CB Richard Ellis Group, Inc. Announces Earnings Per Share up 60% for Third Quarter of 2006

Business Wire, Oct 25, 2006

LOS ANGELES -- CB Richard Ellis Group, Inc. (NYSE:CBG) today reported revenue for the third quarter ended September 30, 2006 of $903.9 million, up 21.5% over the third quarter of 2005, and diluted earnings per share of $0.39 for the third quarter ended September 30, 2006, compared with $0.25 for the same quarter last year. Excluding one-time charges1, third quarter 2006 diluted earnings per share was $0.40, an increase of 60.0% from the $0.25 earned in the third quarter of 2005.

Third Quarter Highlights

For the third quarter of 2006, the Company generated revenue of $903.9 million, up 21.5% over the $744.2 million posted in the third quarter of 2005. The Company reported net income of $92.3 million, or $0.39 per diluted share, in the third quarter of 2006 compared with net income of $56.9 million, or $0.25 per diluted share, in the third quarter of 2005.

Excluding one-time items, the Company would have earned net income2 of $94.5 million, or $0.40 per diluted share, in the third quarter of 2006, an increase of 64.4% and 60.0%, respectively, compared with net income of $57.5 million, or $0.25 per diluted share, in the third quarter of 2005.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)3 totaled $163.5 million for the third quarter of 2006, an increase of $52.3 million, or 47.0%, from the same quarter last year.

The Company's third quarter results continue to reflect strong performance across virtually all business lines and geographies, as well as contributions from acquisitions. Of the 21.5% revenue growth, approximately two-thirds was due to organic growth and one-third was attributable to acquisitions completed in 2005 and 2006. The double-digit organic growth was fueled by notably improved leasing activity in most major markets as well as increased revenue in the appraisal/valuation, mortgage brokerage, property and facilities management and investment management operations. This marks the 16th straight quarter of double-digit year-over-year organic revenue growth.

Nine-Month Results

Revenue was $2.4 billion for the nine months ended September 30, 2006, up $465.6 million, or 23.8%, compared to the same period last year. Approximately two-thirds of the improvement was due to organic growth, while acquisitions completed in 2005 and 2006 drove the remainder of the revenue increase. The Company reported net income of $193.5 million, or $0.83 per diluted share, for the nine months ended September 30, 2006 compared to net income of $121.9 million, or $0.53 per diluted share, in the same period last year.

Excluding one-time items, the Company would have earned net income of $213.8 million, or $0.91 per diluted share, for the nine months ended September 30, 2006, up 64.4% and 59.6%, respectively, over net income of $130.0 million, or $0.57 per diluted share, for the nine months ended September 30, 2005.

EBITDA was $393.1 million for the nine months ended September 30, 2006, up $125.2 million or 46.7% compared to the same period last year.

Management's Commentary

"Our business continues to perform very well in all our major geographies around the world," said Brett White, CB Richard Ellis' president and chief executive officer. "Our premier brand, global platform and client-service focus have enhanced our capture of market share and have positioned us to benefit significantly from the generally strong commercial real estate markets around the world. We are assisting many companies in the expansion of their operations due to continuing economic growth, and rental rates are rising as vacancy rates decline. As discussed previously, the buoyancy of the leasing market more than offset the expected pullback in investment sales activity. Overall, our business remains very strong as we approach year-end, traditionally our busiest time of the year."

Third-Quarter Segment Highlights

Americas Region

Third quarter revenue for the Americas region, including the U.S., Canada, Mexico and Latin America, increased 13.2% to $584.7 million, compared with $516.7 million for the third quarter of 2005. This largely organic revenue increase was mainly attributable to a continued improving leasing trend as well as higher mortgage brokerage, appraisal/valuation and property and facilities management fees.

Operating income for the Americas region totaled $87.9 million for the third quarter of 2006, compared with $64.5 million for the third quarter of 2005. Excluding the impact of one-time items, operating income for the Americas region would have been $90.6 million for the third quarter of 2006, an increase of $24.9 million, or 37.9%, as compared to $65.7 million for the third quarter of last year. The Americas region's EBITDA totaled $101.3 million for the third quarter of 2006, an increase of $26.2 million, or 34.9%, from last year's third quarter.

EMEA Region

Revenue for the EMEA region, mainly consisting of operations in Europe, increased 29.3% to $193.3 million for the third quarter of 2006, compared with $149.6 million for the third quarter of 2005. Organic revenue growth accounted for nearly half of this increase, with the remainder coming from acquisitions completed in 2005 and 2006. Operating income for the EMEA segment totaled $35.1 million for the third quarter of 2006, compared with $26.7 million for the same period last year. Excluding the impact of one-time items, operating income for the EMEA region would have been $35.5 million for the third quarter of 2006, an increase of $8.7 million, or 32.2%, from the third quarter of last year. EBITDA for the EMEA region totaled $38.7 million for the third quarter of 2006, an increase of $9.8 million, or 34.0%, from last year's third quarter. These improvements were primarily driven by significantly higher sales and leasing activities as well as higher appraisal/valuation revenues.