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Segments | 9 Months Ended
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Sep. 30, 2019
Segment Reporting [Abstract] |
Segments |
1 4. | 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 |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  |  | 2019 |  |  | 2018 (1) |  |  |  | 2019 |  |  | 2018 (1) |
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advisory Services |  | $ | 2,240,712 |  |  | $ | 2,059,359 |  |  | $ | 6,254,072 |  |  | $ | 5,717,899 |
Global Workplace Solutions |  |  | 3,555,176 |  |  |  | 3,082,781 |  |  |  | 10,106,543 |  |  |  | 8,945,257 |
Real Estate Investments |  |  | 129,213 |  |  |  | 118,814 |  |  |  | 414,069 |  |  |  | 383,184 |
Total revenue |  | $ | 5,925,101 |  |  | $ | 5,260,954 |  |  | $ | 16,774,684 |  |  | $ | 15,046,340 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advisory Services |  | $ | 345,482 |  |  | $ | 295,902 |  |  | $ | 942,860 |  |  | $ | 801,646 |
Global Workplace Solutions |  |  | 95,209 |  |  |  | 82,810 |  |  |  | 298,948 |  |  |  | 244,626 |
Real Estate Investments |  |  | 13,939 |  |  |  | 84,696 |  |  |  | 131,346 |  |  |  | 204,250 |
Total Adjusted EBITDA |  | $ | 454,630 |  |  | $ | 463,408 |  |  | $ | 1,373,154 |  |  | $ | 1,250,522 |
(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, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, costs associated with our reorganization, including cost-savings initiatives, and other non-recurring costs. Adjusted EBITDA is calculated as follows (dollars in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  |  | 2019 |  |  |  | 2018 |  |  |  | 2019 |  |  |  | 2018 |
Net income attributable to CBRE Group, Inc. |  | $ | 256,599 |  |  | $ | 290,469 |  |  | $ | 644,739 |  |  | $ | 669,424 |
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 111,560 |  |  |  | 113,484 |  |  |  | 323,862 |  |  |  | 335,048 |
Intangible asset impairment |  |  | — |  |  |  | — |  |  |  | 89,037 |  |  |  | — |
Interest expense, net of interest income |  |  | 21,846 |  |  |  | 25,420 |  |  |  | 67,638 |  |  |  | 76,053 |
Write-off of financing costs on extinguished debt |  |  | — |  |  |  | — |  |  |  | 2,608 |  |  |  | 27,982 |
Provision for income taxes |  |  | 63,468 |  |  |  | 94,963 |  |  |  | 169,867 |  |  |  | 211,446 |
EBITDA |  |  | 453,473 |  |  |  | 524,336 |  |  |  | 1,297,751 |  |  |  | 1,319,953 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Integration and other costs related to acquisitions |  |  | 4,517 |  |  |  | 6,100 |  |  |  | 13,554 |  |  |  | 6,100 |
Carried interest incentive compensation (reversal) expense to align with the timing of associated revenue |  |  | (3,360 | ) |  |  | 3,960 |  |  |  | 12,284 |  |  |  | (4,543 | )
Costs associated with our reorganization, including cost-savings initiatives (1) |  |  | — |  |  |  | 12,768 |  |  |  | 49,565 |  |  |  | 12,768 |
Costs incurred in connection with litigation settlement |  |  | — |  |  |  | 8,868 |  |  |  | — |  |  |  | 8,868 |
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired |  |  | — |  |  |  | (92,624 | ) |  |  | — |  |  |  | (92,624 | )
Adjusted EBITDA |  | $ | 454,630 |  |  | $ | 463,408 |  |  | $ | 1,373,154 |  |  | $ | 1,250,522 |
(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 |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  |  | 2019 |  |  |  | 2018 |  |  |  | 2019 |  |  |  | 2018 |
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 3,442,570 |  |  | $ | 3,063,616 |  |  | $ | 9,851,477 |  |  | $ | 8,646,018 |
United Kingdom |  |  | 758,084 |  |  |  | 638,018 |  |  |  | 2,003,671 |  |  |  | 1,852,799 |
All other countries |  |  | 1,724,447 |  |  |  | 1,559,320 |  |  |  | 4,919,536 |  |  |  | 4,547,523 |
Total revenue |  | $ | 5,925,101 |  |  | $ | 5,260,954 |  |  | $ | 16,774,684 |  |  | $ | 15,046,340 |

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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 + Details
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