CB Richard Ellis Group, Inc. Reports Earnings Per Share up 43% for the Fourth Quarter and 82% for Full-Year 2005; 2005 Full-Year Revenue Grows 23% to $2.9 Billion

Business Wire, Feb 1, 2006

LOS ANGELES -- CB Richard Ellis Group, Inc. (NYSE:CBG) today reported full-year 2005 revenue of $2.9 billion, up 23% over the prior year, and diluted earnings per share of $2.84 for the year ended December 31, 2005, compared with $0.91 for the year ended December 31, 2004. Excluding one-time charges, full-year 2005 diluted earnings per share was $3.00, an increase of 82% from $1.65 in the prior year.

Fourth Quarter Highlights

For the fourth quarter of 2005, the Company generated revenue of $956.0 million, up 19.8% over the $798.2 million posted in the fourth quarter of 2004. The Company reported net income of $95.4 million, or $1.24 per diluted share, in the fourth quarter of 2005 compared with net income of $66.4 million, or $0.88 per diluted share in the fourth quarter of 2004.

Excluding one-time items, the Company would have earned net income(1) of $99.9 million, or $1.29 per diluted share in the fourth quarter of 2005, an increase of 46.1% and 43.3%, respectively, compared with net income of $68.4 million, or $0.90 per diluted share in the fourth quarter of 2004.

Revenue

The fourth quarter revenue increase of 19.8% reflects improved performance across all of the Company's business lines. A steady leasing market recovery, combined with increased revenue from our investment management operations and continued investment sales strength, fueled the double-digit growth.

EBITDA(2)

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) totaled $186.2 million for the fourth quarter of 2005, an increase of $51.8 million, or 38.5%, from the same quarter last year. The increased EBITDA reflects strength across all of the Company's business lines and continued cost control.

Interest Expense

Interest expense totaled $13.5 million for the fourth quarter of 2005, a decrease of $0.6 million, or 4.5%, compared with the same quarter last year. The decrease was primarily driven by the interest savings realized from the repurchase of outstanding bonds in the open market during the first three quarters of 2005.

Full-Year Results

Full-year revenue was $2.9 billion for the year ended December 31, 2005, up $545.5 million, or 23.1%, compared to the prior year. The Company reported net income of $217.3 million, or $2.84 per diluted share, for the year ended December 31, 2005 compared to net income of $64.7 million, or $0.91 per diluted share, in the prior year.

Excluding one-time items, the Company would have earned net income of $229.9 million, or $3.00 per diluted share, for the year ended December 31, 2005 up 95.0% and 81.8%, respectively, over net income of $117.9 million, or $1.65 per diluted share, for the year ended December 31, 2004.

Full-year EBITDA was $454.2 million for the year ended December 31, 2005, up $208.8 million or 85.1% compared to the prior year.

Management's Commentary

"2005 was a strong year for CB Richard Ellis," said Brett White, the Company's President and Chief Executive Officer. "We benefited from robust flows of investment capital into commercial real estate, as well as a steady strengthening of leasing market fundamentals on a global basis. Just as important, however, was the success of our people in seizing increased market share by harnessing our extensive service offering, worldwide reach, premier brand equity and broad knowledge base. This powerful combination remains in place as we enter 2006 with a growing client base, increasing market share, favorable macro-market conditions and good momentum overall."

Fourth-Quarter Segment Highlights

Americas Region

Fourth quarter revenue for the Americas region, including the U.S., Canada, Mexico and Latin America, increased 15.3% to $624.0 million, compared with $541.1 million for the fourth quarter of 2004. This increase was mainly attributable to improved leasing activity, continued high volume of investment sales, increased appraisal/valuation activities, and higher loan origination and servicing fees.

Operating income for the Americas region totaled $75.7 million for the fourth quarter of 2005, compared with $58.1 million for the fourth quarter of 2004. The $17.6 million increase was mainly driven by double-digit revenue growth. Excluding the impact of one-time items, operating income for the Americas region would have been $76.6 million for the fourth quarter of 2005, an increase of $13.7 million, or 21.8%, as compared to the fourth quarter of last year. The Americas region's EBITDA totaled $88.5 million for the fourth quarter of 2005, an increase of $15.0 million, or 20.4%, from last year's fourth quarter.

EMEA Region

Revenue for the EMEA region, mainly consisting of operations in Europe, increased 31.4% to $219.3 million for the fourth quarter of 2005, compared with $166.8 million for the fourth quarter of 2004. Operating income for the EMEA segment totaled $56.9 million for the fourth quarter of 2005, compared with $31.9 million for the same period last year. Excluding one-time items incurred in the prior year quarter, operating income increased $24.5 million, or 75.4%, as compared to the fourth quarter of 2004. EBITDA for the EMEA region totaled $60.4 million for the fourth quarter of 2005, an increase of $26.2 million, or 76.8%, from last year's fourth quarter. These improvements were primarily driven by a continued strong investment sales environment as well as higher leasing activities.