10-QPeriod: Q2 FY2012

CBRE GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 9, 2012For Securities:CBRE

Summary

CBRE Group, Inc. reported a revenue of $1.60 billion for the three months ended June 30, 2012, a 12.6% increase compared to the same period in the prior year. This growth was primarily driven by the contributions from the REIM acquisitions completed in the latter half of 2011. Net income attributable to CBRE Group, Inc. shareholders was $75.9 million, an increase from $61.2 million in the prior year's second quarter. For the six-month period ending June 30, 2012, revenue reached $2.95 billion, up 13.2% year-over-year, also significantly boosted by the REIM acquisitions. Net income attributable to CBRE Group, Inc. shareholders for the first six months was $102.8 million, compared to $95.6 million in the same period of 2011. The company's balance sheet reflects a decrease in cash and cash equivalents to $731.2 million from $1.09 billion at the end of 2011, largely due to operating and investing activities.

Financial Highlights

45 data points
Beta

Revenue

$1.60B

Net Income

$75.87M

4.7% Net Margin

EPS (Diluted)

$0.23

Total Assets

$6.58B

Cash & Equivalents

$731.20M

Free Cash Flow

$66.67M

Financial Statements
Beta
Revenue$1.60B
Operating Expenses$1.43B
Operating Income$172.70M
Interest Expense$44.41M
Net Income$75.87M
EPS (Basic)$0.24
EPS (Diluted)$0.23
Shares Outstanding (Basic)320.85M
Shares Outstanding (Diluted)326.08M

Key Highlights

  • 1Revenue increased by 12.6% to $1.60 billion for Q2 2012 compared to Q2 2011, driven by REIM acquisitions.
  • 2Net income attributable to CBRE Group, Inc. shareholders rose to $75.9 million in Q2 2012 from $61.2 million in Q2 2011.
  • 3For the first six months of 2012, revenue grew by 13.2% to $2.95 billion, with net income attributable to CBRE Group, Inc. shareholders at $102.8 million.
  • 4Cash and cash equivalents decreased from $1.09 billion at the end of 2011 to $731.2 million as of June 30, 2012.
  • 5Operating income for Q2 2012 was $172.7 million, up from $130.2 million in Q2 2011.
  • 6Interest expense increased by 29.8% in Q2 2012 and 30.1% for the six-month period, primarily due to financing for REIM acquisitions.
  • 7EBITDA increased by 27.5% to $211.8 million for Q2 2012 and by 26.2% to $352.3 million for the first six months of 2012.

Frequently Asked Questions

The primary driver of the revenue increase was the contribution from the REIM (Real Estate Investment Management) acquisitions, which were completed in the second half of 2011.

The company's debt levels remained significant, with total debt (excluding certain non-recourse debt) at approximately $2.5 billion as of June 30, 2012. Interest expense increased due to borrowings related to the REIM acquisitions and the establishment of new term loan facilities.

Foreign currency translation had a negative impact on total revenue, with a $46.2 million negative impact for the three months ended June 30, 2012. However, it had a positive impact on cost of services and operating expenses in certain periods.

CBRE Group, Inc. believes it can meet its working capital requirements and fund investments with internally generated cash flow and borrowings under its revolving credit facility. They anticipate capital expenditures for the year, including those related to the REIM acquisitions.