CB Richard Ellis Group Inc. (CBG, Financial) filed Quarterly Report for the period ended 2009-03-31.
CB Richard Ellis Group is a global commercial real estate services firm offering a full range of services to occupiers owners lenders and investors in office retail industrial multi-family and other commercial real estate assets. CB Richard Ellis Group Inc. has a market cap of $2.48 billion; its shares were traded at around $9.37 with a P/E ratio of 12.17 and P/S ratio of 0.48. CB Richard Ellis Group Inc. had an annual average earning growth of 14.6% over the past 5 years.
We reported a consolidated net loss of $36.7 million for the three months ended March 31, 2009 on revenue of $890.4 million as compared to consolidated net income of $20.5 million on revenue of $1.2 billion for the three months ended March 31, 2008.
Our cost of services on a consolidated basis decreased by $151.0 million, or 21.4%, during the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. Our sales and leasing professionals generally are paid on a commission and bonus basis, which substantially correlates with our revenue performance. Accordingly, the decrease in revenue led to a corresponding decrease in commissions and bonuses. Foreign currency translation had a $41.9 million positive impact on cost of services during the three months ended March 31, 2009. Cost of services as a percentage of revenue increased from 57.2% for the three months ended March 31, 2008 to 62.2% for the three months ended March 31, 2009. This increase was primarily driven by a shift in the mix of revenues with outsourcing, including reimbursables, comprising a greater portion of the total.
Our equity loss from unconsolidated subsidiaries on a consolidated basis decreased by $0.6 million, or 5.2%, for the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. The loss in the current year period was primarily attributable to non-cash write-downs of $7.1 million of investments in our Global Investment Management segment resulting from other than temporary impairments due to declines in market valuations. Additionally, lower overall performance in our equity investments, particularly in our Global Investment Management segment, also contributed to the variance. The loss in the prior year period was primarily due to a $10.6 million write-down of our investment in Realty Finance Corporation attributable to its decline in market valuation.
Our consolidated interest income was $2.3 million during the three months ended March 31, 2009, a decrease of $2.9 million, or 55.9%, as compared to the three months ended March 31, 2008. This decrease was mainly driven by lower interest income earned in our EMEA segment as a result of lower average cash balances in the current year and our Development Services segment due to a decrease in notes receivable in the current year.
Our benefit for income taxes on a consolidated basis was $12.0 million for the three months ended March 31, 2009 as compared to a provision for income taxes of $6.5 million for the three months ended March 31, 2008. The benefit for income taxes in the current year period was mainly attributable to a pre-tax loss reported as compared to pre-tax income in the prior year period. Our effective tax rate, after adjusting pre-tax (loss) income to remove the portion attributable to non-controlling interests, was relatively consistent at 24.7% for the three months ended March 31, 2009 versus 24.0% for the three months ended March 31, 2008. These effective tax rates are lower than our customary full year effective tax rate given the impact of discrete items in these periods as well as the mix of domestic and foreign earnings/losses.
Read the The complete ReportCBG is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Ron Baron of Baron Funds, Tom Gayner of Markel Gayner Asset Management Corp.
CB Richard Ellis Group is a global commercial real estate services firm offering a full range of services to occupiers owners lenders and investors in office retail industrial multi-family and other commercial real estate assets. CB Richard Ellis Group Inc. has a market cap of $2.48 billion; its shares were traded at around $9.37 with a P/E ratio of 12.17 and P/S ratio of 0.48. CB Richard Ellis Group Inc. had an annual average earning growth of 14.6% over the past 5 years.
Highlight of Business Operations:
Although our management believes that strategic acquisitions can significantly decrease the cost, time and commitment of management resources necessary to attain a meaningful competitive position within targeted markets or to expand our presence within our current markets, our management also believes that most acquisitions will initially have an adverse impact on our operating and net income, both as a result of transaction-related expenditures and the charges and costs of integrating the acquired business and its financial and accounting systems into our own. For example, we incurred $200.9 million of transaction-related expenditures in connection with our acquisition of Insignia in 2003 (the Insignia Acquisition) and $196.6 million of transaction-related expenditures in connection with our acquisition of Trammell Crow Company in 2006. Transaction-related expenditures included severance costs, lease termination costs, transaction costs, deferred financing costs and merger-related costs, among others. We incurred our final transaction expenditures with respect to the Insignia Acquisition in the third quarter of 2004 and the Trammell Crow Company Acquisition in the fourth quarter of 2007. In addition, through March 31, 2009, we have incurred expenses of $41.9 million related to Insignia and $55.0 million related to Trammell Crow Company in connection with the integration of these companies' business lines, as well as accounting and other systems, into our own. During the three months ended March 31, 2009, we incurred $1.7 million of integration expenses, the majority of which were related to the acquisition of Trammell Crow Company. We expect to incur total integration expenses relating to past acquisitions of approximately $7 million during 2009, which include residual integration costs associated with our acquisition of Trammell Crow Company as well as similar costs related to a strategic in-fill acquisition in 2006.We reported a consolidated net loss of $36.7 million for the three months ended March 31, 2009 on revenue of $890.4 million as compared to consolidated net income of $20.5 million on revenue of $1.2 billion for the three months ended March 31, 2008.
Our cost of services on a consolidated basis decreased by $151.0 million, or 21.4%, during the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. Our sales and leasing professionals generally are paid on a commission and bonus basis, which substantially correlates with our revenue performance. Accordingly, the decrease in revenue led to a corresponding decrease in commissions and bonuses. Foreign currency translation had a $41.9 million positive impact on cost of services during the three months ended March 31, 2009. Cost of services as a percentage of revenue increased from 57.2% for the three months ended March 31, 2008 to 62.2% for the three months ended March 31, 2009. This increase was primarily driven by a shift in the mix of revenues with outsourcing, including reimbursables, comprising a greater portion of the total.
Our equity loss from unconsolidated subsidiaries on a consolidated basis decreased by $0.6 million, or 5.2%, for the three months ended March 31, 2009 as compared to the three months ended March 31, 2008. The loss in the current year period was primarily attributable to non-cash write-downs of $7.1 million of investments in our Global Investment Management segment resulting from other than temporary impairments due to declines in market valuations. Additionally, lower overall performance in our equity investments, particularly in our Global Investment Management segment, also contributed to the variance. The loss in the prior year period was primarily due to a $10.6 million write-down of our investment in Realty Finance Corporation attributable to its decline in market valuation.
Our consolidated interest income was $2.3 million during the three months ended March 31, 2009, a decrease of $2.9 million, or 55.9%, as compared to the three months ended March 31, 2008. This decrease was mainly driven by lower interest income earned in our EMEA segment as a result of lower average cash balances in the current year and our Development Services segment due to a decrease in notes receivable in the current year.
Our benefit for income taxes on a consolidated basis was $12.0 million for the three months ended March 31, 2009 as compared to a provision for income taxes of $6.5 million for the three months ended March 31, 2008. The benefit for income taxes in the current year period was mainly attributable to a pre-tax loss reported as compared to pre-tax income in the prior year period. Our effective tax rate, after adjusting pre-tax (loss) income to remove the portion attributable to non-controlling interests, was relatively consistent at 24.7% for the three months ended March 31, 2009 versus 24.0% for the three months ended March 31, 2008. These effective tax rates are lower than our customary full year effective tax rate given the impact of discrete items in these periods as well as the mix of domestic and foreign earnings/losses.
Read the The complete ReportCBG is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Ron Baron of Baron Funds, Tom Gayner of Markel Gayner Asset Management Corp.
