UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2002 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the Transition Period from to |
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Commission File Number 000 - 32983 |
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CBRE HOLDING, INC. |
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(Exact name of Registrant as specified in its charter) |
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Delaware |
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94-3391143 |
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(State or other jurisdiction of incorporation or |
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(I.R.S. Employer Identification Number) |
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355 South Grand Avenue, Suite 3100 |
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90071-1552 |
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(Address of principal executive offices) |
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(Zip Code) |
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(213) 613-3226 |
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Not Applicable |
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(Registrant’s telephone number, including area code) |
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(Former name, former address and |
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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 October 31, 2002 was 1,759,361 and 12,649,813, respectively.
CBRE HOLDING, INC.
FORM 10-Q
September 30, 2002
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Consolidated Balance Sheets at September 30, 2002 (Unaudited) and December 31, 2001 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
CBRE HOLDING, INC.
(Dollars in thousands, except share data)
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September
30, |
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December
31, |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
18,484 |
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$ |
57,450 |
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Receivables, less allowance for doubtful accounts of $13,553 and $11,748 at September 30, 2002 and December 31, 2001, respectively |
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137,616 |
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156,434 |
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Warehouse receivable |
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63,940 |
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106,790 |
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Prepaid expenses |
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12,311 |
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8,325 |
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Deferred taxes, net |
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32,341 |
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32,155 |
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Other current assets |
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8,977 |
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8,493 |
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Total current assets |
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273,669 |
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369,647 |
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Property and equipment, net |
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62,896 |
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68,451 |
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Goodwill |
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581,661 |
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609,543 |
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Other intangible assets, net of accumulated amortization of $6,294 and $3,153 at September 30, 2002 and December 31, 2001, respectively |
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91,874 |
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38,117 |
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Cash surrender value of insurance policies, deferred compensation plan |
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59,466 |
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69,385 |
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Investments in and advances to unconsolidated subsidiaries |
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43,973 |
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42,535 |
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Deferred taxes, net |
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31,947 |
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54,002 |
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Prepaid pension costs |
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13,908 |
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13,588 |
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Other assets |
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95,289 |
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89,244 |
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Total assets |
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$ |
1,254,683 |
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$ |
1,354,512 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable and accrued expenses |
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$ |
77,867 |
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$ |
82,982 |
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Compensation and employee benefits payable |
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54,358 |
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68,118 |
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Accrued bonus and profit sharing |
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53,077 |
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85,188 |
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Income taxes payable |
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11,709 |
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21,736 |
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Short-term borrowings: |
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Warehouse line of credit |
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63,940 |
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106,790 |
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Revolver and swingline credit facility |
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7,000 |
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— |
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Other |
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52,996 |
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48,828 |
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Total short-term borrowings |
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123,936 |
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155,618 |
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Current maturities of long-term debt |
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10,519 |
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10,223 |
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Total current liabilities |
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331,466 |
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423,865 |
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Long-term debt: |
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11¼% senior subordinated notes, net of unamortized discount of $3,111 and $3,263 at September 30, 2002 and December 31, 2001, respectively |
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225,889 |
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225,737 |
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Senior secured term loans |
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213,650 |
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220,975 |
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16% senior notes, net of unamortized discount of $5,170 and $5,344 at September 30, 2002 and December 31, 2001, respectively |
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61,137 |
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59,656 |
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Other long-term debt |
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12,484 |
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15,695 |
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Total long-term debt |
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513,160 |
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522,063 |
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Deferred compensation liability |
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96,453 |
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105,104 |
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Other liabilities |
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51,439 |
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46,661 |
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Total liabilities |
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992,518 |
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1,097,693 |
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Minority interest |
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4,602 |
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4,296 |
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Commitments and contingencies |
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Stockholders’ Equity: |
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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 September 30, 2002 and December 31, 2001, respectively |
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17 |
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17 |
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Class B common stock; $0.01 par value; 25,000,000 shares authorized; 12,649,813 shares issued and outstanding (including treasury shares) at September 30, 2002 and December 31, 2001 |
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127 |
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127 |
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Additional paid-in capital |
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240,646 |
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240,541 |
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Notes receivable from sale of stock |
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(4,874 |
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(5,884 |
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Accumulated earnings |
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21,056 |
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17,426 |
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Accumulated other comprehensive income |
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2,323 |
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296 |
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Treasury stock at cost, 110,174 shares at September 30, 2002 |
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(1,732 |
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Total stockholders’ equity |
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257,563 |
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252,523 |
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Total liabilities and stockholders’ equity |
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$ |
1,254,683 |
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$ |
1,354,512 |
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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)
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Company |
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Company |
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Company |
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Company |
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Predecessor |
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Predecessor |
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CBRE |
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CBRE |
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CBRE |
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CBRE |
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CB Richard |
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CB Richard |
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Three |
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Three |
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Nine |
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February
20, |
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Period from |
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Period from |
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Revenue |
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$ |
284,928 |
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$ |
225,566 |
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$ |
793,811 |
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$ |
225,566 |
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$ |
50,587 |
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$ |
607,934 |
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Costs and expenses: |
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Commissions, fees and other incentives |
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137,510 |
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109,095 |
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368,537 |
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109,095 |
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24,708 |
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280,813 |
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Operating, administrative and other |
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119,852 |
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91,624 |
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353,223 |
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91,624 |
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26,800 |
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293,512 |
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Depreciation and amortization |
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6,404 |
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5,788 |
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18,107 |
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5,788 |
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2,514 |
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25,656 |
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Merger-related and other nonrecurring charges |
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— |
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3,276 |
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50 |
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3,276 |
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16,519 |
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22,127 |
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Operating income (loss) |
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21,162 |
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15,783 |
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53,894 |
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15,783 |
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(19,954 |
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(14,174 |
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Interest income |
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1,275 |
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1,173 |
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2,673 |
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1,753 |
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75 |
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1,567 |
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Interest expense |
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15,420 |
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13,407 |
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46,341 |
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15,182 |
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1,890 |
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20,303 |
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Income (loss) before provision for income tax |
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7,017 |
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3,549 |
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10,226 |
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2,354 |
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(21,769 |
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(32,910 |
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Provision for income tax |
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5,136 |
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1,571 |
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6,596 |
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1,106 |
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7,884 |
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1,110 |
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Net income (loss) |
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$ |
1,881 |
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$ |
1,978 |
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$ |
3,630 |
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$ |
1,248 |
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$ |
(29,653 |
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$ |
(34,020 |
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Basic income (loss) per share |
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$ |
0.13 |
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$ |
0.17 |
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$ |
0.24 |
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$ |
0.25 |
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$ |
(1.40 |
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$ |
(1.60 |
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Weighted average shares outstanding for basic income (loss) per share |
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15,016,044 |
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11,865,459 |
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15,033,640 |
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4,921,204 |
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21,194,674 |
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21,306,584 |
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Diluted income (loss) per share |
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$ |
0.12 |
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$ |
0.17 |
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$ |
0.24 |
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$ |
0.25 |
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$ |
(1.40 |
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$ |
(1.60 |
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Weighted average shares outstanding for diluted income (loss) per share |
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15,225,788 |
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11,885,092 |
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15,216,740 |
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4,929,304 |
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21,194,674 |
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21,306,584 |
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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)
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Company |
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Company |
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Predecessor |
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CBRE |
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CBRE |
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CB Richard |
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Nine |
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February
20, |
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Period from |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
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$ |
3,630 |
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$ |
1,248 |
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$ |
(34,020 |
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Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
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Depreciation and amortization excluding deferred financing costs |
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18,107 |
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5,788 |
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25,656 |
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Deferred compensation plan deferrals |
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9,224 |
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6,125 |
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16,447 |
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Gain on sale of properties, businesses and servicing rights |
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(5,026 |
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(384 |
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(10,009 |
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Equity interest in earnings of unconsolidated subsidiaries |
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(5,880 |
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(912 |
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(2,854 |
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Decrease (increase) in receivables |
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20,020 |
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(10,931 |
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26,970 |
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Decrease (increase) in cash surrender value of insurance policies, deferred compensation plan |
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9,919 |
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8,351 |
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(11,665 |
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(Decrease) increase in compensation and employee benefits and accrued bonus and profit sharing |
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(40,481 |
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25,203 |
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(101,312 |
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Increase (decrease) in accounts payable and accrued expenses |
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2,679 |
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(1,106 |
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(5,491 |
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Decrease in income taxes payable |
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(10,250 |
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(293 |
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(16,357 |
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Decrease in other liabilities |
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(19,409 |
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(11,501 |
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(9,973 |
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Net change in other operating assets and liabilities |
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(1,503 |
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3,500 |
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3,710 |
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Net cash (used in) provided by operating activities |
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(18,970 |
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25,088 |
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(118,898 |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property and equipment |
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(8,281 |
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(5,417 |
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(16,146 |
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Proceeds from sale of properties, businesses and servicing rights |
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5,158 |
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5 |
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9,544 |
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Purchase of investments |
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(491 |
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(1,033 |
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(5,484 |
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Acquisition of businesses including net assets acquired, intangibles and goodwill |
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(14,529 |
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(203,582 |
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(1,924 |
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Other investing activities, net |
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1,681 |
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(2,136 |
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539 |
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Net cash used in investing activities |
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(16,462 |
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(212,163 |
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(13,471 |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from revolver and swingline credit facility |
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214,250 |
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87,750 |
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— |
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Repayment of revolver and swingline credit facility |
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(207,250 |
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(65,250 |
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— |
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(Repayment of) proceeds from senior notes and other loans, net |
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(1,376 |
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(3,179 |
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446 |
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Proceeds from senior secured term loans |
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— |
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235,000 |
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— |
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Repayment of senior secured term loans |
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(7,014 |
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(2,337 |
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— |
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Repayment of 8 7/8% senior subordinated notes |
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— |
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(175,000 |
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— |
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Proceeds from 11 1/4% senior subordinated notes |
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— |
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225,629 |
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— |
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Proceeds from 16% senior subordinated notes |
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— |
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65,000 |
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— |
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Proceeds from revolving credit facility |
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— |
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— |
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195,000 |
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Repayment of revolving credit facility |
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— |
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(235,000 |
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(70,000 |
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Payment of deferred financing fees |
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(443 |
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(21,750 |
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(8 |
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Proceeds from issuance of common stock |
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180 |
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92,402 |
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— |
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Other financing activities, net |
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(412 |
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(5,468 |
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792 |
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Net cash (used in) provided by financing activities |
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(2,065 |
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197,797 |
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126,230 |
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
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(37,497 |
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10,722 |
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(6,139 |
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CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD |
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57,450 |
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13,662 |
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20,854 |
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Effect of exchange rate changes on cash |
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(1,469 |
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(173 |
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(1,053 |
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CASH AND CASH EQUIVALENTS, AT END OF PERIOD |
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$ |
18,484 |
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$ |
24,211 |
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$ |
13,662 |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Cash paid during the period for: |
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Interest (none capitalized) |
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$ |
33,961 |
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$ |
3,871 |
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$ |
18,457 |
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Income taxes, net |
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$ |
16,481 |
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$ |
636 |
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$ |
19,083 |
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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), which 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 Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143, “Accounting for Asset Retirement Obligations.” This statement applies to legal obligations associated with the retirement of tangible 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 lessees. 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. Adoption of this statement is not expected to have any material effect on the Company’s financial position or results of operations.
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. The adoption of SFAS No. 144 did not have a material impact on the Company’s financial position or results of operations.
In April 2002, the FASB issued SFAS 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. All other provisions of this statement shall be effective for financial statements issued on or after May 15, 2002. Adoption of this statement is not expected to have any material effect on the Company’s financial position or results of operations.
In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.”
6
This statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan and nullifies Emerging Issues Task Force Issue No. 94.3,“Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.” This statement is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The Company is currently evaluating the impact of the adoption of this statement on its financial position and results of operations.
3. Basis of Preparation
The accompanying consolidated balance sheets as of September 30, 2002 and December 31, 2001, the consolidated statements of operations for the three months ended September 30, 2002 and 2001, and the consolidated statements of operations and cash flows for the nine months ended September 30, 2002 and for the period from February 20, 2001 (inception) through September 30, 2001, reflect the consolidated balance sheets, results of operations and cash flows of the Company. They 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. Additionally, 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 consolidated financial statements, including the consolidated statement of operations for the period from July 1, 2001 to July 20, 2001 and the consolidated statements of operations and cash flows for the period from January 1, 2001 to July 20, 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 historical 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 |
|
Nine Months |
|
||
|
|
|
2001 |
|
2001 |
|
||
|
|
|
|
|
|
|
||
|
Revenue |
|
$ |
276,153 |
|
$ |
833,500 |
|
|
Operating income |
|
$ |
11,796 |
|
$ |
27,750 |
|
|
Net loss |
|
$ |
(14,412 |
) |
$ |
(19,711 |
) |
|
Basic loss per share |
|
$ |
(0.96 |
) |
$ |
(1.31 |
) |
|
Diluted loss per share |
|
$ |
(0.95 |
) |
$ |
(1.30 |
) |
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 accounting principles generally accepted in the United States (U.S.) 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 the current period presentation. The results of operations for the nine months ended September 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 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.
7
4. Goodwill and Other Intangible Assets
In June 2001, the FASB issued SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 replaces Accounting Principles Board Opinion No. 16, “Business Combinations” and requires the use of the 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. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets.”
The Company adopted SFAS No. 141 for all business combinations completed after June 30, 2001 and 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 June 2002, the Company completed the first step of the transitional goodwill impairment test which entailed comparing the fair value of each reporting unit to its carrying value. The Company determined that no impairment existed at the effective date of the implementation of the new standard. The Company also completed its required annual goodwill impairment test as of October 1, 2002 and determined that no impairment existed as of that date.
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 |
|
CBRE |
|
CBRE |
|
CBRE |
|
CB Richard |
|
CB Richard |
|
||||||
|
|
|
Three |
|
Three |
|
Nine |
|
February
20, |
|
Period from |
|
Period from |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reported net income (loss) |
|
$ |
1,881 |
|
$ |
1,978 |
|
$ |
3,630 |
|
$ |
1,248 |
|
$ |
(29,653 |
) |
$ |
(34,020 |
) |
|
Add back amortization of goodwill, net of taxes |
|
— |
|
— |
|
— |
|
— |
|
662 |
|
7,632 |
|
||||||
|
Adjusted net income (loss) |
|
$ |
1,881 |
|
$ |
1,978 |
|
$ |
3,630 |
|
$ |
1,248 |
|
$ |
(28,991 |
) |
$ |
(26,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Basic income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reported net income (loss) per share |
|
$ |
0.13 |
|
$ |
0.17 |
|
$ |
0.24 |
|
$ |
0.25 |
|
$ |
(1.40 |
) |
$ |
(1.60 |
) |
|
Add back goodwill amortization per share |
|
— |
|
— |
|
— |
|
— |
|
0.03 |
|
0.36 |
|
||||||
|
Adjusted basic income (loss) per share |
|
$ |
0.13 |
|
$ |
0.17 |
|
$ |
0.24 |
|
$ |
0.25 |
|
$ |
(1.37 |
) |
$ |
(1.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reported net income (loss) per share |
|
$ |
0.12 |
|
$ |
0.17 |
|
$ |
0.24 |
|
$ |
0.25 |
|
$ |
(1.40 |
) |
$ |
(1.60 |
) |
|
Add back goodwill amortization per share |
|
— |
|
— |
|
— |
|
— |
|
0.03 |
|
0.36 |
|
||||||
|
Adjusted diluted income (loss) per share |
|
$ |
0.12 |
|
$ |
0.17 |
|
$ |
0.24 |
|
$ |
0.25 |
|
$ |
(1.37 |
) |
$ |
(1.24 |
) |
8
The Company has finalized the fair value of all assets and liabilities as of the merger date. The resulting changes in the carrying amount of goodwill for the nine months ended September 30, 2002, are as follows (dollars in thousands):
|
|
|
Americas |
|
EMEA |
|
Asia Pacific |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Balance at January 1, 2002 |
|
$ |
510,188 |
|
$ |
96,637 |
|
$ |
2,718 |
|
$ |
609,543 |
|
|
Reclassed (to) from intangible assets |
|
(57,841 |
) |
3,617 |
|
— |
|
(54,224 |
) |
||||
|
Purchase accounting adjustments related to prior acquisitions |
|
21,084 |
|
5,458 |
|
(200 |
) |
26,342 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Balance at September 30, 2002 |
|
$ |
473,431 |
|
$ |
105,712 |
|
$ |
2,518 |
|
$ |
581,661 |
|
Intangible assets totaled $91.9 million, net of accumulated amortization of $6.3 million, as of September 30, 2002 and are comprised of the following (dollars in thousands):
|
|
|
As of September 30, 2002 |
|
|||||
|
|
|
Gross Carrying |
|
Accumulated |
|
|||
|
|
|
|
|
|
|
|||
|
Amortizable intangible assets |
|
|
|
|
|
|||
|
Management contracts |
|
$ |
18,638 |
|
$ |
4,558 |
|
|
|
Loan servicing rights |
|
15,830 |
|
1,736 |
|
|||
|
Total |
|
$ |
34,468 |
|
$ |
6,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortizable intangible assets |
|
|
|
|
|
|
||
|
Trademark |
|
$ |
63,700 |
|
|
|
||
In accordance with SFAS No. 141, the trademark was separately identified 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 $1.5 million and $2.6 million for the three and nine months ended September 30, 2002, respectively. 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, $4.1 million, $3.4 million and $3.1 million, respectively.
5. Investments in and Advances to Unconsolidated Subsidiaries
Condensed financial information for the unconsolidated subsidiaries accounted for using the equity method are as follows (in thousands):
Condensed Statements of Operations Information:
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
||||||||
|
|
|
2002 |
|
2001 |
|
2002 |
|
2001 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue |
|
$ |
83,435 |
|
$ |
68,614 |
|
$ |
252,341 |
|
$ |
204,469 |
|
|
Operating income |
|
$ |
17,786 |
|
$ |
10,733 |
|
$ |
58,335 |
|
$ |
32,054 |
|
|
Net income |
|
$ |
24,579 |
|
$ |
7,140 |
|
$ |
34,035 |
|
$ |
13,284 |
|
Condensed Balance Sheets Information:
|
|
|
September 30, 2002 |
|
September 30, 2001 |
|
||
|
|
|
|
|
|
|
||
|
Current assets |
|
$ |
113,750 |
|
$ |
115,380 |
|
|
Noncurrent assets |
|
$ |
1,156,983 |
|
$ |
796,134 |
|
|
Current liabilities |
|
$ |
75,960 |
|
$ |
90,030 |
|
|
Noncurrent liabilities |
|
$ |
475,691 |
|
$ |
314,884 |
|
|
Minority interest |
|
$ |
4,153 |
|
$ |
500 |
|
9
The Company’s investment management business involves investing the Company’s own capital in certain real estate investments together with clients, including its equity investments in CB Richard Ellis Strategic Partners, L.P., Global Innovation Partners, L.L.C., 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 are jointly and severally guaranteed by the Company and its domestic subsidiaries and are secured by substantially all their assets. 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 consolidated balance sheets, net of unamortized discount, was $225.9 million at September 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 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 September 30, 2002 had an outstanding line of credit of $7.0 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 $230.3 million at September 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 and July 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 $61.1 million, net of unamortized discount, at September 30, 2002.
10
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 cash flow 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 Credit Facility requires the Company to pay a facility fee based on the total amount of the unused commitment.
The Company has short-term borrowings of $123.9 million and $155.6 million with related weighted average interest rates of 4.3% and 4.5% as of September 30, 2002 and December 31, 2001, respectively.
A subsidiary of the Company has a credit agreement with Residential Funding Corporation (RFC). The initial credit agreement provided for a revolving line of credit of up to $150.0 million, bore interest at 1.0% over the RFC base rate, and expired on August 31, 2002. On April 20, 2002, the Company obtained a temporary line of credit increase of $210.0 million that 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 that resulted in a total line of credit equaling $170.0 million, which expired on August 31, 2002. On August 21, 2002, the expiration date on the initial credit agreement was extended to October 31, 2002. During the quarter ended September 30, 2002, the Company had a maximum of $186.8 million revolving line of credit principal outstanding. At September 30, 2002, the accompanying consolidated balance sheets include a $63.9 million warehouse line of credit outstanding, included in short-term borrowings, and also contain a $63.9 million warehouse receivable.
On October 24, 2002, the maturity date on the credit agreement with RFC was further extended to November 30, 2002. Effective November 1, 2002, the Company executed an amendment to the revolving line of credit that increased the line of credit from $150.0 million to $200.0 million and redefined the RFC base rate to the greater of LIBOR or 2.0% per annum.
During 2001, the Company incurred certain non recourse debt through a joint venture in order to purchase property that is being marketed for sale. In September 2002, the maturity date on this non-recourse debt was extended to June 18, 2003.
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 September 30, 2002, the Company had committed an additional $28.0 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.
11
The following table provides a summary of the comprehensive income (loss) (dollars in thousands):
|
|
|
Company |
|
Company |
|
Company |
|
Company |
|
Predecessor |
|
Predecessor |
|
||||||
|
|
|
CBRE |
|
CBRE |
|
CBRE |
|
CBRE |
|
CB Richard |
|
CB Richard |
|
||||||
|
|
|
Three |
|
Three |
|
Nine |
|
February
20, |
|
Period from |
|
Period from |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net income (loss) |
|
$ |
1,881 |
|
$ |
1,978 |
|
$ |
3,630 |
|
$ |
1,248 |
|
$ |
(29,653 |
) |
$ |
(34,020 |
) |
|
Foreign currency translation (loss) gain |
|
(8,285 |
) |
1,546 |
|
2,027 |
|
1,546 |
|
(36 |
) |
(7,106 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Comprehensive (loss) income |
|
$ |
(6,404 |
) |
$ |
3,524 |
|
$ |
5,657 |
|
$ |
2,794 |
|
$ |
(29,689 |
) |
$ |
(41,126 |
) |
9. Per Share Information
Basic income (loss) per share for the Company was computed by dividing the net income (loss) by the weighted average number of common shares outstanding of 15,016,044 and 11,865,459 for the three months ended September 30, 2002 and 2001, respectively, and 15,033,640 and 4,921,204 for the nine months ended September 30, 2002 and for the period from February 20, 2001 (inception) through September 30, 2001, respectively. Diluted income per share included the dilutive effect of contingently issuable shares of 209,744 and 19,633 for the three months ended September 30, 2002 and 2001, respectively and 183,100 and 8,100 for the nine months ended September 30, 2002 and 2001, respectively.
Basic loss per share for CBRE was computed by dividing the net loss by the weighted average number of common shares outstanding of 21,194,674 and 21,306,584 for the period from July 1 to July 20, 2001 and for the period from January 1 to July 20, 2001, respectively. As a result of operating losses incurred for the period from July 1 to July 20, 2001 and for the period from January 1 to July 20, 2001, diluted weighted average shares outstanding did not give effect to common stock equivalents, as to do so would have been anti-dilutive.
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 $469.6 million and $373.2 million at September 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 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 September 30, 2002 and December 31, 2001; condensed consolidating statements of operations for the three months ended September 30, 2002 and 2001, the nine months ended September 30, 2002, the period from February 20, 2001 (inception) through September 30, 2001, the period
12
from July 1, 2001 to July 20, 2001 and the period from January 1, 2001 to July 20, 2001 and condensed consolidating statements of cash flows for the nine months ended September 30, 2002, the period from February 20, 2001 (inception) through September 30, 2001 and the period from January 1, 2001 to July 20, 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.
13
CBRE HOLDING, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF SEPTEMBER 30, 2002
(Unaudited)
(Dollars in thousands)
(Company)
|
|
|
Parent |
|
CBRE |
|
Guarantor |
|
Nonguarantor |
|
Elimination |
|
Consolidated |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cash and cash equivalents |
|
$ |
21 |
|
$ |
155 |
|
$ |
12,423 |
|
$ |
5,885 |
|
$ |
— |
|
$ |
18,484 |
|
||
|
Receivables, less allowance for doubtful accounts |
|
24 |
|
34 |
|
62,114 |
|
75,444 |
|
— |
|
137,616 |
|
||||||||
|
Warehouse receivable |
|
— |
|
— |
|
63,940 |
|
— |
|
— |
|
63,940 |
|
||||||||
|
Prepaid and other current assets |
|
32,341 |
|
20,027 |
|
8,493 |
|
10,718 |
|
(17,950 |
) |
53,629 |
|
||||||||
|
Total current assets |
|
32,386 |
|
20,216 |
|
146,970 |
|
92,047 |
|
(17,950 |
) |
273,669 |
|
||||||||
|
Property and equipment, net |
|
— |
|
— |
|
48,436 |
|
14,460 |
|
— |
|
62,896 |
|
||||||||
|
Goodwill |
|
— |
|
— |
|
452,438 |
|
129,223 |
|
— |
|
581,661 |
|
||||||||
|
Other intangible assets, net |
|
— |
|
— |
|
89,464 |
|
2,410 |
|
— |
|
91,874 |
|
||||||||
|
Cash surrender value of insurance policies, deferred compensation plan |
|
— |
|
59,466 |
|
— |
|
— |
|
— |
|
59,466 |
|
||||||||
|
Investment in and advances to unconsolidated subsidiaries |
|
— |
|
4,654 |
|
34,643 |
|
4,676 |
|
— |
|
43,973 |
|
||||||||
|
Investment in consolidated subsidiaries |
|
297,882 |
|
301,481 |
|
76,486 |
|
— |
|
(675,849 |
) |
— |
|
||||||||
|
Inter-company loan receivable |
|
— |
|
457,265 |
|
— |
|
— |
|
(457,265 |
) |
— |
|
||||||||
|
Deferred taxes, net |
|
31,947 |
|
— |
|
— |
|
— |
|
— |
|
31,947 |
|
||||||||
|
Prepaid pension costs |
|
— |
|
— |
|
— |
|
13,908 |
|
— |
|
13,908 |
|
||||||||
|
Other assets |
|
5,038 |
|
18,640 |
|
22,529 |
|
49,082 |
|
— |
|
95,289 |
|
||||||||
|
Total assets |
|
$ |
367,253 |
|
$ |
861,722 |
|
$ |
870,966 |
|
$ |
305,806 |
|
$ |
(1,151,064 |
) |
$ |
1,254,683 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Accounts payable and accrued expenses |
|
$ |
2,064 |
|
$ |
11,185 |
|
$ |
33,244 |
|
$ |
31,374 |
|
$ |
— |
|
$ |
77,867 |
|
||
|
Inter-company payable |
|
17,950 |
|
— |
|
— |
|
— |
|
(17,950 |
) |
— |
|
||||||||
|
Compensation and employee benefits payable |
|
— |
|
— |
|
35,588 |
|
18,770 |
|
— |
|
54,358 |
|
||||||||
|
Accrued bonus and profit sharing |
|
— |
|
— |
|
31,379 |
|
21,698 |
|
— |
|
53,077 |
|
||||||||
|
Income taxes payable |
|
11,709 |
|
— |
|
— |
|
— |
|
— |
|
11,709 |
|
||||||||
|
Short-term borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Warehouse line of credit |
|
— |
|
— |
|
63,940 |
|
— |
|
— |
|
63,940 |
|
||||||||
|
Revolving credit and swingline facility |
|
— |
|
7,000 |
|
— |
|
— |
|
— |
|
7,000 |
|
||||||||
|
Other |
|
— |
|
— |
|
16 |
|
52,980 |
|
— |
|
52,996 |
|
||||||||
|
Total short-term borrowings |
|
— |
|
7,000 |
|
63,956 |
|
52,980 |
|
— |
|
123,936 |
|
||||||||
|
Current maturities of long-term debt |
|
— |
|
9,663 |
|
— |
|
856 |
|
— |
|
10,519 |
|
||||||||
|
Total current liabilities |
|
31,723 |
|
27,848 |
|
164,167 |
|
125,678 |
|
(17,950 |
) |
331,466 |
|
||||||||
|
Long-term debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
11¼% senior subordinated notes, net of unamortized discount |
|
— |
|
225,889 |
|
— |
|
— |
|
— |
|
225,889 |
|
||||||||
|
Senior secured term loans |
|
— |
|
213,650 |
|
— |
|
— |
|
— |
|
213,650 |
|
||||||||
|
16% senior notes, net of unamortized discount |
|
61,137 |
|
— |
|
— |
|
— |
|
— |
|
61,137 |
|
||||||||
|
Other long-term debt |
|
— |
|
— |
|
12,229 |
|
255 |
|
— |
|
12,484 |
|
||||||||
|
Inter-company loan payable |
|
— |
|
— |
|
377,765 |
|
79,500 |
|
(457,265 |
) |
— |
|
||||||||
|
Total long-term debt |
|
61,137 |
|
439,539 |
|
389,994 |
|
79,755 |
|
(457,265 |
) |
513,160 |
|
||||||||
|
Deferred compensation liability |
|
— |
|
96,453 |
|
— |
|
— |
|
— |
|
96,453 |
|
||||||||
|
Other liabilities |
|
16,830 |
|
— |
|
15,324 |
|
19,285 |
|
— |
|
51,439 |
|
||||||||
|
Total liabilities |
|
109,690 |
|
563,840 |
|
569,485 |
|
224,718 |
|
(475,215 |
) |
992,518 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Minority interest |
|
— |
|
— |
|
— |
|
4,602 |
|
— |
|
4,602 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Stockholders’ Equity: |
|
257,563 |
|
297,882 |
|
301,481 |
|
76,486 |
|
(675,849 |
) |
257,563 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total liabilities and stockholders’ equity |
|
$ |
367,253 |
|
$ |
861,722 |
|
$ |
870,966 |
|
$ |
305,806 |
|
$ |
(1,151,064 |
) |
$ |
1,254,683 |
|
||
14
CBRE HOLDING, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2001
(Dollars in thousands)
(Company)
|
|
|
Parent |
|
CBRE |
|
Guarantor |
|
Nonguarantor |
|
Elimination |
|
Consolidated |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
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 |
|
271,615 |
|
65,690 |
|
168,974 |
|
— |
|
(506,279 |
) |
— |
|
||||||
|
Inter-company loan receivable |
|
— |
|
465,173 |
|
— |
|
— |
|
(465,173 |
) |
— |
|
||||||
|
Deferred taxes, net |
|
54,002 |
|
— |
|
— |
|
— |
|
— |
|
54,002 |
|
||||||
|
Prepaid pension costs |
|
— |
|
— |
|
— |
|
13,588 |
|
— |
|
13,588 |
|
||||||
|
Other assets |
|
5,266 |
|
21,600 |
|
14,739 |
|
47,639 |
|
— |
|
89,244 |
|
||||||
|
Total assets |
|
$ |
363,088 |
|
$ |
837,195 |
|
$ |
734,632 |
|
$ |
401,370 |
|
$ |
(981,773 |
) |
$ |
1,354,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
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: |
|
252,523 |
|
271,615 |
|
65,690 |
|
168,974 |
|
(506,279 |
) |
252,523 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total liabilities and stockholders’ equity |
|
$ |
363,088 |
|
$ |
837,195 |
|
$ |
734,632 |
|
$ |
401,370 |
|
$ |
(981,773 |
) |
$ |
1,354,512 |
|
15
CBRE HOLDING, INC.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
(Unaudited)
(Dollars in thousands)
(Company)
|
|
|
Parent |
|
CBRE |
|
Guarantor |
|
Nonguarantor |
|
Elimination |
|
Consolidated |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenue |
|
$ |
— |
|
$ |
— |
|
$ |
211,791 |
|
$ |
73,137 |
|
$ |
— |
|
$ |
284,928 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commissions, fees and other incentives |
|
— |
|
— |
|
103,245 |
|
34,265 |
|
— |
|
137,510 |
|
||||||
|
Operating, administrative and other |
|
60 |
|
86 |
|
82,894 |
|
36,812 |
|
— |
|
119,852 |
|
||||||
|
Depreciation and amortization |
|
— |
|
— |
|
4,065 |
|
2,339 |
|
— |
|
6,404 |
|
||||||
|
Merger-related and other nonrecurring charges |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||||||
|
Operating (loss) income |
|
(60 |
) |
(86 |
) |
21,587 |
|
(279 |
) |
— |
|
21,162 |
|
||||||
|
Interest income |
|
38 |
|
10,154 |
|
643 |
|
566 |
|
(10,126 |
) |
1,275 |
|
||||||
|
Interest expense |
|
2,850 |
|
10,944 |
|
9,270 |
|
2,482 |
|
(10,126 |
) |
15,420 |
|
||||||
|
Equity income (loss) of consolidated subsidiaries |
|
3,458 |
|
3,997 |
|
(1,147 |
) |
— |
|
(6,308 |
) |
— |
|
||||||
|
Income (loss) before (benefit) provision for income tax |
|
586 |
|
3,121 |
|
11,813 |
|
(2,195 |
) |
(6,308 |
) |
7,017 |
|
||||||
|
(Benefit) provision for income tax |
|
(1,295 |
) |
(337 |
) |
7,816 |
|
(1,048 |
) |
— |
|
5,136 |
|
||||||
|
Net income (loss) |
|
$ |
1,881 |
|
$ |
3,458 |
|
$ |
3,997 |
|
$ |
(1,147 |
) |
$ |
(6,308 |
) |
$ |
1,881 |
|
CBRE HOLDING, INC.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001
(Unaudited)
(Dollars in thousands)
(Company)
|
|
|
Parent |
|
CBRE |
|
Guarantor |
|
Nonguarantor |
|
Elimination |
|
Consolidated |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenue |
|
$ |
— |
|
$ |
— |
|
$ |
169,927 |
|
$ |
55,639 |
|
$ |
— |
|
$ |
225,566 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commissions, fees and other incentives |
|
— |
|
— |
|
84,428 |
|
24,667 |
|
— |
|
109,095 |
|
||||||
|
Operating, administrative and other |
|
402 |
|
167 |
|
62,842 |
|
28,213 |
|
— |
|
91,624 |
|
||||||
|
Depreciation and amortization |
|
— |
|
— |
|||||||||||||||