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CBRE Group — CBRE November 2022 Investor Overview (company IR deck)
CBRE Group (CBRE) · 0 slides · Filed Oct 22, 2026
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Slide 1 — CBRE
CBRE Investor Overview November 2022
Slide 2 — Forward-Looking
2022 CBRE, Inc. | 2 This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding CBRE's future growth prospects, including operations, market share, capital deployment strategy and share repurchases, M&A and investment activity, financial performance, cost management and any other statements regarding matters that are not historical fact. These statements are estimates only and actual results may ultimately differ from them. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that you may hear today. Please refer to our third quarter earnings release, furnished on Form 8-K, our most recent annual and quarterly reports filed on Form 10-K and Form 10-Q, respectively, and in particular any discussion of risk factors or forward-looking statements therein, which are available on the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any forward-looking statements that you may hear today. We may make certain statements during the course of this presentation, which include references to “non-GAAP financial measures,” as defined by SEC regulations. Where required by these regulations, we have provided reconciliations of these measures to what we believe are the most directly comparable GAAP measures, which are included in the appendix. INVESTOR OVERVIEW Forward-Looking Statements
Slide 3 — ~500
2022 CBRE, Inc. | 3 CBRE 51% Peers 49% CBRE is the Global Leader in a Growing Industry C R E S E RV I C E S M A R K E T C A P A S O F S E P T E M B E R 3 0 , 2 0 2 2 M A R K E T L E A D E R S H I P • #1 Leasing • #1 Property Sales • #1 Outsourcing • #1 Appraisal & Valuation • #1 Property Management • #1 US Commercial Developer • $143.9 billion AUM as of 9/30/22 • $19.5 billion In-Process Development Portfolio as of 9/30/22 INVESTOR OVERVIEW L E A D I N G G L O B A L B R A N D • Lipsey’s #1 Corporate Real Estate Brand for 21 consecutive years • One of FORTUNE’s Most Admired Companies for 12 consecutive years • One of the World’s Most Ethical Companies awarded by the Ethisphere Institute for 9 straight years • #11 on Barron’s 100 Most Sustainable Companies ~500 Offices Globally +100 Countries Where Clients are Served $27.7B 2021 Revenue 116 Years Continuous operations (1) Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 4 — Serving Global Clients Through Three Business Segments
2022 CBRE, Inc. | 4 Serving Global Clients Through Three Business Segments Full-year 2021, Segment Operating Profit | $ in millions Advisory $2,063 GWS $708 REI $520 11.0% net margin 47.6% net margin 21.7% net margin; 1.6% ex-OMSR gains INVESTOR OVERVIEW CBRE works in every dimension of commercial real estate and is the global leader in our industry. We engage with our global clients through three business segments: Advisory Services: Provide leasing, capital markets, loan servicing, property management and valuation services to both real estate investors and occupiers. Global Workplace Solutions: Providing occupiers of real estate a fully integrated set of services focused on facilities management and project management services. Real Estate Investments: Serving investors in real estate through a $144B AUM investment management business and a development business with around $20B of projects currently under development as of September 30, 2022. Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 5 — CBRE Drivers of Long-Term Growth
2022 CBRE, Inc. | 5 INVESTOR OVERVIEW CBRE Drivers of Long-Term Growth Tailwinds for CRE Services Sector • Increasing institutional ownership of CRE driving demand for institutional quality CRE services • Occupier demand for CRE outsourcing services remains robust • Clients coalescing around market leaders, with CBRE being the most significant beneficiary Market-Leading Competitive Position • CBRE has market-leading service offerings across business lines and geographies • Differentiated platform enables CBRE to attract and retain the industry’s top talent • Significant value creation from maximizing cross selling across the platform • Share of revenue generated from large clients has increased in-line with CBRE’s capabilities Investment Capacity • Low capital intensity + ample investment capacity • TTM Q3 2022 leverage of 0.2x remains well below mid-point target of 1.0x • CBRE has repurchased nearly $1.4B of shares YTD through September 2022 Highly Resilient Business • Business mix is increasingly comprised of highly resilient business lines • Transactional businesses rebound quickly out of a downturn • Cost structure is highly variable; management experienced in reducing non-variable costs CBRE valuation relative to broader market remains below historical average
Slide 6 — Structural Tailwinds for Commercial Real Estate Services Sector
2022 CBRE, Inc. | 6 18.0% 23.7% 2007 2021 INVESTOR OVERVIEW Structural Tailwinds for Commercial Real Estate Services Sector Shift to Outsourcing Institutional Real Estate Ownership Rising Industry Leaders Taking Market Share E s t i m a t e d I n t e g r a t e d F a c i l i t i e s M g t . M k t . S i z e ( 2 ) In-house and outsourced spend ($ Billions) % I n s t i t u t i o n a l A s s e t A l l o c a t i o n t o R e a l E s t a t e ( 3 ) C B R E G l o b a l P r o p e r t y S a l e s S h a r e ( 4 ) $135 ~$200 2018 2024E 8.9% 10.7% 11.0% 2013 2021 2022E +6.5% CAGR +2.1% +5.7% Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 7 — Client Size and Diversity Have Increased with CBRE’s Capabilities
2022 CBRE, Inc. | 7 Industry Diversity of Top 50 Clients has Improved Over Time Large Clients Now Represent Larger Share of Total Revenue INVESTOR OVERVIEW Client Size and Diversity Have Increased with CBRE’s Capabilities 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 2012 2021 Top 50 51 - 100 0% 5% 10% 15% 20% 25% 30% 35% 40% Financials Consumer Health Care IT/Telecom Energy/Industrial/Materials Government Real Estate 2021 2012
Slide 8 — Geographic Breadth Allows CBRE to Better Serve Large Global Clients
2022 CBRE, Inc. | 8 Americas APAC EMEA Client 1 ●●● ●●● ●●● Client 2 ●●● ●●● Client 3 ●●● ●●● ●●● Client 4 ●●● ●● ●● Client 5 ●●● ●●● ●●● Client 6 ●●● ● ●●● Client 7 ●●● Client 8 ●●● ● ●●● Client 9 ●●● ●●● ●●● Client 10 ●●● ●●● ●●● INVESTOR OVERVIEW Geographic Breadth Allows CBRE to Better Serve Large Global Clients 60 >100 2010 2021 +1.7x • Global clients want a global solution • Companies need to offer globally diversified CRE services “under one roof” • More services in more locations gives CBRE more “shots on goal” ●- 2021 Revenue between $1M and $5M ●●- 2021 Revenue between $5M and $10M ●●●- 2021 Revenue greater than $10M CBRE’s 10 Largest Clients Generate Substantial Revenue from Multiple Regions # of Countries in which CBRE serves clients
Slide 9 — Market-Leading Scale Enables Significant Cross-Selling
2022 CBRE, Inc. | 9 Market-Leading Scale Enables Significant Cross-Selling 2021 Services Revenue Characteristics Among Our 10 Largest Clients (5) INVESTOR OVERVIEW ~80% of top 100 clients purchased 4 or more services in 2021, up from <25% a decade ago Client Rank Client Industry Leasing Capital Markets Facilities Mgmt. Project Mgmt. Other Client 1 Financial Services ●●● ●● ●●● ●●● ● Client 2 Logistics ●●● Client 3 Life Sciences ●●● ●●● ●●● Client 4 Financials ●● ●● ●●● ●●● ●●● Client 5 Tech ● ●●● ●●● Client 6 Life Sciences ●● ●●● ●●● Client 7 Retail ● ●●● Client 8 Tech ●●● ●●● ●●● ● Client 9 Tech ●● ● ●●● ●●● Client 10 Tech. ●●● ●●● ●●● ●● ●- Revenue between $1M and $5M ●●- Revenue between $5M and $10M ●●●- Revenue greater than $10M Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 10 — Development Business is a Differentiated Driver of CBRE’s Growth
2022 CBRE, Inc. | 10 Industrial $6.6 Office $3.8 Multifamily $5.3 Healthcare $1.0 Life Sciences $1.3 Other $0.4 In-Process Portfolio Composition $ Billions | As of 12/31/21 INVESTOR OVERVIEW Development Business is a Differentiated Driver of CBRE’s Growth $5.4 $6.7 $6.6 $6.8 $9.0 $13.0 $14.9 $18.5 2014 2015 2016 2017 2018 2019 2020 2021 In-Process Portfolio (6) $ Billions $72 $90 $114 $120 $187 $121 $153 $351 2014 2015 2016 2017 2018 2019 2020 2021 Development Line of Business Operating Profit (7) $ Millions % of Avg. In-Process Portfolio 1.4% 1.4% 1.7% 1.8% 2.1% 1.1% 1.1% 2.1% • Portfolio well positioned for current environment • More than 70% of in-process portfolio related to industrial, multifamily or life sciences • Expect 1% to 2% of in-process portfolio to convert to SOP over a 12-month period in most economic environments 19% CAGR 25% CAGR Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 11 — Ample Capacity
2022 CBRE, Inc. | 11 0.7x 0.5x 0.4x (0.3x) (0.3x) (0.5x) 0.0x 0.5x 1.0x 1.5x 2.0x 2017 2018 2019 2020 2021 Net Leverage Middle of Target Range High-End of Target Range – Strong free cash flow generation combined with fortified balance sheet positions us to pursue dynamic, disciplined capital allocation to further enhance resiliency and diversification – Deployed $1.7 billion to discretionary share buybacks over the last 6 quarters, demonstrating our stated goal of returning capital to shareholders – Deployed approximately $1.8 billion of capital, net of debt proceeds, in total during 2021, the majority of which was for strategic investments to help enhance future growth and resiliency Ample Capacity to Fund Future Investments Free Cash Flow $ Billions INVESTOR OVERVIEW $373 $391 $611 $408 2021 1Q'22 2Q'22 3Q'22 $0 $100 $200 $300 $400 $500 $600 $700 Recent Share Repurchases $ Millions $0.7 $0.9 $0.9 $1.6 $2.2 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 2017 2018 2019 2020 2021 Net Leverage (Net Cash) Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 12 — CBRE’s Business Mix is Increasingly Resilient to Economic Cycles
2022 CBRE, Inc. | 12 INVESTOR OVERVIEW Leasing, $3,956 Property Sales, $3,048 Originations, $653 Facilities Management, $5,093 Project Management, $2,541 Loan Servicing, $329 Property Management, $1,761 Valuation, $771 Development, $626 Carried Int. and Incent. Fees, $70 Asset Mgmt. Fees, $534 Transactional Resilient Advisory GWS CBRE’s Business Mix is Increasingly Resilient to Economic Cycles 40% 32% 2021 2011 Trailing Twelve-Month Net Revenue Contributions as of Q3 2022 (8) $ Millions Portion of Segment Operating Profit from Highly Resilient Business Lines (9) Definitions, endnotes and reconciliations are provided at the end of the presentation REI
Slide 13 — CBRE Cost Structure
CBRE Cost Structure Remains Highly Variable $2.7 $1.3 $10.8 $10.7 2021 Pass-Through Cost of Revenue ex Pass-Through Flexible Opex Fixed Opex Total Costs ($B) INVESTOR OVERVIEW • Cost reductions represent most immediate tool to react to potential downturn • CBRE's cost structure is highly variable, with 42% of costs being pass-through and 42% tied to revenue • Operating expenditures also have flexible component, representing bonuses, equity compensation, travel, and promotion • Only $2.7B of total costs, or 10% of total, are more fixed in nature CBRE will be able to manage cost structure meaningfully lower in the event of economic downturn 2022 CBRE, Inc. | 13
Slide 14 — CBRE’s Property Exposure is Increasingly Diversified (10)
2022 CBRE, Inc. | 14 Office Retail Industrial Multi-Housing Other 2012 2021 2012 2021 2012 2021 2012 2021 2012 2021 U.S. Leasing 72% 55% 10% 8% 16% 33% n/a n/a 2% 3% U.S. Sales 33% 17% 13% 7% 16% 32% 30% 33% 8% 12% Development 43% 19% 3% 1% 15% 37% 11% 27% 27% 16% Investment Management 24% 20% 35% 13% 12% 28% 12% 17% 16% 23% INVESTOR OVERVIEW CBRE’s Property Exposure is Increasingly Diversified (10) Note: Other predominantly consists of mixed use, healthcare, life sciences and infrastructure
Slide 15 — Advisory Segment Lines of Business Resilient Through the Cycle
2022 CBRE, Inc. | 15 (40.0%) (20.0%) 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Property Management Valuation Loan Servicing Advisory Leasing Advisory Sales Commerical Mortgage Origination S&P 500 Trailing-Twelve Month Revenue Growth TTM 1Q'21 TTM 1Q'22 Advisory Segment Lines of Business Resilient Through the Cycle ⎻Advisory Lines of Business with most short-term cyclicality exhibit strongest recovery ⎻Total revenue growth, inclusive of COVID downturn, exceeded S&P 500 in five of six Lines of Business within Advisory Segment ⎻Total Advisory segment revenue growth outperformed broader market from Q1 2020 to Q1 2022 INVESTOR OVERVIEW (11) Definitions, endnotes and reconciliations are provided at the end of the presentation
Slide 16 — CBRE vs. S&P 500 – Earnings per Share Growth is over 3x the S&P 500
2022 CBRE, Inc. | 16 INVESTOR OVERVIEW Definitions, endnotes and reconciliations are provided at the end of the presentation CBRE vs. S&P 500 – Earnings per Share Growth is over 3x the S&P 500 TTM Core EPS (12) since 12/31/2011 0% 100% 200% 300% 400% 500% 600% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 CBRE: +518% S&P 500: +121%
Slide 17 — CBRE’s Valuation vs. S&P 500 Remains Below Historical Average
2022 CBRE, Inc. | 17 INVESTOR OVERVIEW CBRE’s Valuation vs. S&P 500 Remains Below Historical Average 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 CBRE Forward P/E as a % of S&P 500 Forward P/E (13) NTM P/E Avg. +1 Std Dev -1 Std Dev Definitions, endnotes and reconciliations are provided at the end of the presentation
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Slide 19 — $3.2B
2022 CBRE, Inc. | 19 Sustainability and Social Responsibility As of 12/31/21 INVESTOR OVERVIEW $3.2B $20.2M Net Zero Spent with small & diverse suppliers Charitable Giving (incl. employee donations) By 2040 commitment 11th Most Sustainable Company in the U.S., according to Barron’s $2B 3,235 75% 94% 590 5,941 Green Financing bonds / notes issued (CBRE IM) Employee wellbeing and inclusion scores Executives completed unconscious bias training Energy and sustainability experts (GWS and Advisory) ENERGY STAR registered buildings (346.9 million sq. ft) Energy efficiency and decarbonization projects, 272,000 metric tons CO2 reduced (GWS)
Slide 20 — High-Quality and Well-Aligned Corporate Governance
2022 CBRE, Inc. | 20 High-Quality and Well-Aligned Corporate Governance INVESTOR OVERVIEW 2021 NEO “At Risk” Performance-Based Compensation Board Diversity 36% Diverse 27% Women 91% Independent Race & Ethnicity Gender Independence Tenure 2 3 6 8+ Years 5-8 Years 0-4 Years 14% Base Salary 21% Annual Performance Award 37% Adjusted EPS Equity Award 28% Time-Vested Equity Award 86% Variable 58% Tied to Financial and Strategic Performance 65% Tied to Stock Price Performance
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Slide 22 — Non-GAAP
2022 CBRE, Inc. | 22 The following measures are considered “non-GAAP financial measures” under SEC guidelines: i. Net revenue ii. Core EBITDA iii. Business line operating profit/loss iv. Segment operating profit on revenue and net revenue margins v. Net debt vi. Core adjusted net income attributable to CBRE Group, Inc. stockholders (which we also refer to as “core adjusted net income”) vii. Core EPS These measures are not recognized measurements under United States generally accepted accounting principles (GAAP). When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. Because not all companies use identical calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies. Our management generally uses these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. The company believes these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. The company further uses certain of these measures, and believes that they are useful to investors, for purposes described below. With respect to net revenue, net revenue is gross revenue less costs largely associated with subcontracted vendor work performed for clients. We believe that investors may find this measure useful to analyze the company’s overall financial performance because it excludes costs reimbursable by clients that generally have no margin, and as such provides greater visibility into the underlying performance of our business. With respect to Core EBITDA, business line operating profit, and segment operating profit on revenue and net revenue margins, the company believes that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the accounting effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions, the effects of financings and income tax and the accounting effects of capital spending. All of these measures may vary for different companies for reasons unrelated to overall operating performance. In the case of Core EBITDA, this measure is not intended to be a measure of free cash flow for our management’s discretionary use because it does not consider cash requirements such as tax and debt service payments. The Core EBITDA measure calculated herein may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which amounts are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt. The company also uses segment operating profit and core EPS as significant components when measuring our operating performance under our employee incentive compensation programs. With respect to core EBITDA, core EPS and core adjusted net income, the company believes that investors may find these measures useful to analyze the underlying performance of operations without the impact of strategic non-core equity investments (Altus Power, Inc. and VC investments) that are not directly related to our business segments. These can be volatile and are often non-cash in nature. With respect to net debt, the company believes that investors use this measure when calculating the company’s net leverage ratio. INVESTOR OVERVIEW Non-GAAP Financial Measures
Slide 23 — Definitions
2022 CBRE, Inc. | 23 Core EBITDA: Core EBITDA represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, asset impairments, adjustments related to certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, fair value adjustments to real estate assets acquired in the Telford acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, and integration and other costs related to acquisitions. It also removes the fair value changes, on a pre-tax basis, of certain strategic non-core non-controlling equity investments that are not directly related to our business segments (including venture capital “VC” related investments). Core adjusted Earnings Per Diluted Share: adjusted earnings per diluted share less the fair value changes and related tax impact of certain strategic non- core non-controlling equity investments that are not directly related to our business segments (including venture capital “VC” related investments). Core adjusted Net Income: net income attributable to CBRE as adjusted less the fair value changes and related tax impact of certain strategic non-core non-controlling equity investments that are not directly related to our business segments (including venture capital “VC” related investments). Liquidity: includes cash available for company use, as well as availability under the Company’s revolving credit facilities. Net Debt (net cash): calculated as cash and cash equivalents less total debt (excluding non-recourse debt). Net Revenue: gross revenue less costs largely associated with subcontracted vendor work performed for clients. These costs are reimbursable by clients and generally have no margin. Segment operating profit: Segment operating profit is the measure reported to the chief operating decision maker (CODM) for purposes of making decisions about allocating resources to each segment and assessing performance of each segment. Segment operating profit represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization and asset impairments, as well as adjustments related to the following: certain carried interest incentive compensation expense (reversal) to align with the timing of associated revenue, fair value adjustments to real estate acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization, transformation initiatives and integration and other costs related to acquisitions. Prior period results have been recast to conform to this definition. Segment operating profit revenue margin: represents segment operating profit divided by net revenue. Segment operating profit revenue net margin: represents segment operating profit divided by net revenue. Business line operating profit: contribution from each line of business to the respective reportable segment’s operating profit. INVESTOR OVERVIEW Definitions
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Slide 25 — End Notes
2022 CBRE, Inc. | 25 1) Peers include JLL, Cushman & Wakefield, Colliers, Newmark, Walker & Dunlop, Marcus & Millichap and Savills 2) Source: McKinsey’s “Six Emerging Trends in Facilities Management Sourcing,” Frost & Sullivan’s “Future of Facility Management” reports and CBRE research 3) Source: Hodes Weill & Associates. Figures represent target allocations 4) Source: Real Capital Analytics (RCA) 5) Total revenue from services business lines within Advisory and GWS segments 6) In-Process figures include Long-Term Operating Assets (LTOA). LTOA are projects that have achieved a stabilized level of occupancy or have been held 18-24 months following shell completion or acquisition 7) Reflects adjusted EBITDA contribution prior to 2019. Reflects segment operating profit 2019 forward. Adjusted EBITDA includes a small amount of corporate overhead now reflected in our corporate segment 8) Excludes $18 million of revenue primarily associated with intercompany eliminations within our Corporate segment and revenue from Hana of $2 million 9) This chart represents our best estimates and is for illustrative purposes only to show the resiliency of CBRE’s various lines-of-business 10) U.S. Sales and Leasing figures represent total consideration, in $ billions. Development reflects total development portfolio assets, including pipeline and in-process, in $ billions. Investment Management shows Assets under Management in $ billions 11) Source: FactSet 12) Source: Bloomberg, CBRE Financials. GAAP EPS for S&P 500 13) Consensus forward adjusted EPS Source: FactSet INVESTOR OVERVIEW End Notes
Slide 26 — Mandatory Amortization and Maturity Schedule
2022 CBRE, Inc. | 26 Mandatory Amortization and Maturity Schedule $ in millions, totals may not sum due to rounding | As of September 30, 2022 1. Liquidity includes cash available for company use, as well as availability under the Company’s revolving credit facilities 2. Includes outstanding capacity on 120M GBP Turner & Townsend revolver with an additional accordion option of 20M GBP. Maturity extended to 2027 during Q1 2022 3. Maturities on revolvers represent the maturity of the facility Cash Available Revolving Credit Facility (2) Maturity Schedule – No significant maturities until 2023 (3) – Pre-payable debt allows for further flexibility – Mix of EUR and USD denominated debt that matches business exposure act as a natural hedge Liquidity (1) (2) – Robust liquidity at approximately $4.5 billion, enabling net leverage of around 0.2x 29 283 392 600 500 0 1,000 2,000 3,000 4,000 5,000 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Senior Notes - 2.500% Senior Notes - 4.875% Euro Term Loan CBRE Revolver Turner & Townsend Revolver 1,125 3,344 0 1,000 2,000 3,000 4,000 5,000 Liquidity Cash Available Revolving Credit Facility (2) (3) INVESTOR OVERVIEW
Slide 27 — Debt and Leverage
2022 CBRE, Inc. | 27 Debt and Leverage $ in millions, totals may not sum due to rounding INVESTOR OVERVIEW 1. Outstanding amounts for 2022, 2021, 2020, 2019, 2018 and 2017 reflected net of unamortized debt issuance costs 2. Excludes $1,177 million, $1,278 million, $1,384 million, $977 million, $1,329 million and $911 million of warehouse facilities for loans originated on behalf of the FHA and other government sponsored enterprises outstanding at September 30, 2022, year end 2021, 2020, 2019, 2018 and 2017, respectively, which are non-recourse to CBRE Group, Inc 3. Excludes non-recourse notes payable on real estate, net of unamortized debt issuance costs, of $30 million, $48 million, $80 million, $13 million, $6 million and $18 million at September 30, 2022 and year end 2021, 2020, 2019, 2018 and 2017, respectively 4. Net leverage is net debt (net cash) divided by TTM Core EBITDA Definitions and reconciliations are provided at the end of this presentation. Twelve Months Ended Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 Cash $1,125 $2,431 $1,896 $972 $777 $752 Revolving Credit Facility 283 - - - - - Senior term loans (1) 392 455 786 745 751 193 Senior notes (1) 1,085 1,084 595 1,017 1,015 1,806 Other debt (2) (3) 38 33 7 6 4 0 Total Debt $1,798 $1,571 $1,387 $1,768 $1,770 $2,000 Less: Cash 1,125 2,431 1,896 972 777 752 Net debt (net cash) $673 ($860) ($509) $797 $993 $1,248 TTM Core EBITDA 3,212 2,864 1,898 2,070 1,905 1,717 Net leverage (4) 0.21x (0.30x) (0.27x) 0.38x 0.52x 0.73x
Slide 28 — Reconciliation of Cash Flows
2022 CBRE, Inc. | 28 INVESTOR OVERVIEW Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Net cash provided by operating activities $2,364 $1,831 $1,223 $1,131 $894 Less: Capital Expenditures 210 267 294 228 178 Free Cash Flow $2,154 $1,564 $930 $903 $716 Reconciliation of Cash Flows $ in millions, totals may not sum due to rounding
Slide 29 — Reconciliation of Real Estate Investments Business Line Operating Profit
2022 CBRE, Inc. | 29 INVESTOR OVERVIEW Twelve Months Ended December 31, 2021 2020 2019 2018 2017 2016 2015 2014 Investment Management Operating Profit $206 $142 $120 $78 $94 $83 $134 $119 Development Operating Profit 351 153 120 189 120 114 90 72 Other * (37) (38) (31) * * * * * REI Segment Operating Profit $520 $258 $210 $267 $214 $197 $224 $191 Reconciliation of Real Estate Investments Business Line Operating Profit to Segment Operating Profit $ in millions, totals may not sum due to rounding * This information is not readily available since the company has gone through segment reorganization in the recent years. REI SOP from 2014 – 2018 is our best estimate and we believe is a materially accurate representation of the segment’s operating performance for those years
Slide 30 — Reconciliation of Core EPS
2022 CBRE, Inc. | 30 INVESTOR OVERVIEW Reconciliation of Core EPS $ in millions, totals may not sum due to rounding Twelve Months Ended, Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income attributable to CBRE Group, Inc $2,018 $1,837 $752 $1,282 $1,063 $697 $573 $547 $485 $317 $316 $239 Add: Non-cash depreciation and amortization expense related to certain assets attributable to acquisitions 155 87 76 81 113 113 111 87 66 29 37 16 Integration and other costs related to acquisitions 44 45 2 15 9 27 126 49 - 13 39 69 Carried-interest incentive compensation expense (reversal) to align with the timing of associated revenue 25 50 (23) 13 (5) (9) (16) 26 24 9 - -- Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period (11) (6) 12 9 - - - - - - - - Costs incurred related to legal entity restructuring 13 - 9 7 - - - - - - - - Asset impairments 37 - 89 90 - - - - - 98 20 - Costs associated with transformation initiatives - - 155 - - - - - - - - - Costs associated with workforce optimization efforts - - 38 - - - - - - - - - Depreciation expense related to transformation initiatives - - 21 - - - - - - - - - Costs associated with our reorganization, including cost-savings initiatives - - - 50 38 - - - - - - - Write-off of financing costs on extinguished debt 2 - 76 3 28 - - 3 23 56 - - One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired - - - - (100) - - - - - - - Write-down of impaired assets - - - - - - - - - - - 9 Impact of U.S. tax reform - - - - 13 143 - - - - - - Costs incurred in connection with litigation settlement - - - - 9 - - - - - - - Cost-containment expenses - - - - - - 79 40 - 18 18 31 Impact of non-core investment value changes (161) (211) 2 (3) - - - - - - - - Impact of adjustments on non-controlling interest (29) (4) - - - - - - - - - - Costs associated with efficiency and cost-reduction initiatives 19 - - - - - - - - - - - Provision associated with Telford’s fire safety remediation efforts 47 - - - - - - - - - - - Tax impact of adjusted items, including strategic non-core investments (110) 12 (98) (286) (44) (42) (93) (63) (36) (65) (30) (29) Core adjusted Net Income $2,048 $1,810 $1,109 $1,261 $1,124 $930 $780 $689 $561 $474 $399 $334 Weighted average shares outstanding for diluted income per share (millions) 324.7 339.7 338.4 340.5 343.1 340.8 338.4 336.4 334.2 331.8 327.0 323.7 Core EPS $6.15 $5.33 $3.27 $3.71 $3.28 $2.73 $2.30 $2.05 $1.68 $1.43 $1.22 $1.03
Slide 31 — Highly Resilient Business Lines
2022 CBRE, Inc. | 31 INVESTOR OVERVIEW Highly Resilient Business Lines $ in millions, totals may not sum due to rounding Segment Operating Profit 2011 % of Total 2021 % of Total Highly Resilient 300 32% 1,320 40% Transactional 645 68% 1,971 60% Total 945 3,291
Slide 32 — TTM Q3’22 Revenue
2022 CBRE, Inc. | 32 Leasing Property Sales CMO Loan Servicing Valuation Property Management Facilities Management Project Management Development Investment Management Total (1) Revenue TTM Q3’22 $3,956 $3,048 $653 $329 $771 $1,831 $15,064 $4,316 $626 $604 $31,184 Less pass- through costs associated with revenue - - - - - 70 9,972 1,775 - - 11,817 Net Revenue TTM Q3’22 3,956 3,048 653 329 771 1,761 $5,093 $2,541 626 604 19,367 INVESTOR OVERVIEW 1. Total includes impact of Corporate eliminations of ($18) million and revenue from Hana of $2m TTM Q3’22 Revenue $ in millions, totals may not sum due to rounding
Slide 33 — Reconciliation of TTM Net Income to TTM Core EBITDA
2022 CBRE, Inc. | 33 INVESTOR OVERVIEW 1. For the three months ended June 30, 2022, represents impairment charge in our Real Estate Investments segment for the Telford Homes business, due to an expected reduction in cash flows and profitability associated with elevated inflation and rising costs of operations Twelve Months Ended, Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 2011 Net Income attributable to CBRE Group, Inc $2,018 $1,837 $752 $1,282 $1,063 $697 $239 Net income attributable to non-controlling interests 12 5 4 9 3 6 51 Net income 2,031 1,842 756 1,291 1,066 704 290 Add: Depreciation and amortization 616 526 502 439 452 406 117 Asset impairments (1) 37 - 89 90 - - Interest expense, net of interest income 67 50 68 86 99 127 144 Provision for income taxes 484 568 214 70 313 468 193 Write-off of financing costs on extinguished debt 2 - 76 3 28 - - Write-down of impaired assets - - - - - - 9 One-time gain associated with remeasuring an investment in unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired - - - - (100) - - Costs associated with our reorganization, including cost-savings initiatives - - - 50 38 - - Cost containment expenses - - - - - - 31 Costs incurred in connection with litigation settlement - - - - 9 - - Integration and other costs related to acquisitions 44 45 2 15 9 27 69 Costs associated with workforce optimization efforts - - 38 - - - - Costs associated with transformation initiatives - - 155 - - - - Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue 25 50 (23) 13 (5) (9) - Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period (11) (6) 12 9 - - - Provision associated with Telford’s fire safety remediation efforts 47 - - - - - - Costs associated with efficiency and cost-reduction initiatives 19 - - - - - - Costs incurred related to legal entity restructuring 13 - 9 7 - - - Less: Net fair value adjustments on strategic non-core investments 161 211 (2) 3 - - - Core EBITDA $3,212 $2,864 $1,898 $2,070 $1,908 $1,723 $853 Reconciliation of TTM Net Income to TTM Core EBITDA $ in millions, totals may not sum due to rounding