Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Q3 2005 Earnings Presentation
28 slides from Cbre's earnings presentation, Nov 2, 2005
Slide 1: Third Quarter 2005 Earnings Conference Call
CB Richard Ellis Third Quarter 2005 Earnings Conference Call November 2, 2005 CBRE
Slide 2: Forward-looking statements
This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1998, including statements regarding our growth momentum in 2005 and 2006, future operations and future financial performance. These statements should be considered as
Slide 3: Conference Call Participants
Conference Call Participants » Brett White, President & Chief Executive Officer * Ken Kay, Senior Executive VP & Chief Financial Officer » Rob Blain, President, Asia Pacific * Shelley Young, Director, Investor Relations CBRE
Slide 4: Record Financial Performance
» Record Financial Performance « Industry leader in margin expansion and market penetration * Strength of CB Richard Ellis brand and global platform
Slide 5: Revenue totaled $744.2 million, 29% higher than the prior year quarter
Revenue totaled $744.2 million, 29% higher than the prior year quarter 12th straight quarter of double-digit year-over-year organic revenue growth Net income totaled $56.9 million, as compared to $11.9 million for the same quarter last year '% Excluding one-time items, net income for the quarter was
Slide 6: Operating income and EBITDA results
* Operating income totaled $95.9 million, as compared to $44.7 million for the same quarter last year, an increase of 114% Operating income, excluding one-time costs, totaled $97.3 million for 2005 as compared to ‘$54.2 million in 2004, an increase of 79% * EBITDA totaled $111.2 million, $49.4 milli
Slide 7: Q3 2005 Financial Results
Giamions) 2005 2004 % Chango Reverwe maz 5750 29 Cost of Sontces 300. 3007 2 Operating, Administratho & Other 72132 20 Equily income in Unconsolideted Subsidiaries 36 43 28 gor Roltod Charges aA NA EBITDA m2 ois 80 Merger Related Charges = at NA Integration Costs 14 30 53 Normalized EBITDA 2. 689 63
Slide 8: YTD 2005 Financial Results
YTD 2005 Financial Results {Ge mitons) 2005 2004 _% Change Revenue 19546 1,566.9 25 Cost of Senices 997.7 79715 en Operating, Administrative & Other 707 13.0 12 Equily Income in Unconsolidated Subsidiaries 7 10.1 "5 Merger Related Charges, : 256 NA EBITDA 267.8 1109 142 Ono Time Charges: Morgor Rela
Slide 9: 2005 Revenue Breakdown
2005 Revenue Breakdown 3° Quarter, 2005 om 51% 1% 6 38% 31% Trecemonns engeaSeptember30,__Ninemonts ended September30, 20s_2004_ 0 0s M™ sacs 62-2037 at raat Bh cessing m3 280 15 m1 HE Propenyana Facittes Management 45 455 8 1499, Wi aisencea nests wos Pay TP commercia voegageSrerage aso 300 2 smo 1
Slide 10: EBITDA Margins
EBITDA Margins Significant margin improvement: 20. * As of September 30, 2005 on a trailing twelve months basis: FA + Revenue increased by 26% ‘© EBITDA increased by 62% 40. * EBITDA margins improved by 28% EBITDA and EEDA marys excue one-time metered chagt,lepation expenses andPO-rlted compensation
Slide 11: Q3 Earnings Per Share Dynamics
Q3 Earnings Per Share Dynamics’ 2004 2005 07s so iti ws wo oo on = m rr = cup iene Ame ce ea Amant trate stops OE alg MS oS ima “SS co SaaS arate ees ro TS Sots 1 ALEPSeomatin sated ied shes CBRE
Slide 12: Consolidated Balance Sheets
Consolidated Balance Sheets As of inmaece) 97302005 12/81/2004 Variance Assets Cash and cash equivalents. 284.6 256.9 27 Restricted cash 59 92 @3) Receivables, net 355.9 304.1 382) ‘Warehouse receivable’ 146.5 1382 a3 Property and equipment, net 133.4 1377 (43) Goodwill and other intangible assets,
Slide 13: Consolidated Balance Sheets (cont.)
Consolidated Balance Sheets (cont.) Asof (sits 9130/2005 12/31/2004 Variance Liabitties Curent fabities, exciing debt 6224 6372 (151) ‘Warehouse line of credit’ 1465 1382 83 Serior secured term loan tranche 8 2682 274 69) 11% senior subordinated notes, 1630 2050 (420) 9°"% serior notes 1300 1300 - O
Slide 14: Debt and capitalization
Gnmsens) 30/2005 12/31/2004 Variance Cash 2848 2569 27 ‘Serior secured term loan tranche B 2882 204 69) 11'"% serior subordinated notes 163.0 205.0 (42.0) 9% serior notes 130.0 1300 - Other debt! 198 25 27 Total debt 5810 6346 636) Stockholders’ equity 7029 5600 1429 Total capitalization 12839 1,194
Slide 15: Strong cash flow generator
= Strong cash flow generator = Low capital intensity "Utilization of intemal cash flow * Debt reduction * Co-investment activities > Infill acquisitions 1 Represent apt expendtures, tf eoncesins welve Months Normal ed Internal Cash Flow. (anaes) Net nome, a uted ners Ca low CBRE
Slide 16: Infill Acquisitions
Il Acq ns = ioeaen Type of Serves CB Richard Elis Gunne ireland Advisory Services ‘Columbus Commercial Realty ‘Ohio Advleory Services: 3 2005 propery Management Advisory Services, CB Richa Ets Charote,LLc | Northcaoina | Advisory Ser 04 208 Ensjburo SAS France | COPoTateFttoutand | a 995 Dallesn Uni
Slide 17: 2005 and 2006 outlook
2005 = Revenue of $2.8 billion "= Net income, as adjusted, within the range of $207 to $210 million’ * Diluted earnings per share, as adjusted, in the range of $2.70 to $2.75' (growth of approximately 65%) 2006 ™ Consistent with previously disclosed growth objectives: * Revenue increasing by 7-9% *
Slide 18: Q3 2005 Segment Performance
Q3 2005 Segment Performance ete — ‘Americas ‘EMEA Asia Pacific ‘Management ~ : = ‘i a am F 1% T3p% . on I =. LL é CBRE
Slide 19: Selected Transactions and Assignments
Duke Realty Corporation — Represented Duke Reslty Corporation inthe sale of a 143 milion sqft. indusbal property partoto for $1 lion IBM ~ Awarded 4 5 millon sa. f. wansection management perfoto in Latin Amanca, CBRE tepresents EM for 34°5 milion sq ft inthe US.,Latin America and Europe AME: Propert
Slide 20: Global Investment Management Carried Interest
Global Investment Management Carried Interest = Carried interest pertains to certain real estate investment funds from which CBRE eams an additional share of the profts from the fund once its performance meets certain financial hurdles = Dedicated fund team leaders and executives have been granted a
Slide 21: Favorable Trends
Favorable Trends = Investment in commercial real estate remains strong High level of equity flows from both domestic and offshore sources '® Steady improvement in leasing bolsters investor confidence '* Investor demand outpacing the supply in Europe * Continued recovery in leasing markets * 10” stra
Slide 22: Appendix
Slide 23: Net income to net income, as adjusted reconciliation
Gb inmions, xcept shar 0) 2005 2004 Net income 56.9 11.9 ‘Amortization related to net revenue backlog . +7 acquired in the Insignia acquisition, net of tax Merger-related charges related to the Insignia - 29 acquisition, net of tax Integration costs related to the Insignia 06 2.0 acquisition, net of
Slide 24: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
onciliation of Normalized EBITDA to EBITDA to Net Income (Loss) (gia matan) Nomizes EBTDA tothe na a 256 tegration cot etd tothe nega aequton “a a0 62 ne Ported cmpersatin expense 160 EaTo8 12 cr EZ) 108 6 ret income os 13 59 4a ee: Depeition and amoriten 417 13 ne oo eet expanse 38 165 oe 9 Lesson
Slide 25: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) Trailing Twelve Months (Sinmitions @32005 G3 2004 Normalized EBITDA aiid 253.8 Less: Merger-related charges related to the 7 ror Insignia acquisition Integration costs related to the Insignia a 20 acquisition One-time compensation ex
Slide 26: TTM 3rd Quarter 2005 Reconciliation
TTM 3° Quarter 2005 R spaseseeeses Reported @ © As Abusted 2s (a) Amortization expense related to Insignia net revenue backlog (b) Insignia merger-related and integration costs (c) Costs of extinguishment of debt CBRE
Slide 27: Reconciliation of Normalized EBITDA to EBITDA to Operating Income (Loss)
Reconciliation of Normalized EBITDA to EBITDA to Operating Income (Lo: CBRE = Co RCKARO CUS
Slide 28: Searchable text section of graphics
Searchable text section of graphics shown above Exhibit 99.2 CB Richard Ellis [PHOTO] Third Quarter 2005 Earnings Conference Call [PHOTO] November 2, 2005 Lo oking Statements Forward Looking Statements [GRAPHIC] This presentation contains statements that are forward looking within the meaning of the
CB Richard Ellis Group — Q3 2005 Earnings Presentation on 6ix