10-KPeriod: FY2011

CBRE GROUP, INC. Annual Report, Year Ended Dec 31, 2011

Filed February 29, 2012For Securities:CBRE

Summary

CBRE GROUP, INC. (CBRE) reported strong revenue growth of 15.4% in 2011, reaching $5.9 billion, driven by increased activity in sales, leasing, and outsourcing services. This growth was further bolstered by strategic acquisitions, most notably the substantial purchase of ING's Real Estate Investment Management (REIM) operations in Europe and Asia, significantly expanding CBRE's Global Investment Management segment and its Assets Under Management (AUM) to $94.1 billion. Despite increased operating expenses, including significant transaction and integration costs associated with the REIM acquisitions, the company achieved a net income of $239.2 million, an increase from $200.3 million in the prior year. The company's diversified service offerings across multiple geographies position it as a leader in the commercial real estate services sector, though it remains exposed to macroeconomic conditions and global economic uncertainties.

Financial Highlights

48 data points
Beta

Revenue

$5.91B

Net Income

$239.16M

4.0% Net Margin

EPS (Diluted)

$0.74

Total Assets

$7.22B

Cash & Equivalents

$1.09B

Free Cash Flow

$213.24M

Financial Statements
Beta
Revenue$5.91B
Operating Expenses$5.46B
Operating Income$462.86M
Interest Expense$150.25M
Net Income$239.16M
EPS (Basic)$0.75
EPS (Diluted)$0.74
Shares Outstanding (Basic)318.45M
Shares Outstanding (Diluted)323.72M

Key Highlights

  • 1Revenue increased by 15.4% to $5.9 billion in 2011, reflecting broad-based growth across key service lines.
  • 2Completed significant REIM Acquisitions from ING, substantially enhancing the Global Investment Management segment and increasing AUM to $94.1 billion.
  • 3Net income attributable to CBRE Group, Inc. grew to $239.2 million, up from $200.3 million in 2010.
  • 4Operating income showed resilience, increasing to $462.9 million, supported by strong revenue growth.
  • 5The Americas segment remained the largest contributor to revenue, accounting for 62.2% of total revenue.
  • 6Company continues to carry significant long-term debt, totaling $2.5 billion as of December 31, 2011, largely due to acquisitions, but maintains compliance with debt covenants.
  • 7No cash dividends were declared or paid, with earnings retained for debt reduction and future growth investments.

Frequently Asked Questions

CBRE's revenue growth in 2011 was primarily driven by increased transaction activity, specifically in sales (up 24.2%) and leasing (up 9.5%), as well as a strong performance in outsourcing services (up 15.0%). The acquisition of ING's REIM operations also contributed $84.6 million in revenue.

The REIM Acquisitions, completed in stages throughout 2011, significantly boosted CBRE's Global Investment Management segment, increasing its Assets Under Management (AUM) to $94.1 billion. While these acquisitions contributed positively to revenue and market position, they also resulted in significant transaction and integration costs, impacting operating expenses.

CBRE has not declared or paid any cash dividends on its common stock since its inception and does not anticipate doing so in the foreseeable future. The company intends to retain future earnings to reduce debt and fund future growth initiatives. Any future dividend payments would be at the discretion of the board of directors and subject to debt covenants.

CBRE's primary risks include sensitivity to general economic conditions and downturns in the commercial real estate market, adverse developments in credit markets, substantial leverage and debt service obligations, potential goodwill impairment, reliance on senior management and key employees, and risks associated with its extensive international operations and foreign currency fluctuations.