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Segments | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segments |
18. | Segments
We report our operations through the following segments: (1) Americas, (2) EMEA, (3) Asia Pacific, (4) Global Investment Management; and (5) Development Services. The Americas segment is our largest segment of operations and provides a comprehensive range of services throughout the U.S. and in the largest regions of Canada and key markets in Latin America. The primary services offered consist of the following: property sales, property leasing, mortgage services, appraisal and valuation, property management and occupier outsourcing services. Our EMEA and Asia Pacific segments generally provide services similar to the Americas business segment. The EMEA segment has operations primarily in Europe, while the Asia Pacific segment has operations in Asia, Australia and New Zealand. Our Global Investment Management business provides investment management services to clients seeking to generate returns and diversification through direct and indirect investments in real estate in North America, Europe and Asia Pacific. Our Development Services business consists of real estate development and investment activities primarily in the U.S. Summarized financial information by segment is as follows (dollars in thousands):
|  | Year Ended December 31, |
|  |  | 2017 |  |  | 2016 (1) |  |  | 2015 (1) |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 7,860,239 |  |  | $ | 7,246,459 |  |  | $ | 6,201,676 |
EMEA |  |  | 4,164,789 |  |  |  | 3,884,596 |  |  |  | 2,984,312 |
Asia Pacific |  |  | 1,729,309 |  |  |  | 1,499,320 |  |  |  | 1,143,479 |
Global Investment Management |  |  | 377,644 |  |  |  | 369,800 |  |  |  | 460,700 |
Development Services |  |  | 77,627 |  |  |  | 71,414 |  |  |  | 65,643 |
Total revenue |  | $ | 14,209,608 |  |  | $ | 13,071,589 |  |  | $ | 10,855,810 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 289,338 |  |  | $ | 254,118 |  |  | $ | 198,986 |
EMEA |  |  | 72,322 |  |  |  | 66,619 |  |  |  | 68,263 |
Asia Pacific |  |  | 18,258 |  |  |  | 17,810 |  |  |  | 15,609 |
Global Investment Management |  |  | 24,123 |  |  |  | 25,911 |  |  |  | 29,020 |
Development Services |  |  | 2,073 |  |  |  | 2,469 |  |  |  | 2,218 |
Total depreciation and amortization |  | $ | 406,114 |  |  | $ | 366,927 |  |  | $ | 314,096 |
(1) | In 2017, we changed the presentation of the operating results of one of our emerging businesses among our regional services reporting segments. Prior year amounts have been reclassified to conform with the current-year presentation. This change had no impact on our consolidated results.
|  | Year Ended December 31, |
|  |  | 2017 |  |  | 2016 (1) |  |  | 2015 (1) |
Equity income from unconsolidated subsidiaries |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 18,789 |  |  | $ | 17,892 |  |  | $ | 18,413 |
EMEA |  |  | 1,553 |  |  |  | 1,817 |  |  |  | 1,934 |
Asia Pacific |  |  | 397 |  |  |  | 223 |  |  |  | 83 |
Global Investment Management |  |  | 7,923 |  |  |  | 7,243 |  |  |  | 5,972 |
Development Services |  |  | 181,545 |  |  |  | 170,176 |  |  |  | 136,447 |
Total equity income from unconsolidated subsidiaries |  | $ | 210,207 |  |  | $ | 197,351 |  |  | $ | 162,849 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 1,013,864 |  |  | $ | 950,355 |  |  | $ | 858,174 |
EMEA |  |  | 305,743 |  |  |  | 271,648 |  |  |  | 212,687 |
Asia Pacific |  |  | 175,900 |  |  |  | 141,912 |  |  |  | 117,557 |
Global Investment Management |  |  | 94,373 |  |  |  | 83,151 |  |  |  | 134,240 |
Development Services |  |  | 119,654 |  |  |  | 113,937 |  |  |  | 90,066 |
Total Adjusted EBITDA |  | $ | 1,709,534 |  |  | $ | 1,561,003 |  |  | $ | 1,412,724 |
(1) | In 2017, we changed the presentation of the operating results of one of our emerging businesses among our regional services reporting segments. Prior year amounts have been reclassified to conform with the current-year presentation. This change had no impact on our consolidated results.
Adjusted EBITDA is the measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to each segment and assessing performance of each segment. EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of certain cash and non-cash charges related to acquisitions, cost-elimination expenses and certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue. Adjusted EBITDA is calculated as follows (dollars in thousands):
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Net income attributable to CBRE Group, Inc. |  | $ | 691,479 |  |  | $ | 571,973 |  |  | $ | 547,132 |
Add: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 406,114 |  |  |  | 366,927 |  |  |  | 314,096 |
Interest expense |  |  | 136,814 |  |  |  | 144,851 |  |  |  | 118,880 |
Write-off of financing costs on extinguished debt |  |  | — |  |  |  | — |  |  |  | 2,685 |
Provision for income taxes |  |  | 466,147 |  |  |  | 296,662 |  |  |  | 320,853 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 9,853 |  |  |  | 8,051 |  |  |  | 6,311 |
EBITDA |  |  | 1,690,701 |  |  |  | 1,372,362 |  |  |  | 1,297,335 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Integration and other costs related to acquisitions |  |  | 27,351 |  |  |  | 125,743 |  |  |  | 48,865 |
Carried interest incentive compensation (reversal) expense to align with the timing of associated revenue |  |  | (8,518 | ) |  |  | (15,558 | ) |  |  | 26,085 |
Cost-elimination expenses (2) |  |  | — |  |  |  | 78,456 |  |  |  | 40,439 |
Adjusted EBITDA |  | $ | 1,709,534 |  |  | $ | 1,561,003 |  |  | $ | 1,412,724 |
(2) | Represents cost-elimination expenses relating to a program initiated in the fourth quarter of 2015 and completed in the third quarter of 2016 (our cost-elimination project) to reduce the company’s global cost structure after several years of significant revenue and related cost growth. Cost-elimination expenses incurred during the years ended December 31, 2016 and 2015 consisted of $73.6 million and $32.6 million, respectively, of severance costs related to headcount reductions in connection with the program and $4.9 million and $7.8 million, respectively, of third-party contract termination costs. The total amount for each period does have a cash impact.
|  | Year Ended December 31, |
|  |  | 2017 |  |  |  | 2016 |  |  |  | 2015 |
|  | (Dollars in thousands) |
Capital expenditures |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 127,135 |  |  | $ | 134,046 |  |  | $ | 94,376 |
EMEA |  |  | 28,716 |  |  |  | 35,452 |  |  |  | 33,092 |
Asia Pacific |  |  | 19,360 |  |  |  | 19,179 |  |  |  | 7,911 |
Global Investment Management |  |  | 2,776 |  |  |  | 2,273 |  |  |  | 3,558 |
Development Services |  |  | 55 |  |  |  | 255 |  |  |  | 527 |
Total capital expenditures |  | $ | 178,042 |  |  | $ | 191,205 |  |  | $ | 139,464 |
|  | December 31, |
|  |  | 2017 |  |  |  | 2016 |
|  | (Dollars in thousands) |
Identifiable assets |  |  |  |  |  |  |  |
Americas |  | $ | 5,599,820 |  |  | $ | 5,555,400 |
EMEA |  |  | 3,005,122 |  |  |  | 2,592,800 |
Asia Pacific |  |  | 888,992 |  |  |  | 712,271 |
Global Investment Management |  |  | 1,075,691 |  |  |  | 913,563 |
Development Services |  |  | 164,455 |  |  |  | 188,762 |
Corporate |  |  | 749,750 |  |  |  | 816,791 |
Total identifiable assets |  | $ | 11,483,830 |  |  | $ | 10,779,587 |
Identifiable assets by segment are those assets used in our operations in each segment. Corporate identifiable assets primarily include cash and cash equivalents available for general corporate use and net deferred tax assets.
|  | December 31, |
|  |  | 2017 |  |  |  | 2016 |
|  | (Dollars in thousands) |
Investments in unconsolidated subsidiaries |  |  |  |  |  |  |  |
Americas |  | $ | 39,105 |  |  | $ | 20,202 |
EMEA |  |  | 852 |  |  |  | 388 |
Asia Pacific |  |  | 6,581 |  |  |  | 5,802 |
Global Investment Management |  |  | 83,430 |  |  |  | 87,501 |
Development Services |  |  | 108,033 |  |  |  | 118,345 |
Total investments in unconsolidated subsidiaries |  | $ | 238,001 |  |  | $ | 232,238 |
Geographic Information Revenue in the table below is allocated based upon the country in which services are performed (dollars in thousands):
|  | Year Ended December 31, |
|  |  | 2017 |  |  |  | 2016 |  |  |  | 2015 |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 7,424,249 |  |  | $ | 6,917,221 |  |  | $ | 5,991,826 |
United Kingdom |  |  | 2,104,517 |  |  |  | 2,008,776 |  |  |  | 1,861,199 |
All other countries |  |  | 4,680,842 |  |  |  | 4,145,592 |  |  |  | 3,002,785 |
Total revenue |  | $ | 14,209,608 |  |  | $ | 13,071,589 |  |  | $ | 10,855,810 |
The long-lived assets in the table below are comprised of net property and equipment (dollars in thousands).
|  | December 31, |
|  |  | 2017 |  |  |  | 2016 |
Property and equipment, net |  |  |  |  |  |  |  |
United States |  | $ | 432,102 |  |  | $ | 396,608 |
United Kingdom |  |  | 61,335 |  |  |  | 61,327 |
All other countries |  |  | 124,302 |  |  |  | 102,821 |
Total property and equipment, net |  | $ | 617,739 |  |  | $ | 560,756 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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