What were the main drivers of the revenue change in the third quarter of 2012?

Revenue increased by 1.5% to $1.56 billion primarily due to contributions from the ING REIM Europe and Asia acquisitions, higher commercial mortgage brokerage activity, and increased outsourcing. These were partially offset by lower leasing and sales transaction revenue.

Why did net income and EPS decrease year-over-year?

Net income and EPS decreased due to higher costs associated with the ING REIM acquisitions, integration and cost containment expenses (like severance), and a non-amortizable intangible asset impairment of $19.8 million. While revenue grew, these increased expenses outpaced the growth.

How is the company managing its debt and liquidity?

CBRE has a significant debt load, but the company believes it can meet its working capital and funding needs through internally generated cash flow and its revolving credit facility. The company also monitors opportunities to refinance existing debt and maintains covenants within its credit agreements, which it was in compliance with as of the reporting period.

What is the impact of the REIM Acquisitions on the company's financial results?

The REIM Acquisitions, completed in late 2011, contributed to revenue growth, particularly in the Global Investment Management segment. However, these acquisitions also resulted in significant transaction, integration, and amortization expenses, which have negatively impacted profitability in the short term.

CBRE 10-Q Quarterly Report Q3 FY2012 — Revenue, Net Income, EPS

Summary

CBRE Group, Inc. reported a decrease in net income for the third quarter of 2012 to $39.7 million ($0.12 per share) from $63.8 million ($0.20 per share) in the same period last year. For the nine-month period, net income attributable to CBRE Group, Inc. was $142.6 million ($0.44 per share), down from $159.4 million ($0.50 per share) in the prior year. Revenue saw a modest increase of 1.5% year-over-year for the quarter, reaching $1.56 billion, driven by contributions from the recently acquired ING REIM operations and increased commercial mortgage brokerage and outsourcing activity. However, this was partially offset by declines in leasing and sales transaction revenue. The company incurred significant costs related to acquisitions, integration, and cost containment efforts, impacting profitability. Despite the profit decline, CBRE maintained its leading market position and demonstrated resilience in a challenging economic environment.

Financial Highlights

47 data points

Beta

Revenue

$1.56B

Net Income

$39.71M

0.0% Net Margin

EPS (Diluted)

$0.12

Total Assets

$6.77B

Cash & Equivalents

$776.26M

Free Cash Flow

$39.84M

Financial Statements

Beta

Revenue	$1.56B
Operating Expenses	$1.46B
Operating Income	$103.59M
Interest Expense	$43.65M
Net Income	$39.71M
EPS (Basic)	$0.12
EPS (Diluted)	$0.12
Shares Outstanding (Basic)	322.33M
Shares Outstanding (Diluted)	327.31M

Key Highlights

1Revenue for the three months ended September 30, 2012, increased by 1.5% to $1.56 billion compared to the same period in 2011.
2Net income attributable to CBRE Group, Inc. decreased to $39.7 million for the third quarter of 2012, down from $63.8 million in the prior year.
3Diluted EPS attributable to CBRE Group, Inc. shareholders was $0.12 for the third quarter of 2012, down from $0.20 in the prior year.
4The company incurred a non-amortizable intangible asset impairment of $19.8 million related to a trade name discontinuation in the UK.
5Significant investments and integration costs associated with the REIM Acquisitions continue to impact expenses.
6The company maintained a strong EBITDA margin of 10.5% for the quarter.
7Cash and cash equivalents decreased by $316.9 million for the nine months ended September 30, 2012.

CBRE GROUP, INC. Quarterly Report for Q3 Ended Sep 30, 2012

Summary

Financial Highlights

Key Highlights

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