CB Richard Ellis Group, Inc. Reports Second Quarter Revenue Increase of 65%, Earnings Per Share Rise of 94% and Raises Guidance for 2007

Business Wire, July 30, 2007

LOS ANGELES -- CB Richard Ellis Group, Inc. (NYSE:CBG) today reported second quarter 2007 revenue increased 64.9% to $1.5 billion and diluted earnings per share increased 118.5% to $0.59 compared to the second quarter of 2006. Excluding one-time charges1, second quarter 2007 diluted earnings per share was $0.66, representing an increase of 94.1% from the second quarter of 2006.

The strong earnings growth was achieved despite a $28.8 million increase in interest expense associated with the financing of the Trammell Crow Company acquisition and the exclusion of $4.1 million of gains from Development Services activities, which cannot be recognized under purchase accounting rules.

Management's Commentary

"We continue to experience strong revenue growth from all business lines and geographic regions," said Brett White, President and Chief Executive Officer of CB Richard Ellis.

"Our performance in EMEA and Asia-Pacific continues to tell a compelling story of strong growth and increased profitability. We are the largest provider of commercial real estate services in the EMEA and Asia Pacific markets combined, and as reflected by our strong second quarter results, we are continuing to capture market share and capitalize on the increasing globalization of capital flows.

"In the Americas, we generated solid organic growth for the quarter. Leasing revenues resumed double-digit growth in the second quarter, fueled by increased absorption and higher rental rates, while capital markets activities remained strong. We also benefited from significant positive performance in our Investment Management business." Mr. White added, "Our combination with Trammell Crow Company has proceeded exceptionally well, providing enhanced strength in our Outsourcing Services platform. Integration has proceeded rapidly and the results are better than we expected."

Second Quarter Highlights

For the second quarter of 2007, the Company generated revenue of $1.5 billion, up 64.9% over the $903.5 million posted in the second quarter of 2006. The Company reported net income of $141.1 million, or $0.59 per diluted share, in the second quarter of 2007 compared with net income of $64.3 million, or $0.27 per diluted share, in the second quarter of 2006.

Excluding one-time items, the Company would have earned net income2 of $157.3 million, or $0.66 per diluted share, in the second quarter of 2007, an increase of 98.6% and 94.1%, respectively, compared with net income of $79.2 million, or $0.34 per diluted share, in the second quarter of 2006.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)3 totaled $252.2 million for the second quarter of 2007, an increase of $105.2 million, or 71.6%, from the same quarter last year despite the inclusion of $15.4 million4 of acquisition-related expenses.

The Company's second quarter results reflect strong organic growth as well as contributions from acquisitions completed in 2006 (particularly the acquisition of Trammell Crow Company in December), which accounted for about half of the Company's quarter-over-quarter revenue growth. The Company has now achieved double-digit organic revenue increases for 19 straight quarters.

The integration of Trammell Crow Company is progressing well and is ahead of schedule with regard to the timing and attainment of synergy savings. The Company is now forecasting annualized net expense synergy savings of $90 million, and expects to realize 60% of those savings in calendar year 2007.

In line with the Company's strategy to reduce debt, the Company repaid $127.8 million of its senior secured term loans in the second quarter of 2007 and an additional $75.0 million in July of 2007. The Company expects to achieve annual cash interest savings of approximately $14 million as a result of its de-leveraging efforts to date in 2007.

Six-Month Results

Revenue was $2.7 billion for the six months ended June 30, 2007, up $1.0 billion, or 63.4%, compared to the same period last year. Nearly half of the increase was due to organic growth, with the remainder attributable to acquisitions completed in 2006, particularly the acquisition of Trammell Crow Company in December. The Company reported net income of $153.1 million, or $0.65 per diluted share, for the six months ended June 30, 2007 compared to net income of $101.2 million, or $0.43 per diluted share, in the same period last year.

Excluding one-time items, the Company would have earned net income of $222.3 million, or $0.94 per diluted share, for the six months ended June 30, 2007, up 86.4% and 84.3%, respectively, over net income of $119.3 million, or $0.51 per diluted share, for the six months ended June 30, 2006.

EBITDA was $336.5 million for the six months ended June 30, 2007, up $106.9 million or 46.5% compared to the same period last year despite the inclusion of $93.0 million5 of acquisition-related expenses.

Second-Quarter Segment Highlights

Americas Region

Second quarter revenue for the Americas region, including the U.S., Canada, Mexico and Latin America, increased 56.4% to $934.0 million, compared with $597.2 million for the second quarter of 2006. Approximately one-fourth of the improvement was due to organic growth, while the remainder of the revenue increase was driven by acquisitions, particularly the Trammell Crow Company acquisition. The organic growth reflects improvement across all of our business lines.