CBRE(CBRE)2024-02-19 16:00Financial Performance - Core EBITDA for 2023 was 2,924 million in 2022[53] - Core net income attributable to CBRE Group, Inc. for 2023 was 1,863 million in 2022[60] - Core diluted income per share for 2023 was 5.69 in 2022[60] - Revenue for 2023 was 30,828 million in 2022[200] - Net income attributable to CBRE Group, Inc. for 2023 was 1,407 million in 2022[200] - Basic income per share for 2023 was 4.36 in 2022[200] - Diluted income per share for 2023 was 4.29 in 2022[200] - Comprehensive income attributable to CBRE Group, Inc. for 2023 was 1,066 million in 2022[203] - Cost of revenue for 2023 was 24,239 million in 2022[200] - Operating income for 2023 was 1,512 million in 2022[200] - Provision for income taxes for 2023 was 234 million in 2022[200] - Equity income from unconsolidated subsidiaries for 2023 was 229 million in 2022[200] - Interest expense, net of interest income for 2023 was 69 million in 2022[200] - Net income for 2023 was 1,424 million in 2022 and 480 million, significantly lower than 2,364 million in 2021[206] - Net income for 2021 was 1,837 million in 2020[212] - The company's net income for the year ended December 31, 2023, was 12,342 million, up from 26,015 million, compared to 31.949 billion, with the U.S. dollar contributing 9,714 million, down from 17,195 million in 2021[206] - Origination of mortgage loans in 2023 was 13,652 million in 2022 and 5.4 million, while a similar change relative to the euro would increase pre-tax income by 409 million, compared to 159 million in 2020[212] Debt and Financial Obligations - Turner & Townsend had 10.2 million (£8.0 million) outstanding under its £120.0 million revolving credit facility as of December 31, 2023[57] - No amounts were outstanding under the company's Revolving Credit Agreement as of December 31, 2023[56] - The estimated fair value of senior term loans was 1.0 billion, 424.0 million, respectively, as of December 31, 2023[72] - As of December 31, 2023, the company's total debt, excluding certain non-recourse and warehouse lines of credit, was 243.2 million for the year[148] - Long-term debt, net of current maturities, rose from 2.804 billion in 2023, a significant increase of 158.2%[167] - The company's debt instruments impose operating and financial restrictions, including maintaining a minimum interest coverage ratio and a maximum leverage ratio[149] - A breach of debt covenants or failure to meet required financial ratios could result in a default, potentially triggering immediate repayment of all outstanding borrowings[150] - The company's variable rate indebtedness exposes it to interest rate risk, which could increase debt service obligations and limit refinancing capabilities[172][173] - A 100 basis point increase in interest rates on the company's variable rate debt would decrease pre-tax income and cash flow from operating activities by 191 million, up from 41 million in 2021[209] Investments and Real Estate - The company had a net investment of approximately 180.4 million committed for future co-investments, of which 526.7 million in invested equity and 132 unconsolidated projects with a net investment of 1.5 billion invested in certain companies and projects, accounted for under the cost/measurement alternative method of accounting[235] Operational Risks and Challenges - The company faces risks from rising interest rates and reduced credit availability, which impacted its capital markets, mortgage origination, and property sales businesses in 2023[75] - The company has committed additional resources to expand global sales and marketing activities, with a focus on emerging markets, but faces challenges in managing operational and political risks in these regions[79] - The company competes with a variety of firms in the commercial real estate services and investment industry, including outsourcing companies, developers, and institutional lenders[82] - Acquisitions have been a significant component of the company's growth, but future growth through acquisitions depends on the availability of suitable candidates and sufficient liquidity[86] - The company faces challenges in integrating operations and IT systems from acquired companies, which could divert management attention and result in increased costs[88] - The company's brand and reputation are key assets, and negative perceptions or publicity could materially affect its revenues and profitability[91] - The company's investment management business faces volatility in revenue, net income, and cash flows due to market movements affecting management, transaction, and incentive fees[94] - The company's development services business provides completion and budget guarantees, exposing it to potential liabilities if projects exceed specified timeframes or budgets[97] - The company's Global Workplace Solutions segment requires accurate working capital modeling and creditworthiness assessments to mitigate risks of cash flow disruptions[127] - The company's loan origination and servicing business heavily relies on relationships with U.S. Government Sponsored Enterprises (GSEs), including Fannie Mae and Freddie Mac[131] - The company relies on third parties and subcontractors for various business activities, with potential risks related to compliance, data privacy, and operational failures[132] - The company's success depends on retaining senior management and key employees, with intense competition for talent potentially increasing recruitment and retention costs[134] - The company's joint ventures and affiliate programs involve risks, including potential actions by other participants that could harm the company's brand and business[146] - The company's policies and programs to safeguard employee health and safety may not be adequate, potentially leading to severe consequences, including legal liability and reputational damage[139] - The company's global operations present significant management challenges, including maintaining effective standards and culture across a large enterprise[137] Cash Flow and Liquidity - Cash and cash equivalents decreased from 1.265 billion in 2023, a decline of 4%[167] - Receivables increased from 6.370 billion in 2023, a growth of 19.6%[167] - Total assets grew from 22.548 billion in 2023, an increase of 9.9%[167] - Accumulated earnings increased from 9.188 billion in 2023, a growth of 4%[167] - Net cash used in investing activities in 2023 was 832 million in 2022 and 4,006 million, up from 27 million in 2021[209] - Repurchase of common stock in 2023 was 1,850 million in 2022 and 1,371 million, down from 2,540 million in 2021[209] - Income tax payments, net in 2023 were 604 million in 2022 and 9,359 million, up from 1,862 million, significantly higher than 8,367 million in 2021 from 831 million in 2021 from 809 million[212] Cybersecurity and IT - The company's cybersecurity program is governed by multiple frameworks including ISO 27001 and NIST CSF, with policies applicable to all global employees[237] - The company conducts annual cybersecurity training for all employees and enhanced role-specific training for certain employees, along with regular phishing detection exercises[237] - The company maintains and updates incident response plans, including annual third-party cybersecurity incident response exercises to test pre-planned actions[237] - The company's security program is audited annually by independent groups including accredited certification bodies and leading accounting firms[237] - The company engages external cybersecurity experts for periodic audits, threat assessments, and security enhancements[237] - The company relies heavily on information technology, and any failure or disruption could impair service delivery and harm operating results[175][177] - Cybersecurity threats pose a growing risk, with potential for liability, reputational harm, and significant remediation costs[182][183] - The company is subject to complex and evolving privacy, data protection, and cybersecurity laws, which could result in increased operational costs and compliance risks[184][185] Employee and Workforce - The company has approximately 130,000 employees, including Turner & Townsend employees, working in over 100 countries[139] - The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in over 100 countries as of December 31, 2023[246] - Compensation expense for equity awards in 2021 was 185 million in 2020[212] - Restricted stock awards vesting in 2021 totaled 1,028,807 shares, down from 1,268,983 shares in 2020[212] Tax and Legal Liabilities - The company has 192.1 million estimated liability related to fire safety remediation for Telford Homes, with 15 million in 2021, compared to a gain of $35 million in 2020[212] Financial Statements and Accounting - The company's consolidated financial statements include accounts of consolidated subsidiaries, including variable interest entities and voting interest entities[247] - The company determines whether an entity is a Variable Interest Entity (VIE) based on qualitative and quantitative analyses of equity investment at risk[248]