Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Q3 2004 Earnings Presentation
23 slides from Cbre's earnings presentation, Nov 4, 2004
Slide 1: Third Quarter 2004 Financial Results
Third Quarter 2004 Financial Results Investor Conference Call November 4, 2004 CBRE
Slide 2: Forward Looking Statements
Link to searchable text of slide shown above
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: Q3 2004 Performance: Overview
@3 2004 Performance: Overview — Revenue totaled $575.0 million, 36% higher than the prior year quarter’, with organic revenue growth of 24% + 8th straight quarter of double-digit year over year organic revenue gains — Netincome totaled $11.9 million, as compared to a net loss of $28.4 million for th
Slide 5: searchable text of slide shown abov e
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Slide 6: Financial Results
3 Financial Results 2003 (Sin millions) 2004 Reported’ _% Change Revenue 575.0 423.4 36 Cost of Sewices 300.7 207.8 45 230.1 31 Operating, Admin. & Other 213.2 180.7 18 201.4 6 Depreciation & Amortization 12.4 4d 70 42.2 71 Merger-Related Costs 4.0 16.5 76 16.5 76 Operating Incomefloss AAT 227 na 28
Slide 7: Year to Date Financial Results
Yea 2003 Incl. ( in millions) 2004 Reported’ % Change Insignia’ % Change Revenue 1,566.9 1,008.8 55 1,327.6 18 Cost of Sewices 797.5 484.5 65 657.2 21 Operating, Admin. & Other 643.0 444.3 45 592.7 8 Depreciation & Amortization 40.0 53.5 1 62.9 36 Merger-Related Costs 25.6 19.8 29 19.8 29 Operating
Slide 8: Q3 2004 Earnings Per Share Dynamics
@3 2004 Ean igs Per Share Dynamics Excluding One Time Costs related to Merger and IPO’ $0.15 $0.40 $0.02 = $009 oo sic Ti GAAP EPS _-sigla__siglaAnoficdion sf! _Conlsa Adjusted EPS mesgerrdcted inlaplaion Wsigniareverue exingichnert Charges “ohargesbaciog raat relied tome PO 41. All EPS infomation i
Slide 9: Q3 2004 Financial Performance: Operating Income Margin
@3 2004 Financ! 140 120 Significant margin improvement 10.0 due to: eo = Revenue growth wack = Fixed cost leverage ae = Productivity improvements sash * Realization of synergies from Insignia transaction oo Operating Income Margin % [2006 nel. nsiania 4a 2008 37 008 24 2003 m 2004 2008 Incl. Insigni
Slide 10: Consolidated Balance Sheets
onsolidated Balance Sheets CBRICHARD ELLIS GROUP, INC. CONSOLIDATED BALANCE SHEETS, ($ in millions) (Unaudited) September 30, December 31, ID 2004 2003 variance Assets: Cash and cash equivalents 1479 163.9 (16.0) Restricted cash 10.6 14.9 43 Warehouse receivable! 1118 230.8 119.0) Other current asse
Slide 11: Consolidated Balance Sheets (cont.)
onsolidated Balance Sheets (cont.) September 30, December 31, vp 2008 2003. Variance Liabitties: Curent liabilities, excluding debt 4834 5620 68.6) Warehouse line of credit! 18 2308 (119.0) Senior securedterm loan tranche 8 220.0 2075 ars 1 "op senior subordinated notes 208.0 2262 212 07% senior not
Slide 12: Capitalization and Debt
As of (S in milions) 0973012004 12/31/2003 Cash 147.9 163.9 Revolver 0.0 oo Tem B Loan 280.0 297.5 ther Debt + 28.5 39.2 9 3/4% Senior Notes 130.0 200.0 14 1/4% Senior Subordinated Notes 205.0 226.2 Total CB Richard Ellis Services Debt 643.5 762.9 Mezzanine Notes 0.0 35.5 Total Debt 643.5 798.4 Shar
Slide 13: Q3 2004 Revenue Breakdown
@3 2004 Revenue Breakdo: 5% 3% 2% 6% 8% 25% 1% ‘Quarter ended September 30, ‘Yeario date September 3, n$milions) 2003 2003 Tne Tn 2004 Reported’ _ Insignia’ 2004_Reported' _Insigni Investment Sales 2037 1342 1427 39 3383 254 Leasing 2360 «1754 1928 6585 0-25 4 Property and Facilties Managem ent 455
Slide 14: Q3 2004 Segment Performance
@3'2004 Segment Performance Revenue ‘Adjusted Opersting Ineome! in $ milions| q >) soo | zoos | % | zoo | 2001 | cha cha. ameicas | 425 | 340 | 25% | a5 | 18 | 120% EMEA vo | a2 |x | 6 | 4a | 25% Asia 0 ao | asx | a | 3 | ase Padife 43 2. _Adusted operating inoome excludes one time tems incuding the
Slide 15: CBRE Recent Wins
CBRE Recent Wins Americas = Silverstein Properties - Appoirted as exclusive leasing agent for the first office tower at 7 World Trade Center * Kodak - Renewed 37 million square feet of space in the U.S., Canada and Latin America EMEA = City of London — Completed the sale of Mondial House and Banksid
Slide 16: 2004 Company Trends
2004 Company Trends) * Rise in interest rates has been modest and borrowing costs remain near historic iows * Higher allocations of capital to real estate as an investment class + A steady recovery of leasing markets and a robust investment market in the U.S. Y U.S. sales revenue and transaction vol
Slide 17: 2004 Guidance
2004 Guidance: = Full year revenue of $2.2 billion = Narrowed EPS range to $1.50 to $1.55 $0.15 $1.50-$155 $0.13 $0.95 $0.76 - $0.81 GAAP EPS Insignia IPO relsted Amortization of Costs of Adjusted EPS margerrlsted compansstion Insignianet” extinguishment andinagration expense revenue ‘of debt rated
Slide 18: 2004 Forecast Internal Cash Flow
2004 Forecast Internal Cash Fl » Low capital intensity » 2004 capital expenditures include $12.0 million related to the integration of Insignia » Strong cash flow generation supports debt reduction » Other uses of cash flow: y Co-investment activities y¥ Potential in-fill acquisitions 2004 Forecast
Slide 19: Solid Third Quarter Performance
* Solid Third Quarter Performance v Strong revenue, EBITDA, net income and earnings per share performance = Macro Trends v Job growth and economic expansion v Robust investment property sales market and higher capital allocations to real estate v Steady improvement of the global leasing market CBRE
Slide 20: Appendix
Appendix CBRE
Slide 21: Reconciliation of Forecast Net Income to Net Income, As Adjusted
Reconciliation of Forecast Net Income to Net Income, As Adjusted 2004 Forecast Results coy v0 (a) Intangible asset amortization expense related to Insignia net revenue backlog (b) Insignia merger and integration related costs eo {57 (c) One-time IPO related compensation expense (d) Costs of extingui
Slide 22: Q3 Consolidated Net Income to EBITDA Reconciliation
@3 Consolidated Net Income to EBITDA reconci (In 0008) September 30 2004 2003 Net income (loss). $11,898 $ (28,445) Add Depreciation and amartizatian. 12,340 41071 Interest expense. 14,919 21,000 Loss on extinguishment of debt 17,066 6,840 Provision (benefit) far incame taxes 6,300 (18,380) Less: In
Slide 23: Searchable text section of graphics
Searchable text section of graphics shown above Thi rd Quarter 2004 Financial Results Investor Conference Call November 4, 2004 [GRAPHIC] [LOGO] For ward Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform A
CB Richard Ellis Group — Q3 2004 Earnings Presentation on 6ix