CBRE Group, Inc. Reports Full-Year and Fourth-Quarter 2011 Results

Published on Tuesday, 07 February 2012 16:17 Written by TradersHuddle Staff

LOS ANGELES-( Business Wire )-

CBRE Group, Inc. (NYSE:CBG) today reported financial results for the year and fourth quarter ended December 31, 2011.

Full-Year 2011 Results

• Revenue for the full-year 2011 increased 15% to $5.9 billion, compared with $5.1 billion for 2010.
• Excluding selected charges¹, net income² for 2011 totaled $334.5 million, or $1.03 per diluted share, an improvement of 39% and 37%, respectively, from $239.8 million, or $0.75 per diluted share, for 2010. Full-year 2011 results were lowered by selected charges of $95.3 million, net of income taxes, which primarily related to the acquisition of the ING REIM businesses and cost containment actions.
• On a U.S. GAAP basis, net income rose 19% to $239.2 million, or $0.74 per diluted share, for 2011, compared with $200.3 million, or $0.63 per diluted share, for 2010.
• Excluding selected charges, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)³ totaled $802.6 million in 2011 — up 18% from $681.3 million in 2010. EBITDA³ (including selected charges) for 2011 rose 7% to $693.3 million, compared with $647.5 million for 2010. Full-year 2011 EBITDA was lowered by selected charges of $109.4 million, which primarily related to the acquisition of the ING REIM businesses and cost containment actions.

Fourth-Quarter 2011 Results

• Revenue for the quarter totaled $1.8 billion, an increase of 7% from $1.7 billion in the fourth quarter of 2010.
• Excluding selected charges, net income totaled $149.3 million, or $0.46 per diluted share, for the current-year quarter, up 29% and 28%, respectively, from $115.4 million, or $0.36 per diluted share, in the fourth quarter of 2010. Fourth-quarter 2011 results were lowered by selected charges of $69.5 million, net of income taxes, which primarily related to the acquisition of the ING REIM businesses and cost containment actions.
• On a U.S. GAAP basis, net income totaled $79.8 million, or $0.25 per diluted share, for the fourth quarter of 2011 compared with $95.1 million, or $0.30 per diluted share, for the fourth quarter of 2010.
• Excluding selected charges, EBITDA increased 24% to $314.9 million in the current period from $253.1 million in the fourth quarter of 2010. EBITDA (including selected charges) totaled $235.1 million for the fourth quarter of 2011, compared with $241.0 million a year earlier. Fourth-quarter 2011 EBITDA was lowered by selected charges of $79.8 million, which primarily related to the acquisition of the ING REIM businesses and cost containment actions.

Management Commentary

“2011 was a year of unexpectedly tough operating conditions in many parts of the world, particularly in the back-half of the year. Nevertheless, we recorded our second-best year ever for both revenues and normalized EBITDA, enhanced our platform with the ING REIM acquisitions and strategic recruiting, and made other investments that will further position CBRE for leadership across market cycles,” said Brett White, chief executive officer of CBRE.

“Our highly diversified platform was the key to our fourth quarter results,” Mr. White continued. “The macro-environment during this period was marked by intensified concerns about sovereign debt issues, particularly in Europe, and tepid economic growth. This challenge, however, was offset by out-sized gains from our development portfolio, strong growth in outsourcing globally, resilience in our capital markets businesses, as well as actions taken to more carefully manage expenses. As a result, quarterly EBITDA margins reached their highest levels since the second quarter of 2007.”

Double-digit growth in all regions fueled a 14% rise in outsourcing revenue globally. This was the business line’s 5th consecutive quarter of double-digit growth — in part, due to the Company’s ability to take advantage of outsourcing’s growing acceptance in both international markets and new economic sectors. For example, during the fourth quarter of 2011, CBRE was awarded multi-year contracts to provide services for Unilever in Asia Pacific, the Middle East and Eastern Europe; and Newell-Rubbermaid in Asia Pacific. In Europe, the Company was retained by the United Kingdom Commonwealth Office, an example of its growing portfolio of public sector outsourcing clients.

The Company also continued to add significant global mandates, and recently broke new ground with the outsourcing industry’s first global real estate integrator contract. Microsoft Corporation has selected CBRE to serve as global integrator of services for the company’s 34 million square foot global portfolio. Under this contract, Microsoft has retained CBRE to perform real estate strategy and portfolio planning, property management and lease administration; to engage and manage multiple other service partners in the delivery of transaction, construction and facilities management services; and to partner with Microsoft to build an industry-leading commercial real estate IT platform.

Overall, CBRE signed 33 total outsourcing contracts in the fourth quarter, increasing the number of contracts for the year to 173 — a new single-year record for the Company.

Global property sales revenue rose 10%, paced by solid growth in both the Americas and Asia Pacific, while EMEA was relatively flat. In 2011, CBRE once again achieved the #1 market share in investment sales activity in both the U.S. and the U.K. In addition, the Mortgage Brokerage business, mainly centered in the U.S., saw revenue improve by 25% during the quarter.

Global property leasing revenue fell moderately, as double-digit growth in EMEA — despite soft economies across much of Europe — was offset by a decline in the Americas. The Americas decline was in part due to a tough comparison with the fourth quarter of 2010, when leasing revenue was 45% higher than in the fourth quarter of 2009. Asia Pacific’s leasing revenue for the fourth quarter of 2011 was relatively flat.

Fourth quarter results were enhanced by significant contributions from the Development Services business. The sale of two high-quality assets in the Houston and Dallas markets drove a sizable EBITDA improvement for this segment during the quarter.

Global Investment Management revenue improved 31% during the fourth quarter. This included revenue from the ING REIM businesses in Europe and Asia that were acquired this quarter, and the ING global listed real estate securities business that was acquired on July 1, 2011.

Fourth-Quarter 2011 Segment Results

Americas Region (U.S., Canada and Latin America)

• Revenue rose 3% to $1.1 billion, compared with $1.0 billion for the fourth quarter of 2010.
• EBITDA before selected charges totaled $158.2 million, up 18% from $133.5 million in last year’s fourth quarter. Including these charges, EBITDA increased 12% to $142.5 million.
• Operating income rose 11% to $119.1 million from $107.4 million for the prior-year fourth quarter. Current-period operating income was impacted by $15.6 million of cost containment expenses.

EMEA Region (primarily Europe)

• Revenue rose 9% to $334.6 million from $307.3 million for the fourth quarter of 2010. The increase was driven by growth in northern continental Europe and the United Kingdom.
• EBITDA before selected charges totaled $53.1 million, an increase of 12% compared with $47.6 million in last year’s fourth quarter. Including these charges, EBITDA totaled $42.1 million in the fourth quarter of 2011.
• Operating income was $39.0 million, compared with $45.4 million for the same period in 2010. Current-period operating income was impacted by $11.1 million of cost containment expenses.

Asia Pacific Region (Asia, Australia and New Zealand)

• Revenue rose 11% to $231.7 million from $209.4 million for the fourth quarter of 2010. The increase reflects improved performance in several countries, particularly Australia, India and Japan.
• EBITDA before selected charges totaled $35.0 million compared with $36.1 million for last year’s fourth quarter. Including these charges, EBITDA totaled $30.5 million in the fourth quarter of 2011.
• Operating income was $27.3 million, compared with $33.5 million for the fourth quarter of 2010. Current-period operating income was impacted by $4.4 million of cost containment expenses.

Global Investment Management Business (investment management operations in the U.S., Europe and Asia)

• Revenue increased 31% to $104.8 million from $79.8 million in the fourth quarter of 2010. The fourth quarter of 2011 benefited from approximately $60.0 million of revenue from the ING REIM businesses. No carried interest revenue was recognized, while last year’s fourth quarter included $19.9 million of carried interest revenue from a fund liquidation. The current-year period also produced lower acquisition fees and rental revenues (due to property dispositions) than a year ago.
• EBITDA before selected charges totaled $16.5 million compared with $27.3 million in the prior-year fourth quarter. Including these charges, EBITDA reflected a loss of $29.4 million in the fourth quarter of 2011.
• Operating loss totaled $41.4 million, compared with operating income of $13.4 million for the fourth quarter of 2010. Current-period operating loss was affected by $45.0 million of expenses related to the acquisition of ING REIM.
• Current-period EBITDA, excluding and including selected charges, and operating results were affected by a net carried interest incentive compensation accrual of $10.5 million. In the prior-year’s fourth quarter, the carried interest incentive compensation accrual totaled $19.8 million. Positive contributions from ING REIM in the fourth quarter of 2011 were offset by higher equity earnings and the reversal of a doubtful-account provision in the prior-year fourth quarter.
• Assets under management totaled $94.1 billion, representing a 150% increase from year-end 2010, mainly due to the ING REIM acquisitions.

Development Services (real estate development and investment activities primarily in the U.S.)

• Revenue rose 21% to $21.1 million compared with $17.4 million for the fourth quarter of 2010.
• Operating loss totaled $27.3 million as compared with an operating loss of $26.8 million for the same period in 2010.
• EBITDA improved sharply to $49.4 million from $5.4 million in the prior-year period. The increase was driven by gains on the sale of properties, the majority of which was reported as equity income from unconsolidated subsidiaries and income from discontinued operations this quarter. These gains were partially offset by non-controlling interests activity. Equity income from unconsolidated subsidiaries, income from discontinued operations and activity associated with non-controlling interests are all included in the calculation of EBITDA, but not in revenue or operating income.
• Selected charges in the fourth quarters of both 2011 and 2010 were not significant.
• Development projects in process totaled $4.9 billion and the inventory of pipeline deals totaled $1.2 billion, both unchanged from year-end 2010.

2012 Outlook

“The global real estate market remains in recovery as we enter 2012. The pace of recovery, however, remains slow and inconsistent, restrained by sub-par economic growth and job creation in much of the world as well as Europe’s sovereign debt issues,” Mr. White said. “Despite these challenges, we expect that our premier people, brand, global platform, and vigilance around cost control will help us drive both improved financial performance for our shareholders and superior results for our clients in 2012.”

The Company has set its expectations for 2012 based on the above-mentioned factors as well as anticipated increases in interest, depreciation and amortization expense, mostly resulting from the ING REIM acquisition. In light of this, CBRE expects that earnings per share, as adjusted, will be in the range of $1.20 to $1.25 in 2012.

Conference Call Details

The Company’s fourth-quarter earnings conference call will be held on Tuesday, February 7, 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 800-230-1059 for U.S. callers and 612-234-9959 for international callers. A replay of the call will be available starting at 10 p.m. Eastern Time on February 7, 2012, and ending at midnight Eastern Time on February 13, 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 231836. 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, business outlook, and ability to successfully integrate the ING REIM businesses. 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; 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; our ability to control costs relative to revenue growth; 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; 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, 2010 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 September 30, 2011, 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 This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .

¹ Selected charges include integration and other costs related to acquisitions, cost containment expenses, amortization expense related to customer relationships acquired in the ING REIM and Trammell Crow Company (TCC) acquisitions, the write-down of impaired assets and the write-off of financing costs.

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, write-off of financing costs, 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 RESULTS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Dollars in thousands, except share data)
		Three Months Ended							Twelve Months Ended
		December 31,							December 31,
		2011			2010				2011			2010
Revenue		$	1,763,625		$	1,651,296			$	5,905,411		$	5,115,316
Costs and expenses:
Cost of services			1,008,946			930,869				3,457,130			2,960,170
Operating, administrative and other			603,647			522,128				1,882,666			1,607,682
Depreciation and amortization			35,848			28,865				115,719			108,381
Total costs and expenses			1,648,441			1,481,862				5,455,515			4,676,233
Gain on disposition of real estate			1,372			3,499				12,966			7,296
Operating income			116,556			172,933				462,862			446,379
Equity income from unconsolidated subsidiaries			65,815			15,228				104,776			26,561
Other income			8,515			-				2,706			-
Interest income			2,380			2,042				9,443			8,416
Interest expense			43,235			41,329				150,249			191,151
Write-off of financing costs			-			18,148				-			18,148
Income from continuing operations before provision for income taxes			150,031			130,726				429,538			272,057
Provision for income taxes			72,071			58,290				189,103			130,368
Income from continuing operations			77,960			72,436				240,435			141,689
Income (loss) from discontinued operations, net of income taxes			32,979			(641	)			49,890			14,320
Net income			110,939			71,795				290,325			156,009
Less: Net income (loss) attributable to non-controlling interests			31,176			(23,349	)			51,163			(44,336	)
Net income attributable to CBRE Group, Inc.		$	79,763		$	95,144			$	239,162		$	200,345
Basic income per share attributable to CBRE Group, Inc. shareholders
Income from continuing operations attributable to CBRE Group, Inc.		$	0.23		$	0.30			$	0.73		$	0.61
Income from discontinued operations attributable to CBRE Group, Inc.			0.02			-				0.02			0.03
Net income attributable CBRE Group, Inc.		$	0.25		$	0.30			$	0.75		$	0.64
Weighted average shares outstanding for basic income per share			320,638,316			315,879,460				318,454,191			313,873,439
Diluted income per share attributable to CBRE Group, Inc. shareholders
Income from continuing operations attributable to CBRE Group, Inc.		$	0.23		$	0.30			$	0.72		$	0.60
Income from discontinued operations attributable to CBRE Group, Inc.			0.02			-				0.02			0.03
Net income attributable to CBRE Group, Inc.		$	0.25		$	0.30			$	0.74		$	0.63
Weighted average shares outstanding for diluted income per share			324,117,111			321,208,613				323,723,755			319,016,887
EBITDA (1)		$	235,130		$	240,960			$	693,261		$	647,467

__________________________

⁽¹⁾ Includes EBITDA related to discontinued operations of $12.2 million and $1.1 million for the three months ended December 31, 2011 and 2010, respectively and $14.1 million and $16.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

CBRE GROUP, INC.
SEGMENT RESULTS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Dollars in thousands)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2011				2010				2011				2010
Americas
Revenue		$	1,071,525			$	1,037,390			$	3,673,681			$	3,217,543
Costs and expenses:
Cost of services			681,129				653,732				2,325,964				2,015,360
Operating, administrative and other			252,604				259,235				898,675				821,391
Depreciation and amortization			18,721				17,033				62,238				60,663
Operating income		$	119,071			$	107,390			$	386,804			$	320,129
EBITDA		$	142,508			$	127,669			$	462,167			$	389,991
EMEA
Revenue		$	334,555			$	307,275			$	1,076,568			$	936,581
Costs and expenses:
Cost of services			185,890				163,954				638,351				545,354
Operating, administrative and other			106,474				95,438				351,304				302,573
Depreciation and amortization			3,239				2,456				10,945				9,519
Operating income		$	38,952			$	45,427			$	75,968			$	79,135
EBITDA		$	42,057			$	47,631			$	87,527			$	89,407
Asia Pacific
Revenue		$	231,653			$	209,430			$	788,754			$	669,897
Costs and expenses:
Cost of services			141,927				113,183				492,815				399,456
Operating, administrative and other			59,747				60,341				212,548				197,912
Depreciation and amortization			2,704				2,357				9,654				8,419
Operating income		$	27,275			$	33,549			$	73,737			$	64,110
EBITDA		$	30,530			$	34,268			$	82,226			$	70,857
Global Investment Management
Revenue		$	104,763			$	79,810			$	290,065			$	215,631
Costs and expenses:
Operating, administrative and other			137,852				62,533				313,120				177,662
Depreciation and amortization			8,324				3,866				21,271				13,968
Gain on disposition of real estate			-				-				345				-
Operating (loss) income		$	(41,413	)		$	13,411			$	(43,981	)		$	24,001
EBITDA(1)		$	(29,386	)		$	26,040			$	(14,772	)		$	48,556
Development Services
Revenue		$	21,129			$	17,391			$	76,343			$	75,664
Costs and expenses:
Operating, administrative and other			46,970				44,581				107,019				108,144
Depreciation and amortization			2,860				3,153				11,611				15,812
Gain on disposition of real estate			1,372				3,499				12,621				7,296
Operating loss		$	(27,329	)		$	(26,844	)		$	(29,666	)		$	(40,996	)
EBITDA (2)		$	49,421			$	5,352			$	76,113			$	48,656

_________________________

⁽¹⁾ Includes EBITDA related to discontinued operations of $2.1 million and $4.0 million for the three and twelve months ended December 31, 2011.

⁽²⁾ Includes EBITDA related to discontinued operations of $10.1 million and $1.1 million for the three months ended December 31, 2011 and 2010, respectively and $10.1 million and $16.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

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						Twelve Months Ended
		December 31,						December 31,
		2011			2010			2011			2010
Net income attributable to CBRE Group, Inc.		$	79,763		$	95,144		$	239,162		$	200,345
Integration and other costs related to acquisitions, net of tax			42,863			2,645			59,632			4,499
Cost containment expenses, net of tax			20,559			1,949			20,559			9,453
Amortization expense related to ING REIM and TCC customer relationships acquired, net of tax			3,868			1,728			9,396			7,331
Write-down of impaired assets, net of tax			2,216			2,691			5,748			6,988
Write-off of financing costs, net of tax			-			11,220			-			11,220
Net income attributable to CBRE Group, Inc., as adjusted		$	149,269		$	115,377		$	334,497		$	239,836
Diluted income per share attributable to CBRE Group, Inc. shareholders, as adjusted		$	0.46		$	0.36		$	1.03		$	0.75
Weighted average shares outstanding for diluted income per share			324,117,111			321,208,613			323,723,755			319,016,887
EBITDA and EBITDA, as adjusted for selected charges are calculated as follow (dollars in thousands):
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
		2011			2010			2011			2010
Net income attributable to CBRE Group, Inc.		$	79,763		$	95,144		$	239,162		$	200,345
Add:
Depreciation and amortization(1)			36,534			29,245			116,930			108,962
Interest expense(2)			45,130			41,797			153,497			192,706
Write-off of financing costs			-			18,148			-			18,148
Provision for income taxes(3)			76,083			58,668			193,115			135,723
Less:
Interest income			2,380			2,042			9,443			8,417
EBITDA(4)		$	235,130		$	240,960		$	693,261		$	647,467
Adjustments:
Integration and other costs related to acquisitions			45,084			4,335			68,788			7,278
Cost containment expenses			31,139			3,380			31,139			15,291
Write-down of impaired assets			3,558			4,426			9,447			11,307
EBITDA, as adjusted (4)		$	314,911		$	253,101		$	802,635		$	681,343

⁽¹⁾ Includes depreciation and amortization expense related to discontinued operations of $0.7 million and $0.4 million for the three months ended December 31, 2011 and 2010, respectively and $1.2 million and $0.6 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽²⁾ Includes interest expense related to discontinued operations of $1.9 million and $0.5 million for the three months ended December 31, 2011 and 2010, respectively and $3.2 million and $1.6 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽³⁾ Includes provision for income taxes related to discontinued operations of $4.0 million and $0.4 million for the three months ended December 31, 2011 and 2010, respectively and $4.0 million and $5.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽⁴⁾ Includes EBITDA related to discontinued operations of $12.2 million and $1.1 million for the three months ended December 31, 2011 and 2010, respectively and $14.1 million and $16.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

EBITDA and EBITDA, as adjusted for selected charges for segments are calculated as follows (dollars in thousands):

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2011				2010				2011				2010
Americas
Net income attributable to CBRE Group, Inc.		$	45,675			$	26,368			$	182,107			$	105,452
Add:
Depreciation and amortization			18,721				17,033				62,238				60,663
Interest expense			37,147				45,275				118,916				160,685
Write-off of financing costs			-				18,148				-				18,148
Royalty and management service income			(9,026	)			(9,962	)			(29,729	)			(24,363	)
Provision for income taxes			53,280				32,236				136,803				73,944
Less:
Interest income			3,289				1,429				8,168				4,538
EBITDA		$	142,508			$	127,669			$	462,167			$	389,991
Integration and other costs related to acquisitions			10				4,335				126				7,278
Cost containment expenses			15,646				1,517				15,646				7,196
EBITDA, as adjusted		$	158,164			$	133,521			$	477,939			$	404,465
EMEA
Net income attributable to CBRE Group, Inc.		$	22,834			$	41,619			$	37,155			$	53,314
Add:
Depreciation and amortization			3,239				2,456				10,945				9,519
Interest expense			1,446				74				1,633				263
Royalty and management service expense			4,482				4,082				14,142				12,390
Provision for income taxes			12,785				11,596				27,253				27,080
Less:
Interest income			2,729				12,196				3,601				13,159
EBITDA		$	42,057			$	47,631			$	87,527			$	89,407
Cost containment expenses			11,089				13				11,089				1,974
EBITDA, as adjusted		$	53,146			$	47,644			$	98,616			$	91,381
Asia Pacific
Net income attributable to CBRE Group, Inc.		$	17,143			$	20,813			$	32,815			$	30,189
Add:
Depreciation and amortization			2,704				2,357				9,654				8,419
Interest expense			911				402				3,535				2,119
Royalty and management service expense			4,352				5,692				14,666				11,179
Provision for income taxes			5,552				5,182				22,637				21,158
Less:
Interest income			132				178				1,081				2,207
EBITDA		$	30,530			$	34,268			$	82,226			$	70,857
Integration and other costs related to acquisitions			36				-				1,932				-
Cost containment expenses			4,404				1,825				4,404				5,506
EBITDA, as adjusted		$	34,970			$	36,093			$	88,562			$	76,363

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2011				2010				2011				2010
Global Investment Management
Net (loss) income attributable to CBRE Group, Inc.		$	(32,689	)		$	13,814			$	(44,938	)		$	9,062
Add:
Depreciation and amortization(1)			8,952				3,866				22,424				13,968
Interest expense(2)			6,706				3,720				20,892				22,247
Royalty and management service expense			192				188				921				794
(Benefit of) provision for income taxes			(12,181	)			4,505				(13,404	)			2,731
Less:
Interest income			366				53				667				246
EBITDA(3)		$	(29,386	)		$	26,040			$	(14,772	)		$	48,556
Integration and other costs related to acquisitions			45,038				-				66,730				-
Cost containment expenses			-				-				-				442
Write-down of impaired assets			846				1,240				5,301				6,853
EBITDA, as adjusted(3)		$	16,498			$	27,280			$	57,259			$	55,851
Development Services
Net income (loss) attributable to CBRE Group, Inc.		$	26,800			$	(7,470	)		$	32,023			$	2,328
Add:
Depreciation and amortization(4)			2,918				3,533				11,669				16,393
Interest expense(5)			3,183				4,158				12,784				19,224
Provision for income taxes(6)			16,647				5,149				19,826				10,810
Less:
Interest income			127				18				189				99
EBITDA(7)		$	49,421			$	5,352			$	76,113			$	48,656
Cost containment expenses			-				25				-				173
Write-down of impaired assets			2,712				3,186				4,146				4,454
EBITDA, as adjusted(7)		$	52,133			$	8,563			$	80,259			$	53,283

⁽¹⁾ Includes depreciation and amortization expense related to discontinued operations of $0.6 million and $1.2 million for the three and twelve months ended December 31, 2011, respectively.

⁽²⁾ Includes interest expense related to discontinued operations of $1.5 million and $2.8 million for the three and twelve months ended December 31, 2011, respectively.

⁽³⁾ Includes EBITDA related to discontinued operations of $2.1 million and $4.0 million for the three and twelve months ended December 31, 2011, respectively.

⁽⁴⁾ Includes depreciation and amortization expense related to discontinued operations of $0.1 million and $0.4 million for the three months ended December 31, 2011 and 2010, respectively and $0.1 million and $0.6 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽⁵⁾ Includes interest expense related to discontinued operations of $0.4 million and $0.5 million for the three months ended December 31, 2011 and 2010, respectively and $0.4 million and $1.6 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽⁶⁾ Includes provision for income taxes related to discontinued operations of $4.0 million and $0.4 million for the three months ended December 31, 2011 and 2010, respectively and $4.0 million and $5.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

⁽⁷⁾ Includes EBITDA related to discontinued operations of $10.1 million and $1.1 million for the three months ended December 31, 2011 and 2010, respectively and $10.1 million and $16.4 million for the twelve months ended December 31, 2011 and 2010, respectively.

CBRE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
		December 31,			December 31,
		2011			2010
Assets:
Cash and cash equivalents (1)		$	1,093,182		$	506,574
Restricted cash			67,138			52,257
Receivables, net			1,135,371			940,167
Warehouse receivables (2)			720,061			485,433
Real estate assets (3)			464,468			755,509
Goodwill and other intangibles, net			2,622,732			1,656,656
Investments in and advances to unconsolidated subsidiaries			166,832			138,973
Other assets, net			949,359			585,999
Total assets		$	7,219,143		$	5,121,568
Liabilities:
Current liabilities, excluding debt		$	1,688,034		$	1,281,452
Warehouse lines of credit (2)			713,362			453,835
Revolving credit facility			44,825			17,516
Senior secured term loans			1,683,561			640,500
Senior subordinated notes, net			439,016			437,682
Senior notes			350,000			350,000
Other debt			125			156
Notes payable on real estate (4)			372,912			627,528
Other long-term liabilities			510,145			247,104
Total liabilities			5,801,980			4,055,773
CBRE Group, Inc. stockholders’ equity			1,151,481			908,215
Non-controlling interests			265,682			157,580
Total equity			1,417,163			1,065,795
Total liabilities and equity		$	7,219,143		$	5,121,568

⁽¹⁾ Includes $208.1 million and $26.1 million of cash in consolidated funds and other entities not available for company use at December 31, 2011 and 2010, respectively.

⁽²⁾ Represents loan receivables, the majority of which are offset by the related non-recourse warehouse line of credit facility.

⁽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 and $3.7 million are recourse to the Company as of December 31, 2011 and 2010, respectively.

CBRE Group, Inc.Gil Borok, 310-405-8909Chief Financial OfficerorNick Kormeluk, 949-809-4308Investor RelationsorSteve Iaco, 212-984-6535Corporate Communications