CB Richard Ellis Group, Inc. Reports Second Quarter 2005 Earnings Per Share up 119% from 2004 and Raises Full Year Guidance.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 second quarter 2005 revenue of $672.2 million, up 22.0% over the second quarter of 2004, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.66 for the second quarter of 2005, compared with $0.04 in the second quarter of last year. Excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, second quarter 2005 diluted earnings per share was $0.70, compared with $0.32 for the same quarter a year earlier. Based on continuing favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trends in most of the Company's lines of business, CB Richard Ellis raised its full year 2005 guidance for diluted earnings per share to a range of $2.40 to $2.50, excluding one-time Insignia in·sig·ni·a also in·sig·ne n. pl. insignia or in·sig·ni·as 1. A badge of office, rank, membership, or nationality; an emblem. 2. A distinguishing sign. related and debt buy-back charges. Second Quarter Highlights For the second quarter of 2005, the Company generated revenue of $672.2 million, a 22.0% increase over the $550.9 million posted in the second quarter of 2004. The Company reported second quarter net income of $50.4 million, or $0.66 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, compared with net income of $3.0 million, or $0.04 per diluted share in the second quarter of 2004. Excluding one-time items related to the Insignia acquisition and debt buy-back charges, which totaled $4.2 million ($3.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ), the Company would have earned net income(1) of $53.5 million, or $0.70 per diluted share in the second quarter of 2005, compared with net income of $22.4 million, or $0.32 per diluted share in the second quarter of 2004. Revenue The second quarter revenue increase of 22.0% reflects improved performance across virtually all of the Company's business lines and geographies. A steady leasing recovery, combined with continued investment sales strength globally, fueled the double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth. 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 (2) 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) totaled $106.5 million for the second quarter of 2005, an increase of $67.6 million, or 173.4%, from the same quarter last year. The increased EBITDA reflects strength across all the Company's business lines and continued cost control. Also contributing to the year-over-year increase is the absence of Insignia acquisition-related costs and one-time compensation expense related to the initial public offering of the Company's common stock in June June: see month. 2004, both of which significantly impacted second quarter 2004 results. Interest Expense Interest expense totaled $13.4 million for the second quarter of 2005, a decrease of $5.4 million, or 28.8%, compared with the same quarter last year. The decrease was driven by the interest savings realized from the repayment of higher interest rate debt throughout 2004 and the first half of 2005. During the second quarter of 2005, the Company repurchased $11.8 million in aggregate principal amount of its outstanding 11 1/4% senior subordinated notes in the open market at a premium of $1.4 million. The year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. repurchases of $38.2 million will reduce annual interest expense by approximately $4.3 million. Management's Commentary "Consistent with our expectations, the U.S. leasing market is staging a steady recovery," 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. , chief executive officer of CB Richard Ellis. "The market cycle has reached an inflection point Inflection Point An event that changes the way we think and act. -Andy Grove, Founder of Intel. Notes: For example, the fall of the Berlin Wall was an inflection point in global politics and the commercialization of the Internet was an inflection point in technology. nationally, with most markets seeing measured increases in absorption, lower vacancies and modest rental gains. With employment growth continuing, leasing fundamentals are improving. "U.S. real estate continues to attract high levels of capital, and investor appetite for all property types remains robust. Investor confidence has been bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. of leasing market fundamentals as well as continuing low long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. interest rates. Meanwhile, increased capital allocations by financial institutions have helped fuel higher demand for real estate investments. "In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , there is now a clear strengthening of demand for
office space in London London, city, CanadaLondon, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , Paris and Madrid Madrid (mədrĭd`, Span. mäthhrēth`), city (1990 pop. 3,120,732), capital of Spain and of Madrid prov., central Spain, and the focus of its own autonomous region, on the Manzanares River. , which are key indicators of an expected market recovery in 2006. In Asia, demand for office space is strong in Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. , Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Beijing Beijing (bā-jĭng) or Peking (pē-kĭng, pā–), city (1994 est. urban pop. 6,093,300; 1994 est. total pop. 7,240,700), capital of the People's Republic of China. It is in central Hebei prov. and Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. , all of which witnessed significant leasing activity, while China is generally becoming the focus of growing institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. interest. International investment sales markets are strong virtually across the board." Americas A·mer·i·cas , the See America. Region Second quarter revenue for the Americas region, including the U.S., Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Mexico 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. , increased 27.4% to $489.9 million, compared with $384.5 million for the second quarter of 2004. This increase was mainly attributable to improved leasing activity, continued high volume of investment sales, increased appraisal/valuation activities, and higher 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. fees. 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 $69.0 million for the second quarter of 2005, compared with $12.3 million for the second quarter of 2004. The $56.7 million increase was driven by double-digit revenue growth across the board, as well as the lack of merger-related costs associated with the Insignia acquisition and one-time compensation expense associated with the initial public offering, both of which impacted the prior-year quarter. Excluding the impact of these one-time items, operating income for the Americas region would have been $70.7 million for the second quarter of 2005, an increase of $29.3 million, or 70.8%, as compared to the second quarter of last year. The Americas region's EBITDA totaled $79.9 million for the second quarter of 2005, an increase of $58.6 million, or 275.1%, from last year's second quarter. 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. Region Revenue for the EMEA region, mainly consisting of operations in Europe, increased 13.7% to $123.1 million for the second quarter of 2005, compared with $108.3 million for the second quarter of 2004. Operating income for the EMEA segment totaled $10.7 million for the second quarter of 2005, compared with $5.1 million for the same period last year. Excluding one-time items related to the Insignia acquisition, operating income for this region would have been $11.3 million, an increase of $4.4 million, or 63.7%, as compared to the second quarter of 2004. EBITDA for the EMEA region totaled $13.0 million for the second quarter of 2005, an increase of $5.8 million, or 80.9%, from last year's second quarter. These improvements were primarily driven by a continued strong investment sales environment as well as improved leasing activity. Asia Pacific Region 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 $43.3 million for the second quarter of 2005, a 14.8% increase from $37.7 million for the second quarter of 2004. Operating income for the Asia Pacific segment totaled $6.6 million for the second quarter of 2005, compared with $5.2 million for the same period last year, an increase of 27.5%. EBITDA for the Asia Pacific segment totaled $7.6 million for the current quarter, an increase of $1.9 million, or 33.6%, from the second quarter of 2004. The year-over-year second quarter improvement generally reflects increased business activity throughout the region. The Asia Pacific segment did not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. any one-time costs associated with the Insignia acquisition or the initial public offering in the current or prior year quarter. Global Investment Management Business In the Global Investment Management segment, which consists of investment management operations in the U.S., Europe and Asia, revenue totaled $15.9 million for the second quarter of 2005, compared with $20.4 million in the second quarter of 2004. This decrease was mainly due to acquisition and disposition fee revenue earned in the U.S. in the prior year quarter that did not recur as well as the timing of revenues realized in Japan. 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. for this segment totaled $5.4 million for the second quarter of 2005, compared with operating income of $2.8 million for the second quarter of 2004. This decrease was attributable to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. revenue decrease as well as compensation expense associated with funds concluding over the next three years with no related revenue recognition until they conclude. EBITDA for the Global Investment Management segment totaled $6.1 million for the second quarter of 2005, an increase of $1.3 million or 26.6% from last year's same period results. The improved EBITDA was primarily driven by an increase in equity earnings, which is included in the calculation of EBITDA but not in the calculation of operating income (loss). The Global Investment Management segment incurred minimal one-time costs associated with the Insignia acquisition in the second quarter of 2004. Additional Business Line Highlights The Company continues to make steady gains in its global 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. portfolio, reflecting the increasing trend toward 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. of real estate services. Transaction management accounts in this line of business have grown to more than 1.5 billion square feet worldwide, an increase of approximately 10% as compared to December 31, 2004, and facilities management accounts total approximately 161 million square feet on a global basis, an increase of approximately 6% as compared to December 31, 2004. New Corporate Services accounts were established during the second quarter with companies such as DHL DHL abbr. 1. Doctor of Hebrew Letters 2. Doctor of Hebrew Literature , Fujitsu North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Hughes Supply Hughes Supply Incorporated is a very large wholesaler of construction supplies operating in 40 of the United States and two Canadian Provinces. Its major operation is in the Southeast and Southwest of the United States. and Bank of Nova Scotia Nova Scotia (nō`və skō`shə) [Lat.,=new Scotland], province (2001 pop. 908,007), 21,425 sq mi (55,491 sq km), E Canada. Geography . The Company also contracted to provide additional services for existing corporate clients, such as Avaya and Royal Bank of Canada Bank of Canada Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. . At the same time, the Company's mortgage brokerage subsidiary, L.J. Melody melody, succession of single tones of varying pitch. Melody is the linear aspect of music, in contrast to harmony, the chordal aspect, which results from the simultaneous sounding of tones. , continued to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. investors' healthy appetite for debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay . For the first six months of 2005, mortgage originations increased 42% from a year earlier to $7.4 billion. Also during the quarter, CB Richard Ellis established a new specialty finance company, which raised $300 million to invest in debt instruments and originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. new loans and preferred equity investments. CB Richard Ellis holds an equity stake of approximately 5% in this specialty finance company. S&P Rating Upgrade On May 25, 2005, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. raised its rating on CB Richard Ellis, including raising its credit rating to 'BB-' from 'B+', in response to the Company's improved operating performance and debt reduction activities. Six-month Results Six-month revenue increased by $218.5 million, or 22.0%, to $1.2 billion compared to the same period last year. The Company reported net income of $65.0 million, or $0.85 per diluted share, for the six months ended June 30, 2005 compared with a net loss of $13.6 million, or a loss of $0.22 per diluted share, for the six months ended June 30, 2004. Excluding one-time items, the Company would have earned net income of $72.5 million, or $0.95 per diluted share, for the six months ended June 30, 2005 compared to net income of $19.8 million, or $0.29 per diluted share, for the same period in the prior year. EBITDA for the six months ended June 30, 2005 was $156.8 million, representing an increase of $107.7 million, or 219.6%, from EBITDA of $49.1 million for the six months ended June 30, 2004. 2005 Guidance As previously mentioned, the Company is raising its full-year guidance for 2005. CB Richard Ellis expects to generate full year revenue of $2.7 billion, net income in the range of $183.0 million to $191.0 million, and diluted earnings per share in the range of $2.40 to $2.50, excluding residual one-time Insignia related and debt buy-back charges totaling approximately $14.0 million (pre-tax). The Company's second-quarter earnings conference call will be held on Wednesday, August 3, 2005 at 10:30 a.m. 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 866-233-3843 (in the U.S.) and 612-332-0530 (outside the U.S.). The access code for the call is 790789. A replay of the call will be available beginning at 2:00 p.m. EDT on August 3, 2005 and ending at 2:59 a.m. EDT on August 11, 2005. To access the replay, the dial-in number is 800-475-6701 (in the U.S.) and 320-365-3844 (outside the U.S.) The access code for the replay is 790789. A transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record 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 1000 company headquartered in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , is the world's largest commercial real estate services firm (in terms of 2004 revenue). With approximately 13,500 employees, the Company serves real estate owners, investors and occupiers through more than 200 offices worldwide (excluding affiliate and partner offices). The Company's core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. include property sales, leasing and management; corporate services; facilities and project management; mortgage banking; investment management; appraisal and valuation; research and consulting. Please visit our Web site at www.cbre.com. 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 2005; 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: commercial real estate vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. levels; employment conditions and their effect on vacancy rates; property values; rental rates; interest rates; any general economic recession domestically or internationally; general conditions of financial liquidity for real estate transactions; our ability to leverage our platform to sustain revenue growth; 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; and our ability to pay down debt. Additional information concerning factors that may influence CB Richard Ellis Group, Inc.'s financial information can be found in its press releases as well as its periodic filings with the Securities and Exchange Commission. In this regard, risk factors are specifically discussed under the headings "Factors Affecting Our Future Performance" and "Forward-Looking Statements" in CB Richard Ellis Group, Inc.'s 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, 2004, filed March 15, 2005. 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. (1) A reconciliation of net income (loss) to net income, as adjusted for one-time items, is provided in the exhibits to this release. (2) The Company's management believes that EBITDA is useful in evaluating its 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 capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. 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 performance of various business lines and for other discretionary purposes, including as a significant component when measuring its performance under its employee incentive programs. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See 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, operating income (loss) and net income (loss), each as determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. 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 Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and are used to determine compliance with financial covenants and the Company's ability to engage in certain activities, such as incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. additional debt and making certain restricted payments. For a reconciliation of EBITDA with the most comparable financial measures 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, 2005 AND 2004
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenue $672,163 $550,916 $1,210,429 $991,908
Costs and expenses:
Cost of services 338,691 272,611 606,737 496,833
Operating,
administrative and
other 241,730 230,539 464,951 429,790
Depreciation and
amortization 10,818 10,830 21,188 27,661
Merger-related
charges - 11,574 - 21,534
----------- ----------- ----------- -----------
Operating income 80,924 25,362 117,553 16,090
Equity income from
unconsolidated
subsidiaries 14,779 2,768 18,020 5,294
Interest income 3,058 1,564 5,503 2,837
Interest expense 13,374 18,780 26,972 38,425
Loss on extinguishment
of debt 1,832 4,009 6,762 4,009
----------- ----------- ----------- -----------
Income (loss) before
provision (benefit)
for income taxes 83,555 6,905 107,342 (18,213)
Provision (benefit)
for income taxes 33,134 3,940 42,349 (4,610)
----------- ----------- ----------- -----------
Net income (loss) $50,421 $2,965 $64,993 $(13,603)
=========== =========== =========== ===========
Basic income (loss)
per share $0.68 $0.05 $0.88 $(0.22)
=========== =========== =========== ===========
Weighted average
shares outstanding
for basic income
(loss) per share 73,785,232 63,990,494 73,659,733 63,256,275
=========== =========== =========== ===========
Diluted income (loss)
per share $0.66 $0.04 $0.85 $(0.22)
=========== =========== =========== ===========
Weighted average
shares outstanding
for diluted income
(loss) per share 76,365,899 69,375,929 76,275,811 63,256,275
=========== =========== =========== ===========
EBITDA $106,521 $38,960 $156,761 $49,045
=========== =========== =========== ===========
CB RICHARD ELLIS GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Americas
--------
Revenue $489,878 $384,468 $870,992 $703,069
Costs and expenses:
Cost of services 263,295 207,612 463,252 381,508
Operating, administrative and
other 150,150 146,823 290,769 272,832
Depreciation and amortization 7,455 7,310 14,383 17,283
Merger-related charges - 10,381 - 17,998
--------- --------- --------- ---------
Operating income $68,978 $12,342 $102,588 $13,448
========= ========= ========= =========
EBITDA $79,857 $21,290 $123,295 $34,095
========= ========= ========= =========
EMEA
----
Revenue $123,139 $108,309 $225,249 $188,135
Costs and expenses:
Cost of services 54,930 47,363 104,705 83,588
Operating, administrative and
other 55,097 52,364 104,991 98,385
Depreciation and amortization 2,390 2,325 4,814 7,972
Merger-related charges - 1,163 - 3,205
--------- --------- --------- ---------
Operating income (loss) $10,722 $5,094 $10,739 $(5,015)
========= ========= ========= =========
EBITDA $12,989 $7,179 $15,248 $2,468
========= ========= ========= =========
Asia Pacific
------------
Revenue $43,284 $37,710 $77,159 $63,270
Costs and expenses:
Cost of services 20,466 17,636 38,780 31,737
Operating, administrative and
other 15,694 14,303 29,201 25,487
Depreciation and amortization 549 616 1,148 1,250
--------- --------- --------- ---------
Operating income $6,575 $5,155 $8,030 $4,796
========= ========= ========= =========
EBITDA $7,566 $5,665 $9,708 $6,235
========= ========= ========= =========
Global Investment Management
----------------------------
Revenue $15,862 $20,429 $37,029 $37,434
Costs and expenses:
Operating, administrative and
other 20,789 17,049 39,990 33,086
Depreciation and amortization 424 579 843 1,156
Merger-related charges - 30 - 331
--------- --------- --------- ---------
Operating (loss) income $(5,351) $2,771 $(3,804) $2,861
========= ========= ========= =========
EBITDA $6,109 $4,826 $8,510 $6,247
========= ========= ========= =========
Non-GAAP Financial Measures The following measures are considered "non-GAAP financial measures" under SEC guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. : (i) Net income, as adjusted for one-time items (ii) Diluted earnings per share, as adjusted for one-time items (iii) EBITDA (iv) Operating income (loss), as adjusted for one-time items 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 one-time items 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 one-time items that may obscure trends in the underlying performance of its business. Net income, as adjusted for one-time items and diluted earnings per share, as adjusted for one-time items are calculated as follows (dollars in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- --------------------------
2005 2004 2005 2004
----------- ----------- ----------- --------------
Net income (loss) $50,421 $2,965 $64,993 $(13,603)
Amortization
expense related to
net revenue
backlog acquired
in the Insignia
acquisition, net
of tax - 567 - 4,855
Merger-related
charges related to
the Insignia
acquisition, net
of tax - 7,281 - 13,547
Integration costs
related to the
Insignia
acquisition, net
of tax 1,657 2,167 3,135 5,533
One-time
compensation
expense related to
the initial public
offering, net of
tax - 9,437 - 9,437
Loss on
extinguishment of
debt, net of tax 1,442 - 4,408 -
----------- ----------- ----------- --------------
Net income, as
adjusted $53,520 $22,417 $72,536 $19,769
=========== =========== =========== ==============
Diluted income per
share, as adjusted $0.70 $0.32 $0.95 $0.29
=========== =========== =========== ==============
Weighted average
shares outstanding
for diluted income
per share, as
adjusted 76,365,899 69,375,929 76,275,811 68,499,765 (1)
=========== =========== =========== ==============
(1) With adjustments to arrive at "Net income, as adjusted," a net loss translates into a net income position on an adjusted basis. Accordingly, the weighted average impact of the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of potential common shares of 5,243,490 has been considered in determining the dilutive earnings per share on a adjusted basis. EBITDA for the Company is calculated as follows (dollars in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
2005 2004 2005 2004
--------- -------- --------- ---------
Net income (loss) $50,421 $2,965 $64,993 $(13,603)
Add:
Depreciation and amortization 10,818 10,830 21,188 27,661
Interest expense 13,374 18,780 26,972 38,425
Loss on extinguishment of debt 1,832 4,009 6,762 4,009
Provision (benefit) for income
taxes 33,134 3,940 42,349 (4,610)
Less:
Interest income 3,058 1,564 5,503 2,837
--------- -------- --------- ---------
EBITDA $106,521 $38,960 $156,761 $49,045
========= ======== ========= =========
Operating income (loss), as adjusted for one-time items is calculated as follows (dollars in thousands):
Three Months Six Months Ended
Ended June 30,
June 30,
----------------- ------------------
2005 2004 2005 2004
-------- -------- --------- --------
Americas
--------
Operating income $68,978 $12,342 $102,588 $13,448
Amortization expense relating to
net revenue backlog acquired in
the Insignia acquisition - 901 - 4,393
Merger-related charges related to
the Insignia acquisition - 10,381 - 17,998
Integration costs related to the
Insignia acquisition 1,740 2,779 3,571 7,502
One-time compensation expense
related to the initial public
offering - 15,000 - 15,000
-------- -------- --------- --------
Operating income, as adjusted $70,718 $41,403 $106,159 $58,341
======== ======== ========= ========
EMEA
----
Operating income (loss) $10,722 $5,094 $10,739 $(5,015)
Amortization expense related to
net revenue backlog acquired in
the Insignia acquisition - - - 3,324
Merger-related charges related to
the Insignia acquisition - 1,163 - 3,205
Integration costs related to the
Insignia acquisition 612 665 1,237 1,293
-------- -------- --------- --------
Operating income, as adjusted $11,334 $6,922 $11,976 $2,807
======== ======== ========= ========
Asia Pacific
------------
The Asia Pacific segment did not incur any one-time costs associated
with the Insignia acquisition or the initial public offering.
Global Investment Management
----------------------------
Operating (loss) income $(5,351) $2,771 $(3,804) $2,861
Merger-related charges related to
the Insignia acquisition - 30 - 331
-------- -------- --------- --------
Operating (loss) income, as
adjusted $(5,351) $2,801 $(3,804) $3,192
======== ======== ========= ========
The Company does not allocate To reserve a resource such as memory or disk. See memory allocation. net interest expense, loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt or provision (benefit) for income taxes among its segments. Accordingly, EBITDA for segments is calculated as follows (dollars in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ------------------
2005 2004 2005 2004
-------- -------- --------- --------
Americas
--------
Operating income $68,978 $12,342 $102,588 $13,448
Add:
Depreciation and amortization 7,455 7,310 14,383 17,283
Equity income from
unconsolidated subsidiaries 3,424 1,638 6,324 3,364
-------- -------- --------- --------
EBITDA $79,857 $21,290 $123,295 $34,095
======== ======== ========= ========
EMEA
----
Operating income (loss) $10,722 $5,094 $10,739 $(5,015)
Add:
Depreciation and amortization 2,390 2,325 4,814 7,972
Equity loss from unconsolidated
subsidiaries (123) (240) (305) (489)
-------- -------- --------- --------
EBITDA $12,989 $7,179 $15,248 $2,468
======== ======== ========= ========
Asia Pacific
------------
Operating income $6,575 $5,155 $8,030 $4,796
Add:
Depreciation and amortization 549 616 1,148 1,250
Equity income (loss) from
unconsolidated subsidiaries 442 (106) 530 189
-------- -------- --------- --------
EBITDA $7,566 $5,665 $9,708 $6,235
======== ======== ========= ========
Global Investment Management
----------------------------
Operating (loss) income $(5,351) $2,771 $(3,804) $2,861
Add:
Depreciation and amortization 424 579 843 1,156
Equity income from
unconsolidated subsidiaries 11,036 1,476 11,471 2,230
-------- -------- --------- --------
EBITDA $6,109 $4,826 $8,510 $6,247
======== ======== ========= ========
CB RICHARD ELLIS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
June 30, December 31,
2005 2004
------------- -------------
Assets:
Cash and cash equivalents $192,217 $256,896
Restricted cash 5,841 9,213
Receivables, net 320,034 394,062
Warehouse receivable (1) 173,784 138,233
Property and equipment, net 133,729 137,703
Goodwill and other intangibles, net 933,188 935,161
Deferred compensation assets 132,995 102,578
Other assets, net 349,778 297,790
------------- -------------
Total assets $2,241,566 $2,271,636
============= =============
Liabilities:
Current liabilities, excluding debt $523,875 $637,165
Warehouse line of credit (1) 173,784 138,233
Senior secured term loan tranche B 271,150 277,050
11 1/4% senior subordinated notes 167,366 205,032
9 3/4% senior notes 130,000 130,000
Other debt (2) 40,956 22,492
Deferred compensation liability 165,566 160,281
Other long-term liabilities 127,714 135,510
------------- -------------
Total liabilities 1,600,411 1,705,763
Minority interest 5,809 5,925
Stockholders' equity 635,346 559,948
------------- -------------
Total liabilities and stockholders' equity $2,241,566 $2,271,636
============= =============
(1) Includes Freddie MAC Freddie Mac: see Federal Home Loan Mortgage Corporation. loan receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and related non-recourse warehouse line of credit of $173.8 million and $138.2 million at June 30, 2005 and December 31, 2004, respectively. (2) Includes $21.2 million of non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc an investment in Europe at June 30, 2005. |
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