CBRE GROUP, INC. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>CBRE GROUP, INC. filed its Q1 2024 10-Q report on May 3, 2024, detailing financial performance and corporate information.</b>

AI Summary

CBRE GROUP, INC. (CBRE) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. CBRE GROUP, INC. filed its quarterly report (10-Q) on May 3, 2024, for the period ending March 31, 2024. The filing covers the first quarter of 2024. The company's principal executive offices are located in Dallas, TX. CBRE GROUP, INC. was formerly known as CB RICHARD ELLIS GROUP INC and CBRE HOLDING INC. The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023.

Why It Matters

For investors and stakeholders tracking CBRE GROUP, INC., this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance data for CBRE GROUP, INC. for the first quarter of 2024, enabling them to assess the company's current health and operational trends. The detailed financial statements and disclosures within the report are crucial for understanding CBRE's revenue streams, profitability, and overall financial position in the current market environment.

Risk Assessment

Risk Level: medium — CBRE GROUP, INC. shows moderate risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report. While it contains detailed financial information, it does not inherently signal significant positive or negative events beyond normal business operations, placing its risk profile at a medium level for immediate investment decisions based solely on this document.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to identify any emerging trends or shifts in CBRE's core business segments.

Key Numbers

• 2024-03-31 — Period End Date (Reporting period for the 10-Q)
• 2024-05-03 — Filing Date (Date the 10-Q was filed with the SEC)
• 2024-01-01 — Quarter Start Date (Beginning of the reporting quarter)
• 2023-03-31 — Prior Year Quarter End Date (Comparison period)

Key Players & Entities

• CBRE GROUP, INC. (company) — Filer of the 10-Q report
• CB RICHARD ELLIS GROUP INC (company) — Former name of CBRE GROUP, INC.
• CBRE HOLDING INC (company) — Former name of CBRE GROUP, INC.
• DALLAS (location) — City where CBRE GROUP, INC. is headquartered

FAQ

Industry Context

CBRE GROUP, INC. operates in the real estate sector, providing a wide range of commercial real estate services.

Regulatory Implications

The filing is a standard Form 10-Q, which is a mandatory quarterly report filed by public companies with the U.S. Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and other key performance indicators for Q1 2024.
2. Examine any disclosures related to debt, equity, and cash flow.
3. Review the company's business description and risk factors for any material changes or new information.

Key Dates

• 2024-03-31: Quarterly Period End — End date for the financial reporting period covered by the 10-Q.
• 2024-05-03: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the first quarterly report of 2024, providing updated financial data compared to the previous year's Q1 and the end of 2023.

Key Financial Figures

• $0.01 — which registered Class A Common Stock, $0.01 par value per share "CBRE" New York Sto

Filing Documents

• cbre-20240331.htm (10-Q) — 1637KB
• cbre-20240331x10qxex221.htm (EX-22.1) — 2KB
• cbre-20240331x10qxex311.htm (EX-31.1) — 10KB
• cbre-20240331x10qxex312.htm (EX-31.2) — 10KB
• cbre-20240331x10qxex32.htm (EX-32) — 7KB
• cbre-20240331_g1.jpg (GRAPHIC) — 25KB
• 0001138118-24-000014.txt (&nbsp;) — 9637KB
• cbre-20240331.xsd (EX-101.SCH) — 74KB
• cbre-20240331_cal.xml (EX-101.CAL) — 103KB
• cbre-20240331_def.xml (EX-101.DEF) — 383KB
• cbre-20240331_lab.xml (EX-101.LAB) — 825KB
• cbre-20240331_pre.xml (EX-101.PRE) — 591KB
• cbre-20240331_htm.xml (XML) — 1457KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Page Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 1 Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 2 Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 3 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 4 Consolidated Statements of Equity for the three months ended March 31, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 43 Item 4.

Controls and Procedures

Controls and Procedures 45

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 46 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 5. Other Information 46 Item 6. Exhibits 47

Signatures

Signatures 48 Table of contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CBRE GROUP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in millions, except share data) March 31, 2024 December 31, 2023 ASSETS Current Assets: Cash and cash equivalents $ 1,044 $ 1,265 Restricted cash 83 106 Receivables, less allowance for doubtful accounts of $ 100.3 and $ 102.0 at March 31, 2024 and December 31, 2023, respectively 6,172 6,370 Warehouse receivables 848 675 Contract assets 462 443 Prepaid expenses 308 333 Income taxes receivable 162 159 Other current assets 365 315 Total Current Assets 9,444 9,666 Property and equipment, net of accumulated depreciation and amortization of $ 1,634.6 and $ 1,576.1 at March 31, 2024 and December 31, 2023, respectively 900 907 Goodwill 5,554 5,129 Other intangible assets, net of accumulated amortization of $ 2,243.2 and $ 2,178.9 at March 31, 2024 and December 31, 2023, respectively 2,298 2,081 Operating lease assets 1,003 1,030 Investments in unconsolidated subsidiaries (with $ 901.7 and $ 997.3 at fair value at March 31, 2024 and December 31, 2023, respectively) 1,298 1,374 Non-current contract assets 88 75 Real estate under development 331 300 Non-current income taxes receivable 85 78 Deferred tax assets, net 353 361 Other assets, net 1,610 1,547 Total Assets $ 22,964 $ 22,548 LIABILITIES AND EQUITY Current Liabilities: Accounts payable and accrued expenses $ 3,415 $ 3,562 Compensation and employee benefits payable 1,342 1,459 Accrued bonus and profit sharing 829 1,556 Operating lease liabilities 249 242 Contract liabilities 304 298 Income taxes payable 187 217 Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) 839 666 Revolving credit facility 820 — Other short-term borrowings 7 16 Current maturities of long-term debt 19 9 Other current liabilities 222 218 Total Current Liabilities 8,233 8,243 Long-term debt, net of current maturities 3,282 2,804 Non-current ope

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Readers of this Quarterly Report on Form 10-Q (Quarterly Report) should refer to the audited financial statements and notes to consolidated financial statements of CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as "CBRE," "the company," "we," "us" and "our"), for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K (2023 Annual Report) , filed with the United States Securities and Exchange Commission (SEC) and also available on our website (www.cbre.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Significant Accounting Policies, in the notes to consolidated financial statements in our 2023 Annual Report for further discussion of our significant accounting policies and estimates. Financial Statement Preparation The accompanying consolidated financial statements have been prepared in accordance with the rules applicable to quarterly reports on Form 10-Q and include all information and footnotes required for interim financial statement presentation, but do not include all disclosures required under accounting principles generally accepted in the United States (U.S.), or General Accepted Accounting Principles (GAAP), for annual financial statements. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S., which require management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts reported in our consolidated financial statements and accompanying notes and are based on our best judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, includin

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Recent Accounting Pronouncements Pending Adoption In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This update enhances reportable segment disclosures by requiring a public entity to: 1) disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, 2) disclose, on an annual and interim basis, an amount of other segment items by reportable segment and a description of its composition, 3) provide all annual disclosures about a reportable segment's profit or loss and assets currently required by Topic 280 in interim periods, 4) disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and 5) provide all the disclosures required by this update and all existing segment disclosures in Topic 280 if the entity has a single reportable segment. This ASU also clarifies that, in addition to the measure that is most consistent with the measurement principles under GAAP, a public entity is not precluded from reporting additional measures of a segment's profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact this guidance will have on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." This ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as info

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The preliminary purchase accounting adjustments related to the J&J acquisition have been recorded in the accompanying consolidated financial statements. The excess purchase price over the fair value of net assets acquired and non-controlling interest has been recorded to goodwill. The goodwill arising from the J&J acquisition consists largely of the synergies and opportunities to deliver premier engineering services, base support operations and facilities maintenance services. Of the goodwill generated, approximately $ 115.0 million is deductible for tax purposes. The acquired assets and assumed liabilities of J&J were recorded at their estimated fair values. The purchase price allocation for the business combination is preliminary, primarily for intangibles, and subject to change within the respective measurement period which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any such adjustments may be material. The following table summarizes the preliminary fair values assigned to the identified assets acquired and liabilities assumed at the acquisition date on February 27, 2024 (dollars in millions): Assets Acquired: Cash and cash equivalents $ 26 Receivables, net 92 Contract Assets 22 Prepaid expenses 2 Other current assets 2 Property and equipment, net 11 Other intangible assets, net 297 Operating lease assets 6 Investments in unconsolidated subsidiaries 25 Other assets, net 11 Total assets acquired 494 Liabilities Assumed: Accounts payable and accrued expenses 60 Compensation and employee benefits 7 Contract liabilities 1 Income taxes payable 1 Other current liabilities 2 Non-current operating lease liabilities 3 Deferred tax liabilities, net 57 Other liabilities 3 Total liabilities assumed 134 Non-controlling Interest Acquired 6 Estim

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) The fair value of customer relationships and backlog was determined using the Multi-Period Excess Earnings Method (MPEEM), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental cash flows attributable only to the subject intangible asset. This estimation used certain unobservable key inputs such as timing of projected cash flows, growth rates, expected contract renewal probabilities, discount rates, and the assessment of useful life. The fair value of the trademark and the existing technology was determined by using the Relief-from-Royalty Method, a form of the Income Approach, and relied on key unobservable inputs such as timing of the projected cash flows, growth rates, and royalty rates. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments. Unaudited pro forma results, assuming the J&J acquisition had occurred as of January 1, 2023 for purposes of the pro forma disclosures for the three months ended March 31, 2024 and 2023 are presented below. They include certain adjustments for increased amortization expense related to the intangible assets acquired (approximately $ 3.2 million and $ 4.7 million for the three months ended March 31, 2024 and 2023, respectively) as well as increased interest expense related to the long-term financing (approximately $ 4.2 million and $ 7.0 million for the three months ended March 31, 2024 and 2023, respectively). Direct transaction and integration costs of $ 17.5 million incurred during the first quarter of 2024 and $ 2.1 million in

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