CB Richard Ellis Group, Inc. Reports Significantly Improved Fourth Quarter 2004 Results and Increases Full Year 2005 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 full year 2004 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 $0.91, or $1.65 excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items related to the 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. acquisition and the Company's initial public offering. Based on the momentum exhibited by all of its business lines, the Company is revising its diluted earnings per share guidance upward for 2005 to a range of $1.95 to $2.05, excluding residual Residual See:Residual value one-time Insignia-related and debt buy-back charges. Fourth Quarter Highlights For the fourth quarter of 2004, the Company generated revenue of $798.2 million, which was 28.5% ahead of the $621.3 million posted in the fourth quarter of 2003. The Company reported fourth quarter net income of $66.4 million, or $0.88 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. This was $76.5 million ahead of the fourth quarter of 2003, when the Company reported a net loss of $10.1 million, or $0.16 net loss per diluted share. Excluding one-time items primarily related to the July July: see month. 2003 acquisition of Insignia Financial Group, the Company would have earned net income(1) of $68.4 million, or $0.90 per diluted share in the fourth quarter of 2004, compared with $27.9 million of net income, or $0.44 per diluted share, in the fourth quarter of 2003. This constitutes an increase in net income, as adjusted, of 145.5%. Revenue The above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. revenue increase of 28.5% for the fourth quarter of 2004 resulted from organic revenue growth fueled by strong investment property sales and improving leasing market fundamentals on a global basis. 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 $134.4 million for the quarter ended December December: see month. 31, 2004, an increase of $71.1 million, or 112.2%, from the same period last year. The increase was primarily driven by strong revenue growth combined with improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and the absence of Insignia merger-related costs in the current quarter, which significantly impacted fourth quarter 2003 results. Interest Expense Interest expense totaled $13.3 million for the fourth quarter of 2004, a decrease of $6.2 million, or 32.0%, compared with the same period last year. The decrease was driven by the interest savings realized from the repayments of higher interest debt starting in the fourth quarter of 2003 and continuing throughout 2004. The Company expects to achieve annual cash interest savings of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $16.0 million as a result of its de-leveraging efforts totaling approximately $150.0 million in 2004. Management's Commentary "Our fourth quarter results exceeded expectations," said Ray Wirta, chief executive officer of CB Richard Ellis. "Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. business activity was exceptionally strong and we enter 2005 with good momentum. All of our business lines are performing well, led by continued strong investment sales and higher leasing revenues. "Historically low interest rates continue to drive capital flows into real estate and commercial properties are trading hands at a strong pace. Leasing fundamentals have improved as job growth is causing companies to take on more space. Leasing markets showed a distinct upturn late in the year, particularly in major business centers like New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London London, city, Canada London, 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. . Although landlord concessions have tightened, rents have not yet appreciated meaningfully. Assuming the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective remains on course, we will see rental growth in 2005, especially in healthier markets where supply and demand are near equilibrium equilibrium, state of balance. When a body or a system is in equilibrium, there is no net tendency to change. In mechanics, equilibrium has to do with the forces acting on a body. ." New Segmentation Effective with the fourth quarter of 2004, the Company reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. its business segments by separating the Global Investment Management business from its geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions. This has reduced revenues and earnings in the Americas A·mer·i·cas , the See America. , 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). , Middle East and Africa (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. ), and
Asia Pacific regions, but has had no impact on consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: results. This action was taken in an effort to increase the Company's transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. of reporting in light of the growth in the Global Investment Management business. All periods presented have been restated to conform with the 2004 presentation. Americas Region Fourth 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 Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , increased 29.5% to $541.1 million, compared with $417.7 million for the fourth quarter of 2003. This increase was primarily related to strong sales and leasing activity in the U.S. 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 $58.1 million for the fourth quarter of 2004, compared with $17.0 million for the fourth quarter of 2003. The $41.1 million, or 240.5%, increase was driven by the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. revenue growth as well as lower amortization expense related to Insignia net revenue backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. (3) and the lack of merger-related costs in the current quarter, which ended in the third quarter of 2004. Excluding the impact of all one-time items, operating income for the Americas region would have been $62.9 million for the fourth quarter of 2004, an increase of $19.7 million as compared to the fourth quarter of last year. The Americas region's EBITDA totaled $73.6 million for the fourth quarter of 2004, an increase of $32.5 million or 79.4% from last year's fourth quarter. EMEA Region Revenue for the EMEA region, mainly consisting of operations in Europe, increased 18.5% to $166.8 million for the fourth quarter of 2004, compared with $140.8 million for the fourth quarter of 2003. Operating income for the EMEA region totaled $31.9 million for the current quarter, compared with 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 $7.8 million for the same quarter last year. Excluding one-time items related to the Insignia acquisition, operating income for this region would have been $32.5 million, which represents an increase of $11.5 million as compared to the fourth quarter of 2003. EBITDA for the EMEA region totaled $34.1 million for the fourth quarter of 2004, an increase of $24.4 million or 250.9% from last year's same period results. The improvement over the 2003 fourth quarter primarily reflects strong investment sales activity. Asia Pacific Region In the Asia Pacific region, which includes operations in Asia, Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. 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 $50.4 million for the fourth quarter of 2004, an increase of 31.8% from $38.3 million for the fourth quarter of 2003. Operating income for the Asia Pacific segment totaled $9.2 million for the quarter ended December 31, 2004, compared with $4.7 million for the same period last year. EBITDA for the Asia Pacific segment totaled $10.0 million for the current quarter, an increase of $4.6 million, or 84.3%, from last year's same period results. The improved results reflect increasing market share in Australia and China. The Asia Pacific segment incurred minimal one-time costs associated with the Insignia acquisition. 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 $39.8 million for the fourth quarter of 2004, an increase of 62.6% from $24.5 million for the fourth quarter of 2003. Operating income for the Global Investment Management segment totaled $11.0 million for the quarter ended December 31, 2004, compared with $5.2 million for the same period last year. EBITDA for the Global Investment Management segment totaled $16.8 million for the fourth quarter of 2004, an increase of $9.6 million or 132.5% from last year's same period results. The improved results are primarily driven by incentive fees earned in Japan. The Global Investment Management segment incurred minimal one-time costs associated with the Insignia acquisition. Business Line Performance During the fourth quarter of 2004, the Company gained a number of corporate clients, including Alcan, among others, and expanded its relationships with several others, including Textron Founded in 1923 as the Special Yarns Company by Royal Little, Textron NYSE: TXT, today is a multi-industry company with a portfolio of familiar brands such as Bell Helicopter, E-Z-GO, Cessna Aircraft, Cadillac Gage and Greenlee, among others. . In property management, AMB AMB Ambient AMB Ambassador AMB Amber AMB Ambulance AMB Associação Médica Brasileira (Brazil) AMB Ambulatory AMB Advanced Memory Buffer (FBDIMM control unit on DRAM) Property Corporation retained CB Richard Ellis to manage a 25 million square foot portfolio of industrial properties in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . The Company's commercial mortgage brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. business also performed well in 2004 as total volume rose 21% from 2003 to $13.3 billion in 2004. In addition, the Global Investment Management business benefited from the strong market for publicly traded REITs as a means of realizing profits on assets within its investment portfolio. A $400 million J-REIT called New City Residence Investment Corp. was listed on the Tokyo Stock Exchange Tokyo Stock Exchange Main stock market of Japan, located in Tokyo. It opened in 1878 to provide a market for the trading of government bonds newly issued to former samurai. in December 2004 and a $257 million technology-property REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). (the first of its kind) called Digital 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. Trust was listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "DLR DLR Dollar(s) DLR Dealer DLR Deutsches Zentrum für Luft- und Raumfahrt (German Aerospace Center) DLR Docklands Light Railway (London, UK) DLR Dynamic Language Runtime " in October October: see month. 2004. Full Year Results(4) Full year revenue increased by $735.0 million, or 45.1%, to $2.4 billion for the year ended December 31, 2004, compared to the prior year. Organic revenue growth was approximately 21% for 2004. The Company recorded net income of $64.7 million, or $0.91 per diluted share, for the year ended December 31, 2004 compared with a net loss of $34.7 million, or $0.68 net loss per diluted share, for the prior year. Excluding one-time items, the Company would have earned net income of $117.9 million, or $1.65 per diluted share, for the year ended December 31, 2004 as compared to net income of $36.8 million, or $0.71 per diluted share, for the prior year. EBITDA for the year ended December 31, 2004 was $245.3 million, representing an increase of $112.5 million, or 84.7%, from EBITDA of $132.8 million in 2003. The 2004 results included $54.9 million of merger-related charges, integration costs and one-time compensation expense (associated with the Company's initial public offering) versus $50.4 million of merger-related and integration charges in 2003. Subsequent Event In 2005, the Company repurchased $25.4 million of its outstanding 11 1/4% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes at a premium of $3.8 million. This is consistent with its stated objective of reducing debt and will generate additional interest savings of $2.9 million annually. 2005 Guidance As previously mentioned, the Company is revising its guidance upward for 2005. CB Richard Ellis expects to achieve full year revenue growth of approximately 8% compared with 2004 and net income in the range of $149.0 million to $156.0 million, or diluted earnings per share in the range of $1.95 to $2.05, excluding residual one-time Insignia-related and debt buy-back charges totaling approximately $15.0 million (pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ). The Company's fourth-quarter earnings conference call will be held on Thursday Thursday: see week. , February February: see month. 3, 2005 at 10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . 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. To access the call, dial 888-428-4474 (in the U.S.) and 612-288-0329 (outside the U.S.) and use access code 768011. A replay of the call will be available beginning at 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on February 3, 2005 and ending at 2:59 a.m. EST on February 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 768011. 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 Investor Relations section of the Web site. About CB Richard Ellis Headquartered in Los Angeles, CB Richard Ellis 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 220 offices worldwide (excluding affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. 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 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. ; facilities and project management; mortgage banking; investment management; appraisal and valuation; research; and consulting. For more information, visit the Company's 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'' 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; expectations of annual cash interest savings; rental growth 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; 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'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 "Risks Related to Our Business" and "Forward-Looking Statements" in CB Richard Ellis Group's Form 10-K/A for the year ended December 31, 2003, filed June June: see month. 28, 2004. Such filings are available publicly and may be obtained off the company's website 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 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." (3) The intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. amortization pertains to the net revenue backlog acquired in the Insignia transaction. Net income cannot be recognized from purchased backlog; hence this amortization expense offsets that portion of operating income that was generated from the Insignia backlog acquired. (4) The operating results for 2004 include the operations of Insignia. However, the operating results from January January: see month. 1 to July 23, 2003 do not include the operations of Insignia, as the Insignia acquisition occurred on July 23, 2003. As such, our consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge after the Insignia acquisition are not directly comparable to our consolidated financial statements prior to the Insignia acquisition.
CB RICHARD ELLIS GROUP, INC.
OPERATING RESULTS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Dollars in thousands, except share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenue $798,189 $621,257 $2,365,096 $1,630,074
Costs and expenses:
Cost of services 406,221 311,942 1,203,765 796,428
Operating,
administrative and
other 266,876 234,106 909,892 678,377
Depreciation and
amortization 14,856 39,051 54,857 92,622
Merger-related charges - 17,022 25,574 36,817
----------- ----------- ----------- -----------
Operating income 110,236 19,136 171,008 25,830
Equity income from
unconsolidated
subsidiaries 9,355 5,183 19,475 14,365
Interest income 1,961 937 4,264 3,560
Interest expense 13,280 19,518 65,418 71,256
Loss on extinguishment
of debt - 6,639 21,075 13,479
----------- ----------- ----------- -----------
Income (loss) before
provision (benefit)
for income taxes 108,272 (901) 108,254 (40,980)
Provision (benefit) for
income taxes 41,839 9,183 43,529 (6,276)
----------- ----------- ----------- -----------
Net income (loss) $66,433 $(10,084) $64,725 $(34,704)
=========== =========== =========== ===========
Basic income (loss) per
share $0.91 $(0.16) $0.95 $(0.68)
=========== =========== =========== ===========
`
Weighted average shares
outstanding for basic
income (loss) per
share 73,044,481 62,532,166 67,775,406 50,918,572
=========== =========== =========== ===========
Diluted income (loss)
per share $0.88 $(0.16) $0.91 $(0.68)
=========== =========== =========== ===========
Weighted average shares
outstanding for
diluted income (loss)
per share 75,814,979 62,532,166 71,345,073 50,918,572
=========== =========== =========== ===========
EBITDA $134,447 $63,370 $245,340 $132,817
=========== =========== =========== ===========
CB RICHARD ELLIS GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ----------------------
2004 2003 2004 2003
--------- --------- ----------- ----------
Americas
--------
Revenue $541,089 $417,676 $1,660,307 $1,155,461
Costs and expenses:
Cost of services 310,602 228,677 924,856 609,629
Operating, administrative
and other 160,907 146,881 569,195 438,425
Depreciation and
amortization 11,525 20,595 37,514 56,865
Merger-related charges - 4,475 22,038 20,367
--------- --------- ----------- ----------
Operating income $58,055 $17,048 $106,704 $30,175
========= ========= =========== ==========
EBITDA $73,554 $41,010 $154,506 $95,113
========= ========= =========== ==========
EMEA
----
Revenue $166,844 $140,812 $459,741 $298,725
Costs and expenses:
Cost of services 73,257 65,091 206,258 135,864
Operating, administrative
and other 59,477 54,071 207,326 136,644
Depreciation and
amortization 2,170 17,362 12,050 31,110
Merger-related charges - 12,055 3,205 15,958
--------- --------- ----------- ----------
Operating income (loss) $31,940 $(7,767) $30,902 $(20,851)
========= ========= =========== ==========
EBITDA $34,129 $9,726 $42,433 $10,053
========= ========= =========== ==========
Asia Pacific
------------
Revenue $50,422 $38,266 $151,034 $107,501
Costs and expenses:
Cost of services 22,362 18,174 72,651 50,935
Operating, administrative
and other 18,208 14,424 57,354 46,802
Depreciation and
amortization 621 486 2,476 2,226
Merger-related charges - 492 - 492
--------- --------- ----------- ----------
Operating income $9,231 $4,690 $18,553 $7,046
========= ========= =========== ==========
EBITDA $9,995 $5,422 $21,584 $9,633
========= ========= =========== ==========
Global Investment Management
----------------------------
Revenue $39,834 $24,503 $94,014 $68,387
Costs and expenses:
Operating, administrative
and other 28,284 18,730 76,017 56,506
Depreciation and
amortization 540 608 2,817 2,421
Merger-related charges - - 331 -
--------- --------- ----------- ----------
Operating income $11,010 $5,165 $14,849 $9,460
========= ========= =========== ==========
EBITDA $16,769 $7,212 $26,817 $18,018
========= ========= =========== ==========
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, 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 an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. financial performance without the impact of one-time items that may obscure OBSCURE - "A Formal Description of the Specification Language OBSCURE", J. Loeckx, TR A85/15, U Saarlandes, Saarbrucken, 1985. trends in the underlying performance of its business.
Net income (loss), 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 Twelve Months Ended
December 31, December 31,
-------------------------- --------------------------
2004 2003 2004 2003
----------- -------------- ----------- --------------
Net income (loss) $66,433 $(10,084) $64,725 $(34,704)
Amortization
expense related
to net revenue
backlog acquired
in the Insignia
acquisition,
net of tax 1,570 19,392 8,156 38,597
Merger-related
charges related
to the Insignia
acquisition, net
of tax (444) 11,772 15,994 24,041
Integration costs
related to the
Insignia
acquisition, net
of tax 1,410 6,785 8,968 8,907
One-time
compensation
expense related
to the initial
public offering,
net of tax (260) - 9,381 -
Loss on
extinguishment
of debt related
to the initial
public offering,
net of tax (296) - 10,673 -
----------- -------------- ----------- --------------
Net income, as
adjusted $68,413 $27,865 $117,897 $36,841
=========== ============== =========== ==============
Diluted income
per share, as
adjusted $0.90 $0.44 $1.65 $0.71
=========== ============== =========== ==============
Weighted average
shares
outstanding for
diluted income
per share, as
adjusted 75,814,979 63,495,996 (1) 71,345,073 51,767,807 (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 of
potential common shares of 963,830 and 849,235 have been
considered in determining the dilutive earnings per share on a
adjusted basis for the three and twelve months ended December 31,
2003, respectively.
EBITDA for the Company is calculated as follows
(dollars in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net income (loss) $66,433 $(10,084) $64,725 $(34,704)
Add:
Depreciation and amortization 14,856 39,051 54,857 92,622
Interest expense 13,280 19,518 65,418 71,256
Loss on extinguishment of debt - 6,639 21,075 13,479
Provision (benefit) for income
taxes 41,839 9,183 43,529 (6,276)
Less:
Interest income 1,961 937 4,264 3,560
--------- --------- --------- ---------
EBITDA $134,447 $63,370 $245,340 $132,817
========= ========= ========= =========
Operating income (loss), as adjusted for one-time items is
calculated as follows (dollars in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Americas
--------
Operating income $58,055 $17,048 $106,704 $30,175
Amortization expense relating
to net revenue backlog
acquired in the Insignia
acquisition 2,794 13,932 9,717 34,491
Merger-related charges related
to the Insignia acquisition - 4,475 22,038 20,367
Integration costs related to
the Insignia acquisition 2,063 7,758 11,638 10,667
One-time compensation expense
related to the
initial public offering - - 15,000 -
--------- --------- --------- ---------
Operating income, as adjusted $62,912 $43,213 $165,097 $95,700
========= ========= ========= =========
EMEA
----
Operating income (loss) $31,940 $(7,767) $30,902 $(20,851)
Amortization expense related to
net revenue backlog acquired
in the Insignia acquisition - 14,191 3,324 24,617
Merger-related charges related
to the Insignia acquisition - 12,055 3,205 15,958
Integration costs related to
the Insignia acquisition 518 2,459 2,701 2,973
--------- --------- --------- ---------
Operating income, as adjusted $32,458 $20,938 $40,132 $22,697
========= ========= ========= =========
Asia Pacific
------------
Operating income $9,231 $4,690 $18,553 $7,046
Merger-related charges related
to the Insignia acquisition - 492 - 492
--------- --------- --------- ---------
Operating income, as adjusted $9,231 $5,182 $18,553 $7,538
========= ========= ========= =========
Global Investment Management
----------------------------
Operating income $11,010 $5,165 $14,849 $9,460
Merger-related charges related
to the Insignia acquisition - - 331 -
--------- --------- --------- ---------
Operating income, as adjusted $11,010 $5,165 $15,180 $9,460
========= ========= ========= =========
The Company does not allocate net interest expense or provision
(benefit) for income taxes among its segments. Accordingly, EBITDA for
segments is calculated as follows (dollars in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
---------- --------- ---------- ---------
Americas
--------
Operating income $58,055 $17,048 $106,704 $30,175
Add:
Depreciation and
amortization 11,525 20,595 37,514 56,865
Equity income from
unconsolidated
subsidiaries 3,974 3,367 10,288 8,073
---------- --------- ---------- ---------
EBITDA $73,554 $41,010 $154,506 $95,113
========== ========= ========== =========
EMEA
----
Operating income (loss) $31,940 $(7,767) $30,902 $(20,851)
Add:
Depreciation and
amortization 2,170 17,362 12,050 31,110
Equity income (loss) from
unconsolidated
subsidiaries 19 131 (519) (206)
---------- --------- ---------- ---------
EBITDA $34,129 $9,726 $42,433 $10,053
========== ========= ========== =========
Asia Pacific
------------
Operating income $9,231 $4,690 $18,553 $7,046
Add:
Depreciation and
amortization 621 486 2,476 2,226
Equity income from
unconsolidated
subsidiaries 143 246 555 361
---------- --------- ---------- ---------
EBITDA $9,995 $5,422 $21,584 $9,633
========== ========= ========== =========
Global Investment Management
-----------------------------
Operating income $11,010 $5,165 $14,849 $9,460
Add:
Depreciation and
amortization 540 608 2,817 2,421
Equity income from
unconsolidated
subsidiaries 5,219 1,439 9,151 6,137
---------- --------- ---------- ---------
EBITDA $16,769 $7,212 $26,817 $18,018
========== ========= ========== =========
CB RICHARD ELLIS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
-----------------------
2004 2003
----------- -----------
Assets:
Cash and cash equivalents $256,896 $163,881
Restricted cash 9,213 14,899
Receivables, net 394,062 322,416
Warehouse receivable (1) 138,233 230,790
Property and equipment, net 137,703 113,569
Goodwill and other intangibles, net 935,161 951,289
Deferred compensation assets 102,578 76,389
Other assets, net 297,790 340,248
----------- -----------
Total assets $2,271,636 $2,213,481
=========== ===========
Liabilities:
Current liabilities, excluding debt $637,165 $551,995
Warehouse line of credit (1) 138,233 230,790
Senior secured term loan tranche B 277,050 297,500
11 1/4% senior subordinated notes 205,032 226,173
9 3/4% senior notes 130,000 200,000
16% senior notes - 35,472
Other debt (2) 22,492 82,907
Deferred compensation liability 160,281 138,037
Other long-term liabilities 135,510 111,022
----------- -----------
Total liabilities 1,705,763 1,873,896
Minority interest 5,925 6,656
Stockholders' equity 559,948 332,929
----------- -----------
Total liabilities and stockholders' equity $2,271,636 $2,213,481
=========== ===========
(1) Includes Freddie MAC loan receivables and related non-recourse
warehouse line of credit of $138.2 million and $230.8 million at
December 31, 2004 and 2003, respectively.
(2) Includes non-recourse debt relating to a building in Japan of
$43.7 million at December 31, 2003.
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