CB Richard Ellis Group, Inc. Reports First Quarter 2008 Revenue of $1.2 Billion and Earnings Per Share of $0.15.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. Group, Inc. (NYSE NYSE See: New York Stock Exchange :CBG CBG corticosteroid-binding globulin. ) today reported revenue of $1.2 billion for the first quarter of 2008, a slight increase over the first quarter of 2007. The Company reported net income of $20.5 million, or $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the first quarter of 2008, compared with net income of $12.0 million, or $0.05 per diluted share, for the same quarter last year. Excluding one-time charges1, the Company would have earned net income2 of $31.7 million, or $0.15 per diluted share, in the first quarter of 2008 compared with net income of $65.0 million, or $0.27 per diluted share, in the first quarter of 2007. This decrease was driven by two factors: the timing of carried interest revenue recognition in the Global Investment Management segment and the combined impact, in the EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. segment, of a revenue mix shift and planned increase of costs associated with investment in growth of the business. Earnings Before Interest, Taxes, Depreciation, and Amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become )3 totaled $88.5 million for the first quarter of 2008, an increase of $4.2 million, or 5%, from the same quarter last year. CB Richard Ellis' first-quarter results were paced by significant growth in its outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. business activities. Reflecting the increasing strength of this business line following the December 2006 acquisition of Trammell Crow F. Trammell Crow (born June 11, 1914, in Dallas, Texas) is an American property developer who created several famous projects, including Dallas Market Center, Peachtree Center (Atlanta, Georgia), and San Francisco's Embarcadero Center. Company, revenue from this business line rose by 34% and accounted for approximately one-third of global revenue - up from approximately 25% in the same period of 2007. During the first quarter, the Company won 11 new outsourcing accounts, expanded its services for 10 existing customers and renewed its relationship with 11 others. "Generally, first-quarter 2008 results were in line with our expectations," said Brett White Brett White (born April 8 1982 in Cooma, New South Wales) is an Australian professional rugby league footballer. He plays for the Melbourne Storm in the National Rugby League. , president and chief executive officer of CB Richard Ellis. "As anticipated, the weaker economy as well as the unsettled credit market environment materially impacted our capital markets businesses. Investment sales activity declined in the Americas and Europe due to limited credit availability. On the other hand, the quarter underscored our continuing success in diversifying the firm's revenue streams. Our outsourcing business grew substantially in every region worldwide. "In addition, the global leasing business produced strong growth. Leasing revenue rose significantly in every region although continued economic weakness in the U.S. and EMEA could reduce future leasing results. Asia Pacific performed exceptionally well during the quarter, with more than 40% top- and bottom-line growth, reflecting both the relatively muted mut·ed adj. 1. a. Muffled; indistinct: a muted voice. b. Mute or subdued; softened: muted colors. 2. effect, thus far, of credit market uncertainty as well as market share gains and an expansion of our service offering throughout the region." Americas Segment Results First quarter revenue for the Americas region, including the U.S., Canada and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , was $783.5 million, compared with $791.9 million for the first quarter of 2007. The continued growth of our outsourcing business as well as stronger leasing performance compared to the prior year quarter almost entirely mitigated the impact of lower sales and commercial mortgage brokerage activity brought about by the continued challenges in the credit markets. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the Americas region totaled $62.4 million for the first quarter of 2008, compared with $21.6 million for the first quarter of 2007. The Americas region's EBITDA totaled $66.3 million for the first quarter of 2008, an increase of $59.1 million from last year's first quarter, largely due to the inclusion of higher Trammell Crow Company merger and acquisition related expenses in the prior year quarter. Excluding the impact of one-time items, operating income for the Americas region would have totaled $70.7 million for the first quarter of 2008, as compared to $74.5 million for the first quarter of last year. In the current quarter, the Company recorded an equity loss from unconsolidated subsidiaries of $10.6 million due to a write-down of its investment in CBRE CBRE CB Richard Ellis (real-estate firm) CBRE Chemical, Biological, Radiological and Explosive CBRE Component-Based Reliability Estimation CBRE Coldwell Banker Richard Ellis (Boston, MA) Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Finance attributable to a declined market valuation. EMEA Segment Results Revenue for the EMEA region, which mainly consists of operations in Europe, increased 7.7% to $242.8 million for the first quarter of 2008, compared with $225.4 million for the first quarter of 2007. This revenue increase reflects the continued strength of the Company's platform across most business lines and various countries, including the Netherlands, France, the United Kingdom and Russia and the benefit from the strong Euro and British pound sterling against the U.S. dollar. Operating income for the EMEA segment totaled $8.0 million for the first quarter of 2008, compared with $33.6 million for the same period last year. EBITDA for the EMEA region totaled $11.7 million for the first quarter of 2008 compared to $36.8 million for last year's first quarter. The current year quarter's lower operating income and EBITDA is mainly due to a shift in revenue mix from investment sales to outsourcing. Approximately half of the revenue increase was due to higher reimbursements associated with our property and facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. contracts that are included in revenue with a largely corresponding increase in reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. expenses, which therefore does not translate into noticeably increased operating income or EBITDA. In addition, higher compensation costs driven by investments in headcount and acquisitions as a result of our efforts to grow and diversify operations in this region impacted the current quarter's results. The EMEA results were consistent with our expectations and support our current view that this business should post good results in 2008. The EMEA segment did not incur any significant one-time costs in the current or prior year quarter. Asia Pacific Segment Results In the Asia Pacific region, which includes operations in Asia, Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , revenue totaled $137.4 million for the first quarter of 2008, a 46.2% increase from $94.0 million for the first quarter of 2007. This strong revenue increase was primarily driven by improved performance in Australia, China, Japan and Korea as well as from our acquisition of a majority interest in CBRE India during the third quarter of 2007. Operating income for the Asia Pacific segment increased to $12.3 million for the first quarter of 2008 compared to $9.9 million for the same period last year. EBITDA for the Asia Pacific segment totaled $13.7 million for the first quarter of 2008, an increase of $4.2 million, or 44.1%, from last year's first quarter. The Asia Pacific segment did not incur any significant one-time costs in the current or prior year quarter. Global Investment Management Segment Results In the Global Investment Management segment, which consists of investment management operations in the U.S., Europe and Asia, revenue totaled $39.5 million for the first quarter of 2008, compared to $85.6 million recorded in the first quarter of 2007. This segment reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.1 million for the first quarter of 2008, compared with operating income of $38.7 million for the same period last year. EBITDA for this segment was a loss of $1.4 million for the first quarter of 2008, compared with positive EBITDA of $38.9 million in the first quarter of 2007. The lower results were mainly attributable to the timing of carried interest activity. As compared with the prior year first quarter, revenue recognized from funds liquidating (carried interest revenue) decreased by $46.4 million, partially offset by lower carried interest incentive compensation of $11.4 million. For the first quarter of 2008, the Company recorded a total of $5.3 million of incentive compensation expense related to carried interest revenue, all of which related to future periods' revenue. Revenues associated with these expenses cannot be recognized until certain contractual hurdles are met. The Company expects that it will recognize income from funds liquidating in future quarters that will more than offset the $5.3 million of incentive compensation expense recognized. Total assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. grew by nearly 12% from year-end 2007 to $42.2 billion at the end of the first quarter, reflecting strength in fundraising efforts and an active acquisition program. The Global Investment Management segment did not incur any one-time costs in the current or prior year quarter. Development Services Segment Results In the Development Services segment, which consists of real estate development and investment activities primarily in the U.S., revenue totaled $27.7 million for the first quarter of 2008, a 61.8% increase compared to $17.1 million recorded in the first quarter of 2007. This revenue increase was primarily driven by construction revenue, which also led to a corresponding increase in construction job costs, thereby not translating into increased operating income or EBITDA. This segment reported an operating loss of $10.3 million for the first quarter of 2008, compared with an operating loss of $10.7 million for the same period last year. EBITDA for the segment was a loss of $1.8 million for the first quarter of 2008, compared to an EBITDA loss of $8.0 million from last year's first quarter. EBITDA was positively impacted by a reduction in minority interest expense, which is included in the calculation of EBITDA but not in the calculation of operating loss. Development projects in process as of March 31, 2008 totaled $6.3 billion, up nearly 15% from year ago levels and down slightly from year-end 2007. The inventory of pipeline deals as of March 31, 2008 stood at $2.8 billion. Conference Call Details The Company's first-quarter earnings conference call will be held on Wednesday, April 30, 2008 at 10:30 a.m. Eastern Daylight Time (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). A live webcast will be accessible through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's Web site at www.cbre.com. The direct dial-in number for the conference call is 888-428-4480 for U.S. callers and 612-332-0107 for international callers. A replay of the call will be available starting at 2:00 p.m. EDT on April 30, 2008 and ending at midnight EDT on May 13, 2008. 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 917661. A transcript of the call will be available on the Company's Investor Relations Web site. 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 2007 revenue). With over 29,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. ; property, facilities and project management; mortgage brokerage; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis is the only commercial real estate services company named one of the 50 "best in class" companies by BusinessWeek, and was also named one of the 100 fastest growing companies by Fortune. Please visit our Web site at www.cbre.com. Note: This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding our growth momentum in 2008, future operations and future 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 (logic) inference - The logical process by which new facts are derived from known facts by the application of inference rules. See also symbolic inference, type 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; any general economic slow-down or recession in any of our principal operating regions; 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 Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company to offset related incentive compensation expense; our ability to leverage our platform to sustain revenue growth and capture market share; our ability to retain and incentivize in·cen·tiv·ize tr.v. in·cen·tiv·ized, in·cen·tiv·iz·ing, in·cen·tiv·iz·es To offer incentives or an incentive to; motivate: producers; our levels of borrowing; and the integration of our acquisitions and the level of synergy savings achieved as a result. Additional information concerning factors that may influence the Company's financial information is discussed under "Risk Factors", "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2007, 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 off the Company's Web site at www.cbre.com or upon request from the CB Richard Ellis Investor Relations Department at investorrelations@cbre.com. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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