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Segments

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segments

13. Segments

On August 17, 2018, we announced a new organizational structure that became effective on January 1, 2019. Under the new structure, we organize our operations around, and publicly report our financial results on, three global business segments: (1) Advisory Services; (2) Global Workplace Solutions and (3) Real Estate Investments.

Advisory Services provides a comprehensive range of services globally, including property leasing, property sales, mortgage services, valuation, property management and project management. Global Workplace Solutions provides a broad suite of integrated, contractually-based services to occupiers of real estate, including facilities management, project management, transaction management and management consulting. Real Estate Investments includes: (i) investment management services provided globally; (ii) development services in the U.S. and (iii) a new service designed to help institutional property owners meet the demand for flexible office space solutions.

Summarized financial information by segment is as follows (dollars in thousands):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2019			2018 (1)					2019			2018 (1)
Revenue
Advisory Services		$	2,178,958			$	1,959,106			$	4,013,360			$	3,658,540
Global Workplace Solutions			3,385,452				3,034,973				6,551,367				5,862,476
Real Estate Investments			149,663				117,355				284,856				264,370
Total revenue		$	5,714,073			$	5,111,434			$	10,849,583			$	9,785,386
Adjusted EBITDA
Advisory Services		$	333,528			$	290,312			$	597,378			$	505,744
Global Workplace Solutions			104,060				79,081				203,739				161,816
Real Estate Investments			30,904				69,914				117,407				119,554
Total Adjusted EBITDA		$	468,492			$	439,307			$	918,524			$	787,114

(1) Results for 2018 have been presented in conformity with the new structure.

Adjusted EBITDA is the measure reported to the chief operating decision maker (CODM) for purposes of making decisions about allocating resources to each segment and assessing performance of each segment. EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization and intangible asset impairments. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of certain cash and non-cash items related to acquisitions, costs associated with our reorganization, including cost-savings initiatives, certain carried interest incentive compensation reversal to align with the timing of associated revenue and other non-recurring costs.

Adjusted EBITDA is calculated as follows (dollars in thousands):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2019				2018				2019				2018
Net income attributable to CBRE Group, Inc.		$	223,731			$	228,667			$	388,140			$	378,955
Add:
Depreciation and amortization			106,479				113,399				212,302				221,564
Intangible asset impairment			—				—				89,037				—
Interest expense, net of interest income			24,600				25,396				45,792				50,633
Write-off of financing costs on extinguished debt			—				—				2,608				27,982
Provision for income taxes			62,521				70,319				106,399				116,483
EBITDA			417,331				437,781				844,278				795,617
Adjustments:
Costs associated with our reorganization, including    cost-savings initiatives (1)			33,816				—				49,565				—
Integration and other costs related to acquisitions			9,037				—				9,037				—
Carried interest incentive compensation expense (reversal)    to align with the timing of associated revenue			8,308				1,526				15,644				(8,503	)
Adjusted EBITDA		$	468,492			$	439,307			$	918,524			$	787,114

(1) Primarily represents severance costs related to headcount reductions in connection with our reorganization announced in the third quarter of 2018 that became effective January 1, 2019.

Our CODM is not provided with total asset information by segment and accordingly, does not measure or allocate total assets on a segment basis. As a result, we have not disclosed any asset information by segment.

Geographic Information

Revenue in the table below is allocated based upon the country in which services are performed (dollars in thousands):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2019				2018				2019				2018
Revenue
United States		$	3,372,201			$	2,908,185			$	6,408,907			$	5,582,402
United Kingdom			657,005				634,264				1,245,587				1,214,781
All other countries			1,684,867				1,568,985				3,195,089				2,988,203
Total revenue		$	5,714,073			$	5,111,434			$	10,849,583			$	9,785,386

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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