conference Call October 30, 2007
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 growth momentum in 2007, future operations, the impact of acquisitions and future financial perform
Slide 3: Conference Call Participants
Conference Call Participants Brett White, President and Chief Executive Officer Kenneth J. Kay, Senior Executive Vice President & Chief Financial Officer Ray Torto Principal & Chief Strategist, CBRE Torto Wheaton Research Nick Kormeluk, Senior Vice President, Investor Relations
Slide 4: Q3 2007 Summary
Q3 2007 Summary Strong quarterly results amid instability in the credit markets and mixed views about the U.S. economy Organic revenue growth of approximately 20% Continue to build market share through extensive global platform, broad range of services and quality of our brand
Slide 5: Q3 2007 Performance Highlights
Q3 2007 Performance Highlights Revenue $1.5 billion $524.9 million, or 54% higher than the prior year quarter $22.6 million, or 25% higher than the same quarter last year $35.7 million, or 38% higher than the same quarter last year GAAP: $114.9 million Adjusted: $130.2 million Increased 23% as compa
Slide 6: 2007 Revenue Breakdown
2007 Revenue Breakdown 3rd Quarter, 2007 Excludes Trammell Crow Company’s operations, which were not purchased until 12/20/2006. Includes Trammell Crow Company’s operations prior to the acquisition on 12/20/2006. The financial information including Trammell Crow Company is presented for informationa
Slide 7: Q3 2007 Segment Performance – Americas, EMEA and Asia Pacific
Q3 2007 Segment Performance – Americas, EMEA and Asia Pacific $914.7 ($ in millions) Revenue1 Normalized EBITDA2 Americas EMEA Asia Pacific $625.4 $320.2 $214.1 $134.5 $87.0 $139.6 $102.6 $70.0 $39.1 $19.1 $8.7 46% 50% 55% 36% 79% 2007 2006 120% Certain reimbursements (primarily salaries and related
Slide 8: GCS Strength in 2007
GCS Strength in 2007 Strong Account Activity 24 new accounts 12 account expansions 14 account renewals Cross Selling Initiatives Gaining Traction Fifth Third Bank: Transaction Management client added Project Management Services for 11.5 million sq. ft. Regions Bank: 10-year Facilities and Project Ma
Slide 9: CBRE Recent Wins
CBRE Recent Wins Tiffany & Co. Named CBRE as the exclusive tenant representative for retail expansion in Asia Pacific including Australia, Hong Kong, Singapore and Malaysia for both new stores, office and industrial requirements Paramount Group Represented Paramount Group in the sale of 32 Old Slip,
Slide 10: Investment Management Growth
Investment Management Growth Revenue ($ in Millions) CAGR: 41.4% Growth: 139.4% ANNUAL 3rd QUARTER Carried Interest Investment Management CAGR: 27.1% CBRE’s Assets Under Management ($ in Billions) 99.1 41.4 228.0 Growth: 171.8% YEAR TO DATE 268.5 3rd QUARTER EBITDA Growth: 52.6% 98.8 127.3 18.9 11.4
Slide 11: Global Investment Management Carried Interest
Global Investment Management Carried Interest Carried interest pertains to certain real estate investment funds from which CBRE earns an additional share of the profits from the fund once its performance meets certain financial hurdles Dedicated fund team leaders and executives in our investment man
Slide 12: Q3 2007 Segment Performance - Development Services
Q3 2007 Segment Performance - Development Services ($ in billions) Projects In Process/Pipeline 3rd Quarter Activities ($ in millions) Three Months Ended September, 2007 Revenue 24.3 EBITDA 2.7 Add Back: Purchase Accounting Adjustment for the Trammell Crow Company Acquisition 8.4 Pro-forma EBITDA 11
Slide 13: Q3 2007 Financial Results
Q3 2007 Financial Results Excludes Trammell Crow Company’s operations, which were not purchased until 12/20/2006. Includes Trammell Crow Company’s operations prior to the acquisition on 12/20/2006. The financial information including Trammell Crow Company is presented for informational purposes only
Slide 14: YTD 2007 Financial Results
YTD 2007 Financial Results Excludes Trammell Crow Company’s operations, which were not purchased until 12/20/2006. Includes Trammell Crow Company’s operations prior to the acquisition on 12/20/2006. The financial information including Trammell Crow Company is presented for informational purposes onl
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets Represents Freddie Mac loan receivables, which are offset by the related non-recourse warehouse line of credit facility. Includes real estate and other assets held for sale, real estate under development and real estate held for investment. ($ in millions) 9/30/2007 12/31
Slide 16: Consolidated Balance Sheets (cont.)
Consolidated Balance Sheets (cont.) Represents the non-recourse warehouse line of credit facility, which supports the Freddie Mac loan receivables. Includes a non-recourse revolving credit facility balance of $49.1 million in Development Services as of September 30, 2007. Includes recourse notes pay
Slide 17: Capitalization
Capitalization Represents notes payable on real estate in Development Services that are recourse to the Company. Excludes non-recourse notes payable on real estate of $498.0 million and $329.6 million at September 30, 2007 and December 31, 2006, respectively. Excludes $450.9 million and $104.0 milli
Slide 18: Normalized Internal Cash Flow
Strong cash flow generator Low capital intensity Utilization of internal cash flow Debt reduction Co-investment activities Development In-fill acquisitions Q3 2007 Trailing Twelve Months Normalized Internal Cash Flow ($ millions) 487 Net Income, as adjusted D&A Cap Ex (53) 696 Represents capital exp
Slide 19: Moving Toward a Business Driven Economy
Moving Toward a Business Driven Economy We Believe Future GDP Will Continue Second Quarter Trend of Positive Contributions from Business Investment and Trade Source: BEA and Torto Wheaton Research % GDP -2% -1% 0% 1% 2% 3% 4% 5% 2004 2005 2006 2007 Q1 2007 Q2 Consumer Business Government
Slide 20: Business Has the Means to Continue the Expansion
Business Has the Means to Continue the Expansion Source: BEA and Torto Wheaton Research Corporate Profits as a % of GDP 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 21: Employment Situation
Employment Situation Employment % change versus a year ago -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Service-producing
Slide 22: Leasing Fundamentals
Leasing Fundamentals Annual % change in asking rents 9.2 9.3 9.5 Industrial 14.0 13.9 14.1 9.6 9.9 10.9 12.5 12.4 12.9 Office 9.3 9.4 8.4 Retail 3Q2007 2Q2007 3Q2006 Vacancy Summary Current Status of Property Markets 122.0 208.0 290.0 Industrial 49.6 79.8 89.3 Office 9.5 10.1 33.8 Retail 2007 2006 2
Slide 23: Summary
Summary Maintain full year 2007 diluted earnings per share growth of approximately 50% as compared to 2006 performance, excluding one time items Business side of the economy still looks generally favorable Offshore capital investment at record levels Well positioned to capture increasing market shar
Slide 24: Appendix
Appendix
Slide 25: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation of Net Income to Net Income, As Adjusted Twelve Months Ended Dec. 31, ($ in millions) 2007 2006 Net income 114.9 92.3 Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired, net of tax 6.1 0.8 Integration costs related to acquisitions,
Slide 26: Earnings Per Share Dynamics
Earnings Per Share Dynamics1 1. All EPS information is based upon diluted shares. GAAP EPS Integration costs related to acquisitions Adjusted EPS $0.48 $0.03 $0.55 Merger-related charges $0.01 Amortization of net revenue backlog, incentive fees and customer relationships acquired $0.03 Amortization
Slide 27: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income Nine Months Ended September 30, ($ in millions) 2007 2006 2007 2006 Normalized EBITDA 254.6 165.6 684.2 398.6 Adjustments: Integration costs related to acquisitions 9.6 2.1 34.3 5.5 Loss on sale of trading securities acquired in the Trammel
Slide 28: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) Three Months Ended September 30, 2006 ($ in millions) Americas EMEA Asia Pacific Global Investment Management Development Services Normalized EBITDA 102.6 39.1 8.7 15.2 - Less: Integration costs related to acquisitions 1.3 0.4 0.4 -
Slide 29: Reconciliation of Net Income to Net Income, As Adjusted (TTM)
Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired1 Integration costs related to acquisitions1 Loss related to trading securities acquired in the Trammell Crow Company acquisition1 Merger-related charges1 Costs of extinguishment of debt1 Reconcili
Slide 30: CBRE
CBRE CB RICHARD ELLIS
CB Richard Ellis Group — Q3 2007 Earnings Presentation on 6ix