SECURITIES AND EXCHANGE COMMISSION

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2002

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from            to             

 

Commission File Number 000 - 32983

 


 

CBRE HOLDING, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

 

94-3391143

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

 

 

 

355 South Grand Avenue, Suite 3100
Los Angeles, California

 

90071-1552

(Address of principal executive offices)

 

(Zip Code)

 

 

 

(213) 613-3226

 

Not Applicable

(Registrant’s telephone number, including area code)

 

(Former name, former address and
formal fiscal year if changed since last report)

 


 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý  No  o 

 

The number of shares of Class A and Class B common stock outstanding at July 31, 2002 was 1,696,062 and 12,624,813, respectively.

 

 



 

CBRE HOLDING, INC.

 

FORM 10-Q

 

June 30, 2002

 

TABLE OF CONTENTS

 

PART I  -  FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements

 

 

 

Consolidated Balance Sheets at June 30, 2002 (Unaudited) and December 31, 2001

 

 

 

Consolidated Statements of Operations for the three months ended June 30, 2002 and 2001, the six months ended June 30, 2002, the period from February 20, 2001 (inception) through June 30, 2001,  the three months ended June 30, 2001 and the six months ended June 30, 2001 (Unaudited)

 

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2002, the period from February 20, 2001 (inception) through June 30, 2001 and the six months ended June 30, 2001 (Unaudited)

 

 

 

Notes to Consolidated Financial Statements (Unaudited)

 

 

Item 2.

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

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

 

PART II - OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

 

Item 6.

Exhibits and Reports on Form 8-K

 

 

Signatures

 

2



 

CBRE HOLDING, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

 

 

 

June 30,
2002

 

December 31,
2001

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

18,211

 

$

57,450

 

Receivables, less allowance for doubtful accounts of $13,377 and $11,748 at June 30, 2002 and December 31, 2001, respectively

 

137,427

 

156,434

 

Warehouse receivable

 

142,300

 

106,790

 

Prepaid expenses

 

11,413

 

8,325

 

Deferred taxes, net

 

32,649

 

32,155

 

Other current assets

 

10,777

 

8,493

 

Total current assets

 

352,777

 

369,647

 

 

 

 

 

 

 

Property and equipment, net

 

64,928

 

68,451

 

Goodwill

 

583,213

 

609,543

 

Other intangible assets, net of accumulated amortization of $4,665 and $3,153 at June 30, 2002 and December 31, 2001, respectively

 

93,549

 

38,117

 

Cash surrender value of insurance policies, deferred compensation plan

 

63,975

 

69,385

 

Investments in and advances to unconsolidated subsidiaries

 

48,120

 

42,535

 

Deferred taxes, net

 

35,096

 

54,002

 

Prepaid pension costs

 

13,956

 

13,588

 

Other assets

 

96,309

 

94,085

 

Total assets

 

$

1,351,923

 

$

1,359,353

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

80,332

 

$

82,982

 

Compensation and employee benefits payable

 

57,765

 

68,118

 

Accrued bonus and profit sharing

 

33,989

 

85,188

 

Income taxes payable

 

13,009

 

21,736

 

Short-term borrowings:

 

 

 

 

 

Warehouse line of credit

 

142,300

 

106,790

 

Revolver and swingline credit facility

 

30,000

 

 

Other

 

49,193

 

48,828

 

Total short-term borrowings

 

221,493

 

155,618

 

Current maturities of long-term debt

 

10,231

 

10,223

 

Total current liabilities

 

416,819

 

423,865

 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

11¼% senior subordinated notes, net of unamortized discount of $3,163 and $3,263 at June 30, 2002 and December 31, 2001, respectively

 

225,837

 

225,737

 

Senior secured term loans

 

216,300

 

220,975

 

16% senior notes, net of unamortized discount of $5,230 and $5,344 at June 30, 2002 and December 31, 2001, respectively

 

60,420

 

59,656

 

Other long-term debt

 

12,725

 

15,695

 

Total long-term debt

 

515,282

 

522,063

 

Deferred compensation liability

 

100,034

 

105,104

 

Other liabilities

 

46,990

 

46,661

 

Total liabilities

 

1,079,125

 

1,097,693

 

Minority interest

 

4,608

 

4,296

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Class A common stock; $0.01 par value; 75,000,000 shares authorized; 1,759,361 and 1,730,601 shares issued and outstanding (including treasury shares) at June 30, 2002 and December 31, 2001, respectively

 

18

 

17

 

Class B common stock; $0.01 par value; 25,000,000 shares authorized; 12,649,813 shares issued and outstanding (including treasury shares) at June 30, 2002 and December 31, 2001

 

126

 

127

 

Additional paid-in capital

 

240,786

 

240,541

 

Notes receivable from sale of stock

 

(643

)

(1,043

)

Accumulated earnings

 

18,620

 

17,426

 

Accumulated other comprehensive income

 

10,608

 

296

 

Treasury stock at cost, 83,634 shares at June 30, 2002

 

(1,325

)

 

Total stockholders’ equity

 

268,190

 

257,364

 

Total liabilities and stockholders’ equity

 

$

1,351,923

 

$

1,359,353

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3



 

CBRE HOLDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share data)

 

 

 

Company

 

Company

 

Company

 

Company

 

Predecessor

 

Predecessor

 

 

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CB Richard
Ellis Services,
Inc.

 

CB Richard
Ellis Services,
Inc.

 

 

 

Three
Months
Ended
June 30,
2002

 

Three
Months
Ended
June 30,
2001

 

Six
Months
Ended
June 30,
2002

 

February 20,
2001
(inception)
through
June 30,
2001

 

Three
Months
Ended
June 30,
2001

 

Six
Months
Ended
June 30,
2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

284,893

 

$

 

$

508,883

 

$

 

$

284,849

 

$

557,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions, fees and other incentives

 

130,761

 

 

231,027

 

 

133,139

 

256,105

 

Operating, administrative and other

 

120,735

 

 

233,371

 

 

131,201

 

266,712

 

Depreciation and amortization

 

4,111

 

 

11,703

 

 

11,446

 

23,142

 

Merger-related and other nonrecurring charges

 

23

 

 

605

 

 

5,608

 

5,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

29,263

 

 

32,177

 

 

3,455

 

5,780

 

Interest income

 

534

 

580

 

1,398

 

580

 

692

 

1,492

 

Interest expense

 

14,904

 

1,775

 

30,921

 

1,775

 

9,358

 

18,413

 

Income (loss) before provision (benefit) for income tax

 

14,893

 

(1,195

)

2,654

 

(1,195

)

(5,211

)

(11,141

)

Provision (benefit) for income tax

 

7,604

 

(465

)

1,460

 

(465

)

(3,690

)

(6,774

)

Net income (loss)

 

$

7,289

 

$

(730

)

$

1,194

 

$

(730

)

$

(1,521

)

$

(4,367

)

Basic income (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

(0.07

)

$

(0.20

)

Weighted average shares outstanding for basic income (loss) per share

 

15,034,616

 

63,801

 

15,042,584

 

44,323

 

21,328,247

 

21,318,949

 

Diluted income (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

(0.07

)

$

(0.20

)

Weighted average shares outstanding for diluted income (loss) per share

 

15,217,186

 

63,801

 

15,212,141

 

44,323

 

21,328,247

 

21,318,949

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4



 

CBRE HOLDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

Company

 

Company

 

Predecessor

 

 

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CB Richard
Ellis Services,
Inc.

 

 

 

Six
Months
Ended
June 30,
2002

 

February 20,
2001
(inception)
through
June 30,
2001

 

Six
Months
Ended
June 30,
2001

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

 

$

1,194

 

$

(730

)

$

(4,367

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization excluding deferred financing costs

 

11,703

 

 

23,142

 

Deferred compensation plan deferrals

 

5,043

 

 

15,127

 

Gain on sale of properties, businesses and servicing rights

 

(3,999

)

 

(9,728

)

Provision for doubtful accounts

 

2,325

 

 

2,981

 

Decrease in receivables

 

22,969

 

 

20,254

 

Increase in prepaid expenses and other assets

 

(5,422

)

(8,814

)

(4,257

)

Decrease (increase) in cash surrender value of insurance policies, deferred compensation plan

 

5,410

 

 

(16,305

)

Decrease in compensation and employee benefits and accrued bonus and profit sharing

 

(58,982

)

 

(89,893

)

(Decrease) increase in accounts payable and accrued expenses

 

(822

)

9,486

 

(13,393

)

Decrease in income taxes payable

 

(8,921

)

 

(25,695

)

Decrease in other liabilities

 

(10,393

)

 

(6,732

)

Net change in other operating assets and liabilities

 

(237

)

58

 

1,612

 

Net cash used in operating activities

 

(40,132

)

 

(107,254

)

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(5,363

)

 

(14,628

)

Proceeds from sale of properties, businesses and servicing rights

 

2,259

 

 

9,191

 

Purchase of investments

 

(371

)

 

(5,484

)

Acquisition of businesses including net assets acquired, intangibles and goodwill

 

(9,892

)

 

(1,123

)

Other investing activities, net

 

(2,843

)

 

1,476

 

Net cash used in investing activities

 

(16,210

)

 

(10,568

)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from revolver and swingline credit facility

 

134,250

 

 

 

Repayment of revolver and swingline credit facility

 

(104,250

)

 

 

(Repayment of) proceeds from senior notes and other loans, net

 

(6,329

)

 

1,315

 

Repayment of senior secured term loans

 

(4,676

)

 

 

Proceeds from issuance of senior subordinated notes

 

 

225,629

 

 

Proceeds from revolving credit facility

 

 

 

185,000

 

Repayment of revolving credit facility

 

 

 

(70,000

)

Proceeds from issuance of common stock

 

180

 

3,870

 

 

Other financing activities, net

 

(1,265

)

 

602

 

Net cash provided by financing activities

 

17,910

 

229,499

 

116,917

 

 

 

 

 

 

 

 

 

NET  (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(38,432

)

229,499

 

(905

)

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD

 

57,450

 

 

20,854

 

Effect of exchange rate changes on cash

 

(807

)

 

(1,401

)

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

 

$

18,211

 

$

229,499

 

$

18,548

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

Interest (none capitalized)

 

$

27,205

 

$

 

$

17,202

 

Income taxes, net

 

$

10,779

 

$

 

$

18,719

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5



 

CBRE HOLDING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.        Organization

 

CBRE Holding, Inc., a Delaware corporation, was incorporated on February 20, 2001 as Blum CB Holding Corporation.  On March 26, 2001, Blum CB Holding Corporation changed its name to CBRE Holding, Inc. (the Company).  The Company and its former wholly owned subsidiary, Blum CB Corporation (Blum CB), a Delaware corporation, were created to acquire all of the outstanding shares of CB Richard Ellis Services, Inc. (CBRE), an international real estate services firm. Prior to July 20, 2001, the Company was a wholly owned subsidiary of RCBA Strategic Partners, L.P. (RCBA Strategic), and is an affiliate of Richard C. Blum, a director of the Company and CBRE.

 

On July 20, 2001, the Company acquired CBRE (the merger) pursuant to an Amended and Restated Agreement and Plan of Merger, dated May 31, 2001, among the Company, CBRE and Blum CB.  Blum CB was merged with and into CBRE, with CBRE being the surviving corporation.  The operations of the Company after the merger are substantially the same as the operations of CBRE prior to the merger.  In addition, the Company has no substantive operations other than its investment in CBRE.

 

2.        New Accounting Pronouncements

 

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.”  This statement applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and (or) the normal operation of a long-lived asset, except for certain obligations of leases.

The statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of its fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  This statement is effective for financial statements issued for fiscal years beginning after June 15, 2002, although earlier application is encouraged.  The Company is currently evaluating the impact of the adoption of this statement on its results of operations and financial position.

 

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.”  This statement establishes a single accounting model, based on the framework established in SFAS No. 121, for long-lived assets to be disposed of by sale.  This statement is effective for financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years, with early application encouraged.  The adoption of  SFAS No. 144 did not have a material impact on the Company’s results of operations and financial position.

 

In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” This Statement rescinds the following pronouncements:

 

Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt;”

Statement No. 44, “Accounting for Intangible Assets of Motor Carriers;” and

Statement No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.”

 

The statement amends Statement No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have

economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative

pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions.

 

The provisions of this Statement related to the rescission of Statement No. 4 shall be applied in fiscal years beginning after May 15, 2002, with early application encouraged. The provisions of this Statement related to Statement No. 13 shall be effective for transactions occurring after May 15, 2002, with early application encouraged. All other provisions of this Statement shall be effective for financial statements on or after May 15, 2002, with early application encouraged. The Company is currently evaluating the impact of the adoption of this statement on its results of operations and financial position.

 

6



 

3.        Basis of Preparation

 

The accompanying consolidated balance sheets as of June 30, 2002 and December 31, 2001, the consolidated statement of operations for the three months ended June 30, 2002, and the consolidated statements of operations and cash flows for the six months ended June 30, 2002, reflect the consolidated balance sheets, results of operations and cash flows of the Company and also include the consolidated financial statements of CBRE from the date of the merger which include all material adjustments required under the purchase method of accounting.  In addition, in accordance with Regulation S-X, CBRE is considered the predecessor to the Company.  As such, the historical financial statements of CBRE prior to the merger are included in the accompanying unaudited consolidated financial statements, including the consolidated statement of operations for the three and six months ended June 30, 2001 and the consolidated statement of cash flows for the six months ended June 30, 2001 (collectively “Predecessor financial statements”). The Predecessor financial statements have not been adjusted to reflect the acquisition of CBRE by the Company. As such, the consolidated financial statements of the Company after the merger are not directly comparable to the Predecessor financial statements prior to the merger.

 

Pro forma results of the Company assuming the merger had occurred as of January 1, 2001 are presented below.  These pro forma results have been prepared for comparative purposes only and include certain adjustments, such as the elimination of amortization expense related to goodwill as a result of the implementation of SFAS No. 142, “Goodwill and Other Intangible Assets” and increased interest expense as a result of debt acquired to finance the merger. These pro forma results do not purport to be indicative of what the operating results would have been, and may not be indicative of future operating results (in thousands, except per share amounts):

 

 

 

Three Months
Ended
June 30
2001

 

Six Months
Ended
June 30
2001

 

 

 

 

 

 

 

Revenue

 

$

284,849

 

$

557,347

 

Operating income

 

$

9,888

 

$

15,954

 

Net loss

 

$

(809

)

$

(5,299

)

Basic loss per share

 

$

(0.05

)

$

(0.35

)

Diluted loss per share

 

$

(0.05

)

$

(0.35

)

 

The accompanying consolidated financial statements have been prepared in accordance with the rules applicable to Form 10-Q and include all information and footnotes required for interim financial statement presentation. In the opinion of management, all adjustments (consisting of normal recurring adjustments)  considered necessary for a fair presentation have been included.  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.  Actual results could differ materially from those estimates.  All significant inter-company transactions and balances have been eliminated, and certain reclassifications have been made to prior periods’ consolidated statements to conform to current period presentation.  The results of operations for the six months ended June 30, 2002 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2002.  The consolidated financial statements and notes to the consolidated financial statements should be read in conjunction with the Company’s recent filing on form 10-K, which contains the latest available audited consolidated financial statements and notes thereto, as of and for the period ended December 31, 2001.

 

4.        Goodwill and Other Intangible Assets

 

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141 “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 replaces APB 16 and requires the use of the

 

7



 

purchase method of accounting for all business combinations initiated after June 30, 2001.  It also provides guidance on purchase accounting related to the recognition of intangible assets.  Under SFAS No. 142, goodwill and other intangible assets deemed to have indefinite useful lives are no longer amortized but are subject to impairment tests on an annual basis, at a minimum, or whenever events or circumstances occur indicating goodwill might be impaired.  SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.”

 

The Company adopted SFAS No. 141 for all business combinations completed after June 30, 2001.  The Company fully adopted SFAS No. 142 effective January 1, 2002.  The Company has identified its reporting units and has determined the carrying value of each reporting unit by assigning assets and liabilities, including the existing goodwill and intangible assets, to those units.

 

In connection with the transitional goodwill impairment evaluation, SFAS No. 142 requires the Company to perform an assessment of whether there is an indication that goodwill is impaired as of the date of adoption.  The Company obtained third party valuations that were finalized in June 2002, which indicated that there was no goodwill impairment as of January 1, 2002.

 

Had the Company accounted for goodwill consistent with the provisions of SFAS No. 142 in prior periods, the Company’s net income (loss) would have been affected as follows (in thousands, except share data):

 

 

 

Company

 

Company

 

Company

 

Company

 

Predecessor

 

Predecessor

 

 

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CBRE
Holding
Inc.

 

CB Richard
Ellis Services,
Inc.

 

CB Richard
Ellis Services,
Inc.

 

 

 

Three
Months
Ended
June 30,
2002

 

Three
Months
Ended
June 30,
2001

 

Six
Months
Ended
June 30,
2002

 

February 20,
2001
(inception)
through
June 30,
2001

 

Three
Months
Ended
June 30,
2001

 

Six
Months
Ended
June 30,
2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income (loss)

 

$

7,289

 

$

(730

)

$

1,194

 

$

(730

)

$

(1,521

)

$

(4,367

)

Add back amortization of goodwill, net of taxes

 

 

 

 

 

3,452

 

6,970

 

Adjusted net income (loss)

 

$

7,289

 

$

(730

)

$

1,194

 

$

(730

)

$

1,931

 

$

2,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

(0.07

)

$

(0.20

)

Add back goodwill amortization per share

 

 

 

 

 

0.16

 

0.33

 

Adjusted basic earnings (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

0.09

 

$

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

(0.07

)

$

(0.20

)

Add back goodwill amortization per share

 

 

 

 

 

0.16

 

0.33

 

Adjusted diluted earnings (loss) per share

 

$

0.48

 

$

(11.45

)

$

0.08

 

$

(16.48

)

$

0.09

 

$

0.13

 

 

The Company is in the process of finalizing the fair value of all assets and liabilities as of the merger date.  The changes in the carrying amount of goodwill for the six months ended June 30, 2002, are as follows (dollars in thousands):

 

 

 

Americas
(1)

 

Mortgage
Banking

 

Investment
Management
(US)

 

United
Kingdom

 

EMEA
(2)

 

Asia Pacific

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2002

 

$

422,449

 

$

76,219

 

$

11,520

 

$

85,244

 

$

11,393

 

$

2,718

 

$

609,543

 

Reclassed (to) from intangible assets

 

(50,764

)

(6,979

)

(556

)

3,617

 

 

 

(54,682

)

Purchase accounting adjustments related to prior acquisitions

 

17,498

 

2,709

 

148

 

2,743

 

1,014

 

4,240

 

28,352

 

Balance at June 30, 2002

 

$

389,183

 

$

71,949

 

$

11,112

 

$

91,604

 

$

12,407

 

$

6,958

 

$

583,213

 

 


(1)  Excludes Mortgage Banking and Investment Management in the United States.

(2)  Excludes United Kingdom.

 

8



 

Intangible assets totaled $93.5 million, net of accumulated amortization of $4.7 million, as of June 30, 2002 and are comprised of the following (dollars in thousands):

 

 

 

As of June 30, 2002

 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

 

 

 

 

 

 

Amortizable intangible assets

 

 

 

 

 

Management contracts

 

$

18,542

 

$

3,335

 

Loan servicing rights

 

15,972

 

1,330

 

Total

 

$

34,514

 

$

4,665

 

 

 

 

 

 

 

Unamortizable intangible assets

 

 

 

 

 

Trademark

 

$

63,700

 

 

 

 

The trademark was established as a result of the merger and has an indefinite life.  The management contracts and loan servicing rights are amortized over useful lives ranging up to ten years.  Amortization expense related to these intangible assets was $1.1 million for the six months ended June 30, 2002.  The estimated amortization expense for the year ending December 31, 2002 and for the subsequent four years ending December 31, 2006 approximates $5.0 million, $5.0 million, $3.9 million, $3.4 million and $3.1 million, respectively.

 

5.              Investments in and Advances to Unconsolidated Subsidiaries

 

Condensed Statements of Operations for the unconsolidated subsidiaries accounted for using the equity method are as follows (in thousands):

 

 

 

Three Months Ended June 30

 

Six Months Ended June 30

 

 

 

2002

 

2001

 

2002

 

2001

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

88,576

 

$

66,380

 

$

168,906

 

$

136,029

 

Operating income

 

$

23,344

 

$

10,187

 

$

40,549

 

$

22,876

 

Net (loss) income

 

$

(3,771

)

$

(15

)

$

9,456

 

$

7,831

 

 

The Company’s investment management business involves investing the Company’s own capital in certain real estate investments with clients, including its equity investments in CB Richard Ellis Strategic Partners, L.P., CB Richard Ellis Corporate Partners, L.L.C. and other co-investments.  The Company has provided investment management, property management, brokerage, appraisal and other professional services to these equity investees.

 

6.   Debt

 

The Company has $229.0 million in aggregate principal amount of 11 ¼% Senior Subordinated Notes due June 15, 2011 (the Notes), which were issued and sold by Blum CB Corp. for approximately $225.6 million, net of discount, on June 7, 2001 and assumed by CBRE in connection with the merger.  The Notes require semi-annual payments of interest in arrears on June 15 and December 15, commencing on December 15, 2001, and are redeemable in whole or in part on or after June 15, 2006 at 105.625% of par on that date and at declining prices thereafter.  In addition, before June 15, 2004, the Company may redeem up to 35.0% of the originally issued amount of the Notes at 111 ¼% of par, plus accrued and unpaid interest, solely with the net cash proceeds from public equity offerings.  In the event of a change of control, the Company is obligated to make an offer to purchase the Notes at a redemption price of 101.0% of the principal amount, plus accrued and unpaid interest.  The Notes are fully and unconditionally guaranteed on a senior subordinated basis by the Company and CBRE’s domestic subsidiaries.  The effective yield on the Notes is 11.5%.  The amount included in the accompanying unaudited consolidated balance sheets, net of unamortized discount, was $225.8 million at June 30, 2002.

 

The Company also entered into a $325.0 million Senior Credit Facility (the Credit Facility) with Credit Suisse First Boston (CSFB) and other lenders. The Credit Facility is jointly and severally guaranteed by the Company and its domestic subsidiaries and is secured by substantially all their assets.  The Credit Facility includes the Tranche A term

 

9



 

facility of $50.0 million, maturing on July 20, 2007; the Tranche B term facility of $185.0 million, maturing on July 18, 2008; and the revolving line of credit of $90.0 million, including revolving credit loans, letters of credit and a swingline loan facility, maturing on July 20, 2007.  Borrowings under the senior secured credit facilities will bear interest at varying rates based on the Company’s option, at either LIBOR plus 2.50% to 3.25% or the alternate base rate plus 1.50% to 2.25% as determined by reference to the Company’s ratio of total debt less available cash to EBITDA, as defined in the debt agreement, in the case of the Tranche A and the revolving facility, and LIBOR plus 3.75% or the alternate base rate plus 2.75%, in the case of the Tranche B facility.  The alternate base rate is the higher of (1) CSFB’s prime rate or (2) the Federal Funds Effective Rate plus one-half of one percent.

 

The Tranche A facility will fully amortize by July 20, 2007 through quarterly principal payments over 6 years, which total $7.5 million each year through June 30, 2003 and $8.75 million each year thereafter through July 20, 2007. The Tranche B facility requires quarterly principal payments of approximately $0.5 million, with the remaining outstanding principal due on July 18, 2008. The revolving line of credit requires the repayment of any outstanding balance for a period of 45 consecutive days commencing on any day as determined by the Company in the month of December of each year. The Company repaid its revolving credit facility as of December 1, 2001 and at June 30, 2002 had an outstanding line of credit of $30.0 million. The total amount outstanding under the credit facility included in senior secured term loans, current maturities of long-term debt and short-term borrowings in the accompanying consolidated balance sheets was $255.7 million at June 30, 2002.

 

The Company issued an aggregate principal amount of $65.0 million of 16.0% Senior Notes due on July 20, 2011

(the Senior Notes).  The Senior Notes are unsecured obligations, senior to all current and future unsecured indebtedness, but subordinated to all current and future secured indebtedness of the Company.  Interest accrues at a rate of 16.0% per year and is payable quarterly in cash in arrears.  However, until July 2006, interest in excess of 12.0% may be paid in kind. Additionally, at any time, interest may be paid in kind to the extent CBRE’s ability to pay cash dividends is restricted by the terms of the Credit Facility.  The Company elected to pay in kind interest in excess of 12.0%, or 4.0% that was payable on April 20, 2002.  The Senior Notes are redeemable at the Company’s option, in whole or in part, at 116.0% of par commencing on July 20, 2001 and at declining prices thereafter. In the event of a change in control, the Company is obligated to make an offer to purchase all of the outstanding Senior Notes at 101.0% of par. The total amount included in the accompanying consolidated balance sheets was $60.4 million, net of unamortized discount, at June 30, 2002.

 

The Senior Notes are solely the Company’s obligation to repay.  CBRE has neither guaranteed nor pledged any of its assets as collateral for the Senior Notes, and is not obligated to provide cashflow to the Company for repayment of these Senior Notes.  However, the Company has no substantive assets or operations other than its investment in CBRE to meet any required principal and interest payments on the Senior Notes.  The Company will depend on CBRE’s cash flows to fund principal and interest payments as they come due.

 

The Notes, the Credit Facility and the Senior Notes all contain numerous restrictive covenants that, among other things, limit the Company’s ability to incur additional indebtedness, pay dividends or distributions to stockholders or repurchase capital stock or debt, make investments, sell assets or subsidiary stock, engage in transactions with affiliates, issue subsidiary equity and enter into consolidations or mergers.  The debt agreements require the Company to maintain certain minimum levels of net worth, a minimum coverage ratio of interest and certain fixed charges and a maximum leverage and senior leverage ratio of earnings before interest, taxes, depreciation and amortization to funded debt (all as defined in the agreements).  The agreements also restrict the payment of cash dividends.  The Credit Facility requires the Company to pay a facility fee based on the total amount of the unused commitment.

 

The Company has short-tem borrowings of $221.5 million and $155.6 million with related weighted average interest rates of 4.2% and 4.5% as of June 30, 2002 and December 31, 2001, respectively.

 

A subsidiary of the Company has a credit agreement with Residential Funding Corporation (RFC).  The credit agreement provides for a revolving line of credit of up to $350.0 million through February 28, 2002, and $150.0 million for the period from March 1, 2002 through August 31, 2002, and bears interest at 1.0% over the RFC base rate.  The agreement expires on August 31, 2002. On April 20, 2002, the Company obtained a temporary line of credit increase of $210.0 million, which resulted in a total line of credit equaling $360.0 million, which expired on July 31, 2002.  On August 1, 2002, the Company obtained another temporary line of credit increase of $20.0 million, resulting in a total line

 

10



 

of credit equaling $170.0 million, which expires on August 31, 2002.  During the quarter ended June 30, 2002, the Company had a maximum of $309.2 million revolving line of credit principal outstanding.  At June 30, 2002, the Company had a $142.3 million warehouse line of credit outstanding, which is included in short-term borrowings in the accompanying consolidated balance sheets.  The Company also had a $142.3 million warehouse receivable.

 

During 2001, the Company incurred certain non recourse debt through a joint venture in order to purchase property that is held for sale.  In February 2002, the maturity date on this non recourse debt was extended to September 18, 2002.

 

7.  Commitments and Contingencies

 

The Company is a party to a number of pending or threatened lawsuits arising out of, or incident to, its ordinary course of business. Management believes that any liability that may result from disposition of these lawsuits will not have a material effect on the Company’s consolidated financial position or results of operations.

 

An important part of the strategy for the Company’s investment management business involves investing the

Company’s own capital in certain real estate investments with its clients. As of June 30, 2002, the Company had committed an additional $29.7 million to fund future co-investments.

 

8.   Comprehensive Income (Loss)

 

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss).  Accumulated other comprehensive income (loss) consists of foreign currency translation adjustments. Foreign currency translation adjustments exclude income tax expense (benefit) given that the earnings of non-US subsidiaries are deemed to be reinvested for an indefinite period of time.

 

The following table provides a summary of the comprehensive income (loss) (dollars in thousands):

 

 

 

Company

 

Company

 

Predecessor

 

 

 

CBRE
Holding,
Inc.

 

CBRE
Holding,
Inc.

 

CB Richard
Ellis Services,
Inc.

 

 

 

Six
Months
Ended
June 30,
2002

 

February 20,
2001
(inception)
through
June 30,
2001

 

Six
Months
Ended
June 30,
2001

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,194

 

$

(730

)

$

(4,367

)

Foreign currency translation gain (loss)

 

10,312

 

 

(7,070

)

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

$

11,506

 

$

(730

)

$

(11,437

)

 

9.  Per Share Information

 

Basic income (loss) per share was computed by dividing the net income (loss) by the weighted average number of common shares outstanding of 15,034,616 and 63,801 for the three months ending June 30, 2002 and 2001, respectively, and 15,042,584 and 44,323 for the six months ended June 30, 2002 and for the period from February 20, 2001 (inception) to June 30, 2001, respectively. Diluted income per share for the three and six months ended June 30, 2002 included the dilutive effect of contingently issuable shares of 182,570 and 169,557, respectively.  As of June 30, 2001, the Company had no common stock equivalents outstanding.

 

Basic loss per share for CBRE was computed by dividing the net loss by the weighted average number of common shares outstanding of 21,328,247 and 21,318,949 for the three and six months ended June 30, 2001, respectively.  As a result of operating losses incurred for the three and six months ended June 30, 2001, diluted weighted average shares

outstanding do not give effect to common stock equivalents, as to do so would be anti-dilutive.

 

11



 

Due to the change in equity structure as a result of the merger, the current year per share information is not comparable to that of the prior year.

 

10.  Fiduciary Funds

 

The consolidated balance sheets do not include the net assets of escrow, agency and fiduciary funds, which amounted to $413.0 million and $373.2 million at June 30, 2002 and December 31, 2001, respectively.

 

11.  Guarantor and Nonguarantor Financial Statements

 

In connection with the merger with Blum CB, and as part of the financing of the merger, CBRE assumed an aggregate of $229.0 million in Senior Subordinated Notes due June 15, 2011.  These Notes are unsecured and rank equally in right of payment with any of the Company’s future senior subordinated unsecured indebtedness.  The Notes are effectively subordinated to indebtedness and other liabilities of the Company’s subsidiaries that are not guarantors of the Notes.  The Notes are guaranteed on a full, unconditional, joint and several basis by the Company, CBRE and CBRE’s wholly-owned domestic subsidiaries.

 

The following condensed consolidating financial information includes:

 

(1) Condensed consolidating balance sheets as of June 30, 2002 and December 31, 2001; condensed consolidating statements of operations for the three and six months ended June 30, 2002 and 2001, and the period from February 20, 2001 (inception) through June 30, 2001 and condensed consolidating statements of cash flows for the six months ended June 30, 2002 and 2001 and the period from February 20, 2001 (inception) through June 30, 2001 of (a) Holding, the parent, (b) CBRE, which is the subsidiary issuer, (c) the guarantor subsidiaries, (d) the nonguarantor subsidiaries and (e) the Company on a consolidated basis; and (2) Elimination entries necessary to consolidate CBRE Holding, Inc., the parent, with CBRE and its guarantor and nonguarantor subsidiaries.

 

Investments in consolidated subsidiaries are presented using the equity method of accounting.  The principal elimination entries eliminate investments in consolidated subsidiaries and inter-company balances and transactions.

 

12



 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2002

(Unaudited)

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

216

 

$

142

 

$

11,255

 

$

6,598

 

$

 

$

18,211

 

Receivables, less allowance for doubtful accounts

 

29

 

29

 

57,938

 

79,431

 

 

137,427

 

Warehouse receivable

 

 

 

142,300

 

 

 

142,300

 

Prepaid and other current assets

 

32,649

 

17,913

 

8,709

 

11,490

 

(15,922

)

54,839

 

Total current assets

 

32,894

 

18,084

 

220,202

 

97,519

 

(15,922

)

352,777

 

Property and equipment, net

 

 

 

49,003

 

15,925

 

 

64,928

 

Goodwill

 

 

 

454,253

 

128,960

 

 

583,213

 

Other intangible assets, net

 

 

 

90,405

 

3,144

 

 

93,549

 

Cash surrender value of insurance policies, deferred compensation plan

 

 

63,975

 

 

 

 

63,975

 

Investment in and advances to unconsolidated subsidiaries

 

 

4,472

 

39,390

 

4,258

 

 

48,120

 

Investment in consolidated subsidiaries

 

301,549

 

294,902

 

86,928

 

 

(683,379

)

 

Inter-company loan receivable

 

 

484,156

 

 

 

(484,156

)

 

Deferred taxes, net

 

35,096

 

 

 

 

 

35,096

 

Prepaid pension costs

 

 

 

 

13,956

 

 

13,956

 

Other assets

 

6,874

 

22,542

 

16,219

 

50,674

 

 

96,309

 

Total assets

 

$

376,413

 

$

888,131

 

$

956,400

 

$

314,436

 

$

(1,183,457

)

$

1,351,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,042

 

$

4,873

 

$

32,643

 

$

40,774

 

$

 

$

80,332

 

Inter-company payable

 

15,922

 

 

 

 

(15,922

)

 

Compensation and employee benefits payable

 

 

 

37,950

 

19,815

 

 

57,765

 

Accrued bonus and profit sharing

 

 

 

18,696

 

15,293

 

 

33,989

 

Income taxes payable

 

13,009

 

 

 

 

 

13,009

 

Short-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Warehouse line of credit

 

 

 

142,300

 

 

 

142,300

 

Revolving credit and swingline facility

 

 

30,000

 

 

 

 

30,000

 

Other

 

 

188

 

316

 

48,689

 

 

49,193

 

Total short-term borrowings

 

 

30,188

 

142,616

 

48,689

 

 

221,493

 

Current maturities of long-term debt

 

 

9,350

 

49

 

832

 

 

10,231

 

Total current liabilities

 

30,973

 

44,411

 

231,954

 

125,403

 

(15,922

)

416,819

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

11¼% senior subordinated notes, net of unamortized discount

 

 

225,837

 

 

 

 

225,837

 

Senior secured term loans

 

 

216,300

 

 

 

 

216,300

 

16% senior notes, net of unamortized discount

 

60,420

 

 

 

 

 

60,420

 

Other long-term debt

 

 

 

12,324

 

401

 

 

12,725

 

Inter-company loan payable

 

 

 

401,327

 

82,829

 

(484,156

)

 

Total long-term debt

 

60,420

 

442,137

 

413,651

 

83,230

 

(484,156

)

515,282

 

Deferred compensation liability

 

 

100,034

 

 

 

 

100,034

 

Other liabilities

 

16,830

 

 

15,893

 

14,267

 

 

46,990

 

Total liabilities

 

108,223

 

586,582

 

661,498

 

222,900

 

(500,078

)

1,079,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

 

 

4,608

 

 

4,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

268,190

 

301,549

 

294,902

 

86,928

 

(683,379

)

268,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

376,413

 

$

888,131

 

$

956,400

 

$

314,436

 

$

(1,183,457

)

$

1,351,923

 

 

13



 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2001

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3

 

$

931

 

$

42,204

 

$

14,312

 

$

 

$

57,450

 

Receivables, less allowance for doubtful accounts

 

47

 

71

 

70,343

 

85,973

 

 

156,434

 

Warehouse receivable

 

 

 

106,790

 

 

 

106,790

 

Prepaid and other current assets

 

32,155

 

12,465

 

6,321

 

8,353

 

(10,321

)

48,973

 

Total current assets

 

32,205

 

13,467

 

225,658

 

108,638

 

(10,321

)

369,647

 

Property and equipment, net

 

 

 

51,314

 

17,137

 

 

68,451

 

Goodwill

 

 

197,748

 

208,432

 

203,363

 

 

609,543

 

Other intangible assets, net

 

 

 

31,219

 

6,898

 

 

38,117

 

Cash surrender value of insurance policies, deferred compensation plan

 

 

69,385

 

 

 

 

69,385

 

Investment in and advances to unconsolidated subsidiaries

 

 

4,132

 

34,296

 

4,107

 

 

42,535

 

Investment in consolidated subsidiaries

 

274,402

 

65,690

 

168,974

 

 

(509,066

)

 

Inter-company loan receivable

 

 

465,173

 

 

 

(465,173

)

 

Deferred taxes, net

 

54,002

 

 

 

 

 

54,002

 

Prepaid pension costs

 

 

 

 

13,588

 

 

13,588

 

Other assets

 

7,320

 

24,387

 

14,739

 

47,639

 

 

94,085

 

Total assets

 

$

367,929

 

$

839,982

 

$

734,632

 

$

401,370

 

$

(984,560

)

$

1,359,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,022

 

$

4,236

 

$

37,325

 

$

39,399

 

$

 

$

82,982

 

Inter-company payable

 

10,321

 

 

 

 

(10,321

)

 

Compensation and employee benefits payable

 

 

 

44,192

 

23,926

 

 

68,118

 

Accrued bonus and profit sharing

 

 

 

56,821

 

28,367

 

 

85,188

 

Income taxes payable

 

21,736

 

 

 

 

 

21,736

 

Short-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Warehouse line of credit

 

 

 

106,790

 

 

 

106,790

 

Other

 

 

178

 

309

 

48,341

 

 

48,828

 

Total short-term borrowings

 

 

178

 

107,099

 

48,341

 

 

155,618

 

Current maturities of long-term debt

 

 

9,350

 

129

 

744

 

 

10,223

 

Total current liabilities

 

34,079

 

13,764

 

245,566

 

140,777

 

(10,321

)

423,865

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

11¼% senior subordinated notes, net of unamortized discount

 

 

225,737

 

 

 

 

225,737

 

Senior secured term loans

 

 

220,975

 

 

 

 

220,975

 

16% senior notes, net of unamortized discount

 

59,656

 

 

 

 

 

59,656

 

Other long-term debt

 

 

 

14,974

 

721

 

 

15,695

 

Inter-company loan payable

 

 

 

393,827

 

71,346

 

(465,173

)

 

Total long-term debt

 

59,656

 

446,712

 

408,801

 

72,067

 

(465,173

)

522,063

 

Deferred compensation liability

 

 

105,104

 

 

 

 

105,104

 

Other liabilities

 

16,830

 

 

14,575

 

15,256

 

 

46,661

 

Total liabilities

 

110,565

 

565,580

 

668,942

 

228,100

 

(475,494

)

1,097,693

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

 

 

4,296

 

 

4,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

257,364

 

274,402

 

65,690

 

168,974

 

(509,066

)

257,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

367,929

 

$

839,982

 

$

734,632

 

$

401,370

 

$

(984,560

)

$

1,359,353

 

 

14



 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2002

(Unaudited)

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 

$

 

$

205,051

 

$

79,842

 

$

 

$

284,893

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions, fees and other incentives

 

 

 

97,778

 

32,983

 

 

130,761

 

Operating, administrative and other

 

140

 

1,031

 

85,682

 

33,882

 

 

120,735

 

Depreciation and amortization

 

 

 

2,446

 

1,665

 

 

4,111

 

Merger-related and other nonrecurring charges

 

 

23

 

 

 

 

23

 

Operating (loss) income

 

(140

)

(1,054

)

19,145

 

11,312

 

 

29,263

 

Interest income

 

40

 

13,250

 

297

 

168

 

(13,221

)

534

 

Interest expense

 

2,821

 

10,943

 

12,279

 

2,082

 

(13,221

)

14,904

 

Equity income of consolidated subsidiaries

 

9,499

 

9,240

 

5,448

 

 

(24,187

)

 

Income before (benefit) provision for income tax

 

6,578

 

10,493

 

12,611

 

9,398

 

(24,187

)

14,893

 

(Benefit) provision for income tax

 

(711

)

994

 

3,371

 

3,950

 

 

7,604

 

Net income

 

$

7,289

 

$

9,499

 

$

9,240

 

$

5,448

 

$

(24,187

)

$

7,289

 

 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2001

(Unaudited)

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 

$

 

$

 

$

 

$

 

$

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions, fees and other incentives

 

 

 

 

 

 

 

Operating, administrative and other

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

Interest income

 

580

 

 

 

 

 

580

 

Interest expense

 

1,775

 

 

 

 

 

1,775

 

Equity income of consolidated subsidiaries

 

 

 

 

 

 

 

Loss before benefit for income tax

 

(1,195

)

 

 

 

 

(1,195

)

Benefit for income tax

 

(465

)

 

 

 

 

(465

)

Net loss

 

$

(730

)

$

 

$

 

$

 

$

 

$

(730

)

 

15



 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2002

(Unaudited)

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 

$

 

$

373,611

 

$

135,272

 

$

 

$

508,883

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions, fees and other incentives

 

 

 

169,433

 

61,594

 

 

231,027

 

Operating, administrative and other

 

240

 

3,242

 

165,566

 

64,323

 

 

233,371

 

Depreciation and amortization

 

 

 

7,647

 

4,056

 

 

11,703

 

Merger-related and other nonrecurring charges

 

 

605

 

 

 

 

605

 

Operating (loss) income

 

(240

)

(3,847

)

30,965

 

5,299

 

 

32,177

 

Interest income

 

85

 

23,065

 

1,000

 

254

 

(23,006

)

1,398

 

Interest expense

 

5,615

 

21,410

 

21,634

 

5,268

 

(23,006

)

30,921

 

Equity income of consolidated subsidiaries

 

4,288

 

5,869

 

163

 

 

(10,320

)

 

(Loss) income before (benefit) provision for income tax

 

(1,482

)

3,677

 

10,494

 

285

 

(10,320

)

2,654

 

(Benefit) provision for income tax

 

(2,676

)

(611

)

4,625

 

122

 

 

1,460

 

Net income

 

$

1,194

 

$

4,288

 

$

5,869

 

$

163

 

$

(10,320

)

$

1,194

 

 

CBRE HOLDING, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE PERIOD FROM FEBRUARY 20, 2001 (INCEPTION) THROUGH JUNE 30, 2001

(Unaudited)

(Dollars in thousands)

(Company)

 

 

 

Parent

 

CBRE

 

Guarantor
Subsidiaries

 

Nonguarantor
Subsidiaries

 

Elimination

 

Consolidated
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$