Companies are focused on properties where electric vehicle drivers most often want to charge: multifamily complexes, hotels, hospitals and healthcare-related facilities DALLAS, May 16, 2024 /PRNewswire/ -- EV+, a provider of on-site, electric vehicle charging infrastructure solutions, today announced a preferred partner agreement with CBRE to deploy electric vehicle charging systems at 10,000 U.S. commercial properties over the next five years. The companies are focused on EV-enabling real estate where driv ...

Have you evaluated the performance of CBRE Group's (CBRE) international operations for the quarter ending March 2024? Given the extensive global presence of this provider of real estate investment management services, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial he ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of the company's unaudited financial performance, condition, and liquidity for the first quarter of 2024, including detailed financial statements and explanatory notes [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the three months ended March 31, 2024 and 2023, including statements of operations, balance sheets, cash flows, and equity, along with detailed notes covering accounting policies, acquisitions, debt, fair value measurements, and segment information [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's revenues, expenses, and net income for the three months ended March 31, 2024 and 2023, highlighting key profitability metrics Consolidated Statements of Operations (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :---------------------------------------- | :----------- | :----------- | | Revenue | 7,935 | 7,411 | | Operating income | 204 | 37 | | Net income | 148 | 125 | | Net income attributable to CBRE Group, Inc. | 126 | 117 | | Basic income per share | 0.41 | 0.38 | | Diluted income per share | 0.41 | 0.37 | - Net income attributable to CBRE Group, Inc. increased by **8.0%** year-over-year, while total revenue rose by **7.1%**[89](index=89&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, as of March 31, 2024, and December 31, 2023 Consolidated Balance Sheet Highlights (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :-------------------------- | :---------------- | :---------------- | | Total Assets | 22,964 | 22,548 | | Total Liabilities | 13,865 | 13,481 | | Total Equity | 9,099 | 9,067 | | Goodwill | 5,554 | 5,129 | | Other intangible assets, net | 2,298 | 2,081 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024 and 2023 Consolidated Statements of Cash Flows (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------------------------------ | :----------- | :----------- | | Net cash used in operating activities | (492) | (745) | | Net cash used in investing activities | (900) | (115) | | Net cash provided by financing activities | 1,192 | 761 | - Net cash used in operating activities decreased by **$253 million**, primarily due to net inflow from working capital and higher non-cash charges[147](index=147&type=chunk)[148](index=148&type=chunk) - Net cash used in investing activities increased significantly by **$784.7 million**, mainly due to the J&J Worldwide Services acquisition[147](index=147&type=chunk)[148](index=148&type=chunk) [Consolidated Statements of Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Equity) This section presents changes in the company's equity, including stockholders' equity and non-controlling interests, for the three months ended March 31, 2024 and 2023 Consolidated Statements of Equity Highlights (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :---------------------------------------- | :---------------- | :---------------- | | Total CBRE Group, Inc. Stockholders' Equity | 8,261 | 8,267 | | Non-controlling interests | 838 | 800 | | Accumulated earnings | 9,263 | 9,188 | | Accumulated other comprehensive loss | (1,005) | (924) | - Accumulated other comprehensive loss increased by **$81 million** due to foreign currency translation loss in Q1 2024[233](index=233&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, significant transactions, and financial instrument details [Basis of Presentation](index=10&type=section&id=Basis%20of%20Presentation) The consolidated financial statements are prepared in accordance with GAAP for quarterly reports, relying on management's estimates and assumptions that are continuously evaluated - Financial statements are prepared in accordance with GAAP for Form 10-Q, requiring management estimates and assumptions[236](index=236&type=chunk) [New Accounting Pronouncements](index=10&type=section&id=New%20Accounting%20Pronouncements) The company adopted ASU 2023-01 (Leases) and ASU 2023-02 (Tax Credit Structures) in Q1 2024, neither of which had a material impact. It is currently evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures) for future impact - Adopted ASU 2023-01 (Leases) and ASU 2023-02 (Tax Credit Structures) in Q1 2024 with no material impact[213](index=213&type=chunk)[16](index=16&type=chunk) - Evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures) for future impact[37](index=37&type=chunk)[215](index=215&type=chunk) [J&J Worldwide Services Acquisition](index=11&type=section&id=J%26J%20Worldwide%20Services%20Acquisition) CBRE acquired J&J Worldwide Services on February 27, 2024, for $820 million, enhancing its Global Workplace Solutions segment. The acquisition contributed $41.4 million in revenue and $0.5 million in net income for Q1 2024, with $17.5 million in transaction and integration costs - Acquired J&J Worldwide Services on February 27, 2024, for **$820 million** (**$809 million** cash, **$11 million** deferred/contingent consideration)[18](index=18&type=chunk)[216](index=216&type=chunk) - J&J is a leading provider of engineering services, base support operations, and facilities maintenance for the U.S. federal government, reported as part of the Global Workplace Solutions (GWS) segment[18](index=18&type=chunk) J&J Acquisition Q1 2024 Financial Contribution | Metric | Amount ($M) | | :--------------- | :---------- | | Revenue | 41.4 | | Operating loss | 0.3 | | Net income | 0.5 | - Goodwill arising from the acquisition was **$430 million**, with approximately **$115 million** deductible for tax purposes[20](index=20&type=chunk) [Warehouse Receivables & Warehouse Lines of Credit](index=13&type=section&id=Warehouse%20Receivables%20%26%20Warehouse%20Lines%20of%20Credit) Warehouse receivables increased to $848 million as of March 31, 2024, primarily due to mortgage loan originations, funded by warehouse lines of credit. The company had a maximum of $1.2 billion in warehouse lines of credit principal outstanding during Q1 2024 Warehouse Receivables (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :------------------- | :---------------- | :---------------- | | Warehouse receivables | 848 | 675 | - Origination of mortgage loans totaled **$2,216 million** in Q1 2024[221](index=221&type=chunk) - Maximum warehouse lines of credit principal outstanding during Q1 2024 was **$1.2 billion**[43](index=43&type=chunk) [Variable Interest Entities (VIEs)](index=14&type=section&id=Variable%20Interest%20Entities%20(VIEs)) The company holds variable interests in certain unconsolidated VIEs, primarily in its Real Estate Investments segment, with a maximum exposure to loss of $238 million as of March 31, 2024 Maximum Exposure to Loss from Unconsolidated VIEs | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :--------------------- | :---------------- | :---------------- | | Maximum exposure to loss | 238 | 223 | [Fair Value Measurements](index=15&type=section&id=Fair%20Value%20Measurements) The company measures assets and liabilities at fair value using a three-level hierarchy. Total assets at fair value were $1,597 million as of March 31, 2024, with significant portions in warehouse receivables and investments in unconsolidated subsidiaries. No significant changes to valuation techniques were reported, except as described Total Assets and Liabilities at Fair Value (Mar 31, 2024) | Metric | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | Total ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | | Total assets at fair value | 212 | 909 | 476 | 1,597 | | Total liabilities at fair value | — | 1 | 43 | 44 | - Warehouse receivables are classified as Level 2, with fair values primarily based on locked-in purchase prices[275](index=275&type=chunk) - Investments in unconsolidated subsidiaries include Level 1 (Altus Power, Inc. common stock) and Level 3 (Altus alignment shares, Industrious, other non-public entities) measurements[279](index=279&type=chunk) [Investments in Unconsolidated Subsidiaries](index=19&type=section&id=Investments%20in%20Unconsolidated%20Subsidiaries) Total investments in unconsolidated subsidiaries decreased to $1,298 million as of March 31, 2024, primarily due to a decrease in the value of Altus Class A common stock and alignment shares Investment in Unconsolidated Subsidiaries (Mar 31, 2024 vs Dec 31, 2023) | Investment Type | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :---------------------------------- | :---------------- | :---------------- | | Real Estate Investments | 631 | 661 | | Investment in Altus: | | | | Class A common stock | 117 | 168 | | Alignment shares | 28 | 56 | | Other | 522 | 489 | | Total investment in unconsolidated subsidiaries | 1,298 | 1,374 | [Long-Term Debt and Short-Term Borrowings](index=20&type=section&id=Long-Term%20Debt%20and%20Short-Term%20Borrowings) Total long-term debt increased to $3,311 million as of March 31, 2024, primarily due to the issuance of $500 million in 5.500% senior notes in February 2024. The company was in compliance with all debt covenants Long-Term Debt (Mar 31, 2024 vs Dec 31, 2023) | Debt Instrument | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :-------------------------------------------- | :---------------- | :---------------- | | Senior term loans due in 2028 | 746 | 755 | | 5.950% senior notes due in 2034 | 976 | 976 | | 4.875% senior notes due in 2026 | 599 | 599 | | 5.500% senior notes due in 2029 | 496 | — | | 2.500% senior notes due in 2031 | 494 | 494 | | Total long-term debt | 3,311 | 2,824 | - Issued **$500 million** in 5.500% senior notes due April 1, 2029, in February 2024[290](index=290&type=chunk) - Outstanding under the Revolving Credit Agreement was **$820 million** as of March 31, 2024[294](index=294&type=chunk) - The company was in compliance with all covenants under its debt instruments as of March 31, 2024[292](index=292&type=chunk) [Leases](index=23&type=section&id=Leases) The company's lease liabilities and right-of-use assets primarily relate to office space, vehicles, and land for development. Total leased assets were $1,213 million and total lease liabilities were $1,413 million as of March 31, 2024 Lease Assets and Liabilities (Mar 31, 2024 vs Dec 31, 2023) | Category | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :------------------ | :---------------- | :---------------- | | Total leased assets | 1,213 | 1,240 | | Total lease liabilities | 1,413 | 1,439 | [Commitments and Contingencies](index=23&type=section&id=Commitments%20and%20Contingencies) The company has various commitments and contingencies, including guarantees for Fannie Mae DUS Program loans ($38.7 billion subject to loss sharing), outstanding letters of credit ($253.7 million), performance and payment bonds ($462.2 million), and deferred/contingent consideration for acquisitions ($536.1 million). Future co-investment commitments total $175.7 million - Fannie Mae DUS Program loans subject to loss sharing totaled **$38.7 billion** as of March 31, 2024[329](index=329&type=chunk) Commitments and Contingencies (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :------------------------------------ | :---------------- | :---------------- | | Outstanding letters of credit | 253.7 | N/A | | Outstanding performance and payment bonds | 462.2 | 241.8 | | Deferred and contingent consideration | 536.1 | 530.2 | - Aggregate future commitments for co-investment funds in the Real Estate Investments segment were **$175.7 million** as of March 31, 2024[73](index=73&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) The company reported a benefit from income taxes of $28.9 million in Q1 2024, a $56.9 million decrease from a provision in Q1 2023, primarily due to the reversal of unrecognized tax positions and lower pretax earnings. The effective tax rate fell to (24.3)% from 18.3% Income Tax Summary (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------------------------------ | :----------- | :----------- | | (Benefit from) provision for income taxes | (29) | 28 | | Effective tax rate | (24.3)% | 18.3% | - Gross unrecognized tax benefits decreased by **$76.3 million** to **$337.2 million** as of March 31, 2024, primarily due to an audit closure and expiration of statute of limitations[335](index=335&type=chunk) [Income Per Share and Stockholders' Equity](index=25&type=section&id=Income%20Per%20Share%20and%20Stockholders'%20Equity) Basic income per share increased to $0.41 in Q1 2024 from $0.38 in Q1 2023, and diluted income per share increased to $0.41 from $0.37. The company did not repurchase any Class A common stock in Q1 2024, but repurchased $13.7 million in April 2024, with $1.5 billion capacity remaining under the 2021 program Income Per Share (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($) | Q1 2023 ($) | | :--------------- | :---------- | :---------- | | Basic income per share | 0.41 | 0.38 | | Diluted income per share | 0.41 | 0.37 | - No Class A common stock repurchases were made during Q1 2024. However, **$13.7 million** of Class A common stock was repurchased in April 2024[60](index=60&type=chunk)[145](index=145&type=chunk) - Approximately **$1.5 billion** of capacity remained under the 2021 stock repurchase program as of March 31, 2024[60](index=60&type=chunk) [Revenue from Contracts with Customers](index=26&type=section&id=Revenue%20from%20Contracts%20with%20Customers) Total revenue from contracts with customers increased to $7,935 million in Q1 2024 from $7,411 million in Q1 2023. Global Workplace Solutions contributed the largest share of revenue. Contract assets increased to $549.8 million, while contract liabilities remained stable at $303.5 million Total Revenue from Contracts with Customers (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------ | :----------- | :----------- | | Total Revenue | 7,935 | 7,411 | Revenue by Segment (Q1 2024) | Segment | Revenue ($M) | | :------------------------- | :----------- | | Global Workplace Solutions | 5,809 | | Advisory Services | 1,904 | | Real Estate Investments | 228 | Contract Assets and Liabilities (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :------------------- | :---------------- | :---------------- | | Contract assets | 549.8 | 517.4 | | Contract liabilities | 303.5 | 304.3 | [Segments](index=27&type=section&id=Segments) Total reportable segment operating profit decreased to $528 million in Q1 2024 from $631 million in Q1 2023, primarily due to a significant decline in Real Estate Investments' operating profit. Global Workplace Solutions showed strong growth Total Reportable Segment Operating Profit (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------------------------------ | :----------- | :----------- | | Total reportable segment operating profit | 528 | 631 | Segment Operating Profit (Q1 2024) | Segment | Operating Profit ($M) | | :------------------------- | :-------------------- | | Advisory Services | 262 | | Global Workplace Solutions | 232 | | Real Estate Investments | 34 | Revenue by Geographic Region (Q1 2024 vs Q1 2023) | Region | Q1 2024 ($M) | Q1 2023 ($M) | | :---------------- | :----------- | :----------- | | United States | 4,422 | 4,145 | | United Kingdom | 1,085 | 995 | | All other countries | 2,428 | 2,271 | [Telford Fire Safety Remediation](index=28&type=section&id=Telford%20Fire%20Safety%20Remediation) The estimated liability for Telford Fire Safety Remediation efforts decreased slightly to $188.9 million as of March 31, 2024, primarily due to foreign exchange rate movements and minor costs incurred Telford Fire Safety Remediation Liability (Mar 31, 2024 vs Dec 31, 2023) | Metric | Mar 31, 2024 ($M) | Dec 31, 2023 ($M) | | :----------------- | :---------------- | :---------------- | | Estimated liability | 188.9 | 192.1 | [Restructuring Activities](index=28&type=section&id=Restructuring%20Activities) The company continued restructuring activities in Q1 2024 to simplify management and improve efficiencies, incurring $31 million in expenses, primarily for employee separation benefits and professional fees. These activities are expected to be substantially completed by the end of fiscal year 2024 Restructuring Expense Incurred (Q1 2024) | Category | Amount ($M) | | :--------------------------- | :---------- | | Employee separation benefits | 26 | | Professional fees and other | 5 | | Total expense incurred | 31 | - Restructuring activities are expected to be substantially completed by the end of fiscal year 2024[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and liquidity for the three months ended March 31, 2024. It highlights the challenging commercial real estate environment, consolidated and segment-specific performance, and the company's capital resources and critical accounting policies [Business Environment](index=29&type=section&id=Business%20Environment) The commercial real estate market remains challenging due to high borrowing costs and interest rate uncertainty, impacting investment and financing. However, office leasing markets have improved, reflecting a resilient economy and return-to-office trends. The company invested $820.2 million in M&A and strategic investments in Q1 - Commercial real estate operating environment remains challenging due to higher borrowing costs and interest rate uncertainty, inhibiting investment and financing activities[113](index=113&type=chunk) - Office leasing markets have improved, reflecting a resilient economy and progress on occupiers' return-to-office plans[113](index=113&type=chunk) - Invested approximately **$820.2 million** in M&A and other strategic investments during the quarter[87](index=87&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated and segment-specific financial performance for Q1 2024 compared to Q1 2023, detailing revenue drivers, expense changes, and profitability [Consolidated Results](index=30&type=section&id=Consolidated%20Results) Consolidated net income increased 8.0% to $126.2 million on a 7.1% revenue increase to $7.9 billion in Q1 2024. Resilient businesses grew 8%, while transactional businesses saw a 1% increase. Cost of revenue increased due to higher pass-through costs and compensation, while operating, administrative, and other expenses decreased due to lower restructuring charges. Equity loss was recorded due to a non-recurring development asset disposition gain in Q1 2023 and unrealized losses on an equity investment Consolidated Financial Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change (%) | | :---------------------------------------- | :----------- | :----------- | :------------- | | Revenue | 7,935 | 7,411 | 7.1 | | Net income attributable to CBRE Group, Inc. | 126.2 | 116.9 | 8.0 | | Cost of revenue | 6,475 | 6,006 | 7.8 | | Operating, administrative and other | 1,111 | 1,209 | (8.1) | | Equity (loss) income from unconsolidated subsidiaries | (58) | 142 | N/A | | Interest expense, net | 36 | 28 | 28.3 | - Revenue from resilient businesses increased **8%**, while transactional businesses saw a **1%** increase[89](index=89&type=chunk) - Operating, administrative and other expenses decreased primarily due to lower restructuring charges (**$29.3 million** in Q1 2024 vs **$139.0 million** in Q1 2023)[119](index=119&type=chunk) - Equity loss was mainly due to an unusually large development asset disposition in Q1 2023 that did not recur, and higher unrealized loss related to the non-core strategic equity investment in Altus Power, Inc[120](index=120&type=chunk) [Segment Operations](index=32&type=section&id=Segment%20Operations) The company operates through three global business segments: Advisory Services, Global Workplace Solutions, and Real Estate Investments, along with a Corporate and Other segment. Each segment showed varied performance in Q1 2024 [Advisory Services](index=32&type=section&id=Advisory%20Services) Advisory Services revenue increased 2.7% in Q1 2024, driven by a 4% rise in global leasing (especially APAC and U.S. office leasing) and strong property management growth. However, property sales revenue declined 11.2% due to high interest rates. Operating income increased significantly to $190 million from $126 million Advisory Services Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :------------- | | Total segment revenue | 1,904 | 1,854 | 2.7 | | Operating income | 190 | 126 | 50.8 | | Global leasing revenue growth | N/A | N/A | 4 | | Property sales revenue growth | N/A | N/A | (11.2) | | Cost of revenue (% of total revenue) | 60.3% | 60.8% | (0.5 pp) | - Global office leasing growth improved compared with Q1 2023, with APAC growing **9%** and U.S. leasing up **5%**[99](index=99&type=chunk) [Global Workplace Solutions](index=34&type=section&id=Global%20Workplace%20Solutions) Global Workplace Solutions revenue increased 8.8% in Q1 2024, primarily from a double-digit increase in facilities management, despite slower growth in project management. Operating income rose to $162 million from $109 million Global Workplace Solutions Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :------------- | | Total segment revenue | 5,809 | 5,338 | 8.8 | | Operating income | 162 | 109 | 48.6 | | Cost of revenue (% of total revenue) | 90.8% | 90.7% | 0.1 pp | - Revenue increase reflected a double-digit increase in facilities management, led by the Local business[102](index=102&type=chunk) [Real Estate Investments](index=35&type=section&id=Real%20Estate%20Investments) Real Estate Investments revenue increased 1.9% in Q1 2024, driven by slightly higher development and construction fees and incentive fees. However, the segment recorded an equity loss of $10.6 million, a significant decline from Q1 2023's equity income of $166.7 million, which included a large development asset sale gain. Operating income improved to $6 million from a loss of $71 million Real Estate Investments Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :------------- | | Total segment revenue | 228 | 223 | 1.9 | | Operating income (loss) | 6 | (71) | N/A | | Equity (loss) income from unconsolidated subsidiaries | (10.6) | 166.7 | N/A | | Cost of revenue (% of total revenue) | 18.8% | 17.2% | 1.6 pp | - The equity loss from unconsolidated subsidiaries in Q1 2024 contrasts with a large gain on a development portfolio asset sale in Q1 2023[135](index=135&type=chunk) [Corporate and Other](index=37&type=section&id=Corporate%20and%20Other) The Corporate and Other segment reported an increased operating loss of $175 million in Q1 2024, up from $124 million in Q1 2023. This was primarily due to a higher equity loss of $70.7 million (reflecting lower value of Altus Power, Inc. investment) and increased operating, administrative, and other expenses related to employee separation and strategic projects Corporate and Other Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------------------------------ | :----------- | :----------- | | Segment operating loss | (175) | (124) | | Equity loss from unconsolidated subsidiaries | (70.7) | (26.3) | | Operating, administrative and other expenses | 128.4 | 111 | - The increased equity loss reflects the lower value of the investment in publicly traded Altus Power, Inc[166](index=166&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $2.8 billion available under revolving credit facilities and $1.0 billion in cash as of March 31, 2024. It relies on internally generated cash flow and credit facilities for working capital and investments. Long-term liquidity needs include debt repayment and acquisition obligations. The company issued $500 million in senior notes in Q1 2024 and repurchased $13.7 million of stock in April 2024 - As of March 31, 2024, the company had **$2.8 billion** of borrowings available under its revolving credit facilities and **$1.0 billion** of cash and cash equivalents[142](index=142&type=chunk) - Expected capital expenditures for 2024 are up to **$331.4 million**[142](index=142&type=chunk) - Issued **$500 million** in 5.500% senior notes in February 2024, generating net proceeds of **$494.9 million**[143](index=143&type=chunk) - Repurchased **$13.7 million** of Class A common stock in April 2024, with **$1.5 billion** capacity remaining under the 2021 program[145](index=145&type=chunk) [Historical Cash Flows](index=39&type=section&id=Historical%20Cash%20Flows) Net cash used in operating activities decreased to $491.9 million in Q1 2024 from $744.8 million in Q1 2023, driven by improved working capital and higher non-cash charges. Net cash used in investing activities increased significantly to $899.7 million due to the J&J acquisition. Net cash provided by financing activities increased to $1.2 billion due to new debt issuance and no share repurchases in Q1 Historical Cash Flows (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($M) | Q1 2023 ($M) | | :------------------------------------ | :----------- | :----------- | | Net cash used in operating activities | (491.9) | (744.8) | | Net cash used in investing activities | (899.7) | (115) | | Net cash provided by financing activities | 1,192 | 761 | [Indebtedness](index=39&type=section&id=Indebtedness) The company's long-term debt includes senior term loans and various senior notes (5.950%, 5.500%, 4.875%, 2.500%). In Q1 2024, $500 million in 5.500% senior notes were issued. The company also utilizes a $3.5 billion revolving credit facility and a £120 million Turner & Townsend facility, with $820 million and no amount outstanding respectively as of March 31, 2024 - Issued **$500 million** in 5.500% senior notes due April 1, 2029, on February 23, 2024[185](index=185&type=chunk) - As of March 31, 2024, **$820 million** was outstanding under the **$3.5 billion** Revolving Credit Agreement[181](index=181&type=chunk)[189](index=189&type=chunk) - The Turner & Townsend **£120 million** revolving credit facility had no amount outstanding as of March 31, 2024[190](index=190&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have off-balance sheet arrangements that are expected to have a material current or future impact on its financial condition, liquidity, or results of operations - No off-balance sheet arrangements are expected to have a material current or future impact on financial condition, liquidity, or results of operations[192](index=192&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies and estimates, including revenue recognition, business combinations, goodwill, income taxes, contingencies, and investments in unconsolidated subsidiaries, remain unchanged from the 2023 Annual Report - There have been no material changes to critical accounting policies and estimates as of March 31, 2024[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from foreign currency exchange rate fluctuations and changes in interest rates on debt obligations. These risks are managed through debt funding strategies and derivative financial instruments [International Operations](index=46&type=section&id=International%20Operations) The company is exposed to foreign currency exchange rate fluctuations due to significant international operations, with 44.3% of Q1 2024 revenue transacted in foreign currencies. A hypothetical 10% adverse change in the U.S. dollar against the British pound sterling or euro would impact pre-tax income by $2.0 million and $1.7 million, respectively - Approximately **44.3%** of Q1 2024 revenue was transacted in foreign currencies[382](index=382&type=chunk) Hypothetical Impact of 10% Adverse USD Change on Pre-Tax Income (Q1 2024) | Currency | Impact on Pre-Tax Income ($M) | | :------------------- | :---------------------------- | | British pound sterling | 2.0 | | Euro | 1.7 | [Interest Rates](index=47&type=section&id=Interest%20Rates) The company manages interest rate risk using a combination of fixed and variable rate debt. A hypothetical 100 basis point increase in interest rates on variable rate debt would decrease pre-tax income by $3.9 million and increase cash used in operating activities by $3.9 million for Q1 2024 - A hypothetical **100 basis point** increase in interest rates on outstanding variable rate debt would decrease pre-tax income by **$3.9 million** and increase cash used in operating activities by **$3.9 million** for Q1 2024[366](index=366&type=chunk) [PART II – OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional non-financial disclosures, including legal proceedings, risk factors, equity sales, and executive trading plans, supplementing the financial information [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) There have been no material changes to the company's legal proceedings as previously disclosed in its 2023 Annual Report - No material changes to legal proceedings since the 2023 Annual Report[372](index=372&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as previously disclosed in its 2023 Annual Report. The business remains susceptible to macroeconomic conditions, interest rate volatility, and geopolitical events - No material changes to risk factors since the 2023 Annual Report[380](index=380&type=chunk) - The business could suffer from rapid changes in interest rates, reduced access to debt capital, macroeconomic downturns, regulatory uncertainty, or unanticipated disruptions like public health crises and geopolitical events[381](index=381&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 287 shares of Class A common stock to a non-employee director in lieu of cash payments in Q1 2024, under an exemption from registration - Issued **287 shares** of Class A common stock to a non-employee director on February 26, 2024, in lieu of **$25,847** of prorated director fees[373](index=373&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) The Chief Operating Officer and CEO of Real Estate Investments entered into Rule 10b5-1 Trading Plans in February 2024 to sell Class A common stock - Chief Operating Officer, Vikram Kohli, and CEO, Real Estate Investments, Daniel Queenan, entered into Rule 10b5-1 Trading Plans in February 2024[374](index=374&type=chunk) Rule 10b5-1 Trading Plans Details | Name | Plan Adoption Date | Trading Commencement Date | Maximum Shares | Plan Expiration Date | | :----------------- | :----------------- | :------------------------ | :------------- | :------------------- | | Vikramaditya Kohli | Feb 26, 2024 | Aug 12, 2024 | Up to 2,123 | Nov 29, 2024 | | Daniel Queenan | Feb 27, 2024 | Jun 3, 2024 | Up to 50,000 | Jun 13, 2025 | [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate documents, indentures for senior notes, equity incentive plan agreements, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, By-Laws, Ninth Supplemental Indenture for 5.500% Senior Notes due 2029, and various equity incentive plan agreements[388](index=388&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. §1350 are also filed[388](index=388&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report is signed by the Chief Financial Officer and Chief Accounting Officer on May 3, 2024, certifying its accuracy - The report was signed by Emma E. Giamartino (Chief Financial Officer) and Lindsey S. Caplan (Chief Accounting Officer) on May 3, 2024[391](index=391&type=chunk)[392](index=392&type=chunk)

Financial Data and Key Metrics Changes - The company reported core earnings per share (EPS) in the range of $4.25 to $4.65 for the year, with confidence driven by resilient business performance and rapid cost actions [52][58] - Core EBITDA was in line with expectations, with slight outperformance in Real Estate Investment (REI) and lower than expected corporate costs offsetting margin underperformance in Global Workplace Solutions (GWS) [30][31] - The company experienced a decline in property sales revenue by 11%, with weakness noted in the US and APAC regions, while EMEA showed early signs of recovery with an 8% year-over-year increase [32][35] Business Line Data and Key Metrics Changes - GWS segment delivered double-digit net revenue growth of 10%, although margins fell short of expectations due to increased costs [51][55] - Advisory services saw a 3% increase in net revenue, bolstered by the first quarter of transactional revenue growth in six quarters, despite a challenging interest rate environment [52][54] - The loan origination business grew by 16%, driven by higher margin loans sourced with debt funds, while escrow income increased nearly threefold from Q1 2023 [54] Market Data and Key Metrics Changes - Leasing revenue rose in every region, with global growth exceeding expectations, particularly in office leasing which grew by double digits globally [31][28] - The company noted that financial services companies are leading the recovery with active demand up more than 20% year-over-year across US gateway markets [53] - The value of the development in process portfolio increased by $3 billion to $19 billion due to a large fee development project [35] Company Strategy and Development Direction - The company is focusing on cost structure improvements and has initiated actions to mitigate GWS cost challenges, expecting to achieve mid-teens SOP growth for the full year [29][38] - There is a strategic effort underway to identify growth opportunities, particularly in enterprise facilities management, project management for corporates, and green energy [22][93] - The company remains confident in its growth profile, expecting mid-teens SOP growth in advisory services unless economic conditions sharply worsen [58][93] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that persistent inflation has kept interest rates higher than expected, impacting property sales transaction activity [28] - The outlook remains cautious due to economic uncertainties, but the company expects a significant recovery in the second half of the year driven by onboarding large enterprise contracts [14][83] - Management emphasized that the cost components of the business are within their control, which will drive profit growth in 2024 [38][58] Other Important Information - The company has started share repurchases in Q2 and plans to continue as long as prices remain attractive, aiming to deploy at least free cash flow on an annual basis [16][30] - A one-time tax benefit of approximately $50 million was noted in the quarter, which will not repeat [91] Q&A Session Summary Question: What is the guidance for the midpoint and the comments around 70% in the back half? - Management indicated that the second quarter is expected to see a decline year-over-year, but EBITDA will not decline from Q1 to Q2 [83][84] Question: Can you provide more details on the large development project? - The $3 billion increase in developments underway is primarily a fee deal, which may not directly contribute to profits [44][72] Question: How is the company addressing the cost issues in GWS? - Management is consolidating the management of advisory and GWS to better integrate solutions and reduce unnecessary costs [29][110] Question: What is the outlook for the office leasing sector? - Management noted that companies are focused on bringing employees back to the office, which is driving demand for higher quality office spaces [114][100] Question: How does the company view the current transaction market? - There has been a slowdown in activity on the sell side due to higher interest rates, with management indicating a cautious approach to selling assets [90][122]

With respect to Core EBITDA, business line operating profit/itsss, and segment operating profit on revenue and net revenue margins, the company believes that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the accounting effects of strategic acquisitions, which would include impairment charges of goodwill and intangibles created from such acquisitions, the effects of financings ...

Revenue Performance - Total revenue increased by 1% (flat in local currency), with asset management fees remaining flat[1] - Total revenue for Q1 2024 was $7,935 million, reflecting a 7.1% increase from $7,411 million in Q1 2023[38] - Consolidated revenue for the three months ended March 31, 2024, was $7,935 million, an increase from $7,411 million in the same period of 2023, representing a growth of 7.1%[92] - Net revenue for the same period was $4,444 million, up from $4,181 million year-over-year, indicating a growth of 6.3%[92] - Property Management revenue increased to $496 million in Q1 2024 from $464 million in Q1 2023, reflecting a growth of 6.9%[92] - Global Workplace Solutions (GWS) revenue rose to $5,809 million, compared to $5,338 million in the prior year, marking an increase of 8.8%[92] - CBRE's Facilities Management revenue for Q1 2024 was $4,067 million, up from $3,680 million in Q1 2023[29] Profitability and Income - Operating profit decreased by 14.0% (same local currency) to approximately $37 million, slightly better than expectations[1] - Net income attributable to CBRE Group, Inc. was $126 million, compared to $117 million in the previous year[10] - CBRE Group, Inc. reported a net income of $126 million for Q1 2024, an increase of 8.0% compared to $117 million in Q1 2023[31] - Core adjusted net income decreased to $241 million in Q1 2024, down 16.7% from $290 million in Q1 2023[38] - Core diluted earnings per share (EPS) for Q1 2024 was $0.78, a decline of 14.8% compared to $0.92 in Q1 2023[38] - Core EPS decreased by 15% to $0.78, reflecting the overall performance of the company[51] - Net income for Q1 2024 was $148 million, compared to $125 million in Q1 2023, showing a year-over-year increase of 18.4%[98] Assets and Management - Assets Under Management (AUM) totaled $144.0 billion, a decrease of $3.5 billion from year-end 2023, driven by lower asset values and adverse foreign currency movements[1] - Total assets as of March 31, 2024, were $22.964 billion, an increase from $22.548 billion at year-end 2023[14] - The in-process portfolio for the Real Estate Investments segment reached $18.8 billion, up $3.0 billion from year-end 2023, primarily due to a new fee-based industrial development project[49] Cash Flow and Liquidity - Free cash flow for Q1 2024 was $(560) million, an improvement from $(805) million in Q1 2023[38] - Free cash outflow for the first quarter of 2024 was $560 million, with cash used in operating activities amounting to $492 million[76] - Total liquidity as of March 31, 2024, was approximately $3.9 billion, including $1.04 billion in cash and $2.85 billion available under revolving credit facilities[76] - The company reported a net cash provided by financing activities of $1,192 million for Q1 2024, compared to $761 million in Q1 2023, indicating a significant increase of 56.7%[99] - The company’s cash and cash equivalents at the end of the period were $1,127 million, down from $1,320 million at the end of Q1 2023[99] Acquisitions and Investments - CBRE acquired J&J Worldwide Services, Inc. for a total consideration of $820 million, partially funded by a $500 million senior notes offering with a 5.5% interest rate due in 2029[3] - Integration and other costs related to acquisitions included $17.5 million in deal and integration costs, offset by a reversal of $21.7 million in previously recognized transaction-related bonus expense[92] - Costs related to acquisitions amounted to $40 million, while efficiency cost-reduction initiatives contributed $50 million[102] Other Financial Metrics - Non-core operating loss amounted to $71 million, primarily due to a decline in the company's investment in Altus Power, Inc.[2] - Core corporate operating loss increased by 5%, or roughly $5 million[2] - The net leverage ratio as of March 31, 2024, was 1.47x, significantly below the company's primary debt covenant of 4.25x[50] - Mortgage origination revenue surged by 34% (33% local currency), attributed to higher loan fees and interest earnings on escrow balances[54] - Global sales revenue declined by 11% (10% local currency), with the Americas experiencing a 15% drop, while EMEA saw an 8% increase driven by the U.K. and Spain[54]

Investors are always looking for stocks that are poised to beat at earnings season and CBRE Group, Inc. (CBRE) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because CBRE Group is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good i ...

Analysts on Wall Street project that CBRE Group (CBRE) will announce quarterly earnings of $0.69 per share in its forthcoming report, representing a decline of 25% year over year. Revenues are projected to reach $8.07 billion, increasing 8.9% from the same quarter last year.The consensus EPS estimate for the quarter has been revised 3% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timefram ...

CBRE Group, Inc. (CBRE) , the global leader in real estate services, is gearing up to announce its first-quarter 2024 earnings on May 3 before the bell. The company has been at the forefront of the industry, offering a wide range of services, including property sales and leasing, property management, valuation, project management and consulting.In the last reported quarter, this Dallas, TX-based commercial real estate services and investment firm reported an earnings surprise of 14.05%. Results reflected gr ...

The market expects CBRE Group (CBRE) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 3, 2024, might help the stock move higher if these key numbers are better ...