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Press release from Business Wire

CBRE Group, Inc. Reports Improved Adjusted Earnings for the Third Quarter of 2012

<p class='bwalignc'> <b>Total Revenue Rose 1% (5% in local currency)</b> </p> <p class='bwalignc'> <b>Outsourcing Revenue Up 7% (11% in local currency)</b> </p>

Tuesday, October 30, 2012

CBRE Group, Inc. Reports Improved Adjusted Earnings for the Third Quarter of 201216:05 EDT Tuesday, October 30, 2012 LOS ANGELES (Business Wire) -- CBRE Group, Inc. (NYSE:CBG) today reported an 8% increase in adjusted earnings for the third quarter ended September 30, 2012. Third-Quarter 2012 Results Revenue for the quarter was $1.56 billion, up 1% (5% in local currency) from $1.53 billion in the third quarter of 2011. Excluding selected charges1, net income2 was $83.6 million, or $0.26 per diluted share, for the current quarter, up 8% from $77.7 million, or $0.24 per diluted share, in the third quarter of 2011. For the current quarter, selected charges (net of income taxes), which primarily related to the acquisition of the ING REIM businesses (completed in 2011), cost containment expenses and an intangible asset impairment related to the discontinuation of a U.K. trade name, totaled $43.9 million. For the same period in 2011, selected charges totaled $13.9 million. On a U.S. GAAP basis, net income was $39.7 million, or $0.12 per diluted share, for the third quarter of 2012 compared with $63.8 million, or $0.20 per diluted share, for the third quarter of 2011. Excluding selected charges, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)3 increased marginally to $195.3 million for the third quarter of 2012 from $194.8 million a year earlier. EBITDA(including selected charges) was $163.6 million for the third quarter of 2012, compared with $179.0 million for the same period last year. For the current quarter, selected charges, which primarily related to the aforementioned acquisition of the ING REIM businesses, cost containment expenses and an intangible asset impairment, reduced EBITDA by $31.7 million. For the same period in 2011, selected charges totaled $15.8 million. Management Commentary “Many investors and occupiers turned more cautious in the third quarter. Concerns about Europe's ongoing sovereign debt crisis and Asia's slowing growth, which have been weighing on markets for most of the year, were heightened by unease about weakening corporate profit outlooks as well as U.S. fiscal policy and political uncertainty,” said Brett White, CBRE's chief executive officer. “CBRE was not immune from these macro trends. Nevertheless, our strong brand, best-in-class professionals and diversified global platform enabled us to modestly improve on last year's performance in this cautious market environment. We also continued to carefully manage expenses, and preserved our industry-leading margins. During the third quarter, we took steps to further align our cost base with reduced business volumes in certain parts of our business. This was particularly true in Europe, where the ongoing debt problems continue to adversely affect transaction activity, most notably in France.” Outsourcing continued to grow solidly, with revenue up 7% globally (11% in local currency) and 13% in the Americas. CBRE remains at the forefront of an industry-wide trend in which property occupiers are hiring third-party service providers to manage their real estate in order to reduce costs and improve efficiency. The Company signed a record 67 total outsourcing contracts in the quarter, surpassing its previous record (54 total contracts) achieved in the first quarter of 2012. In EMEA and Asia Pacific, CBRE signed four contracts with new clients and expanded three contracts with existing clients during the quarter. CBRE continued to benefit from last year's acquisition of the ING real estate investment management businesses, which added significant recurring, fee-based revenue to the Company's business mix. Fueled by contributions from the ING REIM businesses, global investment management revenue rose 48% during the third quarter, and this segment's contributions to total Company normalized EBITDA increased significantly. Geographically, the Americas was the Company's best-performing region, with 4% overall revenue growth. Double-digit revenue increases in Americas outsourcing and commercial mortgage brokerage more than offset declines in sales and leasing. EMEA revenue fell 17% (9% in local currency) primarily due to the continued effects of sovereign debt issues. On a positive note, the U.K. business proved resilient, with overall revenue edging up 2%. Property sales activity was a source of particular strength in the U.K., with revenue rising 17% as CBRE claimed a greater share of investment activity in a market that is increasingly attracting offshore capital due to its relative safe-haven status. Asia Pacific revenue declined 4%, but rose 2% in local currency. “The current recovery, unlike past ones, remains frustratingly slow and inconsistent, and is subject to quick swings in market sentiment,” Mr. White said. “We expect these variable conditions to persist until global economic growth and job creation shift into higher gear. In the meantime, we remain highly focused on operating efficiently while investing in our platform, as we help our clients navigate this choppy environment. CBRE is well positioned for the uncertain market environment because of the strength of our brand, people and diverse platform.” Third-Quarter 2012 Segment ResultsAmericas Region (U.S., Canada and Latin America) Revenue rose 4% to $996.4 million, compared with $954.2 million for the third quarter of 2011. EBITDA rose 2% to $128.7 million from $126.2 million for the prior-year third quarter. Operating income totaled $105.4 million compared with $107.0 million in last year's third quarter. Growth in outsourcing and commercial mortgage brokerage more than offset softer sales and lease transaction revenue. EMEA Region (primarily Europe) Revenue was $228.7 million, a decrease of 17% (9% in local currency) from $276.0 million in the third quarter of 2011. EBITDA, before selected charges, was $7.2 million, compared with $21.1 million in the prior-year third quarter. Including selected charges, current-quarter EBITDA swung to a loss of $8.1 million. There were no selected charges in the comparable period of 2011. The region reported an operating loss of $31.7 million, compared with operating income of $17.5 million for the same period in 2011. Operating loss for the third quarter of 2012 included an approximately $20 million non-cash write-off of a trade name in the U.K., and cost containment expenses of $15.3 million, for a total of $35.3 million in charges. The non-amortizable intangible asset impairment is included in the calculation of operating loss but not in EBITDA. The weaker results reflected the continued impact of Europe's sovereign debt crisis and related economic difficulties as well as the negative effect of currency movement. Asia Pacific Region (Asia, Australia and New Zealand) Revenue was $200.0 million, a decrease of 4% (a 2% increase in local currency) from $208.1 million in the third quarter of 2011. EBITDA, before selected charges, was $18.7 million, compared with $22.3 million in the prior-year third quarter. Including selected charges, current-quarter EBITDA was $16.4 million versus $21.8 million in the prior-year period. Operating income was $13.9 million, compared with $19.3 million for the third quarter of 2011. The weaker results reflected the impact of slower economic growth, which resulted in lower sales and leasing activity throughout much of the region, as well as the negative effect of currency movement. Global Investment Management Business (investment management operations in the U.S., Europe and Asia) Revenue rose 48% to $114.3 million from $77.4 million in the third quarter of 2011. EBITDA, before selected charges, rose 84% to $36.9 million from $20.0 million in the prior-year third quarter. Including selected charges in both periods, current-quarter EBITDA rose to $22.7 million from $6.2 million in the third quarter of 2011. Operating income was $12.1 million, compared with an operating loss of $0.3 million for the third quarter of 2011. The improved performance was driven by contributions from the ING REIM Europe and Asia businesses, acquired in the fourth quarter of 2011. The global real estate securities business was acquired from ING on July 1, 2011, and is therefore fully included in both the current and prior-year quarters. Assets under management totaled $90.4 billion at the end of the third quarter, a decrease of 1% from the second quarter of 2012 and 4% from year-end 2011. The decrease from year end was in part driven by a non-traded REIT's decision to internalize its management, as previously reported. Development Services (real estate development and investment activities primarily in the U.S.) Revenue was $17.8 million compared with $18.8 million for the third quarter of 2011. Operating income improved to $3.9 million, compared with an operating loss of $0.4 million for the third quarter of 2011. The 2011 period included real estate asset impairments, which did not recur in the current year, as well as higher incentive compensation. EBITDA was $3.8 million in both the current-year and prior-year periods. The improvement reflected in operating income in the current year was offset by equity losses from unconsolidated subsidiaries and activity associated with non-controlling interests; equity loss from unconsolidated subsidiaries and non-controlling interests are included in the calculation of EBITDA, but not in operating income. Development projects in process totaled $4.6 billion, down $0.1 billion from the second quarter of 2012 and $0.3 billion from year-end 2011. The inventory of pipeline deals totaled $1.9 billion, up $0.5 billion from the second quarter of 2012 and $0.7 billion from year-end 2011. Nine-Month Results Revenue for the nine months ended September 30, 2012 was $4.5 billion, an increase of 9% (11% in local currency) from $4.1 billion for the same period in 2011. Excluding selected charges, net income was $217.5 million, or $0.67 per diluted share, for the current-year-to-date period, up 17% and 18%, respectively, from $185.2 million, or $0.57 per diluted share, in the prior-year period. Selected charges (net of income taxes), which primarily related to the acquisition of the ING REIM businesses, cost containment expenses and the impairment of assets, totaled $74.9 million for the nine months ended September 30, 2012 and $25.8 million for the same period in 2011. On a U.S. GAAP basis, net income was $142.6 million, or $0.44 per diluted share, for the nine months ended September 30, 2012, compared with $159.4 million, or $0.49 per diluted share, in the same period in 2011. Excluding selected charges, EBITDA increased 16% to $566.8 million for the first nine months of 2012 from $487.7 million a year earlier. EBITDA(including selected charges) rose 13% to $515.9 million for the current nine-month period from $458.1 million for the same period a year earlier. Selected charges, which primarily related to the acquisition of the ING REIM businesses, cost containment expenses and the impairment of assets, reduced EBITDA by $50.9 million for the nine months ended September 30, 2012 and $29.6 million for the same period in 2011. Conference Call Details The Company's third-quarter earnings conference call will be held on Tuesday, October 30, 2012 at 5:00 p.m. Eastern Time. A webcast will be accessible through the Investor Relations section of the Company's Web site at www.cbre.com/investorrelations. The direct dial-in number for the conference call is 800-230-1951 for U.S. callers and 612-332-0342 for international callers. A replay of the call will be available starting at 10 p.m. Eastern Time on October 30, 2012, and ending at midnight Eastern Time on November 5, 2012. 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 268007. A transcript of the call will be available on the Company's Investor Relations Web site at www.cbre.com/investorrelations. About CBRE Group, Inc. CBRE 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 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com. Note: This release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance, and business outlook. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested in forward-looking statements in this release. Any forward-looking statements speak only as of the date of this release and, except to the extent required by applicable securities laws, the Company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Factors that could cause results to differ materially include, but are not limited to: general conditions of financial liquidity for real estate transactions, including the impact of the European sovereign debt crisis and potential “fiscal cliff” in the U.S.; our leverage and our ability to perform under our credit facilities; commercial real estate vacancy levels; employment conditions and their effect on vacancy rates; property values; rental rates; interest rates; our ability to leverage our platform to grow revenues and capture market share; continued growth in trends toward use of outsourced real estate services; our ability to control costs relative to revenue growth and expand EBITDA margins; our ability to retain and incentivize producers; our ability to identify, acquire and integrate synergistic and accretive businesses; expected levels of interest, depreciation and amortization expense resulting from completed acquisitions; maintaining our effective tax rate; realization of values in investment funds to offset related incentive compensation expense; a decline in asset values in, or a reduction in earnings or cash flow from, our investment programs, as well as related litigation, liabilities and reputational harm; and our ability to comply with laws and regulations related to our international operations, including the anti-corruption laws of the U.S. and other countries. Additional information concerning factors that may influence the Company's financial information is discussed under “Risk Factors”, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, “Quantitative and Qualitative Disclosures About Market Risk” and “Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2011, and under “Management's Discussion and Analysis of Financial Condition and Results of Operations”, “Quantitative and Qualitative Disclosures About Market Risk” and “Forward-Looking Statements” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as well as in the Company's press releases and other periodic filings with the Securities and Exchange Commission. Such filings are available publicly and may be obtained on the Company's Web site at www.cbre.com or upon written request from the CBRE Investor Relations Department at investorrelations@cbre.com. 1 Selected charges include integration and other costs related to acquisitions, amortization expense related to incentive fees and customer relationships acquired in the ING REIM and Trammell Crow Company (TCC) acquisitions, cost containment expenses and the write-down of impaired assets, including a non-amortizable intangible asset. 2 A reconciliation of net income attributable to CBRE Group, Inc. to net income attributable to CBRE Group, Inc., as adjusted for selected charges, is provided in the section of this press release entitled “Non-GAAP Financial Measures.” 3 EBITDA represents earnings before net interest expense, income taxes, depreciation and amortization, while amounts shown for EBITDA, as adjusted (or normalized EBITDA), remove the impact of certain cash and non-cash charges related to acquisitions, cost containment and asset impairments. Our management believes that both of these measures are useful in evaluating our operating performance compared to that of other companies in our industry because the calculations of EBITDA and EBITDA, as adjusted, generally eliminate the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses these measures to evaluate operating performance and for other discretionary purposes, including as a significant component when measuring our operating performance under our employee incentive programs. Additionally, we believe EBITDA and EBITDA, as adjusted, are useful to investors to assist them in getting a more complete picture of our results from operations. However, EBITDA and EBITDA, as adjusted, are not recognized measurements under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, readers should use EBITDA and EBITDA, as adjusted, in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA and EBITDA, as adjusted, may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA and EBITDA, as adjusted, are not intended to be measures of free cash flow for our management's discretionary use, as they do not consider certain cash requirements such as tax and debt service payments. The amounts shown for EBITDA and EBITDA, as adjusted, also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments. For a reconciliation of EBITDA and EBITDA, as adjusted to net income attributable to CBRE Group, Inc., the most comparable financial measure calculated and presented in accordance with GAAP, see the section of this press release titled “Non-GAAP Financial Measures.”   CBRE GROUP, INC.OPERATING RESULTSFOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011(Dollars in thousands, except share data)(Unaudited)     Three Months Ended   Nine Months EndedSeptember 30,September 30,2012     2011   2012     2011   Revenue $ 1,557,147 $ 1,534,463 $ 4,508,253 $ 4,141,786   Costs and expenses: Cost of services 915,245 894,607 2,610,944 2,448,184 Operating, administrative and other 482,362 469,138 1,405,461 1,279,019 Depreciation and amortization 40,102 31,308 124,895 79,871 Non-amortizable intangible asset impairment   19,826   -     19,826   -   Total costs and expenses 1,457,535 1,395,053 4,161,126 3,807,074   Gain on disposition of real estate   3,983   3,595     5,231   11,594     Operating income 103,595 143,005 352,358 346,306   Equity income from unconsolidated subsidiaries 2,875 6,714 19,870 38,961 Other income (loss) 151 (5,809 ) 4,635 (5,809 ) Interest income 1,895 2,493 5,783 7,063 Interest expense   43,651   39,080     132,043   107,014   Income from continuing operations before provision for income taxes 64,865 107,323 250,603 279,507 Provision for income taxes   22,160   47,290     102,353   117,032   Income from continuing operations 42,705 60,033 148,250 162,475 Income from discontinued operations, net of income taxes   -   -     -   16,911   Net income 42,705 60,033 148,250 179,386 Less: Net income (loss) attributable to non-controlling interests   2,996   (3,774 )   5,693   19,987   Net income attributable to CBRE Group, Inc. $ 39,709 $ 63,807   $ 142,557 $ 159,399     Basic income per shareattributable to CBRE Group, Inc. shareholders Income from continuing operations attributable to CBRE Group, Inc. $ 0.12 $ 0.20 $ 0.44 $ 0.50 Income from discontinued operations attributable to CBRE Group, Inc.   -   -     -   -   Net income attributable CBRE Group, Inc. $ 0.12 $ 0.20   $ 0.44 $ 0.50     Weighted average shares outstanding for basic income per share   322,331,850   318,867,447     321,289,017   317,718,150     Diluted income per shareattributable to CBRE Group, Inc. shareholders Income from continuing operations attributable to CBRE Group, Inc. $ 0.12 $ 0.20 $ 0.44 $ 0.49 Income from discontinued operations attributable to CBRE Group, Inc.   -   -     -   -   Net income attributable to CBRE Group, Inc. $ 0.12 $ 0.20   $ 0.44 $ 0.49     Weighted average shares outstanding for diluted income per share   327,309,341   323,714,703     326,380,448   323,584,637     EBITDA (1) $ 163,553 $ 178,992   $ 515,891 $ 458,131   __________________________ (1)   Includes EBITDA related to discontinued operations of $1.9 million for the nine months ended September 30, 2011.   CBRE GROUP, INC.SEGMENT RESULTSFOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011(Dollars in thousands)(Unaudited)     Three Months Ended   Nine Months EndedSeptember 30,September 30,   2012       2011     2012       2011   Americas Revenue $ 996,380 $ 954,213 $ 2,855,899 $ 2,602,156 Costs and expenses: Cost of services 638,138 600,168 1,818,162 1,644,835 Operating, administrative and other 232,108 231,181 665,157 646,071 Depreciation and amortization   20,744     15,855     58,555     43,517   Operating income $ 105,390   $ 107,009   $ 314,025   $ 267,733   EBITDA $ 128,749   $ 126,156   $ 379,304   $ 319,659     EMEA Revenue $ 228,737 $ 275,958 $ 674,367 $ 742,013 Costs and expenses: Cost of services 150,729 165,450 426,486 452,461 Operating, administrative and other 86,662 89,853 248,751 244,830 Depreciation and amortization 3,181 3,191 9,674 7,706 Non-amortizable intangible asset impairment   19,826     -     19,826     -   Operating (loss) income $ (31,661 ) $ 17,464   $ (30,370 ) $ 37,016   EBITDA $ (8,141 ) $ 21,089   $ 507   $ 45,470     Asia Pacific Revenue $ 199,950 $ 208,055 $ 568,396 $ 557,101 Costs and expenses: Cost of services 126,378 128,989 366,296 350,888 Operating, administrative and other 56,792 56,835 159,433 152,801 Depreciation and amortization   2,905     2,979     8,458     6,950   Operating income $ 13,875   $ 19,252   $ 34,209   $ 46,462   EBITDA $ 16,448   $ 21,817   $ 42,047   $ 51,696     Global Investment Management Revenue $ 114,306 $ 77,426 $ 359,180 $ 185,302 Costs and expenses: Operating, administrative and other 91,658 71,770 282,952 175,268 Depreciation and amortization 10,524 6,281 39,803 12,947 Gain on disposition of real estate   -     345     -     345   Operating income (loss) $ 12,124   $ (280 ) $ 36,425   $ (2,568 ) EBITDA(1) $ 22,658   $ 6,154   $ 77,925   $ 14,614     Development Services Revenue $ 17,774 $ 18,811 $ 50,411 $ 55,214 Costs and expenses: Operating, administrative and other 15,142 19,499 49,168 60,049 Depreciation and amortization 2,748 3,002 8,405 8,751 Gain on disposition of real estate   3,983     3,250     5,231     11,249   Operating income (loss) $ 3,867   $ (440 ) $ (1,931 )   $ (2,337 ) EBITDA $ 3,839   $ 3,776     $ 16,108   $ 26,692   _________________________ (1)   Includes EBITDA related to discontinued operations of $1.9 million for the nine months ended September 30, 2011. Non-GAAP Financial Measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: (i)     Net income attributable to CBRE Group, Inc., as adjusted for selected charges   (ii) Diluted income per share attributable to CBRE Group, Inc., as adjusted for selected charges   (iii) EBITDA and EBITDA, as adjusted for selected charges The Company believes that these non-GAAP financial measures provide a more complete understanding of ongoing operations and enhance comparability of current results to prior periods as well as presenting the effects of selected charges in all periods presented. The Company believes that investors may find it useful to see these non-GAAP financial measures to analyze financial performance without the impact of selected charges that may obscure trends in the underlying performance of its business.   Net income attributable to CBRE Group, Inc., as adjusted for selected charges and diluted net income per share attributable to CBRE Group, Inc. shareholders, as adjusted for selected charges are calculated as follows (dollars in thousands, except per share data):     Three Months Ended   Nine Months EndedSeptember 30,September 30,2012   20112012   2011   Net income attributable to CBRE Group, Inc. $ 39,709 $ 63,807 $ 142,557 $ 159,399 Non-amortizable intangible asset impairment, net of tax 15,018 - 15,018 - Cost containment expenses, net of tax 13,521 - 13,521 - Integration and other costs related to acquisitions, net of tax 10,681 8,390 25,418 16,769 Amortization expense related to ING REIM and TCC incentive fees and customer relationships acquired, net of tax 4,623 1,924 20,984 5,528 Write-down of impaired assets, net of tax   -   3,532   -   3,532 Net income attributable to CBRE Group, Inc., as adjusted $ 83,552 $ 77,653 $ 217,498 $ 185,228   Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted $ 0.26 $ 0.24 $ 0.67 $ 0.57   Weighted average shares outstanding for diluted income per share   327,309,341   323,714,703   326,380,448   323,584,637   EBITDA and EBITDA, as adjusted for selected charges are calculated as follow (dollars in thousands):   Three Months EndedNine Months EndedSeptember 30,September 30,2012201120122011   Net income attributable to CBRE Group, Inc. $ 39,709 $ 63,807 $ 142,557 $ 159,399 Add: Depreciation and amortization(1) 40,102 31,308 124,895 80,396 Non-amortizable intangible asset impairment 19,826 - 19,826 - Interest expense(2) 43,651 39,080 132,043 108,367 Provision for income taxes 22,160 47,290 102,353 117,032 Less: Interest income   1,895   2,493   5,783   7,063   EBITDA(3) $ 163,553 $ 178,992 $ 515,891 $ 458,131   Adjustments: Cost containment expenses 17,578 - 17,578 - Integration and other costs related to acquisitions 14,215 9,921 33,313 23,704 Write-down of impaired assets   -   5,889   -   5,889   EBITDA, as adjusted (3) $ 195,346 $ 194,802 $ 566,782 $ 487,724 _________________________ (1)   Includes depreciation and amortization related to discontinued operations of $0.5 million for the nine months ended September 30, 2011. (2) Includes interest expense related to discontinued operations of $1.4 million for the nine months ended September 30, 2011. (3) Includes EBITDA related to discontinued operations of $1.9 million for the nine months ended September 30, 2011.   EBITDA and EBITDA, as adjusted for selected charges for segments are calculated as follows (dollars in thousands):     Three Months Ended   Nine Months EndedSeptember 30,September 30,   2012       2011     2012       2011   Americas Net income attributable to CBRE Group, Inc. $ 48,403 $ 54,908 $ 142,634 $ 136,432 Add: Depreciation and amortization 20,744 15,855 58,555 43,517 Interest expense 35,403 30,197 106,367 81,769 Royalty and management service income (6,921 ) (7,188 ) (20,779 ) (20,703 ) Provision for income taxes 32,283 34,196 96,000 83,523 Less: Interest income   1,163     1,812     3,473     4,879   EBITDA $ 128,749 $ 126,156 $ 379,304 $ 319,659 Integration and other costs related to acquisitions   -     10     -     116   EBITDA, as adjusted $ 128,749   $ 126,166   $ 379,304   $ 319,775       EMEA Net (loss) income attributable to CBRE Group, Inc. $ (17,893 ) $ 3,929 $ (18,956 ) $ 14,321 Add: Depreciation and amortization 3,181 3,191 9,674 7,706 Non-amortizable intangible asset impairment 19,826 - 19,826 - Interest expense 2,175 30 6,738 187 Royalty and management service expense 3,182 3,507 8,966 9,660 (Benefit of) provision for income taxes (13,473 ) 10,680 (11,339 ) 14,468 Less: Interest income   5,139     248     14,402       872   EBITDA $ (8,141 ) $ 21,089 $ 507 $ 45,470 Cost containment expenses   15,331     -     15,331     -   EBITDA, as adjusted $ 7,190   $ 21,089   $ 15,838   $ 45,470       Asia Pacific Net income attributable to CBRE Group, Inc. $ 10,001 $ 6,585 $ 17,670 $ 15,672 Add: Depreciation and amortization 2,905 2,979 8,458 6,950 Interest expense 1,124 1,395 3,188 2,624 Royalty and management service expense 3,704 3,468 11,700 10,314 (Benefit of) provision for income taxes (1,182 ) 7,550 1,653 17,085 Less: Interest income   104     160     622     949   EBITDA $ 16,448 $ 21,817 $ 42,047 $ 51,696 Cost containment expenses 2,247 - 2,247 - Integration and other costs related to acquisitions   -     512     -     1,896   EBITDA, as adjusted $ 18,695   $ 22,329   $ 44,294   $ 53,592       Global Investment Management Net income (loss) attributable to CBRE Group, Inc. $ 291 $ (17 ) $ 1,957 $ (12,249 ) Add: Depreciation and amortization(1) 10,524 6,281 39,803 13,472 Interest expense(2) 7,162 4,097 20,981 14,186 Royalty and management service expense 35 213 113 729 Provision for (benefit of) income taxes 4,966 (4,156 ) 15,911 (1,223 ) Less: Interest income   320     264     840     301   EBITDA(3) $ 22,658 $ 6,154 $ 77,925 $ 14,614 Integration and other costs related to acquisitions 14,215 9,399 33,313 21,692 Write-down of impaired assets   -     4,455     -     4,455   EBITDA, as adjusted(3) $ 36,873   $ 20,008   $ 111,238   $ 40,761       Development Services Net (loss) income attributable to CBRE Group, Inc. $ (1,093 ) $ (1,598 ) $ (748 ) $ 5,223 Add: Depreciation and amortization 2,748 3,002 8,405 8,751 Interest expense 2,691 3,361 8,602 9,601 (Benefit of) provision for income taxes (434 ) (980 ) 128 3,179 Less: Interest income   73     9     279     62   EBITDA $ 3,839 $ 3,776 $ 16,108 $ 26,692 Write-down of impaired assets   -     1,434     -     1,434   EBITDA, as adjusted $ 3,839   $ 5,210   $ 16,108   $ 28,126   _________________________ (1)   Includes depreciation and amortization related to discontinued operations of $0.5 million for the nine months ended September 30, 2011. (2) Includes interest expense related to discontinued operations of $1.4 million for the nine months ended September 30, 2011. (3) Includes EBITDA related to discontinued operations of $1.9 million for the nine months ended September 30, 2011.   CBRE GROUP, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in thousands)(Unaudited)     September 30,   December 31,20122011 Assets: Cash and cash equivalents (1) $ 776,260 $ 1,093,182 Restricted cash 64,600 67,138 Receivables, net 1,127,992 1,135,371 Warehouse receivables (2) 465,794 720,061 Real estate assets (3) 465,369 464,468 Goodwill and other intangibles, net 2,615,027 2,622,732 Investments in and advances to unconsolidated subsidiaries 214,231 166,832 Other assets, net   1,039,504   949,359 Total assets $ 6,768,777 $ 7,219,143   Liabilities: Current liabilities, excluding debt $ 1,344,636 $ 1,688,034 Warehouse lines of credit (2) 458,306 713,362 Revolving credit facility 72,658 44,825 Senior secured term loans 1,643,308 1,683,561 Senior subordinated notes, net 440,129 439,016 Senior notes 350,000 350,000 Other debt 9,139 125 Notes payable on real estate (4) 365,590 372,912 Other long-term liabilities   565,905   510,145 Total liabilities 5,249,671 5,801,980   CBRE Group, Inc. stockholders' equity 1,340,432 1,151,481 Non-controlling interests   178,674   265,682 Total equity 1,519,106 1,417,163     Total liabilities and equity $ 6,768,777 $ 7,219,143   (1) Includes $66.9 million and $208.1 million of cash in consolidated funds and other entities not available for Company use at September 30, 2012 and December 31, 2011, respectively. (2) Represents loan receivables, the majority of which are offset by related warehouse lines of credit facilities. (3) Includes real estate and other assets held for sale, real estate under development and real estate held for investment. (4) Represents notes payable on real estate of which $13.6 million are recourse to the Company as of both September 30, 2012 and December 31, 2011. CBRE Group, Inc.Gil BorokChief Financial Officer310-405-8909orNick KormelukInvestor Relations949-809-4308orSteve IacoCorporate Communications212-984-6535