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CB Richard Ellis Group, Inc. Reports Higher Revenue and Earnings for The Second Quarter of 2010

Earnings Per Share Improves to $0.17 on 23% Revenue Rise; EBITDA More Than Doubles

 

Los Angeles, CA – July 27, 2010 CB Richard Ellis Group, Inc. (NYSE:CBG) today reported higher revenue and earnings for the second quarter ended June 30, 2010.   

  • Net income on a U.S. GAAP basis improved to $54.8 million, or $0.17 per diluted share, for the quarter, compared with a net loss of $6.6 million, or $0.02 loss per diluted share, in the second quarter of 2009.  
  • Excluding selected charges1, net income2 would have totaled $58.8 million, or $0.18 per diluted share, for the current-year quarter, compared to net income of $9.7 million, or $0.04 per diluted share, in the second quarter of 2009. 
  • Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)3 more than doubled to $161.6 million in the second quarter of 2010 from $68.4 million a year earlier.  Excluding selected charges, EBITDA3 rose 82% to $165.2 million in the current period from $90.9 million in the second quarter of 2009.  
  • Revenue for the quarter totaled $1.2 billion, an increase of 23% from $955.7 million in the second quarter of 2009. 

These results represent the Company’s strongest quarterly year-over-year growth in revenue since the fourth quarter of 2007, and in EBITDA, excluding selected charges, since the first quarter of 2007.  

“Our financial performance continued to strengthen across most business lines globally, and we have good momentum entering the year’s second half,” said Brett White, chief executive officer of CB Richard Ellis. “In the U.S., we saw a very strong pick up in property sales and leasing, reflecting recovering market conditions. Europe produced robust growth, fueled by the recovery of the property sales market in the larger economies, such as the U.K., Germany and France. Asia Pacific also sustained the strong top-line growth that first became evident there late last year. 

“We are mindful of concerns about the pace of economic recovery, but the rebound in commercial real estate activity is progressing. During the 2008-2009 downturn, we removed more than $600 million of expense from our platform. We predicted then that even a modest recovery would produce outsized gains in profitability due to this cost reduction, and this is precisely the result we are now seeing. We are a very efficient, client-centric organization with a diversified revenue base, resulting in operating leverage that, as we saw in the second quarter, enables us to drive strong EBITDA growth and margin expansion.” 

Revenue rose at a double-digit rate across all major business lines, except Development Services, with property sales and leasing growing globally by 61% and 29%, respectively.  The property sales recovery was particularly strong in Europe (up 93%) and Asia Pacific (up 67%). The Americas also saw revenue grow significantly in both the property sales (up 47%) and property leasing (up 37%) business lines. Reflecting increased liquidity in the real estate capital markets, commercial mortgage revenue rose 33% and loan origination volume improved 30% from the year-earlier quarter’s very weak level.  

Globally, outsourcing revenue, including property and facilities management, increased by 10% in the second quarter, its strongest growth since the third quarter of 2008. International outsourcing growth was once again very strong, with Asia Pacific and Europe posting revenue increases of 44% and 27%, respectively. The Company also achieved significant new business, signing 34 multi-year contracts, its highest quarterly total ever. This total included 17 new clients – including Deere & Company, Genbrand and NYSE Euronext – and 17 contract renewals or expansions, including Boeing, Chevron, Marathon Oil Corporation, Microsoft, Rockwell Automation, The Coca Cola Company, and the United States Department of State. 

Although the market for distressed asset dispositions has developed more slowly than originally expected, the Company has continued to capture substantial opportunities in this sector. In the U.S., it is now marketing more than $7.5 billion of distressed assets and has successfully sold more than $1.3 billion of such assets since the beginning of the year. CB Richard Ellis also has a sizeable distressed asset specialty services business in Europe. In the U.K., the Company arranged for the sale of seven properties on behalf of the borrowers, administrators and receivers of the defaulted White Tower 2006-3 portfolio of CMBS loans, for aggregate gross proceeds of approximately $1.1 billion. 

During the second quarter, the Company’s Development Services subsidiary completed two dispositions of high quality assets in the greater Houston market. Gains from these sales contributed to a significant increase in EBITDA for this segment during the quarter.    

Following the close of the quarter, the Company pre-paid $150 million of its Term B loans maturing in December of 2013. In addition to the interest expense savings on the pre-paid debt, this pre-payment will lower the annual interest expense on the Company’s remaining $898 million of Term B loans by 50 basis points.  

Second-Quarter 2010 Segment Results
Americas
Region
Revenue for the Americas region, including the U.S., Canada and Latin America, rose 20% to $722.3 million for the second quarter of 2010, compared with $601.6 million for the second quarter of 2009.  Operating income for the Americas region rose nearly three-fold during the current quarter to $72.2 million from $26.5 million for the second quarter of 2009.  EBITDA for this region totaled $89.8 million for the second quarter of 2010, more than double the $42.6 million produced in last year’s second quarter. The region saw meaningful improvement across all business lines during the quarter.  

EMEA Region
Revenue for the EMEA region, which mainly consists of operations in Europe, rose 28% to $225.4 million for the second quarter of 2010 from $176.6 million for the second quarter of 2009.  The EMEA region reported operating income of $18.0 million for the second quarter of 2010, up very significantly from operating income of $3.4 million for the same period in 2009.  EBITDA totaled $19.9 million for the second quarter of 2010— more than three times the $5.9 million of EBITDA achieved in last year’s second quarter.  These improved results reflect better business performance in the larger countries in Europe, particularly the United Kingdom, Germany and France.

 

Asia Pacific Region
In the Asia Pacific region, which includes operations in Asia, Australia and New Zealand, revenue rose 29% to $158.7 million for the second quarter of 2010 from $122.7 million for the second quarter of 2009.  Operating income for the Asia Pacific region remained relatively flat at $10.8 million for the second quarter of 2010 compared with the same period of 2009.  EBITDA increased slightly to $12.8 million for the second quarter of 2010 compared with $12.2 million for last year’s second quarter.  These results reflect a shift in the revenue mix and aggressive hiring in this region to support expected growth.

 

Global Investment Management Business
In the Global Investment Management segment, which includes investment management operations in the U.S., Europe and Asia, revenue increased 44% to $46.9 million for the second quarter of 2010 from $32.6 million in the second quarter of 2009.  This segment posted operating income for the second quarter of $3.4 million, compared with operating income of $4.5 million for the same period in 2009.  Second-quarter 2010 EBITDA rose to $10.8 million, compared with EBITDA of $2.2 million in the prior year second quarter.  The improvements noted in revenue and EBITDA in the current year were largely attributable to the consolidation of several properties due to a change in accounting regulations effective January 1, 2010. This accounting change had no bottom line impact.    EBITDA for the second quarter of 2009 included $2.6 million of net non-cash write-downs, which were not included in operating income and did not recur in the current year quarter.   

Assets under management totaled $33.7 billion at the end of the second quarter, down 3% from year-end 2009, but up 1% from the first quarter of 2010. 

Development Services
In the Development Services segment, which consists of real estate development and investment activities primarily in the U.S., revenue totaled $18.7 million for the second quarter of 2010, compared with $22.2 million for the second quarter of 2009.  The operating loss for the second quarter of 2010 was $7.3 million, compared with $6.4 million for the same period in 2009.  Second-quarter 2010 EBITDA was $28.4 million, up from $5.5 million in the prior year second quarter.  The increase in EBITDA was primarily driven by gains on property sales reflected in equity income and income from discontinued operations, both of which are included in the calculation of EBITDA but not operating income. 

As of June 30, 2010, development projects in process totaled $4.4 billion and the inventory of pipeline deals as of June 30, 2010 was $0.8 billion.  These totals are down from $4.7 billion and $0.9 billion, respectively, at year-end 2009. 

Six-Month Results
For the six months ended June 30, 2010, the Company reported net income on a U.S. GAAP basis of $48.2 million, or $0.15 per diluted share, compared with a net loss of $43.3 million, or $0.16 loss per diluted share, in 2009. Excluding selected charges, net income would have totaled $62.0 million, or $0.19 per diluted share, for the six-month period, a significant improvement from $2.2 million, or $0.01 per diluted share in the year-earlier period.  Revenue for the six months increased 19% to $2.2 billion.  EBITDA for the six months ended June 30, 2010 increased to $236.6 million, compared with $106.8 million for the same period last year.  Excluding selected charges, EBITDA would have totaled $252.7 million in the current year-to-date period, up from $145.0 million for the same period last year. 

Conference Call Details
The Company’s second-quarter earnings conference call will be held on Wednesday, July 28, 2010 at 10:30 a.m. Eastern Time.  A live webcast will be accessible through the Investor Relations section of the Company’s Web site at www.cbre.com/investorrelations 

The direct dial-in number for the conference call is 800-288-8968 for U.S. callers and 612-332-0228 for international callers.  A replay of the call will be available starting at 2:00 p.m. Eastern Time on July 28, 2010, and ending at midnight Eastern Time on August 3, 2010. The dial-in number for the replay is 800-475-6701 for U.S. callers and 320-365-3844 for international callers.  The access code for the replay is 165456.  A transcript of the call will be available on the Company’s Investor Relations Web site at www.cbre.com/investorrelations.   

About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue).  The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com 

Note:  This release contains forward-looking statements within the meaning of the ''safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations and financial performance.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this release.  Any forward-looking statements speak only as of the date of this release and, except to the extent required by applicable securities laws, the Company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events.  If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.  Factors that could cause results to differ materially include, but are not limited to: general conditions of financial liquidity for real estate transactions; a return to the economic slow-down or recession we experienced in our principal operating regions in 2008 and 2009; our leverage and our ability to perform under our credit facilities; commercial real estate vacancy levels; employment conditions and their effect on vacancy rates; property values; rental rates; interest rates; realization of values in investment funds to offset related incentive compensation expense; our ability to leverage our platform to grow revenues and capture market share; our ability to retain and incentivize producers; the integration of our acquisitions and the level of synergy savings achieved as a result; our ability to maintain or enhance our operating leverage; and a decline in asset values in, or a reduction in earnings or cash flow from, our investment programs, as well as related litigation, liabilities and reputational harm. 

Additional information concerning factors that may influence the Company's financial information is discussed under “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Quantitative and Qualitative Disclosures About Market Risk” and “Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2009 and under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Quantitative and Qualitative Disclosures About Market Risk” and “Forward-Looking Statements” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, as well as in the Company’s press releases and other periodic filings with the Securities and Exchange Commission.  Such filings are available publicly and may be obtained on the Company’s Web site at www.cbre.com or upon request from the CB Richard Ellis Investor Relations Department at investorrelations@cbre.com .   

1Selected charges include amortization expense related to customer relationships resulting from acquisitions, integration costs related to acquisitions, cost-containment expenses, the write-down of impaired assets and the write-off of financing costs.    

2A reconciliation of net income (loss) attributable to CB Richard Ellis Group, Inc. to net income attributable to CB Richard Ellis Group, Inc., as adjusted for selected charges, is provided in the section of this press release entitled “Non-GAAP Financial Measures.” 

3The Company’s management believes that EBITDA is useful in evaluating its operating performance compared to that of other companies in its industry because the calculation of EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which items may vary for different companies for reasons unrelated to overall operating performance.  As a result, the Company’s management uses EBITDA as a measure to evaluate the operating performance of various business segments and for other discretionary purposes, including as a significant component when measuring its operating performance under its employee incentive programs. Additionally, management believes EBITDA is useful to investors to assist them in getting a more accurate picture of the Company’s results from operations. 

However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles (GAAP), and when analyzing the Company’s operating performance, readers should use EBITDA in addition to, and not as an alternative for, net income determined in accordance with GAAP.  Because not all companies use identical calculations, the Company’s presentation of EBITDA may not be comparable to similarly titled measures of other companies.  Furthermore, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as tax and debt service payments.  The amounts shown for EBITDA also differ from the amounts calculated under similarly titled definitions in the Company’s debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and the Company’s ability to engage in certain activities, such as incurring additional debt and making certain restricted payments. Amounts shown for EBITDA, as adjusted, remove the impact of certain cash and non-cash charges related to acquisitions, cost containment and asset impairments. 

For a reconciliation of EBITDA and EBITDA, as adjusted to net income (loss) attributable to CB Richard Ellis Group, Inc., the most comparable financial measure calculated and presented in accordance with GAAP, see the section of this press release titled “Non-GAAP Financial Measures.”
 

CB RICHARD ELLIS GROUP, INC.

OPERATING RESULTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

 (Dollars in thousands, except share data)

(Unaudited)

 

Three Months Ended

 June 30,

 

Six Months Ended

June 30,

 

 2010

 

 2009

 

 2010

 

 2009

Revenue

$1,171,919

 

$955,667

 

$2,197,802

 

 $1,846,116

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of services

678,714

 

566,831

 

1,293,908

 

1,120,250

Operating, administrative and other

372,033

 

328,671

 

710,739

 

634,830

Depreciation and amortization

27,616

 

24,166

 

53,911

 

    49,558

Total costs and expenses

1,078,363

 

919,668

 

2,058,558

 

1,804,638

 

 

 

 

 

 

 

 

Gain on disposition of real estate

3,623

 

2,925

 

3,623

 

2,925

 

 

 

 

 

 

 

 

Operating income

97,179

 

38,924

 

142,867

 

44,403

 

 

 

 

 

 

 

 

Equity income (loss) from unconsolidated subsidiaries

14,235

 

(1,743)

 

7,651

 

(11,940)

Interest income

3,111

 

1,237

 

4,911

 

3,542

Interest expense

50,275

 

47,418

 

100,067

 

82,216

Write-off of financing costs

-

 

-

 

-

 

29,255

Income (loss) from continuing operations before provision for (benefit of) income taxes

64,250

 

(9,000)

 

55,362

 

(75,466)

Provision for (benefit of) income taxes

26,704

 

4,706

 

34,003

 

(7,341)

Income (loss) from continuing operations

    37,546    

 

    (13,706)    

 

    21,359    

 

    (68,125)    

Income from discontinued operations, net of income tax

7,140

 

-

 

7,140

 

-

Net income (loss)

    44,686    

 

    (13,706)    

 

    28,499    

 

    (68,125)    

Less:  Net loss attributable to non-controlling interests

 

(10,104)

 

 

(7,069)

 

 

(19,664)

 

 

(24,799)

Net income (loss) attributable to CB Richard Ellis Group, Inc.

 

$54,790

 

 

$6,637)

 

 

$48,163

 

 

$(43,326)

 

 

 

 

 

 

 

 

Basic income (loss) per share attributable to CB Richard Ellis Group, Inc. shareholders

 

 

 

 

 

 

 

Income (loss) from continuing operations attributable to CB Richard Ellis Group, Inc.

$0.15   

 

$(0.02)   

 

$0.13

 

$(0.16)   

Income from discontinued operations, net of income taxes, attributable to CB Richard Ellis Group, Inc.

0.02

 

-

 

0.02

 

-

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$0.17   

 

$(0.02)   

 

$0.15   

 

$(0.16)   

 

 

 

 

 

 

 

 

Weighted average shares outstanding for basic income (loss) per share

 

312,910,934

 

 

265,683,366

 

 

312,895,372

 

 

263,851,431

 

 

 

 

 

 

 

 

Diluted  income (loss) per share attributable to CB Richard Ellis Group, Inc. shareholders

 

 

 

 

 

 

 

Income (loss) from continuing operations attributable to CB Richard Ellis Group, Inc.

$0.15   

 

$(0.02)   

 

$0.13

 

$(0.16)   

Income from discontinued operations, net of income taxes, attributable to CB Richard Ellis Group, Inc.

0.02

 

-

 

0.02

 

-

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$0.17   

 

$(0.02)    

 

$0.15   

 

$(0.16)   

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted income (loss) per share

318,425,227

 

265,683,366

 

 

317,736,844

 

 

263,851,431

 

 

 

 

 

 

 

 

EBITDA (1)

$161,635  

 

$68,416  

 

$236,594  

 

$106,820  

__________________________

(1) Includes EBITDA related to discontinued operations of $12.9 million for the three and six months ended June 30, 2010.

 

CB RICHARD ELLIS GROUP, INC.

SEGMENT RESULTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

(Dollars in thousands)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 2010

 

 2009

 

 2010

 

 2009

Americas

 

 

 

 

 

 

 

Revenue 

$722,255

 

$601,565

 

$1,367,866

 

$1,178,606

Costs and expenses:

 

 

 

 

 

 

 

Cost of services 

448,937

 

385,402

 

       859,224

 

       768,494

Operating, administrative and other

186,075

 

175,442

 

       360,916

 

       332,241

Depreciation and amortization

14,997

 

14,233

 

         29,687

 

         28,491

Operating income

$72,246

 

$ 26,488

 

$118,039

 

$49,380

EBITDA

 $89,847

 

 $42,602

 

 

$151,835

 

 $81,243

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

Revenue 

$225,378

 

$176,595

 

$413,538

 

$338,756

Costs and expenses:

 

 

 

 

 

 

 

Cost of services 

132,132

 

109,345

 

       251,583

 

       219,362

Operating, administrative and other

72,820

 

61,216

 

137,796

 

116,900

Depreciation and amortization

2,384

 

2,621

 

4,774

 

5,161

Operating income (loss)

 $18,042

 

 $3,413

 

$19,385

 

$(2,667)

EBITDA

 $19,865

 

 $5,928

 

 $ 23,990

 

 $2,811

 

 

 

 

 

 

 

 

Asia Pacific

 

 

 

 

 

 

 

Revenue 

$158,678

 

$122,652

 

$293,110

 

$215,746

Costs and expenses:

 

 

 

 

 

 

 

Cost of services 

97,645

 

72,084

 

183,101

 

132,394

Operating, administrative and other

48,220

 

37,569

 

88,925

 

67,518

Depreciation and amortization

2,007

 

2,128

 

4,119

 

4,256

Operating income

$10,806

 

$ 10,871

 

$16,965

 

$11,578

EBITDA

 $12,777

 

 $12,219

 

 $21,035

 

 $14,159

 

 

 

 

 

 

 

 

Global Investment Management

 

 

 

 

 

 

 

Revenue

$46,896

 

$32,606

 

$86,303

 

$69,902

Costs and expenses:

 

 

 

 

 

 

 

Operating, administrative and other

39,930

 

26,909

 

80,869

 

56,291

Depreciation and amortization

3,613

 

1,186

 

6,470

 

2,389

Operating income (loss)

$3,353

 

$4,511

 

$(1,036)

 

$11,222

EBITDA

 $10,766

 

 $2,181

 

 $5,836

 

 $1,755

 

 

 

 

 

 

 

 

Development Services

 

 

 

 

 

 

 

Revenue

$18,712

 

$22,249

 

$36,985

 

$43,106

Costs and expenses:

 

 

 

 

 

 

 

Operating, administrative and other

24,988

 

27,535

 

42,233

 

61,880

Depreciation and amortization

4,615

 

3,998

 

8,861

 

9,261

Gain on disposition of real estate

3,623

 

2,925

 

3,623

 

2,925

Operating loss

$(7,268)

 

$(6,359)

 

$(10,486)

 

$(25,110)

EBITDA (1)

 $28,380

 

 $5,486

 

 $33,898

 

 $6,852

__________________________

(1) Includes EBITDA related to discontinued operations of $12.9 million for the three and six months ended June 30, 2010.


Non-GAAP Financial Measures

 

The following measures are considered “non-GAAP financial measures” under SEC guidelines:

 

(i)                 Net income attributable to CB Richard Ellis Group, Inc., as adjusted for selected charges

 

(ii)               Diluted income per share attributable to CB Richard Ellis Group, Inc, as adjusted for selected charges

 

(iii)             EBITDA and EBITDA, as adjusted for selected charges

                 

The Company believes that these non-GAAP financial measures provide a more complete understanding of ongoing operations and enhance comparability of current results to prior periods as well as presenting the effects of selected charges in all periods presented.  The Company believes that investors may find it useful to see these non-GAAP financial measures to analyze financial performance without the impact of selected charges that may obscure trends in the underlying performance of its business.


Net income attributable to CB Richard Ellis Group, Inc., as adjusted for selected charges and diluted net income per share attributable to CB Richard Ellis Group, Inc. shareholders, as adjusted for selected charges are calculated as follows (dollars in thousands, except per share data):

 

 

Three Months Ended

 June 30,

 

Six Months Ended

June 30,

 

 2010

 

 2009

 

 2010

 

 2009

 

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$54,790

 

$(6,637)

 

$48,163

 

$(43,326)

Cost containment expenses, net of tax

1,605

 

10,630

 

6,092

 

15,471

Write-down of impaired assets, net of tax

(36)

 

2,369

 

2,804

 

6,061

Amortization expense related to customer relationships acquired, net of tax

1,842

 

1,871

 

3,732

 

 

3,679

Integration costs related to acquisitions, net of         tax

 

598

 

 

1,123

 

1,240

 

2,162

Write-off of financing costs, net of tax 

-

 

308

 

-

 

18,153

Net income attributable to CB Richard Ellis Group, Inc., as adjusted

$58,799   

 

$9,664   

 

$62,031   

 

$2,200   

 

 

 

 

 

 

 

 

Diluted income per share attributable to CB Richard Ellis Group, Inc. shareholders, as adjusted

$0.18 

 

$0.04   

 

$0.19

 

$0.01

 

 

 

 

 

 

 

 

Weighted average shares outstanding for

diluted income per share

 

318,425,227

 

 

268,132,723

 

 

317,736,844

 

 

265,908,443

 

EBITDA and EBITDA, as adjusted for selected charges are calculated as follows (dollars in thousands):

 

 

Three Months Ended

 June 30,

 

Six Months Ended

June 30,

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$54,790       

 

$(6,637)       

 

$48,163

 

$(43,326)

Add:

 

 

 

 

 

 

 

Depreciation and amortization(1)

27,784

 

24,166

 

54,079

 

49,558

Interest expense(2)

50,990

 

47,418

 

100,782

 

82,216

Write-off of financing costs

-

 

-

 

-

 

29,255

Provision for (benefit of) income taxes(3)

31,183

 

4,706

 

38,482

 

(7,341)

Less:

 

 

 

 

 

 

 

Interest income

3,112

 

1,237

 

4,912

 

3,542

 

 

 

 

 

 

 

 

EBITDA(4)

$161,635

 

$68,416

 

$236,594

 

$106,820

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Cost containment expenses

2,642

 

16,997

 

9,677

 

24,933

Write-down of impaired assets

-

 

3,713

 

4,453

 

9,769

Integration costs related to acquisitions

964

 

1,782

 

1,970

 

3,485

 

 

 

 

 

 

 

 

EBITDA, as adjusted (4)

$165,241

 

$90,908

 

$252,694

 

$145,007

 

(1)     Includes depreciation and amortization related to discontinued operations of $0.2 million for the three and six months ended June 30, 2010.

(2)     Includes interest expense related to discontinued operations of $0.7 million for the three and six months ended June 30, 2010.

 (3)    Includes provision for income taxes related to discontinued operations of $4.5 million for the three and six months ended June 30, 2010.

 (4)    Includes EBITDA related to discontinued operations of $12.9 million for the three and six months ended June 30, 2010.

 

EBITDA for segments is calculated as follows (dollars in thousands):


 

 

 Three Months Ended

June 30,

 

 Six Months Ended

June 30,

 

2010

 

2009

 

2010

 

2009

Americas

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$35,038

 

$(13,383)

 

$37,584

 

$(30,759)

Add:

 

 

 

 

 

 

 

Depreciation and amortization

14,997

 

14,233

 

29,687

 

28,491

Interest expense

38,972

 

39,307

 

78,686

 

67,007

Write-off of financing costs

-

 

-

 

-

 

29,255

 Royalty and management service income

(5,347)

 

(3,878)

 

(9,492)

 

(4,705)

   Provision for (benefit of) income taxes

7,062

 

7,163

 

17,431

 

(6,090)

Less:

 

 

 

 

 

 

 

   Interest income

875

 

840

 

2,061

 

1,956

EBITDA

$89,847             

 

$42,602             

 

$151,835             

 

$81,243             

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$5,278         

 

$6,954         

 

$6,250

 

$(1,428)

Add:

 

 

 

 

 

 

 

Depreciation and amortization

2,384

 

2,621

 

4,774

 

5,161

Interest expense

36

 

481

 

125

 

483

Royalty and management service expense

3,329

 

2,456

 

5,541

 

2,612

Provision for (benefit of) income taxes

9,189

 

(6,488)

 

7,984

 

(3,688)

Less:

 

 

 

 

 

 

 

Interest income

351

 

96

 

684

 

329

EBITDA

$19,865             

 

$5,928             

 

$23,990

 

$2,811

 

 

 

 

 

 

 

 

Asia Pacific

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$5,907         

 

$(2,022)         

 

$6,650

 

$(1,535)

Add:

 

 

 

 

 

 

 

Depreciation and amortization

2,007

 

2,128

 

4,119

 

4,256

Interest expense

613

 

745

 

1,170

 

1,393

Royalty and management service expense

1,745

 

1,220

 

3,538

 

1,677

Provision for income taxes

4,288

 

10,293

 

7,488

 

8,619

Less:

 

 

 

 

 

 

 

Interest income

1,783

 

145

 

1,930

 

251

EBITDA

$12,777

 

$12,219

 

$21,035             

 

$14,159             

 

 

 

 

 

 

 

 

Global Investment Management

 

 

 

 

 

 

 

Net (loss) income attributable to CB Richard Ellis Group, Inc.

$(1,119)         

 

$4,490         

 

$(9,587)

 

$(1,011)

Add:

 

 

 

 

 

 

 

Depreciation and amortization

3,613

 

1,186

 

6,470

 

2,389

Interest expense

6,063

 

1,041

 

10,478

 

1,589

Royalty and management service expense

273

 

202

 

413

 

416

Provision for (benefit of) income taxes

1,992

 

(4,703)

 

(1,770)

 

(1,176)

Less:

 

 

 

 

 

 

 

Interest income

56

 

35

 

168

 

452

EBITDA

$10,766

 

$2,181

 

$5,836             

 

$1,755             

 

 

 

 

 

 

 

 

 


 

 

 Three Months Ended

June 30,

 

 Six Months Ended

June 30,

 

2010

 

2009

 

2010

 

2009

Development Services

 

 

 

 

 

 

 

Net income (loss) attributable to CB Richard Ellis Group, Inc.

$9,686         

 

$(2,676)         

 

$7,266         

 

$(8,593)         

Add:

 

 

 

 

 

 

 

Depreciation and amortization(1) 

4,783

 

3,998

 

9,029

 

9,261

Interest expense(2) 

5,306

 

5,844

 

10,323

 

11,744

Provision for (benefit of) income taxes(3) 

8,652         

 

(1,559)         

 

7,349         

 

(5,006)         

Less:

 

 

 

 

 

 

 

Interest income

47

 

121

 

69

 

554

EBITDA(4) 

$28,380

 

$5,486

 

$33,898

 

$6,852

 

 

(1)     Includes depreciation and amortization related to discontinued operations of $0.2 million for the three and six months ended June 30, 2010.

(2)     Includes interest expense related to discontinued operations of $0.7 million for the three and six months ended June 30, 2010.

 (3)    Includes provision for income taxes related to discontinued operations of $4.5 million for the three and six months ended June 30, 2010.

 (4)  Includes EBITDA related to discontinued operations of $12.9 million for the three and six months ended June 30, 2010.


 


CB RICHARD ELLIS GROUP, INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 (Unaudited)

 

June 30,

 

December 31,

 

2010

 

2009

Assets:

 

 

 

    Cash and cash equivalents

$743,563

 

$741,557

    Restricted cash

37,324

 

46,797

Receivables, net

731,621

 

775,929

    Warehouse receivables (1)

260,636

 

315,033

Real estate assets (2)

886,048

 

693,442

Goodwill and other intangibles, net

1,600,340

 

1,629,276

Investments in and advances to unconsolidated subsidiaries

119,120

 

135,596

Other assets, net

552,398

 

701,776

Total assets

$4,931,050

 

$5,039,406

Liabilities:

 

 

 

    Current liabilities, excluding debt

$802,058

 

$989,491

    Warehouse lines of credit (1)

258,972

 

312,872

Revolving credit facility

25,155

 

21,050

    Senior secured term loans

1,622,840

 

1,683,610

Senior subordinated notes, net

437,074

 

436,502

    Other debt (3)

2,260

 

6,541

Notes payable on real estate (4)

718,464

 

551,277

Other long-term liabilities

243,617

 

253,768

Total liabilities

4,110,440

 

4,255,111

 

 

 

 

CB Richard Ellis Group, Inc. stockholders’ equity

641,801

 

629,122

Non-controlling interests

178,809

 

155,173

Total equity

820,610

 

784,295

 

 

 

 

Total liabilities and equity

$4,931,050

 

$5,039,406

 

 

 

 

 

 

 

 

(1) Represents loan receivables, substantially all of which are offset by the related non-recourse warehouse line of credit facility.

(2) Includes real estate and other assets held for sale, real estate under development and real estate held for investment.

(3) Includes a non-recourse revolving credit line balance of $2.0 million and $5.5 million in Development Services as of June 30, 2010 and December 31, 2009, respectively.

(4) Represents notes payable on real estate of which $3.5 million are recourse to the Company as of June 30, 2010 and December 31, 2009.

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