CB Richard Ellis Group, Inc. Reports Earnings Per Share Up 59% for the First Quarter of 2007

Business Wire, May 1, 2007

LOS ANGELES -- CB Richard Ellis Group, Inc. (NYSE:CBG) today reported revenue of $1.2 billion for the first quarter of 2007, an increase of 61.6% over the first quarter of 2006, and diluted earnings per share of $0.05 for the first quarter of 2007, compared with $0.16 for the same quarter last year. Excluding one-time charges1, first quarter 2007 diluted earnings per share was $0.27, an increase of 58.8% from the $0.17 earned in the first quarter of 2006, despite the $28.0 million increase in interest expense that was driven by the debt incurred to finance the Trammell Crow Company acquisition at the end of 2006 and the exclusion of $8.5 million of gains from Development Services in the first quarter of 2007, the recognition of which was impacted by purchase accounting.

First Quarter Highlights

For the first quarter of 2007, the Company generated revenue of $1.2 billion, up 61.6% over the $751.3 million posted in the first quarter of 2006. The Company reported net income of $12.0 million, or $0.05 per diluted share, in the first quarter of 2007 compared with net income of $36.9 million, or $0.16 per diluted share, in the first quarter of 2006.

Excluding one-time items, the Company would have earned net income2of $65.0 million, or $0.27 per diluted share, in the first quarter of 2007, an increase of 62.2% and 58.8%, respectively, compared with net income of $40.1 million, or $0.17 per diluted share, in the first quarter of 2006.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)3 totaled $84.3 million for the first quarter of 2007, an increase of $1.6 million, or 2.0%, from the same quarter last year despite the inclusion of $77.64 million of acquisition-related expenses.

The Company's first quarter results continue to reflect strong performance across virtually all business lines and geographies, as well as contributions from acquisitions. Of the 61.6% revenue growth, over one-half was organic with the remainder attributable to acquisitions completed in 2006, particularly the acquisition of Trammell Crow Company in December 2006. This marks the 18th straight quarter of double-digit year-over-year organic revenue growth. The growth was fueled by overall strength in investment management, Europe and Asia Pacific, capital markets in the Americas, and property and facilities management operations.

The integration of Trammell Crow Company is going extremely well and is ahead of schedule with regard to timing and attainment of synergy savings, which are now expected to exceed the Company's initial targets.

In January 2007, the Company sold Trammell Crow Company's approximately 19% ownership interest in Savills, plc, a real estate provider in the United Kingdom. This sale resulted in a non-cash, pre-tax loss of $34.9 million in the first quarter of 2007, which was largely driven by stock price depreciation at the date of sale as compared to December 31, 2006 when the investment was marked to market. The pre-tax proceeds from this sale, net of selling expenses, of approximately $311.0 million has been used to reduce net indebtedness.

Management's Commentary

"For the past 18 quarters, the Company has been the acknowledged market leader in most major business centers worldwide," said Brett White, President and Chief Executive Officer of CB Richard Ellis. "This dominant geographic footprint coupled with the industry's most extensive offering of client services and business lines, has allowed us to leverage a favorable global marketplace into exceptionally strong financial growth. The first quarter of 2007 was no exception to this long term trend. In addition, we are just now beginning to experience the revenue synergy of the Trammell Crow Company integration, which is translating into the acquisition of significant new corporate services clientele.

"Our first quarter results were bolstered by extremely strong growth in EMEA, Asia Pacific and the growth and timing of our Global Investment Management revenues, most notably the recognition of certain carried interests. Based upon these factors and the continuing favorable global marketplace for our services, our bias for full year 2007 results is at the upper end of our previously discussed earnings guidance range."

First-Quarter Segment Highlights

Americas Region

First quarter revenue for the Americas region, including the U.S., Canada, Mexico and Latin America, increased 60.5% to $791.9 million, compared with $493.3 million for the first quarter of 2006. Approximately one-fifth 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 increased sales activity as well as higher appraisal/valuation, mortgage brokerage and property and facilities management fees as the Company increased services provided to existing clients, while also growing market share.

Operating income for the Americas region totaled $21.6 million for the first quarter of 2007, compared with $43.5 million for the first quarter of 2006. Excluding the impact of one-time items, operating income for the Americas region would have been $74.5 million for the first quarter of 2007, an increase of $30.2 million, or 68.0%, as compared to $44.3 million for the first quarter of last year. The Americas region's EBITDA totaled $7.1 million for the first quarter of 2007, a decrease of $47.4 million from last year's first quarter due to the inclusion of $77.1 million of acquisition-related expenses.