CB Richard Ellis Group, Inc. Reports Earnings Per Share up 33% for the Fourth Quarter of 2006 and 48% for the Full Year 2006

Business Wire, Feb 6, 2007

2006 Full Year Revenue Grows 26% to $4 Billion

LOS ANGELES -- CB Richard Ellis Group, Inc. (NYSE:CBG) today reported revenue of $1.4 billion for the fourth quarter ended December 31, 2006, an increase of 36.5% over the fourth quarter of 2005, and diluted earnings per share of $0.53 for the fourth quarter of 2006, compared with $0.41 for the same quarter last year. Excluding one-time charges1, fourth quarter 2006 diluted earnings per share was $0.57, an increase of 32.6% from the $0.43 earned in the fourth quarter of 2005.

These results include operations of the newly acquired Trammell Crow Company for the period December 20, 2006 through December 31, 2006. Excluding one-time items, the impact from the acquisition on quarterly results was negligible.

Fourth Quarter Highlights

For the fourth quarter of 2006, the Company generated revenue of $1.4 billion, up 36.5% over the $1.0 billion posted in the fourth quarter of 2005. The Company reported net income of $125.1 million, or $0.53 per diluted share, in the fourth quarter of 2006 compared with net income of $95.4 million, or $0.41 per diluted share, in the fourth quarter of 2005.

Excluding one-time items, the Company would have earned net income2of $134.2 million, or $0.57 per diluted share, in the fourth quarter of 2006, an increase of 34.3% and 32.6%, respectively, compared with net income of $99.9 million, or $0.43 per diluted share, in the fourth quarter of 2005.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)3 totaled $260.4 million for the fourth quarter of 2006, an increase of $74.2 million, or 39.8%, from the same quarter last year.

The Company's fourth quarter results continue to reflect strong performance across virtually all business lines and geographies, as well as contributions from acquisitions. Of the 36.5% revenue growth, nearly three-fourths was due to organic growth with the remainder attributable to acquisitions completed in 2006. This marks the 17th straight quarter of double-digit year-over-year organic revenue growth. The organic growth was fueled by strong leasing activity in most major markets, continued strength in investment sales, especially overseas, as well as increased revenue in the appraisal/valuation, mortgage brokerage, and property and facilities management operations. In addition, global investment management operations showed robust revenue growth.

The Company has reclassified certain reimbursements (primarily salaries and related costs) related to its facilities and property management operations from cost of services to revenue. In the fourth quarter of 2006, the Company reclassified $72.7 million and $76.7 million for the three months ended December 31, 2006 and 2005, respectively, and $275.3 million and $283.4 million for the years ended December 31, 2006 and 2005, respectively. This reclassification has no impact on operating income, EBITDA, net income or earnings per share.

Full Year Results

Revenue was $4.0 billion for the year ended December 31, 2006, up $838.0 million, or 26.2%, compared to the same period last year. Over 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 $318.6 million, or $1.35 per diluted share, for the year ended December 31, 2006 compared to net income of $217.3 million, or $0.95 per diluted share, in the same period last year.

Excluding one-time items, the Company would have earned net income of $348.0 million, or $1.48 per diluted share, for the year ended December 31, 2006, up 51.4% and 48.0%, respectively, over net income of $229.9 million, or $1.00 per diluted share, for the year ended December 31, 2005.

EBITDA was $653.5 million for the year ended December 31, 2006, up $199.3 million or 43.9% compared to the same period last year.

Management's Commentary

"Our performance in 2006 is the result of the powerful client-focused platform we have built and continue to enhance, which has resulted in the creation of the premier global commercial real estate services firm," said Brett White, president and chief executive officer of CB Richard Ellis. "Our primary markets remain strong. Worldwide economic expansion and increased employment rolls have produced strong demand for commercial space. Rental growth is accelerating as market fundamentals continue to improve while new construction remains limited. Commercial real estate continues to be a magnet for institutional and private-equity capital, especially in high-growth markets in Asia and traditional business centers like New York, London and Paris. Cross-border investment flows, in particular, have reached new highs.

"We are ideally positioned to take advantage of macro trends in the marketplace, due to our global footprint, broad service offering, collaborative culture and leading position in virtually every major business center worldwide. The exceptional talent, resources, and relationships we have added with our new Trammell Crow Company operations have materially enhanced the depth and breadth of our service offering. We enter 2007 a stronger company poised for continued growth."