UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~June 30, ~~2017~~

2021

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

For the Transition Period from _______________ to _______________

Commission File Number ~~001 – 32205~~

001-32205

CBRE GROUP, INC.

(Exact name of ~~Registrant~~registrant as specified in its charter)

~~Delaware~~	~~94-3391143~~
Delaware			94-3391143
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			~~(I.R.S. Employer~~ Identification ~~Number)~~ No.)
2100 McKinney Avenue, Suite 1250
400 South Hope Street, 25th Floor Los Angeles, California Dallas, Texas			~~90071~~ 75201
(Address of principal executive offices)			(Zip Code)
		(214) 979-6100
~~(213) 613-3333~~			~~Not applicable~~
(Registrant's telephone number, including area code)

_____________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

	(Former name, former address and former fiscal year, if changed since last report)
Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share		“CBRE”	New York Stock Exchange

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 ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

The number of shares of Class A common stock outstanding at ~~October 31, 2017~~July 23, 2021 was ~~339,459,138.~~

335,736,404.

Table of contents

FORM 10-Q

~~September~~

June 30, ~~2017~~

2021

TABLE OF CONTENTS

		~~Page~~

PART I – FINANCIAL INFORMATION			Page

Item 1.			Financial Statements (Unaudited)

			Consolidated Balance Sheets at ~~September~~June 30, ~~2017 (Unaudited)~~2021 and December 31, ~~2016~~2020		1

			Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 (Unaudited)~~2020		2

			Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 (Unaudited)~~2020		3

			Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 (Unaudited)~~ 2020		4

			Consolidated ~~Statement~~Statements of Equity for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 (Unaudited)~~2021 and 2020		5 6

			Notes to Consolidated Financial Statements ~~(Unaudited)~~		6 8

Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations		34 27

Item 3.			Quantitative and Qualitative Disclosures About Market Risk		57 49

Item 4.			Controls and Procedures		58 50

PART II – OTHER INFORMATION

Item 1.			Legal Proceedings		59 51

Item 1A.			Risk Factors		59 51

Item 6. 2.	Unregistered Sales of Equity Securities and Use of Proceeds		~~Exhibits~~51		59

Item 5 .	Other Information		51

Item 6.	Exhibits		53

Signatures				62 54

Table of contents

PART I – ~~FINANCI~~ALFINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements~~

Item 1. Financial Statements

CBRE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share data)

	September 30,			December 31,
	2017			2016
	(Unaudited)							June 30, 2021		December 31, 2020
ASSETS							ASSETS
Current Assets:							Current Assets:
Cash and cash equivalents	$	955,605		$	762,576		Cash and cash equivalents	$	2,142,820	$	1,896,188
Restricted cash		84,794			68,836		Restricted cash	113,989		143,059
Receivables, less allowance for doubtful accounts of $47,596 and $39,469 at September 30, 2017 and December 31, 2016, respectively		2,843,126		��	2,605,602
Receivables, less allowance for doubtful accounts of $95,184 and $95,533 at June 30, 2021 and December 31, 2020, respectively							Receivables, less allowance for doubtful accounts of $95,184 and $95,533 at June 30, 2021 and December 31, 2020, respectively	4,426,189		4,394,954
Warehouse receivables		1,434,910			1,276,047		Warehouse receivables	1,117,677		1,411,170
Prepaid expenses							Prepaid expenses	327,562		294,992
Contract assets							Contract assets	322,889		318,191
Income taxes receivable		66,386			45,626		Income taxes receivable	114,417		93,756
Prepaid expenses		218,049			184,107
Other current assets		201,864			179,656		Other current assets	321,346		293,321
Total Current Assets		5,804,734			5,122,450		Total Current Assets	8,886,889		8,845,631
Property and equipment, net		574,266			560,756		Property and equipment, net	741,946		815,009
Goodwill		3,135,208			2,981,392		Goodwill	3,892,134		3,821,609
Other intangible assets, net of accumulated amortization of $943,587 and $771,673 at September 30, 2017 and December 31, 2016, respectively		1,400,699			1,411,039
Investments in unconsolidated subsidiaries		233,634			232,238
Other intangible assets, net of accumulated amortization of $1,656,750 and $1,556,537 at June 30, 2021 and December 31, 2020, respectively							Other intangible assets, net of accumulated amortization of $1,656,750 and $1,556,537 at June 30, 2021 and December 31, 2020, respectively	1,345,143		1,367,913
Operating lease assets							Operating lease assets	1,001,608		1,020,352
Investments in unconsolidated subsidiaries (with $361,143 and $116,314 at fair value at June 30, 2021 and December 31, 2020, respectively)							Investments in unconsolidated subsidiaries (with $361,143 and $116,314 at fair value at June 30, 2021 and December 31, 2020, respectively)	747,608		452,365
Non-current contract assets							Non-current contract assets	138,025		153,636
Real estate under development							Real estate under development	308,431		277,630
Non-current income taxes receivable							Non-current income taxes receivable	19,287		43,555
Deferred tax assets, net		94,250			105,324		Deferred tax assets, net	93,337		91,529
Investments held in trust - special purpose acquisition company							Investments held in trust - special purpose acquisition company	402,511		402,501
Other assets, net		409,223			366,388		Other assets, net	881,433		747,413
Total Assets	$	11,652,014		$	10,779,587		Total Assets	$	18,458,352	$	18,039,143
LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current Liabilities:							Current Liabilities:
Accounts payable and accrued expenses	$	1,505,860		$	1,446,438		Accounts payable and accrued expenses	$	2,485,081	$	2,692,939
Compensation and employee benefits payable		763,554			772,922		Compensation and employee benefits payable	1,269,837		1,287,383
Accrued bonus and profit sharing		727,066			890,321		Accrued bonus and profit sharing	877,204		1,183,786
Operating lease liabilities							Operating lease liabilities	216,879		208,526
Contract liabilities							Contract liabilities	197,402		162,045
Income taxes payable		82,106			58,351		Income taxes payable	109,586		57,892
Short-term borrowings:
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase)		1,416,253			1,254,653		Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase)	1,102,156		1,383,964
Other		16			16
Total short-term borrowings		1,416,269			1,254,669
Other short-term borrowings							Other short-term borrowings	5,561		5,330
Current maturities of long-term debt		10			11		Current maturities of long-term debt	1,181		1,514
Other current liabilities		56,512			102,717		Other current liabilities	133,094		160,604
Total Current Liabilities		4,551,377			4,525,429		Total Current Liabilities	6,397,981		7,143,983
Long-term debt, net of current maturities		2,551,568			2,548,126		Long-term debt, net of current maturities	1,854,327		1,380,202
Non-current operating lease liabilities							Non-current operating lease liabilities	1,071,499		1,116,795
Non-current tax liabilities							Non-current tax liabilities	99,807		87,954
Non-current income taxes payable							Non-current income taxes payable	54,761		54,761
Deferred tax liabilities, net		125,782			70,719		Deferred tax liabilities, net	145,928		124,485
Non-current tax liabilities		17,851			54,042
Other liabilities		553,600			524,026		Other liabilities	710,862		625,303
Total Liabilities		7,800,178			7,722,342		Total Liabilities	10,335,165		10,533,483
Commitments and contingencies		—			—		Commitments and contingencies	0		0
Non-controlling interest subject to possible redemption - special purpose acquisition company							Non-controlling interest subject to possible redemption - special purpose acquisition company	402,511		385,573
Equity:							Equity:
CBRE Group, Inc. Stockholders’ Equity:							CBRE Group, Inc. Stockholders’ Equity:
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 339,459,138 and 337,279,449 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		3,395			3,373
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 335,706,818 and 335,561,345 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively							Class A common stock; $0.01 par value; 525,000,000 shares authorized; 335,706,818 and 335,561,345 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	3,357		3,356
Additional paid-in capital		1,192,855			1,145,226		Additional paid-in capital	1,001,832		1,074,639
Accumulated earnings		3,179,985			2,656,906		Accumulated earnings	7,238,896		6,530,057
Accumulated other comprehensive loss		(580,765	)		(791,018	)	Accumulated other comprehensive loss	(564,564)		(529,726)
Total CBRE Group, Inc. Stockholders’ Equity		3,795,470			3,014,487		Total CBRE Group, Inc. Stockholders’ Equity	7,679,521		7,078,326
Non-controlling interests		56,366			42,758		Non-controlling interests	41,155		41,761
Total Equity		3,851,836			3,057,245		Total Equity	7,720,676		7,120,087
Total Liabilities and Equity	$	11,652,014		$	10,779,587		Total Liabilities and Equity	$	18,458,352	$	18,039,143

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

Table of contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF ~~OPERATONS~~

OPERATIONS

(Unaudited)

(Dollars in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Revenue

$
3,549,977

$
3,193,487

$
9,873,396

$
9,247,758

Costs and expenses:

Cost of services

2,513,377

2,252,783

6,919,018

6,520,629

Operating, administrative and other

704,898

686,530

2,023,503

2,010,338

Depreciation and amortization

102,591

92,725

297,014

269,987

Total costs and expenses

3,320,866

3,032,038

9,239,535

8,800,954

Gain on disposition of real estate

6,180

11,043

18,863

15,862

Operating income

235,291

172,492

652,724

462,666

Equity income from unconsolidated
   subsidiaries

67,834

24,672

158,236

116,902

Other income

1,768

1,356

9,069

8,453

Interest income

3,129

1,020

6,967

5,545

Interest expense

34,483

37,273

103,923

109,050

Income before provision for income
   taxes

273,539

162,267

723,073

484,516

Provision for income taxes

76,178

51,414

195,813

165,578

Net income

197,361

110,853

527,260

318,938

Less:  Net income attributable to non-
   controlling interests

1,044

6,690

4,181

10,940

Net income attributable to CBRE Group,
   Inc.

$
196,317

$
104,163

$
523,079

$
307,998

Basic income per share:

Net income per share attributable to
   CBRE Group, Inc.

$
0.58

$
0.31

$
1.55

$
0.92

Weighted average shares outstanding
   for basic income per share

337,948,324

335,770,122

337,280,914

334,949,606

Diluted income per share:

Net income per share attributable to
   CBRE Group, Inc.

$
0.58

$
0.31

$
1.54

$
0.91

Weighted average shares outstanding
   for diluted income per share

341,186,431

338,488,975

340,502,432

338,053,297


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	6,458,613	$	5,381,384	$	12,397,492	$	11,270,552
Costs and expenses:
Cost of revenue	5,016,759		4,399,537		9,736,305		9,112,211
Operating, administrative and other	957,216		770,806		1,785,543		1,560,872
Depreciation and amortization	119,085		116,384		241,163		230,178
Asset impairments	0		0		0		75,171
Total costs and expenses	6,093,060		5,286,727		11,763,011		10,978,432
Gain (loss) on disposition of real estate	929		(492)		1,085		22,335
Operating income	366,482		94,165		635,566		314,455
Equity income from unconsolidated subsidiaries	212,132		19,480		295,726		40,111
Other income	12,045		5,220		14,777		5,027
Interest expense, net of interest income	13,772		17,950		23,878		33,966

Income before provision for income taxes	576,887		100,915		922,191		325,627
Provision for income taxes	133,445		18,803		209,772		69,985
Net income	443,442		82,112		712,419		255,642
Less: Net income attributable to non-controlling interests	805		215		3,580		1,550
Net income attributable to CBRE Group, Inc.	$	442,637	$	81,897	$	708,839	$	254,092
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.32	$	0.24	$	2.11	$	0.76
Weighted average shares outstanding for basic income per share	335,643,233		335,126,126		335,751,530		335,048,115
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.30	$	0.24	$	2.09	$	0.75
Weighted average shares outstanding for diluted income per share	339,502,871		337,361,419		339,541,354		338,549,805

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

Table of contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net income

$
197,361

$
110,853

$
527,260

$
318,938

Other comprehensive income (loss):

Foreign currency translation gain
   (loss)

64,711

(15,940
)

204,147

(101,654
)
Amounts reclassified from
   accumulated other comprehensive
   loss to interest expense, net of tax

1,260

1,720

4,148

5,196

Unrealized gains (losses) on interest
   rate swaps, net of tax

25

788

102

(3,327
)
Unrealized holding gains on available
   for sale securities, net of tax

339

348

2,239

993

Other, net

(4
)

2

(20
)

(757
)
Total other comprehensive income
   (loss)

66,331

(13,082
)

210,616

(99,549
)
Comprehensive income

263,692

97,771

737,876

219,389

Less: Comprehensive income
   attributable to non-controlling interests

1,227

6,768

4,544

11,057

Comprehensive income attributable to
   CBRE Group, Inc.

$
262,465

$
91,003

$
733,332

$
208,332


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	443,442	$	82,112	$	712,419	$	255,642
Other comprehensive income (loss):
Foreign currency translation gain (loss)	18,402		25,936		(33,944)		(146,438)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	107		100		214		214

Unrealized holding (losses) gains on available for sale debt securities, net of tax	(508)		(409)		(1,186)		500
Other, net	0		(13,045)		0		(13,045)
Total other comprehensive income (loss)	18,001		12,582		(34,916)		(158,769)
Comprehensive income	461,443		94,694		677,503		96,873
Less: Comprehensive income attributable to non-controlling interests	835		275		3,502		1,550
Comprehensive income attributable to CBRE Group, Inc.	$	460,608	$	94,419	$	674,001	$	95,323

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

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

Nine Months Ended

September 30,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$
527,260

$
318,938

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

Depreciation and amortization

297,014

269,987

Amortization of financing costs

7,371

8,302

Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets

(131,062
)

(134,775
)
Net realized and unrealized gains from investments

(9,069
)

(8,453
)
Gain on disposition of real estate held for investment

—

(9,901
)
Equity income from unconsolidated subsidiaries

(158,236
)

(116,902
)
Provision for doubtful accounts

7,442

6,805

Compensation expense for equity awards

68,975

43,346

Proceeds from sale of mortgage loans

11,316,041

10,075,850

Origination of mortgage loans

(11,441,884
)

(9,917,310
)
Increase (decrease) in warehouse lines of credit

161,600

(131,690
)
Distribution of earnings from unconsolidated subsidiaries

17,612

19,982

Tenant concessions received

14,739

7,667

Purchase of trading securities

(61,813
)

(76,136
)
Proceeds from sale of trading securities

53,251

84,234

(Increase) decrease in receivables

(90,526
)

46,289

Increase in prepaid expenses and other assets

(82,673
)

(101,916
)
Decrease in real estate held for sale and under development

10,784

2,870

Decrease in accounts payable and accrued expenses

(4,876
)

(125,471
)
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing

(224,798
)

(210,670
)
Increase in income taxes receivable/payable

(10,631
)

(66,589
)
Increase in other liabilities

1,162

8,807

Other operating activities, net

(20,415
)

(46,453
)
Net cash provided by (used in) operating activities

247,268

(53,189
)
CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(101,606
)

(134,357
)
Acquisition of businesses (other than Global Workplace Solutions (GWS)), including net assets
acquired, intangibles and goodwill, net of cash acquired

(59,394
)

(22,066
)
Acquisition of GWS, including net assets acquired, intangibles and goodwill

—

(10,477
)
Contributions to unconsolidated subsidiaries

(36,659
)

(57,295
)
Distributions from unconsolidated subsidiaries

177,506

119,539

Net proceeds from disposition of real estate held for investment

—

44,326

Increase in restricted cash

(11,020
)

(1,623
)
Purchase of available for sale securities

(29,408
)

(31,413
)
Proceeds from the sale of available for sale securities

25,618

29,560

Other investing activities, net

1,156

24,185

Net cash used in investing activities

(33,807
)

(39,621
)
CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of senior term loans

—

(23,125
)
Proceeds from revolving credit facility

911,000

2,195,000

Repayment of revolving credit facility

(911,000
)

(2,112,000
)
Proceeds from notes payable on real estate held for investment

79

7,274

Repayment of notes payable on real estate held for investment

(1,324
)

(33,516
)
Proceeds from notes payable on real estate held for sale and under development

3,341

15,110

Repayment of notes payable on real estate held for sale and under development

(10,777
)

(4,102
)
Units repurchased for payment of taxes on equity awards

(29,549
)

(27,796
)
Non-controlling interest contributions

3,410

1,478

Non-controlling interest distributions

(6,643
)

(12,800
)
Payment of financing costs

(21
)

(5,601
)
Other financing activities, net

(2,673
)

(761
)
Net cash used in financing activities

(44,157
)

(839
)
Effect of currency exchange rate changes on cash and cash equivalents

23,725

(408
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

193,029

(94,057
)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD

762,576

540,403

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

$
955,605

$
446,346

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$
111,826

$
118,272

Income taxes, net

$
204,228

$
225,129


	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	712,419	$	255,642
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	241,163		230,178
Amortization of financing costs	3,317		3,082
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets	(132,004)		(105,697)
Asset impairments	0		75,171
Net realized and unrealized gains, primarily from investments	(14,777)		(5,027)
Provision for doubtful accounts	12,789		29,923
Net compensation expense for equity awards	85,233		19,704
Equity income from unconsolidated subsidiaries	(295,726)		(40,111)
Distribution of earnings from unconsolidated subsidiaries	232,627		52,664
Proceeds from sale of mortgage loans	7,902,512		7,421,127
Origination of mortgage loans	(7,578,056)		(7,162,747)
Decrease in warehouse lines of credit	(281,808)		(223,281)
Tenant concessions received	12,874		23,384
Purchase of equity securities	(3,896)		(6,627)
Proceeds from sale of equity securities	5,488		8,909
(Increase) decrease in real estate under development	(27,894)		701
(Increase) decrease in receivables, prepaid expenses and other assets (including contract and lease assets)	(100,368)		276,065
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities)	(275,591)		(112,173)
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing	(359,365)		(816,621)
Decrease in net income taxes receivable/payable	83,325		125,361
Other operating activities, net	4,856		(25,473)
Net cash provided by operating activities	227,118		24,154
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(75,944)		(134,149)
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired	(57,920)		(25,911)
Contributions to unconsolidated subsidiaries	(245,714)		(51,168)
Distributions from unconsolidated subsidiaries	36,207		63,972
Other investing activities, net	(1,120)		11,314
Net cash used in investing activities	(344,491)		(135,942)

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

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~EQUITY~~

CASH FLOWS (Continued)

(Unaudited)

(Dollars in thousands)

CBRE Group, Inc. Shareholders

Accumulated

Class A

Additional

other

Non-

common

paid-in

Accumulated

comprehensive

controlling

stock

capital

earnings

loss

interests

Total

Balance at December 31, 2016

$
3,373

$
1,145,226

$
2,656,906

$
(791,018
)

$
42,758

$
3,057,245

Net income

—

—

523,079

—

4,181

527,260

Non-cash issuance of common
   stock related to acquisition

5

7,586

—

—

—

7,591

Compensation expense for
   equity awards

—

68,975

—

—

—

68,975

Units repurchased for
   payment of taxes
   on equity awards

—

(29,549
)

—

—

—

(29,549
)
Foreign currency translation gain

—

—

—

203,784

363

204,147

Amounts reclassified from
   accumulated other
   comprehensive loss to
   interest expense, net of tax

—

—

—

4,148

—

4,148

Unrealized gains on interest
   rate swaps, net of tax

—

—

—

102

—

102

Unrealized holding gains on
   available for sale
   securities, net of tax

—

—

—

2,239

—

2,239

Contributions from non-
   controlling interests

—

—

—

—

3,410

3,410

Distributions to non-
   controlling interests

—

—

—

—

(6,643
)

(6,643
)
Acquisition of non-
   controlling interests

—

—

—

—

12,671

12,671

Other

17

617

—

(20
)

(374
)

240

Balance at September 30, 2017

$
3,395

$
1,192,855

$
3,179,985

$
(580,765
)

$
56,366

$
3,851,836


	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	0		835,671
Repayment of revolving credit facility	0		(384,671)
Proceeds from notes payable on real estate	48,548		22,705
Proceeds from issuance of 2.500% senior notes	492,255		0
Repurchase of common stock	(88,275)		(50,028)
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date)	(3,421)		(6,839)
Units repurchased for payment of taxes on equity awards	(36,275)		(37,358)
Non-controlling interest contributions	527		1,428
Non-controlling interest distributions	(3,377)		(1,092)
Other financing activities, net	(30,958)		(20,944)
Net cash provided by financing activities	379,024		358,872
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash	(44,089)		(27,095)
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	217,562		219,989
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD	2,039,247		1,093,745
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD	$	2,256,809	$	1,313,734
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	16,212	$	31,145
Income tax payments (refunds), net	$	131,156	$	(53,829)

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

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands)


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at March 31, 2021	$	3,359	$	1,013,287	$	6,796,259	$	(582,535)	$	41,014	$	7,271,384
Net income	—		—		442,637		—		805		443,442
Net compensation expense for equity awards	—		49,447		—		—		—		49,447
Units repurchased for payment of taxes on equity awards	—		(1,392)		—		—		—		(1,392)
Repurchase of common stock	(3)		(24,130)		—		—		—		(24,133)
Foreign currency translation gain	—		—		—		18,372		30		18,402
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		107		—		107
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(508)		—		(508)
Contributions from non-controlling interests	—		—		—		—		455		455
Distributions to non-controlling interests	—		—		—		—		(725)		(725)
Other	1		(35,380)		—		—		(424)		(35,803)
Balance at June 30, 2021	$	3,357	$	1,001,832	$	7,238,896	$	(564,564)	$	41,155	$	7,720,676


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at March 31, 2020	$	3,351	$	1,026,768	$	5,950,263	$	(851,039)	$	40,204	$	6,169,547
Net income	—		—		81,897		—		215		82,112
Net compensation expense for equity awards	—		20,943		—		—		—		20,943
Units repurchased for payment of taxes on equity awards	—		(485)		—		—		—		(485)

Foreign currency translation gain	—		—		—		25,876		60		25,936
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		100		—		100

Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(409)		—		(409)
Contributions from non-controlling interests	—		—		—		—		806		806
Distributions to non-controlling interests	—		—		—		—		(595)		(595)

Other	1		(227)		—		(13,045)		367		(12,904)
Balance at June 30, 2020	$	3,352	$	1,046,999	$	6,032,160	$	(838,517)	$	41,057	$	6,285,051

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

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)

(Dollars in thousands)


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at December 31, 2020	$	3,356	$	1,074,639	$	6,530,057	$	(529,726)	$	41,761	$	7,120,087
Net income	—		—		708,839		—		3,580		712,419
Net compensation expense for equity awards	—		85,233		—		—		—		85,233
Units repurchased for payment of taxes on equity awards	—		(36,275)		—		—		—		(36,275)
Repurchase of common stock	(11)		(88,264)		—		—		—		(88,275)
Foreign currency translation loss	—		—		—		(33,866)		(78)		(33,944)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		214		—		214
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(1,186)		—		(1,186)
Contributions from non-controlling interests	—		—		—		—		527		527
Distributions to non-controlling interests	—		—		—		—		(3,377)		(3,377)
Other	12		(33,501)		—		—		(1,258)		(34,747)
Balance at June 30, 2021	$	3,357	$	1,001,832	$	7,238,896	$	(564,564)	$	41,155	$	7,720,676


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at December 31, 2019	$	3,348	$	1,115,944	$	5,793,149	$	(679,748)	$	40,419	$	6,273,112
Net income	—		—		254,092		—		1,550		255,642
Net compensation expense for equity awards	—		19,704		—		—		—		19,704
Units repurchased for payment of taxes on equity awards	—		(37,358)		—		—		—		(37,358)
Repurchase of common stock	(11)		(50,017)		—		—		—		(50,028)
Foreign currency translation loss	—		—		—		(146,438)		—		(146,438)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		214		—		214

Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		500		—		500
Contributions from non-controlling interests	—		—		—		—		1,428		1,428
Distributions to non-controlling interests	—		—		—		—		(1,092)		(1,092)

Other	15		(1,274)		(15,081)		(13,045)		(1,248)		(30,633)
Balance at June 30, 2020	$	3,352	$	1,046,999	$	6,032,160	$	(838,517)	$	41,057	$	6,285,051

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

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	~~Basis of Presentation~~

1. Basis of Presentation

Readers of this Quarterly Report on Form 10-Q (Quarterly Report) should refer to the audited financial statements and notes to consolidated financial statements of CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as ~~the “company,~~“the company,” “we,” “us” and “our”), for the year ended December 31, ~~2016,~~2020, which are included in our ~~2016~~2020 Annual Report on Form 10-K ~~(2016~~(2020 Annual Report), filed with the United States Securities and Exchange Commission (SEC) and also available on our website (~~www.cbre.com~~)(www.cbre.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Significant Accounting Policies, in the notes to consolidated financial statements in our ~~2016~~2020 Annual Report for further discussion of our significant accounting policies and estimates.

Considerations Related to the Covid-19 Pandemic

The Covid-19 pandemic has primarily impacted the property sales and leasing lines of business in the Advisory Services segment. Many property owners and occupiers put transactions on hold and withdrew existing mandates, sharply reducing sales and leasing volumes. The effects of Covid-19 have eased in parts of the world where progress has been made with vaccine distribution and global economic conditions have improved. Nevertheless Covid-19 continues to pose public health challenges that impact our operations, particularly as new strains emerge and spread and vaccine administration is slow in parts of the world. As of the date of this Quarterly Report, the majority of workers remain out of their offices and occupier confidence in making long-term office leasing decisions has not returned to pre-pandemic levels.

See Note 5 (Fair Value Measurements) and Note 10 (Commitments and Contingencies) for further discussion of Covid-19 considerations.

Financial Statement Preparation

The accompanying consolidated financial statements have been prepared in accordance with the rules applicable to quarterly reports on Form 10-Q and include all information and footnotes required for interim financial statement presentation, but do not include all disclosures required under accounting principles generally accepted in the United States (U.S.), or GAAP, for annual financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments, except as otherwise noted) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions about future ~~events.~~events, including the impact Covid-19 may have on our business. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported and reported amounts of revenue and expenses. Such estimates include the value of goodwill, intangibles and other long-lived assets, real estate assets, accounts receivable, contract assets, operating lease assets, investments in unconsolidated subsidiaries and assumptions used in the calculation of income taxes, retirement and other post-employment benefits, among others. These estimates and assumptions are based on our best judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the current economic environment, and adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Certain reclassifications have been made to the ~~2016~~2020 financial statements to conform with the ~~2017~~2021 presentation.

~~The results~~

Table of ~~operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2017.~~

contents

2.	~~New Accounting Pronouncements~~

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2.New Accounting Pronouncements

Recent Accounting Pronouncements Pending Adoption

~~The~~

In March 2020 and January 2021, the Financial Accounting Standards Board (FASB) ~~has recently~~ issued ~~five~~ Accounting Standards ~~Updates (ASUs)~~Update (ASU) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU 2021-01, “Reference Rate Reform: Scope,” respectively. Together, the ASUs provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to ~~revenue recognition (“new revenue recognition guidance”), all of which will become~~the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective for a limited time for all entities through December 31, 2022. We are evaluating the ~~company on January 1, 2018. The ASUs issued are: (1) in May 2014, ASU 2014-09,~~ ~~“Revenue from Contracts with Customers (Topic 606);”~~ ~~(2) in March 2016, ASU 2016-08,~~ ~~“Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net);”~~ ~~(3) in~~ ~~April 2016, ASU 2016-10,~~ “~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;”~~ ~~(4) in~~ ~~May 2016, ASU 2016-12,~~ “~~Revenue from Contracts with Customers (Topic 606): Narrow-scope Improvements and Practical Expedients;”~~ ~~and(5) in December 2016, ASU 2016-20,~~ ~~“Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers.”~~ ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognitioneffect that this guidance ~~under GAAP. This ASU permits the use of either the retrospective or cumulative effect transition method.~~ ~~ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations.~~ ~~ASU 2016-10~~ ~~clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09.~~ ~~ASU 2016-12~~ ~~clarifies guidance in~~

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~certain narrow areas and adds some practical expedients.~~ ~~ASU 2016-20 also clarifies guidance in certain narrow areas and adds optional exemptions to certain disclosure requirements.~~

~~We plan to adopt the new revenue recognition guidance in the first quarter of 2018 using the retrospective transition method. We continue to evaluate the impact that adoption of these updates~~ will have on our consolidated financial statements and related disclosures. ~~Based on our assessment, the impact~~

3. Warehouse Receivables & Warehouse Lines of the application of the new revenue recognition guidance will result in an acceleration of some revenues that are based, in part, on future contingent events. For example, some brokerage revenues from leasing commissions in various countries where we operate will get recognized earlier. Under current GAAP, a portion of these commissions are deferred until a future contingency is resolved (e.g., tenant move-in or payment of first month’s rent). Under the new revenue guidance, the company’s performance obligation will be typically satisfied at lease signing and therefore the portion of the commission that is contingent on a future event will likely be recognized earlier if deemed not subject to significant reversal. We have evaluated the impact of the updated principal versus agent guidance on our consolidated financial statements in relation to third-party costs which are billed to clients in association with facilities management and project management services. We determined a significant amount of additional contracts will be accounted for on a gross basis, resulting in a significant gross up of third-party costs as compared to our current presentation, with no impact on profitability. This is driven by a change in the indicators used to assess if we control these third-party service providers.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~“Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.”~~ This ASU will significantly change the income statement impact of equity investments and the recognition of changes in fair value of financial liabilities when the fair value option is elected. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is not permitted, except for the provisions related to the recognition of changes in fair value of financial liabilities when the fair value option is elected. We do not believe the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~“Leases (Topic 842).”~~ This ASU requires lessees to recognize most leases on the balance sheet as liabilities, with corresponding right-of-use assets. For income statement recognition purposes, leases will be classified as either a finance or operating lease in a manner similar to the requirements under the current lease accounting literature, but without relying upon the bright-line tests. This ASU is effective for annual periods in fiscal years beginning after December 15, 2018 and mandates a modified retrospective transition method for all entities. We plan to adopt ASU 2016-02 in the first quarter of 2019 and are currently evaluating the magnitude of its impact on our consolidated financial statements by reviewing our existing lease contracts and service contracts that may include embedded leases.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~“Financial Instruments –~~ Credit ~~Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”~~ This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~“Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.”~~ This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. At this point in time, we do not believe the adoption of ASU 2016-15 will have a material impact on our consolidated financial statements and related disclosures.

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~“Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.”~~ This ASU requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. At this point in

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~time, we do not believe the adoption of ASU 2016-16 will have a material impact on our consolidated financial statements and related disclosures.~~

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~“Statement of Cash Flows (Topic 230): Restricted Cash.”~~ This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. At this point in time, we do not believe the adoption of ASU 2016-18 will have a material impact on our consolidated financial statements and related disclosures.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~“Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.”~~ This ASU eliminates Step 2 from the goodwill impairment test. This ASU also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2017-04 will have on our goodwill assessment process, but do not believe the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements and related disclosures.

~~In February 2017, the FASB issued ASU 2017-05,~~ “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This ASU clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and also defines the term in substance nonfinancial asset. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. At this point in time, we do not believe the adoption of ASU 2017-05 will have a material impact on our consolidated financial statements and related disclosures.

~~In March 2017, the FASB issued ASU 2017-08,~~ ~~“Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.”~~ This ASU requires the premium to be amortized to the earliest call date. This ASU does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2017-08 will have on our consolidated financial statements and related disclosures.

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~“Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.”~~ This ASU refines and expands hedge accounting for both financial and commodity risks. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the effect that ASU 2017-12 will have on our consolidated financial statements and related disclosures.

3.	~~Warehouse Receivables & Warehouse Lines of Credit~~

Our wholly-owned subsidiary CBRE Capital Markets, Inc. (CBRE Capital Markets) is a Federal Home Loan Mortgage Corporation (Freddie Mac) approved Multifamily Program Plus Seller/Servicer and an approved Federal National Mortgage Association (Fannie Mae) Aggregation and Negotiated Transaction Seller/Servicer. In addition, CBRE Capital Markets’ wholly-owned subsidiary CBRE Multifamily Capital, Inc. (CBRE MCI) is an approved Fannie Mae Delegated Underwriting and Servicing (DUS) Seller/Servicer and CBRE Capital Markets’ wholly-owned subsidiary CBRE HMF, Inc. (CBRE HMF) is a U.S. Department of Housing and Urban Development (HUD) approved Non-Supervised Federal Housing Authority (FHA) Title II Mortgagee, an approved Multifamily Accelerated Processing (MAP) lender and an approved Government National Mortgage Association (Ginnie Mae) issuer of mortgage-backed securities (MBS). Under these arrangements, before loans are originated through proceeds from warehouse lines of credit, we obtain either a contractual loan purchase commitment from either Freddie Mac or Fannie Mae or a confirmed forward trade commitment for the issuance and purchase of a Fannie

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Mae or Ginnie Mae MBS that will be secured by the loans. ~~Loans funded from the~~The warehouse lines of credit are generally repaid within a one-month period ~~on average,~~ when Freddie Mac or Fannie Mae buys the loans or upon settlement of the Fannie Mae or Ginnie Mae MBS, while we retain the servicing rights. ~~Such loans~~Loans are funded at the prevailing market rates. ~~The warehouse lines of credit are recourse only to CBRE Capital Markets and are secured by our related warehouse receivables.~~ We elect the fair value option for all warehouse receivables. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, all of the warehouse receivables included in the accompanying consolidated balance sheets were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities that will be secured by the underlying loans.

A rollforward of our warehouse receivables is as follows (dollars in thousands):

Beginning balance at January 1, 2017

$
1,276,047

Origination of mortgage loans

11,441,884

Gains (premiums on loan sales)

32,711

Sale of mortgage loans

(11,283,330
)
Cash collections of premiums on loan sales

(32,711
)
Proceeds from sale of mortgage loans

(11,316,041
)

Net increase in mortgage servicing rights included
in warehouse receivables

309

Ending balance at September 30, 2017

$
1,434,910


Beginning balance at December 31, 2020	$	1,411,170
Origination of mortgage loans	7,578,056
Gains (premiums on loan sales)	41,855
Proceeds from sale of mortgage loans:
Sale of mortgage loans	(7,860,657)
Cash collections of premiums on loan sales	(41,855)
Proceeds from sale of mortgage loans	(7,902,512)
Net decrease in mortgage servicing rights included in warehouse receivables	(10,892)
Ending balance at June 30, 2021	$	1,117,677

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table is a summary of our warehouse lines of credit in place as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (dollars in thousands):


			June 30, 2021				December 31, 2020
Lender	Current Maturity	Pricing	Maximum Facility Size		Carrying Value		Maximum Facility Size		Carrying Value
JP Morgan Chase Bank, N.A. (JP Morgan) (1)	10/18/2021	daily floating rate LIBOR plus 1.60%	$	985,000	$	719,747	$	1,585,000	$	561,726
JP Morgan	10/18/2021	daily floating rate LIBOR plus 2.75%	15,000		0		15,000		0
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (5)	Cancelable anytime	daily one-month LIBOR plus 1.45%, with a LIBOR floor of 0.25%	650,000		29,739		450,000		132,692
TD Bank, N.A. (TD Bank) (2)	7/15/2022	daily floating rate LIBOR plus 1.30%	800,000		87,916		800,000		401,849
Bank of America, N.A. (BofA) (3)	5/25/2022	daily floating rate LIBOR plus 1.30%, with a LIBOR floor of 0.30%	350,000		138,866		350,000		175,862
BofA (6)	5/25/2022	daily floating rate LIBOR plus 1.30%, with a LIBOR floor of 0.30%	250,000		0		0		0
MUFG Union Bank, N.A. (Union Bank) (4)	7/28/2021	daily floating rate LIBOR plus 1.50% with a LIBOR floor of 0.25%	200,000		125,888		300,000		111,835
			$	3,250,000	$	1,102,156	$	3,500,000	$	1,383,964

September 30, 2017

December 31, 2016

Maximum

Maximum

Lender

Current
Maturity

Pricing

Facility
Size

Carrying
Value

Facility
Size

Carrying
Value

JP Morgan Chase Bank, N.A.
   (JP Morgan)  (1)

2/28/2017

daily one-month LIBOR plus 1.45%

$
—

$
—

$
300,000

$
275,945

JP Morgan (2)

10/23/2017

daily one-month LIBOR plus 1.45%

800,000

704,908

700,000

—

JP Morgan (2)

10/23/2017

daily one-month LIBOR plus 2.75%

25,000

1,487

25,000

3,768

Bank of America (BofA) (1)

1/30/2017

daily one-month LIBOR plus 1.60%

—

—

300,000

300,000

BofA

6/5/2018

daily one-month LIBOR plus 1.40%

225,000

155,744

200,000

18,555

Fannie Mae Multifamily As Soon
   As Pooled Plus Agreement and
   Multifamily As Soon As Pooled
   Sale Agreement (ASAP) Program
   (1)

1/17/2017

daily one-month LIBOR plus 1.35%, with a LIBOR floor of 0.35%

—

—

200,000

200,000

Fannie Mae ASAP Program

Cancelable
anytime

daily one-month LIBOR plus 1.35%, with a LIBOR floor of 0.35%

450,000

94,250

450,000

111,160

TD Bank, N.A. (TD Bank) (1)

2/28/2017

daily one-month LIBOR plus 1.35%

—

—

375,000

154,032

TD Bank

6/30/2018

daily one-month LIBOR plus 1.25%

400,000

366,600

400,000

—

Capital One, N.A. (Capital One) (1)

1/23/2017

daily one-month LIBOR plus 1.45%

—

—

250,000

191,193

Capital One

7/27/2018

daily one-month LIBOR plus 1.40%

200,000

93,264

200,000

—

$
2,100,000

$
1,416,253

$
3,400,000

$
1,254,653

~~(1)~~

~~Temporary facility to accommodate year-end volume.~~

(1)Effective October 19, 2020, this facility was amended and the maximum facility size was temporarily increased to $1,585.0 million, and reverted back to $985.0 million on January 18, 2021.

~~(2)~~

~~On October 23, 2017, this agreement was amended to extend the maturity date to October 22, 2018.~~

(2)Effective July 1, 2020, this facility was amended and provides for a maximum aggregate principal amount of $400.0 million, in addition to an uncommitted $400.0 million temporary line of credit. Effective June 28, 2021, this facility was renewed with a revised interest rate of daily floating rate LIBOR plus 1.30% and a maturity date of July 15, 2022. As of June 30, 2021, the uncommitted $400.0 million temporary line of credit was not utilized.

(3)The total commitment amount of $350.0 million includes a separate sublimit borrowing in the amount of $100.0 million, which can be utilized for specific purposes as defined within the agreement. Effective June 30, 2021, this facility was renewed with a revised interest rate of daily floating LIBOR plus 1.30% and a maturity date of May 25, 2022. The sublimit is subject to an interest rate of daily floating LIBOR plus 1.30%, with a LIBOR floor of 0.30%. As of June 30, 2021, the sublimit borrowing has not been utilized.

(4)On June 28, 2019, we added a new warehouse facility for $200.0 million that contains an accordion feature which allowed for temporary increases not to exceed an additional $150.0 million. If utilized, the additional borrowings must be in predefined multiples and are not to occur more than 3 times within 12 consecutive months. Effective August 4, 2020, this facility was amended and decreased the accordion feature from $150.0 million to $100.0 million, with no changes to the predefined borrowing multiples. On September 22, 2020, the temporary increase of $100.0 million was utilized and expired on January 20, 2021. Effective June 28, 2021, the facility maturity date was extended to July 28, 2021.

(5)Effective January 15, 2021, the maximum facility was temporarily increased to $650.0 million.

(6)Effective June 30, 2021, the advised consent line was renewed for $250.0 million of capacity with a revised interest rate of daily floating LIBOR plus 1.30%, with a LIBOR floor of 0.30%, and a maturity date of May 25, 2022.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, we had a maximum of ~~$1.4~~$2.1 billion of warehouse lines of credit principal outstanding.

4.	~~Variable Interest Entities (VIEs)~~

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4. Variable Interest Entities (VIEs)

We hold variable interests in certain VIEs in our ~~Global Investment Management and Development Services segments~~Real Estate Investments segment which are not consolidated as it was determined that we are not the primary beneficiary. Our involvement with these entities is in the form of equity co-investments and fee arrangements.

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, our maximum exposure to loss related to ~~the~~ VIEs which are not consolidated was as follows (dollars in thousands):

	September 30,		December 31,
	2017		2016			June 30, 2021		December 31, 2020
Investments in unconsolidated subsidiaries	$	32,003	$	31,041	Investments in unconsolidated subsidiaries	$	81,250	$	66,947
Other current assets					Other current assets	4,219		4,219
Co-investment commitments		4,425		168	Co-investment commitments	80,133		47,957
Other current assets		3,301		3,314
Maximum exposure to loss	$	39,729	$	34,523	Maximum exposure to loss	$	165,602	$	119,123

5.	~~Fair Value Measurements~~

~~The~~ “

5. Fair Value Measurements ~~and Disclosures”~~ ~~topic (Topic 820)~~

Topic 820 of the FASB ~~Accounting Standards Codification~~ASC defines fair value as the ~~exchange~~ price that would be received ~~for~~to sell an asset or paid to transfer a ~~liability (an exit price) in the principal or most advantageous market for the asset or~~ liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 – Quoted prices in active markets for identical assets or liabilities.

•Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

~~There were no significant transfers in or out of Level 1 and Level 2 during the three and nine months ended September 30, 2017 and 2016.~~

There have been no significant changes to the valuation techniques and inputs used to develop the recurring fair value measurements from those disclosed in our ~~2016~~2020 Annual ~~Report.~~

Report.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (dollars in thousands):


	As of September 30, 2017									As of June 30, 2021
	Fair Value Measured and Recorded Using									Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets									Assets
Available for sale securities:									Available for sale securities:
Debt securities:									Debt securities:
U.S. treasury securities	$	2,349	$	—	$	—	$	2,349	U.S. treasury securities	$	7,094	$	0	$	0	$	7,094
Debt securities issued by U.S. federal agencies		—		5,169		—		5,169	Debt securities issued by U.S. federal agencies	0		8,689		0		8,689
Corporate debt securities		—		22,134		—		22,134	Corporate debt securities	0		51,177		0		51,177
Asset-backed securities		—		3,600		—		3,600	Asset-backed securities	0		3,778		0		3,778
Collateralized mortgage obligations		—		2,684		—		2,684	Collateralized mortgage obligations	0		1,314		0		1,314
Total debt securities		2,349		33,587		—		35,936
Total available for sale debt securities									Total available for sale debt securities	7,094		64,958		0		72,052
Equity securities		27,693		—		—		27,693	Equity securities	45,395		0		0		45,395
Total available for sale securities		30,042		33,587		—		63,629
Trading securities		68,744		—		—		68,744
Investments in unconsolidated subsidiaries									Investments in unconsolidated subsidiaries	0		0		265,531		265,531
Warehouse receivables		—		1,434,910		—		1,434,910	Warehouse receivables	0		1,117,677		0		1,117,677
Total assets at fair value	$	98,786	$	1,468,497	$	—	$	1,567,283	Total assets at fair value	$	52,489	$	1,182,635	$	265,531	$	1,500,655

Liabilities									Liabilities
Interest rate swaps	$	—	$	6,601	$	—	$	6,601
Securities sold, not yet purchased		2,246		—		—		2,246
Foreign currency exchange forward contracts		—		75		—		75
Warrant liabilities									Warrant liabilities	10,868		0		0		10,868
Total liabilities at fair value	$	2,246	$	6,676	$	—	$	8,922	Total liabilities at fair value	$	10,868	$	0	$	0	$	10,868

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

As of December 31, 2016

Fair Value Measured and Recorded Using

Level 1

Level 2

Level 3

Total

Assets

Available for sale securities:

Debt securities:

U.S. treasury securities

$
8,485

$
—

$
—

$
8,485

Debt securities issued by U.S.
   federal agencies

—

5,046

—

5,046

Corporate debt securities

—

17,094

—

17,094

Asset-backed securities

—

2,695

—

2,695

Collateralized mortgage
   obligations

—

1,010

—

1,010

Total debt securities

8,485

25,845

—

34,330

Equity securities

22,744

—

—

22,744

Total available for sale
   securities

31,229

25,845

—

57,074

Trading securities

52,629

—

—

52,629

Warehouse receivables

—

1,276,047

—

1,276,047

Foreign currency exchange forward
   contracts

—

1,471

—

1,471

Total assets at fair value

$
83,858

$
1,303,363

$
—

$
1,387,221

Liabilities

Interest rate swaps

$
—

$
13,162

$
—

$
13,162

Securities sold, not yet purchased

3,591

—

—

3,591

Total liabilities at fair value

$
3,591

$
13,162

$
—

$
16,753


	As of December 31, 2020
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	7,270	$	0	$	0	$	7,270
Debt securities issued by U.S. federal agencies	0		10,216		0		10,216
Corporate debt securities	0		51,244		0		51,244
Asset-backed securities	0		3,801		0		3,801
Collateralized mortgage obligations	0		1,369		0		1,369
Total available for sale debt securities	7,270		66,630		0		73,900
Equity securities	43,334		0		0		43,334
Investments in unconsolidated subsidiaries	0		0		50,000		50,000
Warehouse receivables	0		1,411,170		0		1,411,170
Total assets at fair value	$	50,604	$	1,477,800	$	50,000	$	1,578,404

We classify certain investments as level 3 in the fair value hierarchy which represent investments in non-public entities where we elected the fair value option. The valuation of these investments is determined utilizing recent market activity as well as income and/or market approach valuation methodologies. As of June 30, 2021 and December 31, 2020, investments in unconsolidated subsidiaries at fair value using NAV were $95.6 million and $66.3 million, respectively. These investments fall under practical expedient rules that do not require them to be included in the fair value hierarchy and as a result have been excluded from the tables above.

There were no significant non-recurring fair value measurements recorded during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

There were no significant non-recurring fair value measurement recorded during the three months ended June 30, 2020. The following non-recurring fair value measurements were recorded for the six months ended June 30, 2020 (dollars in thousands):


	Net Carrying Value as of June 30, 2020		Fair Value Measured and Recorded Using						Total Impairment Charges for the Six Months Ended June 30, 2020
			Level 1		Level 2		Level 3
Property and equipment	$	9,875	$	0	$	0	$	9,875	$	21,663
Goodwill	421,574		0		0		421,574		25,000
Other intangible assets	13,123		0		0		13,123		28,508
Total	$	444,572	$	0	$	0	$	444,572	$	75,171

During the six months ended June 30, 2020, we recorded $50.2 million of non-cash asset impairment charges in our Global Workplace Solutions segment and ~~2016.~~

a non-cash goodwill impairment charge of $25.0 million in our Real Estate Investments segment. Primarily as a result of the global economic disruption and uncertainty due to Covid-19, we deemed there to be triggering events in the first quarter of 2020 that required testing of goodwill and certain assets for impairment at that time. Based on these tests, we recorded the aforementioned non-cash impairment charges, which were primarily driven by lower anticipated cash flows in certain businesses directly resulting from a downturn in forecasts as well as increased forecast risk due to Covid-19 and changes in our business going forward. These asset impairment charges were included within the line item “Asset impairments” in the accompanying consolidated statements of operations. The fair value measurements employed for our impairment evaluations were based on a discounted cash flow approach. Inputs used in these evaluations included risk-free rates of return, estimated risk premiums, terminal growth rates, working capital assumptions, income tax rates as well as other economic variables.

FASB ASC Topic 825, “Financial Instruments” requires disclosure of fair value information about financial instruments, whether or not recognized in the accompanying consolidated balance sheets. Our financial instruments are as follows:

•Cash and Cash Equivalents and Restricted Cash – These balances include cash and cash equivalents as well as restricted cash with maturities of less than three months. The carrying amount approximates fair value due to the short-term maturities of these instruments.

•Receivables, less Allowance for Doubtful Accounts– Due to their short-term nature, fair value approximates carrying value.

•Warehouse Receivables – These balances are carried at fair value. The primary source of value ~~based on market prices~~is either a contractual purchase commitment from Freddie Mac or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS (see Note 3).

•Investments in Unconsolidated Subsidiaries – A portion of these investments are carried at ~~the balance sheet date.~~

fair value as discussed above.

~~Trading~~ ~~and~~ •Available for Sale Debt Securities – ~~These~~Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.

~~Foreign Currency Exchange Forward Contracts~~•Equity Securities – ~~These assets and liabilities~~Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.

•Investments Held in Trust - special purpose acquisition company – Funds received as part of the initial public offering of CBRE Acquisition Holdings, Inc. have been deposited in an interest-bearing U.S. based trust account. The funds will be invested only in specified U.S. government treasury bills with a maturity of 180 days or less or in money market funds. The carrying amount approximates fair value ~~as calculated by using widely accepted valuation techniques including discounted cash flow analysis~~due to the short-term maturities of these instruments.

•Warrant liabilities - A liability of CBRE Acquisition Holdings, Inc., the redeemable warrants are separately traded on the ~~expected cash flows of each derivative.~~

~~Securities Sold, not yet Purchased~~ –NYSE under the symbol “CBAH.WS.” These ~~liabilities~~warrants are carried at ~~their~~ fair ~~value.~~

value, which was determined at quoted trading price of these instruments.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~(Unaudited)~~

•

~~Short-Term Borrowings~~ – The majority of this balance represents outstanding amounts under our warehouse lines of credit of our wholly-owned subsidiary, CBRE Capital Markets. Due to the short-term nature and variable interest rates of these instruments, fair value approximates carrying value (see Notes 3 and 7).

(Unaudited)

•Short-Term Borrowings – The majority of this balance represents outstanding amounts under our warehouse lines of credit of our wholly-owned subsidiary, CBRE Capital Markets. Due to the short-term nature and variable interest rates of these instruments, fair value approximates carrying value (see Notes 3 and 8).

•Senior Term Loans– Based upon information from third-party banks (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our senior term loans was approximately ~~$750.8~~$770.4 million and $772.2 million at ~~September~~June 30, ~~2017~~2021 and ~~$751.4 million at~~ December 31, ~~2016.~~2020, respectively. Their actual carrying value, net of unamortized debt issuance costs, totaled ~~$746.0~~$771.8 million and ~~$744.3~~$785.7 million at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively (see Note 7)8).

~~Interest Rate Swaps~~ ~~– These liabilities are carried at their fair value as calculated by using widely-accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.~~

•Senior Notes – Based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair ~~values~~value of our ~~5.00% senior notes,~~ 4.875% senior notes ~~and 5.25% senior notes were $829.1 million, $646.6~~was $696.3 million and ~~$463.4~~$702.5 million ~~respectively,~~ at ~~September~~June 30, ~~2017~~2021 and ~~$827.6 million, $607.0 million and $439.3 million, respectively, at~~ December 31, ~~2016.~~2020, respectively. The actual carrying value of our ~~5.00% senior notes,~~ 4.875% ~~senior notes and 5.25%~~ senior notes, net of unamortized debt issuance costs and discount, totaled ~~$791.4 million, $591.8~~$595.0 million and ~~$422.4~~$594.5 million ~~respectively,~~ at ~~September~~June 30, ~~2017~~2021 and ~~$790.4~~December 31, 2020, respectively. The estimated fair value of our 2.500% senior notes was $507.2 million ~~$591.2~~as of June 30, 2021. The actual carrying value of our 2.500% senior notes, net of unamortized debt issuance costs and discount, totaled $487.6 million at June 30, 2021. On December 28, 2020, we redeemed the $425.0 million aggregate outstanding principal amount of our 5.25% senior notes in full (See Note 8).

•Notes Payable on Real Estate - As of June 30, 2021 and December 31, 2020, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $128.7 million and ~~$422.2~~$79.6 million, ~~respectively,~~respectively. These notes payable were not recourse to CBRE Group, Inc., except for being recourse to the single-purpose entities that held the real estate assets and were the primary obligors on the notes payable. These borrowings have either fixed interest rates or floating interest rates at ~~December 31, 2016.~~

spreads added to a market index. Although it is possible that certain portions of our notes payable on real estate may have fair values that differ from their carrying values, based on the terms of such loans as compared to current market conditions, or other factors specific to the borrower entity, we do not believe that the fair value of our notes payable is significantly different than their carrying value.

6.	~~Investments in Unconsolidated Subsidiaries~~

6. Goodwill

We test each of our reporting units for goodwill impairment annually at October 1st, or upon a triggering event, in accordance with ASC Topic 350, “Intangibles – Goodwill and Other.” As of January 1, 2021, we underwent an internal reorganization in our Advisory Services and Global Workplace Solutions reportable segments (see Note 14 for further discussion). This changed the composition of our reporting units which resulted in the reallocation of $101.4 million of goodwill from our Advisory Services to our Global Workplace Solutions reportable segments as of January 1, 2021. Additionally, the change in composition of our reporting units was considered a triggering event for a quantitative test as of January 1, 2021. We determined that no impairment existed as the estimated fair values of our reporting units were in excess of their respective carrying values.

7.Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Our investment ownership percentages in equity method investments vary, generally ranging up to ~~5.0% in our Global Investment Management segment, up to 10.0% in our Development Services segment, and up to~~ 50.0% ~~in our other business segments.~~

Combined condensed financial information for the entities accounted for using the equity method is as follows (dollars in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2017			2016		2017		2016			2021		2020		2021		2020
Global Investment Management
Revenue	$	308,221		$	418,028	$	813,279	$	902,932
Operating (loss) income	$	(59,677	)	$	93,491	$	32,211	$	155,869
Net income	$	36,937		$	52,477	$	101,334	$	118,348
Development Services
Revenue	$	29,273		$	26,179	$	78,276	$	57,255	Revenue	$	906,765	$	412,169	$	1,462,622	$	823,420
Operating income	$	152,102		$	26,027	$	329,959	$	184,136	Operating income	431,539		138,924		707,001		313,458
Net income	$	141,489		$	19,745	$	307,641	$	169,837	Net income	1,108,718		54,055		1,476,935		158,584
Other
Revenue	$	46,648		$	40,292	$	116,651	$	106,807
Operating income	$	6,504		$	6,130	$	17,483	$	20,418
Net income	$	7,868		$	6,135	$	21,526	$	20,506
Total
Revenue	$	384,142		$	484,499	$	1,008,206	$	1,066,994
Operating income	$	98,929		$	125,648	$	379,653	$	360,423
Net income	$	186,294		$	78,357	$	430,501	$	308,691

During the second quarter of 2021, the company closed on its integration of Hana with Industrious National Management Company LLC (“Industrious”), increasing its ownership interest to 40% as of June 30, 2021.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7.	~~Long-Term Debt and Short-Term Borrowings~~

8. Long-Term Debt

and Short-Term Borrowings

Long-Term Debt

Long-term debt consists of the following (dollars in thousands):

September 30,

December 31,

2017

2016

Senior term loans, with interest ranging from
   1.77% to 2.84%, due quarterly through 2022

$
751,876

$
751,875

5.00% senior notes due in 2023

800,000

800,000

4.875% senior notes due in 2026, net of
   unamortized discount

596,181

595,912

5.25% senior notes due in 2025, net of
   unamortized premium

426,363

426,500

Other

10

14

Total long-term debt

2,574,430

2,574,301

Less: current maturities of long-term debt

(10
)

(11
)
Less: unamortized debt issuance costs

(22,852
)

(26,164
)
Total long-term debt, net of current
   maturities

$
2,551,568

$
2,548,126


	June 30, 2021		December 31, 2020
Senior term loans, with interest ranging from 0.75% to 1.15%, due quarterly through 2024	$	774,327	$	788,759
4.875% senior notes due in 2026, net of unamortized discount	597,688		597,470
2.500% senior notes due in 2031, net of unamortized discount	492,443		0
Other	1,193		1,514
Total long-term debt	1,865,651		1,387,743
Less: current maturities of long-term debt	1,181		1,514
Less: unamortized debt issuance costs	10,143		6,027
Total long-term debt, net of current maturities	$	1,854,327	$	1,380,202

We maintain credit facilities with third-party lenders, which we use for a variety of purposes. On ~~January 9, 2015,~~March 4, 2019, CBRE Services, Inc. (CBRE Services)~~, our wholly-owned subsidiary,~~ entered into an ~~amended and restated~~incremental assumption agreement with respect to its credit agreement, ~~(2015~~dated October 31, 2017 (such agreement, as amended by a December 20, 2018 incremental loan assumption agreement and such March 4, 2019 incremental assumption agreement, collectively, the 2019 Credit Agreement) with a syndicate of banks jointly led by Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Credit Suisse AG (CS). On March 21, 2016, CBRE Services executed an amendment to the 2015 Credit Agreement that, among other things,, which (i) extended the maturity onof the U.S. dollar tranche A term loans under such credit agreement, (ii) extended the termination date of the revolving credit ~~facility~~commitments available under such credit agreement and (iii) made certain changes to ~~March 2021~~the interest rates and ~~increased~~fees applicable to such tranche A term loans and revolving credit commitments under such credit agreement. The proceeds from the ~~borrowing capacity~~new tranche A term loan facility under the ~~revolving~~2019 Credit Agreement were used to repay the $300.0 million of tranche A term loans outstanding under the credit ~~facility by $200.0 million.~~

~~Our 2015~~agreement in effect prior to the entry into the 2019 incremental assumption agreement.

The 2019 Credit Agreement is ana senior unsecured credit facility that is jointly and severally guaranteed by ~~us and substantially all of~~us. On May 21, 2021, we entered into a definitive agreement whereby our ~~material domestic subsidiaries.~~subsidiary guarantors were released as guarantors from our 2019 Credit Agreement. As of ~~September~~June 30, ~~2017,~~2021, the ~~2015~~2019 Credit Agreement provided for the following: (1) a $2.8 billion revolving credit facility, which includes the capacity to obtain letters of credit and swingline loans and ~~matures~~terminates on March ~~21, 2021;~~4, 2024; (2) a ~~$500.0~~$300.0 million tranche A term loan facility maturing on March 4, 2024, requiring quarterly principal payments which began on June 30, 2015 and continue through maturity on January 9, 2020; (3) a $270.0 million tranche B-1 term loan facility requiring quarterly principal payments, which began on December 31, 2015 and continue through maturity on September 3, 2020; and (4) a $130.0 million tranche B-2 term loan facility requiring quarterly principal payments, which began on December 31, 2015 and continue through maturity on September 3, 2022.

~~Our 2015 Credit Agreement contains restrictive covenants that, among other things, limit~~unless our ability to incur additional indebtedness, pay dividends or make distributions to stockholders, repurchase capital stock or debt, make investments, sell assets or subsidiary stock, create or permit liens on assets, engage in transactions with affiliates, enter into sale/leaseback transactions, issue subsidiary equity and enter into consolidations or mergers. Our 2015 Credit Agreement also requires us to maintain a minimum coverageleverage ratio ~~of EBITDA~~ (as defined in the ~~2015~~2019 Credit Agreement) is less than or equal to ~~total~~2.50 to 1.00 on the last day of the fiscal quarter immediately preceding any such payment date and (3) a €400.0 million term loan facility due and payable in full at maturity on December 20, 2023.

On July 9, 2021, CBRE Services entered into an incremental assumption agreement with respect to the 2019 Credit Agreement for purposes of increasing the revolving credit commitments available under the 2019 Credit Agreement by an aggregate principal amount of $350.0 million. The increase is comprised of an increase in domestic borrowings of $330.0 million and an increase in our U.K. subsidiaries' borrowings of $20.0 million.

On August 13, 2015, CBRE Services issued $600.0 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 at a price equal to 99.24% of their face value. The 4.875% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 4.875% senior notes are jointly and severally guaranteed on a senior basis by us. Interest accrues at a rate of 4.875% per year and is payable semiannually in arrears on March 1 and September 1.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

be redeemed and (2) the sum of the present value at the date of redemption of the remaining scheduled payments of principal and interest thereon to January 1, 2031, assuming the notes matured on January 1, 2031, discounted to the date of redemption on a ~~maximum leverage ratio~~semi-annual basis at an adjusted rate equal to the treasury rate plus 20 basis points, minus accrued and unpaid interest to, but excluding, the date of ~~total~~redemption, plus, in either case, accrued and unpaid interest, if any, to, but not including the redemption date. The amount of the 2.500% senior notes, net of unamortized discount and unamortized debt ~~less available cash to EBITDA (as defined~~issuance costs, included in the ~~2015 Credit Agreement) of 4.25x as of the end of each fiscal quarter. On this basis, our coverage ratio of EBITDA to total interest expense~~accompanying consolidated balance sheet was ~~14.29x for the trailing twelve months ended September~~$487.6 million at June 30, ~~2017, and our leverage ratio of total debt less available cash to EBITDA was 0.97x as of September 30, 2017.~~

2021.

The indentures governing our ~~5.00% senior notes,~~ 4.875% senior notes and ~~5.25%~~2.500% senior notes contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, ~~entering~~enter into sale/leaseback transactions and ~~entering~~enter into consolidations or mergers.

In addition, these indentures require that the 4.875% senior notes and 2.500% senior notes be jointly and severally guaranteed on a senior basis by CBRE ~~GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Group, Inc. and any domestic subsidiary that guarantees the 2019 Credit Agreement. In addition, our 2019 Credit Agreement also requires us to maintain a minimum coverage ratio of consolidated EBITDA (as defined in the 2019 Credit Agreement) to consolidated interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 2019 Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 2019 Credit Agreement), 4.75x) as of the end of each fiscal quarter. On this basis, our coverage ratio of consolidated EBITDA to consolidated interest expense was 39.78x for the trailing twelve months ended June 30, 2021, and our leverage ratio of total debt less available cash to consolidated EBITDA was (0.02)x as of June 30, 2021.

Short-Term Borrowings

Revolving Credit Facility

The revolving credit facility under the 2019 Credit Agreement allows for borrowings outside of the U.S., with a $200.0 million sub-facility available to CBRE Services, one of our Canadian subsidiaries, one of our Australian subsidiaries and one of our New Zealand subsidiaries and a $300.0 million sub-facility available to CBRE Services and one of our U.K. subsidiaries. On July 9, 2021, the U.K. subsidiaries sub-facility was increased to $320.0 million. Borrowings under the revolving credit facility bear interest at varying rates, based at our option, on either (1) the applicable fixed rate plus 0.680% to 1.075% or (2) the daily rate plus 0.0% to 0.075%, in each case as determined by reference to our Credit Rating (as defined in the 2019 Credit Agreement). The 2019 Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). As of ~~September~~June 30, ~~2017,~~2021, 0 amount was outstanding under the revolving credit facility other than letters of credit totaling $2.0 ~~million were outstanding under our revolving credit facility under our 2015 Credit Agreement.~~million. These letters of credit, which reduce the amount we may borrow under ~~our~~the revolving credit facility, were primarily issued in the ordinary course of business. ~~As of September 30, 2017 and December 31, 2016, no amounts were outstanding under our revolving credit facility other than these letters of credit totaling $2.0 million.~~

Warehouse Lines of Credit

CBRE Capital Markets has warehouse lines of credit with third-party lenders for the purpose of funding mortgage loans that will be resold, and a funding arrangement with Fannie Mae for the purpose of selling a percentage of certain closed multifamily loans to Fannie Mae. These warehouse lines are recourse only to CBRE Capital Markets and are secured by our related warehouse receivables. See Note 3 for additional information.

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(Unaudited)

9. Leases

We are the lessee in contracts for our office space tenancies, for leased vehicles and for our wholly-owned subsidiary Hana. These arrangements account for the significant portion of our lease liabilities and right-of-use assets. We monitor our service arrangements to evaluate whether they meet the definition of a lease.

Supplemental balance sheet information related to our leases is as follows (dollars in thousands):


Category	Classification	June 30, 2021		December 31, 2020
Assets
Operating	Operating lease assets	$	1,001,608	$	1,020,352
Financing	Other assets, net	117,117		117,805
Total leased assets		$	1,118,725	$	1,138,157
Liabilities
Current:
Operating	Operating lease liabilities	$	216,879	$	208,526
Financing	Other current liabilities	36,232		39,298
Non-current:
Operating	Non-current operating lease liabilities	1,071,499		1,116,795
Financing	Other liabilities	80,376		78,881
Total lease liabilities		$	1,404,986	$	1,443,500

Supplemental cash flow information and non-cash activity related to our operating and finance leases are as follows (dollars in thousands):


	Six Months Ended June 30,
	2021		2020
Right-of-use assets obtained in exchange for new operating lease liabilities	$	62,591	$	155,935
Right-of-use assets obtained in exchange for new financing lease liabilities	22,430		23,845
Other non-cash increases in operating lease right-of-use assets (1)	6,876		11,426
Other non-cash decreases in financing lease right-of-use assets (1)	(2,496)		(969)

8.	~~Commitments and Contingencies~~

(1)The non-cash activity in the right-of-use assets resulted from lease modifications and remeasurements.

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10. Commitments and Contingencies

We are a party to a number of pending or threatened lawsuits arising out of, or incident to, our ordinary course of business. We believe that any losses in excess of the amounts accrued ~~therefor~~therefore as liabilities on our financial statements are unlikely to be significant, but litigation is inherently uncertain and there is the potential for a material adverse effect on our financial statements if one or more matters are resolved in a particular period in an amount materially in excess of what we anticipated.

In January 2008, CBRE MCI, a wholly-owned subsidiary of CBRE Capital Markets, entered into an agreement with Fannie Mae under Fannie Mae’s Delegated Underwriting and Servicing Lender Program (DUS Program), to provide financing for multifamily housing with five or more units. Under the DUS Program, CBRE MCI originates, underwrites, closes and services loans without prior approval by Fannie Mae, and ~~in selected cases,~~typically, is subject to sharing up to one-third of any losses on loans originated under the DUS Program. CBRE MCI has funded loans with unpaid principal balances of $34.6 billion at June 30, 2021, of which $30.0 billion was subject to such loss sharing ~~arrangements with unpaid principal balances of $18.5 billion at September 30, 2017.~~arrangements. CBRE MCI, under its agreement with Fannie Mae, must post cash reserves or other acceptable collateral under formulas established by Fannie Mae to provide for sufficient capital in the event losses occur. As of ~~September~~both June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, CBRE MCI had a ~~$53.0~~$95.0 million ~~and a $45.0 million, respectively,~~ letter of credit under this reserve arrangement and had ~~provided~~recorded a liability of approximately ~~$31.1~~$61.2 million and ~~$28.2~~$57.1 million, respectively, offor its loan loss ~~accruals.~~guarantee obligation under such arrangement. Fannie Mae’s recourse under the DUS Program is limited to the assets of CBRE MCI, which assets totaled approximately ~~$668.4~~$796.1 million (including ~~$431.3~~$323.9 million of warehouse receivables, a substantial majority of which are pledged against warehouse lines of credit and are therefore not available to Fannie Mae) at ~~September~~June 30, ~~2017.~~

2021.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the United States in response to the Covid-19 pandemic. The CARES Act, among other things, permits borrowers with government-backed mortgages from Government Sponsored Enterprises who are experiencing a financial hardship to obtain forbearance of their loans. For Fannie Mae loans that we service, CBRE MCI is obligated to advance (for a forbearance period up to 90 consecutive days and potentially longer) scheduled principal and interest payments to Fannie Mae, regardless of whether the borrowers actually make the payments.These advances are reimbursable by Fannie Mae after 120 days. As of June 30, 2021, total advances for principal and interest were $9.3 million, of which $5.6 million have already been reimbursed.

CBRE Capital Markets participates in Freddie Mac’s Multifamily Small Balance Loan (SBL) Program. Under the SBL program, CBRE Capital Markets has certain repurchase and loss reimbursement obligations. ~~These obligations are~~We could potentially be obligated to repurchase any SBL loan originated by CBRE Capital Markets that remains in default for 120 days following the forbearance period, ~~from~~if the default occurred during the first 12 months after origination and such loan had not been earlier securitized. In addition, CBRE Capital Markets may be responsible for a loss not to exceed 10% of the original principal amount of any SBL loan tothat is not securitized and goes into default after the ~~securitization date.~~12-month repurchase period. CBRE Capital Markets must post a cash reserve or other acceptable collateral to provide for sufficient capital in the event the obligations are triggered. As of ~~September~~both June 30, ~~2017,~~2021 and December 31, 2020, CBRE Capital Markets had posted a $5.0 million letter of credit under this reserve arrangement.

We had outstanding letters of credit totaling ~~$64.5~~$145.7 million as of ~~September~~June 30, ~~2017,~~2021, excluding letters of credit for which we have outstanding liabilities already accrued on our consolidated balance sheet related to our subsidiaries’ outstanding reserves for claims under certain insurance programs as well as letters of credit related to operating leases. The CBRE Capital Markets letters of credit totaling ~~$58.0~~$95.0 million as of ~~September~~June 30, ~~2017~~2021 referred to in the preceding paragraphs represented the majority of the ~~$64.5~~$145.7 million outstanding letters of credit as of such date. The remaining letters of credit are primarily executed by us in the ordinary course of business and expire at ~~varying dates through September 2018.~~

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

the end of each of the respective agreements.

We had guarantees totaling ~~$62.3~~$38.7 million as of ~~September~~June 30, ~~2017,~~2021, excluding guarantees related to pension liabilities, consolidated indebtedness and other obligations for which we have outstanding liabilities already accrued on our consolidated balance sheet, and excluding guarantees related to operating leases. The ~~$62.3~~$38.7 million primarily represents guarantees executed by us in the ordinary course of business, including various guarantees of management and vendor contracts in our operations overseas, which expire at the end of each of the respective agreements.

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(Unaudited)

In addition, as of ~~September~~June 30, ~~2017,~~2021, we had issued numerous non-recourse carveout, completion and budget guarantees relating to development projects for the benefit of third parties. These guarantees are commonplace in our industry and are made by us in the ordinary course of our ~~Development Services~~Real Estate Investments business. Non-recourse carveout guarantees generally require that our project-entity borrower not commit specified improper acts, with us potentially liable for all or a portion of such entity’s indebtedness or other damages suffered by the lender if those acts occur. Completion and budget guarantees generally require us to complete construction of the relevant project within a specified timeframe and/or within a specified budget, with us potentially being liable for costs to complete in excess of such timeframe or budget. However, we generally use “guaranteed maximum price” contracts with reputable, bondable general contractors with respect to projects for which we provide these guarantees. These contracts are intended to pass the risk to such contractors. While there can be no assurance, we do not expect to incur any material losses under these guarantees.

An important part of the strategy for our ~~Global Investment Management~~Real Estate Investments business involves investing our capital in certain real estate investments with our clients. These co-investments generally total up to 2.0% of the equity in a particular fund. As of ~~September~~June 30, ~~2017,~~2021, we had aggregate commitments of ~~$33.5~~$118.7 million to fund these future co-investments.

Additionally, an important part of our ~~Development Services~~Real Estate Investments business strategy is to invest in unconsolidated real estate subsidiaries as a principal (in most cases co-investing with our clients). As of ~~September~~June 30, ~~2017,~~2021, we had committed to fund ~~$20.4~~$55.5 million of additional capital to these unconsolidated subsidiaries.

11. Income Taxes

Our provision for income taxes on a consolidated basis was $133.4 million for the three months ended June 30, 2021 as compared to $18.8 million for the three months ended June 30, 2020. The increase of $114.6 million is primarily related to the corresponding increase in our consolidated pre-tax book income. Our effective tax rate increased to 23.1% for the three months ended June 30, 2021 from 18.6% for the three months ended June 30, 2020 primarily resulted from a percentage decrease of favorable permanent book tax differences and tax credits in 2021.

Our provision for income taxes on a consolidated basis was $209.8 million for the six months ended June 30, 2021 as compared to $70.0 million for the six months ended June 30, 2020. The increase of $139.8 million is primarily related to the corresponding increase in consolidated pre-tax book income. Our effective tax rate increased to 22.7% for the six months ended June 30, 2021 from 21.5% for the six months ended June 30, 2020 primarily resulting from a percentage decrease of favorable permanent book tax differences and tax credits in 2021.

Our effective tax rate for the three and six months ended June 30, 2021 was different than the U.S. federal statutory tax rate of 21.0% primarily due to U.S. state taxes and favorable permanent book tax differences.

As of June 30, 2021 and December 31, 2020, the company had gross unrecognized tax benefits of $172.7 million and $168.5 million, respectively. The net increase of $4.2 million primarily resulting from an accrual of gross unrecognized tax benefits of $9.9 million and a release of $5.7 million of gross unrecognized tax benefits primarily related to the expiration of statute of limitations in various tax jurisdictions.

The CARES Act has not had, nor is it expected to have, a significant impact on our effective tax rate for 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

9.	~~Income Per Share Information~~

12. Income Per Share and Stockholders' Equity

The calculations of basic and diluted income per share attributable to CBRE Group, Inc. ~~shareholders~~stockholders are as follows (dollars in thousands, except share and per share data):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Basic Income Per Share

Net income attributable to CBRE Group, Inc.
   shareholders

$
196,317

$
104,163

$
523,079

$
307,998

Weighted average shares outstanding for basic
   income per share

337,948,324

335,770,122

337,280,914

334,949,606

Basic income per share attributable to CBRE
   Group, Inc. shareholders

$
0.58

$
0.31

$
1.55

$
0.92

Diluted Income Per Share

Net income attributable to CBRE Group, Inc.
   shareholders

$
196,317

$
104,163

$
523,079

$
307,998

Weighted average shares outstanding for basic
   income per share

337,948,324

335,770,122

337,280,914

334,949,606

Dilutive effect of contingently issuable
   shares

3,236,525

2,707,401

3,217,594

3,070,134

Dilutive effect of stock options

1,582

11,452

3,924

33,557

Weighted average shares outstanding for
   diluted income per share

341,186,431

338,488,975

340,502,432

338,053,297

Diluted income per share attributable to
   CBRE Group, Inc. shareholders

$
0.58

$
0.31

$
1.54

$
0.91


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Basic Income Per Share
Net income attributable to CBRE Group, Inc. stockholders	$	442,637	$	81,897	$	708,839	$	254,092
Weighted average shares outstanding for basic income per share	335,643,233		335,126,126		335,751,530		335,048,115
Basic income per share attributable to CBRE Group, Inc. stockholders	$	1.32	$	0.24	$	2.11	$	0.76
Diluted Income Per Share
Net income attributable to CBRE Group, Inc. stockholders	$	442,637	$	81,897	$	708,839	$	254,092
Weighted average shares outstanding for basic income per share	335,643,233		335,126,126		335,751,530		335,048,115
Dilutive effect of contingently issuable shares	3,859,638		2,235,293		3,789,824		3,501,690
Weighted average shares outstanding for diluted income per share	339,502,871		337,361,419		339,541,354		338,549,805
Diluted income per share attributable to CBRE Group, Inc. stockholders	$	1.30	$	0.24	$	2.09	$	0.75

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, 384,775~~2021, 3,974 and ~~1,141,522,~~15,852, respectively, of contingently issuable shares were excluded from the computation of diluted income per share because their inclusion would have had an anti-dilutive effect.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, 1,972,360~~2020, 2,381,476 and ~~1,704,848,~~1,585,601, respectively, of contingently issuable shares were excluded from the computation of diluted income per share because their inclusion would have had an anti-dilutive effect.

In February 2019, our board of directors authorized a new program for the repurchase of up to $300.0 million of our common stock over three years, effective March 11, 2019. In both August and November 2019, our board of directors authorized an additional $100.0 million under our program, bringing the total authorized repurchase amount under the program to a total of $500.0 million. During the year ended December 31, 2020, we spent $50.0 million to repurchase 1,050,084 shares of our common stock at an average price of $47.62 per share using cash on hand. During the three months ended March 31, 2021, we spent $64.1 million to repurchase an additional 831,274 shares of our common stock with an average price of $77.15 per share using cash on hand. During the three months ended June 30, 2021, we spent $24.1 million to repurchase an additional 300,454 shares of our common stock with an average price of $80.31 per share using cash on hand. As of June 30, 2021, we had $261.7 million of capacity remaining under our stock repurchase program.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

13. Revenue from Contracts with Customers

We account for revenue with customers in accordance with FASB ASC Topic, “Revenue from Contracts with Customers” (Topic 606). Revenue is recognized when or as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those services.

Disaggregated Revenue

The following tables represent a disaggregation of revenue from contracts with customers by type of service and/or segment (dollars in thousands):


	Three Months Ended June 30, 2021
	Advisory Services		Global Workplace Solutions		Real Estate Investments		Corporate, other and eliminations		Consolidated
Topic 606 Revenue:
Facilities management	$	—	$	3,435,754	$	—	$	—	$	3,435,754
Advisory leasing	692,908		—		—		—		692,908
Advisory sales	611,834		—		—		—		611,834
Property management	423,244		—		—		(4,457)		418,787
Project management	—		646,968		—		—		646,968
Valuation	181,226		—		—		—		181,226
Commercial mortgage origination (1)	72,211		—		—		—		72,211
Loan servicing (2)	5,118		—		—		—		5,118
Investment management	—		—		139,271		—		139,271
Development services	—		—		92,514		—		92,514
Topic 606 Revenue	1,986,541		4,082,722		231,785		(4,457)		6,296,591
Out of Scope of Topic 606 Revenue:
Commercial mortgage origination	89,667		—		—		—		89,667
Loan servicing	60,777		—		—		—		60,777
Development services (3)	—		—		11,578		—		11,578
Total Out of Scope of Topic 606 Revenue	150,444		0		11,578		0		162,022
Total Revenue	$	2,136,985	$	4,082,722	$	243,363	$	(4,457)	$	6,458,613

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Three Months Ended June 30, 2020
	Advisory Services (4)		Global Workplace Solutions (4)		Real Estate Investments		Corporate, other and eliminations (4)		Consolidated
Topic 606 Revenue:
Facilities management	$	—	$	3,297,039	$	—	$	—	$	3,297,039
Advisory leasing	521,778		—		—		—		521,778
Advisory sales	243,007		—		—		—		243,007
Property management	400,110		—		—		(4,892)		395,218
Project management	—		473,394		—		—		473,394
Valuation	131,837		—		—		—		131,837
Commercial mortgage origination (1)	20,115		—		—		—		20,115
Loan servicing (2)	9,021		—		—		—		9,021
Investment management	—		—		103,132		—		103,132
Development services	—		—		57,700		—		57,700
Topic 606 Revenue	1,325,868		3,770,433		160,832		(4,892)		5,252,241
Out of Scope of Topic 606 Revenue:
Commercial mortgage origination	80,335		—		—		—		80,335
Loan servicing	48,029		—		—		—		48,029
Development services (3)	—		—		779		—		779
Total Out of Scope of Topic 606 Revenue	128,364		0		779		0		129,143
Total Revenue	$	1,454,232	$	3,770,433	$	161,611	$	(4,892)	$	5,381,384

~~10.~~

~~Segments~~

(1)We earn fees for arranging financing for borrowers with third-party lender contacts. Such fees are in scope of Topic 606.

(2)Loan servicing fees earned from servicing contracts for which we do not hold mortgage servicing rights are in scope of Topic 606.

(3)Out of scope revenue for development services represents selling profit from transfers of sales-type leases in the scope of Topic 842.

(4)Prior period segment results have been recast to conform to the changes as discussed in Note 14.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Six Months Ended June 30, 2021
	Advisory Services		Global Workplace Solutions		Real Estate Investments		Corporate, other and eliminations		Consolidated
Topic 606 Revenue:
Facilities management	$	—	$	6,915,255	$	—	$	—	$	6,915,255
Advisory leasing	1,213,124		—		—		—		1,213,124
Advisory sales	1,004,146		—		—		—		1,004,146
Property management	850,432		—		—		(10,602)		839,830
Project management	—		1,193,350		—		—		1,193,350
Valuation	340,816		—		—		—		340,816
Commercial mortgage origination (1)	105,962		—		—		—		105,962
Loan servicing (2)	20,505		—		—		—		20,505
Investment management	—		—		271,342		—		271,342
Development services	—		—		170,692		—		170,692
Topic 606 Revenue	3,534,985		8,108,605		442,034		(10,602)		12,075,022
Out of Scope of Topic 606 Revenue:
Commercial mortgage origination	195,782		—		—		—		195,782
Loan servicing	114,230		—		—		—		114,230
Development services (3)	—		—		12,458		—		12,458
Total Out of Scope of Topic 606 Revenue	310,012		0		12,458		0		322,470
Total Revenue	$	3,844,997	$	8,108,605	$	454,492	$	(10,602)	$	12,397,492


	Six Months Ended June 30, 2020
	Advisory Services (4)		Global Workplace Solutions (4)		Real Estate Investments		Corporate, other and eliminations (4)		Consolidated
Topic 606 Revenue:
Facilities management	$	—	$	6,632,832	$	—	$	—	$	6,632,832
Advisory leasing	1,146,806		—		—		(2,134)		1,144,672
Advisory sales	674,676		—		—		—		674,676
Property management	818,591		—		—		(12,276)		806,315
Project management	—		1,022,130		—		—		1,022,130
Valuation	279,575		—		—		—		279,575
Commercial mortgage origination (1)	58,003		—		—		—		58,003
Loan servicing (2)	20,430		—		—		—		20,430
Investment management	—		—		224,809		—		224,809
Development services	—		—		133,926		—		133,926
Topic 606 Revenue	2,998,081		7,654,962		358,735		(14,410)		10,997,368
Out of Scope of Topic 606 Revenue:
Commercial mortgage origination	165,538		—		—		—		165,538
Loan servicing	93,300		—		—		—		93,300
Development services (3)	—		—		14,346		—		14,346
Total Out of Scope of Topic 606 Revenue	258,838		0		14,346		0		273,184
Total Revenue	$	3,256,919	$	7,654,962	$	373,081	$	(14,410)	$	11,270,552

(1)We earn fees for arranging financing for borrowers with third-party lender contacts. Such fees are in scope of Topic 606.

(2)Loan servicing fees earned from servicing contracts for which we do not hold mortgage servicing rights are in scope of Topic 606.

(3)Out of scope revenue for development services represents selling profit from transfers of sales-type leases in the scope of Topic 842.

(4)Prior period segment results have been recast to conform to the changes as discussed in Note 14.

Contract Assets and Liabilities

We had contract assets totaling $460.9 million ($322.9 million of which was current) and $471.8 million ($318.2 million of which was current) as of June 30, 2021 and December 31, 2020, respectively.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

We had contract liabilities totaling $200.7 million ($197.4 million of which was current) and $164.1 million ($162.0 million of which was current) as of June 30, 2021 and December 31, 2020, respectively. During the six months ended June 30, 2021, we recognized revenue of $142.4 million that was included in the contract liability balance at December 31, 2020.

14. Segments

We organize our operations around, and publicly report our ~~operations through the following~~financial results on, 3 global business segments: (1) ~~Americas;~~Advisory Services; (2) ~~Europe, Middle East~~Global Workplace Solutions and ~~Africa (EMEA);~~ (3) ~~Asia Pacific; (4) Global Investment Management;~~Real Estate Investments. Effective January 1, 2021, we have realigned our organizational structure and ~~(5) Development Services.~~

~~The Americas~~performance measure to how our chief operating decision maker (CODM) views the company. This includes a “Corporate, other and elimination” component and a segment ~~is our largest~~measurement of profit and loss referred to as segment ~~of operations and~~operating profit.

Advisory Services provides a comprehensive range of services ~~throughout~~globally, including property leasing, property sales, mortgage services, property management, and valuation. Global Workplace Solutions provides a broad suite of integrated, contractually-based outsourcing services to occupiers of real estate, including facilities management and project management. Effective January 1, 2021, transaction services was fully moved under the Advisory Services segment and project management was fully moved under the Global Workplace Solutions segment. Previously transaction services and project management were split between the Global Workplace Solutions segment and the Advisory Services segment. Real Estate Investments includes investment management services provided globally, development services in the U.S. and ~~in the largest regions~~U.K. and flexible office space solutions. Corporate and other includes activities not attributed to our core business, primarily consisting of ~~Canada~~corporate headquarters costs for executive officers 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~~certain other central functions, as well as certain strategic equity investments. These costs, which were previously allocated to the ~~Americas~~ business ~~segment. The EMEA~~segments on a reasonable basis, are no longer allocated and are reported under Corporate and other. It also includes eliminations related to inter-segment revenue. Prior period segment ~~has operations primarily in Europe, while~~results for all of our reportable segments have been recast to conform to 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.

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~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):~~

above changes.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016 (1)

2017

2016 (1)

Revenue

Americas

$
1,969,430

$
1,775,326

$
5,518,963

$
5,143,590

EMEA

1,033,042

948,053

2,831,964

2,742,318

Asia Pacific

440,933

361,802

1,202,706

1,032,763

Global Investment Management

92,122

91,807

274,451

277,924

Development Services

14,450

16,499

45,312

51,163

Total revenue

$
3,549,977

$
3,193,487

$
9,873,396

$
9,247,758

Adjusted EBITDA

Americas

$
238,259

$
222,043

$
689,068

$
636,668

EMEA

71,169

61,177

173,610

148,842

Asia Pacific

43,081

31,467

106,562

72,570

Global Investment Management

23,202

18,988

72,971

68,329

Development Services

35,863

15,709

85,120

66,109

Total Adjusted EBITDA

$
411,574

$
349,384

$
1,127,331

$
992,518

~~(1)~~

~~Adjusted EBITDA~~Segment operating profit 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~~Segment operating profit 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~~amortization and ~~non-cash charges~~asset impairments, as well as adjustments related to ~~acquisitions, cost-elimination expenses and~~the following: certain carried interest incentive compensation expense (reversal) to align with the timing of associated ~~revenue.~~

revenue, impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization efforts and integration and other costs related to acquisitions. This metric excludes the impact of corporate overhead as these costs are now reported under Corporate and other.

Table of contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~Adjusted EBITDA~~

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue
Advisory Services	$	2,136,985	$	1,454,232	$	3,844,997	$	3,256,919
Global Workplace Solutions	4,082,722		3,770,433		8,108,605		7,654,962
Real Estate Investments	243,363		161,611		454,492		373,081
Corporate, other and eliminations	(4,457)		(4,892)		(10,602)		(14,410)
Total revenue	$	6,458,613	$	5,381,384	$	12,397,492	$	11,270,552

Segment operating profit
Advisory Services	$	464,297	$	202,112	$	796,597	$	535,076
Global Workplace Solutions	170,152		127,490		322,329		234,457
Real Estate Investments	153,463		24,654		214,040		67,675
Total reportable segment operating profit	$	787,912	$	354,256	$	1,332,966	$	837,208

Reconciliation of total reportable segment operating profit to net income is as follows (dollars in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income attributable to CBRE Group, Inc.	$	442,637	$	81,897	$	708,839	$	254,092
Adjustments to increase (decrease) net income:
Depreciation and amortization	119,085		116,384		241,163		230,178
Asset impairments	0		0		0		75,171
Interest expense, net of interest income	13,772		17,950		23,878		33,966

Provision for income taxes	133,445		18,803		209,772		69,985

Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue	1,672		(7,500)		17,004		(15,284)
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period	(374)		1,247		725		7,000
Costs incurred related to legal entity restructuring	0		693		0		3,934
Integration and other costs related to acquisitions	8,134		236		8,134		1,019
Costs associated with workforce optimization efforts (1)	0		37,594		0		37,594

Corporate and other loss, including eliminations	69,541		86,952		123,451		139,553
Total reportable segment operating profit	$	787,912	$	354,256	$	1,332,966	$	837,208

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016 (1)

2017

2016 (1)

Net income attributable to CBRE Group, Inc.

$
196,317

$
104,163

$
523,079

$
307,998

Add:

Depreciation and amortization

102,591

92,725

297,014

269,987

Interest expense

34,483

37,273

103,923

109,050

Provision for income taxes

76,178

51,414

195,813

165,578

Less:

Interest income

3,129

1,020

6,967

5,545

EBITDA

406,440

284,555

1,112,862

847,068

Adjustments:

Cost-elimination expenses (2)

—

38,877

—

78,456

Integration and other costs related to
   acquisitions

—

28,596

27,351

73,520

Carried interest incentive compensation
   expense (reversal) to align with the timing of
   associated revenue

5,134

(2,644
)

(12,882
)

(6,526
)
Adjusted EBITDA

$
411,574

$
349,384

$
1,127,331

$
992,518

~~(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(1)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. of the total costs, $7.4 million was included within the “Cost of revenue” line item and $30.2 million was included in the “Operating, administrative and other” line item in the accompanying consolidated ~~results.~~

~~(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 three and nine months ended September 30, 2016 consisted of $36.7 million and $73.6 million, respectively, of severance costs related to headcount reductions in connection with the program and $2.2 million and $4.9 million, respectively, of third-party contract termination costs.

~~11.~~

~~Guarantor and Nonguarantor Financial Statements~~

~~The following condensed consolidating financial information includes condensed consolidating balance sheets as of September 30, 2017 and December 31, 2016, condensed consolidating~~ statements of operations ~~and condensed consolidating statements of comprehensive income~~ for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020.

Our CODM is not provided with total asset information by segment and ~~2016 and condensed consolidating statements of cash flows for the nine months ended September 30, 2017 and 2016 of:~~

~~CBRE Group, Inc., as the parent; CBRE Services, as the subsidiary issuer; the guarantor subsidiaries; the nonguarantor subsidiaries;~~

~~Elimination entries necessary to consolidate CBRE Group, Inc., as the parent, with CBRE Services and its guarantor and nonguarantor subsidiaries; and~~

~~CBRE Group, Inc.,~~accordingly, does not measure or allocate total assets on a ~~consolidated~~segment basis.

As a result, we have not disclosed any asset information by segment.

~~Investments in consolidated subsidiaries are presented using the equity method~~

Table of ~~accounting. The principal elimination entries eliminate investments in consolidated subsidiaries and intercompany balances and transactions.~~

contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~AS OF SEPTEMBER 30, 2017~~

~~(Dollars~~

Geographic Information

Revenue in ~~thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

ASSETS

Current Assets:

Cash and cash equivalents

$
7

$
7,721

$
446,123

$
501,754

$
—

$
955,605

Restricted cash

—

—

2,048

82,746

—

84,794

Receivables, net

—

—

1,069,509

1,773,617

—

2,843,126

Warehouse receivables (1)

—

—

1,002,000

432,910

—

1,434,910

Income taxes receivable

587

4,399

—

61,425

(25
)

66,386

Prepaid expenses

—

—

77,336

140,713

—

218,049

Other current assets

—

—

60,622

141,242

—

201,864

Total Current Assets

594

12,120

2,657,638

3,134,407

(25
)

5,804,734

Property and equipment, net

—

—

400,273

173,993

—

574,266

Goodwill

—

—

1,684,808

1,450,400

—

3,135,208

Other intangible assets, net

—

—

753,706

646,993

—

1,400,699

Investments in unconsolidated subsidiaries

—

—

188,353

45,281

—

233,634

Investments in consolidated subsidiaries

5,143,175

4,988,534

2,807,898

—

(12,939,607
)

—

Intercompany loan receivable

—

2,690,873

700,000

—

(3,390,873
)

—

Deferred tax assets, net

—

—

30,673

94,250

(30,673
)

94,250

Other assets, net

—

18,306

275,452

115,465

—

409,223

Total Assets

$
5,143,769

$
7,709,833

$
9,498,801

$
5,660,789

$
(16,361,178
)

$
11,652,014

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable and accrued expenses

$
—

$
7,788

$
482,449

$
1,015,623

$
—

$
1,505,860

Compensation and employee benefits
   payable

—

626

412,761

350,167

—

763,554

Accrued bonus and profit sharing

—

—

413,826

313,240

—

727,066

Income taxes payable

—

—

34,581

47,550

(25
)

82,106

Short-term borrowings:

—

Warehouse lines of credit (which
   fund loans that U.S. Government
   Sponsored Enterprises have
   committed to purchase) (1)

—

—

999,172

417,081

—

1,416,253

Other

—

—

16

—

—

16

Total short-term borrowings

—

—

999,188

417,081

—

1,416,269

Current maturities of long-term debt

—

—

—

10

—

10

Other current liabilities

—

84

40,500

15,928

—

56,512

Total Current Liabilities

—

8,498

2,383,305

2,159,599

(25
)

4,551,377

Long-Term Debt, net:

Long-term debt, net

—

2,551,568

—

—

—

2,551,568

Intercompany loan payable

1,348,299

—

1,826,325

216,249

(3,390,873
)

—

Total Long-Term Debt, net

1,348,299

2,551,568

1,826,325

216,249

(3,390,873
)

2,551,568

Deferred tax liabilities, net

—

—

—

156,455

(30,673
)

125,782

Non-current tax liabilities

—

—

16,037

1,814

—

17,851

Other liabilities

—

6,592

284,600

262,408

—

553,600

Total Liabilities

1,348,299

2,566,658

4,510,267

2,796,525

(3,421,571
)

7,800,178

Commitments and contingencies

—

—

—

—

—

—

Equity:

CBRE Group, Inc. Stockholders’ Equity

3,795,470

5,143,175

4,988,534

2,807,898

(12,939,607
)

3,795,470

Non-controlling interests

—

—

—

56,366

—

56,366

Total Equity

3,795,470

5,143,175

4,988,534

2,864,264

(12,939,607
)

3,851,836

Total Liabilities and Equity

$
5,143,769

$
7,709,833

$
9,498,801

$
5,660,789

$
(16,361,178
)

$
11,652,014

~~(1)~~

Although CBRE Capital Markets is included among our domestic subsidiaries that jointly and severally guarantee our 5.00% senior notes, 4.875% senior notes, 5.25% senior notes and our 2015 Credit Agreement, a substantial majority of warehouse receivables funded under JP Morgan, TD Bank, BofA, Fannie Mae ASAP and Capital One lines of credit are pledged to JP Morgan, TD Bank, BofA, Fannie Mae and Capital One.

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~AS OF DECEMBER 31, 2016~~

~~(Dollars~~the table below is allocated based upon the country in ~~thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

ASSETS

Current Assets:

Cash and cash equivalents

$
7

$
16,889

$
264,121

$
481,559

$
—

$
762,576

Restricted cash

—

—

6,967

61,869

—

68,836

Receivables, net

—

—

943,028

1,662,574

—

2,605,602

Warehouse receivables (1)

—

—

687,454

588,593

—

1,276,047

Income taxes receivable

1,915

17,364

8,170

37,456

(19,279
)

45,626

Prepaid expenses

—

—

78,296

105,811

—

184,107

Other current assets

—

1,421

64,576

113,659

—

179,656

Total Current Assets

1,922

35,674

2,052,612

3,051,521

(19,279
)

5,122,450

Property and equipment, net

—

—

395,749

165,007

—

560,756

Goodwill

—

—

1,669,683

1,311,709

—

2,981,392

Other intangible assets, net

—

—

793,525

617,514

—

1,411,039

Investments in unconsolidated subsidiaries

—

—

189,455

42,783

—

232,238

Investments in consolidated subsidiaries

4,226,629

4,076,265

2,314,549

—

(10,617,443
)

—

Intercompany loan receivable

—

2,684,421

700,000

—

(3,384,421
)

—

Deferred tax assets, net

—

—

72,325

90,334

(57,335
)

105,324

Other assets, net

—

22,229

240,707

103,452

—

366,388

Total Assets

$
4,228,551

$
6,818,589

$
8,428,605

$
5,382,320

$
(14,078,478
)

$
10,779,587

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable and accrued expenses

$
—

$
30,049

$
409,470

$
1,006,919

$
—

$
1,446,438

Compensation and employee benefits
   payable

—

626

402,719

369,577

—

772,922

Accrued bonus and profit sharing

—

—

506,715

383,606

—

890,321

Income taxes payable

—

—

40,946

36,684

(19,279
)

58,351

Short-term borrowings:

—

Warehouse lines of credit (which
   fund loans that U.S. Government
   Sponsored Enterprises have
   committed to purchase) (1)

—

—

680,473

574,180

—

1,254,653

Other

—

—

16

—

—

16

Total short-term borrowings

—

—

680,489

574,180

—

1,254,669

Current maturities of long-term debt

—

—

—

11

—

11

Other current liabilities

—

—

81,590

21,127

—

102,717

Total Current Liabilities

—

30,675

2,121,929

2,392,104

(19,279
)

4,525,429

Long-Term Debt, net:

Long-term debt, net

—

2,548,123

—

3

—

2,548,126

Intercompany loan payable

1,214,064

—

1,916,675

253,682

(3,384,421
)

—

Total Long-Term Debt, net

1,214,064

2,548,123

1,916,675

253,685

(3,384,421
)

2,548,126

Deferred tax liabilities, net

—

—

—

128,054

(57,335
)

70,719

Non-current tax liabilities

—

—

53,422

620

—

54,042

Other liabilities

—

13,162

260,314

250,550

—

524,026

Total Liabilities

1,214,064

2,591,960

4,352,340

3,025,013

(3,461,035
)

7,722,342

Commitments and contingencies

—

—

—

—

—

—

Equity:

CBRE Group, Inc. Stockholders’ Equity

3,014,487

4,226,629

4,076,265

2,314,549

(10,617,443
)

3,014,487

Non-controlling interests

—

—

—

42,758

—

42,758

Total Equity

3,014,487

4,226,629

4,076,265

2,357,307

(10,617,443
)

3,057,245

Total Liabilities and Equity

$
4,228,551

$
6,818,589

$
8,428,605

$
5,382,320

$
(14,078,478
)

$
10,779,587

~~(1)~~

Although CBRE Capital Markets is included among our domestic subsidiaries that jointly and severally guarantee our 5.00% senior notes, 4.875% senior notes, 5.25% senior notes and our 2015 Credit Agreement, a substantial majority of warehouse receivables funded under BofA, Fannie Mae ASAP, JP Morgan, Capital One and TD Bank lines of credit are pledged to BofA, Fannie Mae, JP Morgan, Capital One and TD Bank.

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(Dollars~~which services are performed (dollars in thousands)

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Revenue

$
—

$
—

$
1,774,112

$
1,775,865

$
—

$
3,549,977

Costs and expenses:

Cost of services

—

—

1,256,664

1,256,713

—

2,513,377

Operating, administrative and other

770

756

374,966

328,406

—

704,898

Depreciation and amortization

—

—

60,610

41,981

—

102,591

Total costs and expenses

770

756

1,692,240

1,627,100

—

3,320,866

Gain on disposition of real estate

—

—

5,315

865

—

6,180

Operating (loss) income

(770
)

(756
)

87,187

149,630

—

235,291

Equity income from unconsolidated
   subsidiaries

—

—

65,439

2,395

—

67,834

Other income

—

—

455

1,313

—

1,768

Interest income

—

30,651

1,352

1,777

(30,651
)

3,129

Interest expense

—

33,577

22,660

8,897

(30,651
)

34,483

Royalty and management service (income)
   expense

—

—

(4,389
)

4,389

—

—

Income from consolidated subsidiaries

196,791

199,062

99,222

—

(495,075
)

—

Income before (benefit of) provision for
   income taxes

196,021

195,380

235,384

141,829

(495,075
)

273,539

(Benefit of) provision for income taxes

(296
)

(1,411
)

36,322

41,563

—

76,178

Net income

196,317

196,791

199,062

100,266

(495,075
)

197,361

Less:  Net income attributable to
   non-controlling interests

—

—

—

1,044

—

1,044

Net income attributable to CBRE Group, Inc.

$
196,317

$
196,791

$
199,062

$
99,222

$
(495,075
)

$
196,317


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue
United States	$	3,563,704	$	3,089,794	$	6,912,563	$	6,470,357
United Kingdom	832,938		677,880		1,609,981		1,451,895
All other countries	2,061,971		1,613,710		3,874,948		3,348,300
Total revenue	$	6,458,613	$	5,381,384	$	12,397,492	$	11,270,552

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Revenue

$
—

$
—

$
1,611,836

$
1,581,651

$
—

$
3,193,487

Costs and expenses:

Cost of services

—

—

1,149,943

1,102,840

—

2,252,783

Operating, administrative and other

1,165

(158
)

353,420

332,103

—

686,530

Depreciation and amortization

—

—

54,423

38,302

—

92,725

Total costs and expenses

1,165

(158
)

1,557,786

1,473,245

—

3,032,038

Gain on disposition of real estate

—

—

—

11,043

—

11,043

Operating (loss) income

(1,165
)

158

54,050

119,449

—

172,492

Equity income from unconsolidated
   subsidiaries

—

—

24,287

385

—

24,672

Other income

—

—

278

1,078

—

1,356

Interest income

—

33,550

592

428

(33,550
)

1,020

Interest expense

—

34,809

24,921

11,093

(33,550
)

37,273

Royalty and management service (income)
   expense

—

—

(2,972
)

2,972

—

—

Income from consolidated subsidiaries

104,881

105,560

65,474

—

(275,915
)

—

Income before (benefit of) provision for
   income taxes

103,716

104,459

122,732

107,275

(275,915
)

162,267

(Benefit of) provision for income taxes

(447
)

(422
)

17,172

35,111

—

51,414

Net income

104,163

104,881

105,560

72,164

(275,915
)

110,853

Less:  Net income attributable to
   non-controlling interests

—

—

—

6,690

—

6,690

Net income attributable to CBRE Group, Inc.

$
104,163

$
104,881

$
105,560

$
65,474

$
(275,915
)

$
104,163

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Revenue

$
—

$
—

$
5,046,641

$
4,826,755

$
—

$
9,873,396

Costs and expenses:

Cost of services

—

—

3,504,306

3,414,712

—

6,919,018

Operating, administrative and other

1,532

1,643

1,078,709

941,619

—

2,023,503

Depreciation and amortization

—

—

176,035

120,979

—

297,014

Total costs and expenses

1,532

1,643

4,759,050

4,477,310

—

9,239,535

Gain on disposition of real estate

—

—

5,543

13,320

—

18,863

Operating (loss) income

(1,532
)

(1,643
)

293,134

362,765

—

652,724

Equity income from unconsolidated
   subsidiaries

—

—

154,769

3,467

—

158,236

Other income

—

1

1,481

7,587

—

9,069

Interest income

—

91,250

3,891

3,076

(91,250
)

6,967

Interest expense

—

101,087

67,276

26,810

(91,250
)

103,923

Royalty and management service (income)
   expense

—

—

(11,088
)

11,088

—

—

Income from consolidated subsidiaries

524,024

531,104

227,120

—

(1,282,248
)

—

Income before (benefit of) provision for
   income taxes

522,492

519,625

624,207

338,997

(1,282,248
)

723,073

(Benefit of) provision for income taxes

(587
)

(4,399
)

93,103

107,696

—

195,813

Net income

523,079

524,024

531,104

231,301

(1,282,248
)

527,260

Less:  Net income attributable to
   non-controlling interests

—

—

—

4,181

—

4,181

Net income attributable to CBRE Group, Inc.

$
523,079

$
524,024

$
531,104

$
227,120

$
(1,282,248
)

$
523,079

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Revenue

$
—

$
—

$
4,751,526

$
4,496,232

$
—

$
9,247,758

Costs and expenses:

Cost of services

—

—

3,304,291

3,216,338

—

6,520,629

Operating, administrative and other

3,358

(1,584
)

1,061,778

946,786

—

2,010,338

Depreciation and amortization

—

—

165,087

104,900

—

269,987

Total costs and expenses

3,358

(1,584
)

4,531,156

4,268,024

—

8,800,954

Gain on disposition of real estate

—

—

3,659

12,203

—

15,862

Operating (loss) income

(3,358
)

1,584

224,029

240,411

—

462,666

Equity income from unconsolidated
   subsidiaries

—

—

114,504

2,398

—

116,902

Other income (loss)

—

1

(203
)

8,655

—

8,453

Interest income

—

99,119

2,163

3,382

(99,119
)

5,545

Interest expense

—

103,425

74,331

30,413

(99,119
)

109,050

Royalty and management service (income)
   expense

—

—

(26,740
)

26,740

—

—

Income from consolidated subsidiaries

310,069

311,747

107,849

—

(729,665
)

—

Income before (benefit of) provision for
   income taxes

306,711

309,026

400,751

197,693

(729,665
)

484,516

(Benefit of) provision for income taxes

(1,287
)

(1,043
)

89,004

78,904

—

165,578

Net income

307,998

310,069

311,747

118,789

(729,665
)

318,938

Less:  Net income attributable to
   non-controlling interests

—

—

—

10,940

—

10,940

Net income attributable to CBRE Group, Inc.

$
307,998

$
310,069

$
311,747

$
107,849

$
(729,665
)

$
307,998

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME~~

~~FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Net income

$
196,317

$
196,791

$
199,062

$
100,266

$
(495,075
)

$
197,361

Other comprehensive income:

Foreign currency translation gain

—

—

—

64,711

—

64,711

Amounts reclassified from accumulated
   other comprehensive loss to interest
   expense, net

—

1,260

—

—

—

1,260

Unrealized gains on interest rate swaps,
   net

—

25

—

—

—

25

Unrealized holding gains on available
   for sale securities, net

—

—

331

8

—

339

Other, net

—

—

(4
)

—

—

(4
)
Total other comprehensive income

—

1,285

327

64,719

—

66,331

Comprehensive income

196,317

198,076

199,389

164,985

(495,075
)

263,692

Less: Comprehensive income attributable to
   non-controlling interests

—

—

—

1,227

—

1,227

Comprehensive income attributable to
   CBRE Group, Inc.

$
196,317

$
198,076

$
199,389

$
163,758

$
(495,075
)

$
262,465

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME~~

~~FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Net income

$
104,163

$
104,881

$
105,560

$
72,164

$
(275,915
)

$
110,853

Other comprehensive income (loss):

Foreign currency translation loss

—

—

—

(15,940
)

—

(15,940
)
Amounts reclassified from accumulated
   other comprehensive loss to interest
   expense, net

—

1,720

—

—

—

1,720

Unrealized gains on interest rate swaps,
   net

—

788

—

—

—

788

Unrealized holding gains on available
   for sale securities, net

—

—

348

—

—

348

Other, net

—

—

—

2

—

2

Total other comprehensive income (loss)

—

2,508

348

(15,938
)

—

(13,082
)
Comprehensive income

104,163

107,389

105,908

56,226

(275,915
)

97,771

Less: Comprehensive income attributable to
   non-controlling interests

—

—

—

6,768

—

6,768

Comprehensive income attributable to
   CBRE Group, Inc.

$
104,163

$
107,389

$
105,908

$
49,458

$
(275,915
)

$
91,003

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Net income

$
523,079

$
524,024

$
531,104

$
231,301

$
(1,282,248
)

$
527,260

Other comprehensive (loss) income:

Foreign currency translation gain

—

—

—

204,147

—

204,147

Amounts reclassified from accumulated
   other comprehensive loss to interest
   expense, net

—

4,148

—

—

—

4,148

Unrealized gains on interest rate swaps,
   net

—

102

—

—

—

102

Unrealized holding gains on available
   for sale securities, net

—

—

2,056

183

—

2,239

Other, net

(2
)

—

(18
)

—

—

(20
)
Total other comprehensive (loss) income

(2
)

4,250

2,038

204,330

—

210,616

Comprehensive income

523,077

528,274

533,142

435,631

(1,282,248
)

737,876

Less: Comprehensive income attributable to
   non-controlling interests

—

—

—

4,544

—

4,544

Comprehensive income attributable to
   CBRE Group, Inc.

$
523,077

$
528,274

$
533,142

$
431,087

$
(1,282,248
)

$
733,332

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Eliminations

Total

Net income

$
307,998

$
310,069

$
311,747

$
118,789

$
(729,665
)

$
318,938

Other comprehensive income (loss):

Foreign currency translation loss

—

—

—

(101,654
)

—

(101,654
)
Amounts reclassified from accumulated
   other comprehensive loss to interest
   expense, net

—

5,196

—

—

—

5,196

Unrealized losses on interest rate swaps,
   net

—

(3,327
)

—

—

—

(3,327
)
Unrealized holding gains on available
   for sale securities, net

—

—

862

131

—

993

Other, net

—

—

(759
)

2

—

(757
)
Total other comprehensive income (loss)

—

1,869

103

(101,521
)

—

(99,549
)
Comprehensive income

307,998

311,938

311,850

17,268

(729,665
)

219,389

Less: Comprehensive income attributable to
   non-controlling interests

—

—

—

11,057

—

11,057

Comprehensive income attributable to
   CBRE Group, Inc.

$
307,998

$
311,938

$
311,850

$
6,211

$
(729,665
)

$
208,332

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Total

CASH FLOWS PROVIDED BY (USED IN) OPERATING
   ACTIVITIES:

$
69,358

$
(7,513
)

$
129,361

$
56,062

$
247,268

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

—

—

(68,566
)

(33,040
)

(101,606
)
Acquisition of businesses (other than GWS), including net
   assets acquired, intangibles and goodwill, net of cash acquired

—

—

(39,937
)

(19,457
)

(59,394
)
Contributions to unconsolidated subsidiaries

—

—

(33,582
)

(3,077
)

(36,659
)
Distributions from unconsolidated subsidiaries

—

—

172,868

4,638

177,506

Decrease (increase) in restricted cash

—

—

4,919

(15,939
)

(11,020
)
Purchase of available for sale securities

—

—

(29,408
)

—

(29,408
)
Proceeds from the sale of available for sale securities

—

—

25,618

—

25,618

Other investing activities, net

—

—

892

264

1,156

Net cash provided by (used in) investing activities

—

—

32,804

(66,611
)

(33,807
)
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from revolving credit facility

—

911,000

—

—

911,000

Repayment of revolving credit facility

—

(911,000
)

—

—

(911,000
)
Proceeds from notes payable on real estate held for investment

—

—

—

79

79

Repayment of notes payable on real estate held for investment

—

—

—

(1,324
)

(1,324
)
Proceeds from notes payable on real estate held for sale and
   under development

—

—

—

3,341

3,341

Repayment of notes payable on real estate held for sale and
   under development

—

—

—

(10,777
)

(10,777
)
Units repurchased for payment of taxes on equity awards

(29,549
)

—

—

—

(29,549
)
Non-controlling interest contributions

—

—

—

3,410

3,410

Non-controlling interest distributions

—

—

—

(6,643
)

(6,643
)
Payment of financing costs

—

—

—

(21
)

(21
)
(Increase) decrease in intercompany receivables, net

(40,288
)

(1,655
)

22,982

18,961

—

Other financing activities, net

479

—

(3,145
)

(7
)

(2,673
)
Net cash (used in) provided by financing activities

(69,358
)

(1,655
)

19,837

7,019

(44,157
)
Effect of currency exchange rate changes on cash and cash
   equivalents

—

—

—

23,725

23,725

NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS

—

(9,168
)

182,002

20,195

193,029

CASH AND CASH EQUIVALENTS, AT BEGINNING OF
   PERIOD

7

16,889

264,121

481,559

762,576

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

$
7

$
7,721

$
446,123

$
501,754

$
955,605

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:

Cash paid during the period for:

Interest

$
—

$
111,795

$
—

$
31

$
111,826

Income taxes, net

$
—

$
—

$
80,156

$
124,072

$
204,228

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(Dollars in thousands)~~

CBRE

Guarantor

Nonguarantor

Consolidated

Parent

Services

Subsidiaries

Subsidiaries

Total

CASH FLOWS PROVIDED BY (USED IN) OPERATING
   ACTIVITIES:

$
65,900

$
(9,453
)

$
(80,074
)

$
(29,562
)

$
(53,189
)
CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

—

—

(81,359
)

(52,998
)

(134,357
)
Acquisition of businesses (other than GWS), including net
   assets acquired, intangibles and goodwill, net of cash acquired

—

—

(1,249
)

(20,817
)

(22,066
)
Acquisition of GWS, including net assets acquired, intangibles
   and goodwill

—

—

3,256

(13,733
)

(10,477
)
Contributions to unconsolidated subsidiaries

—

—

(36,693
)

(20,602
)

(57,295
)
Distributions from unconsolidated subsidiaries

—

—

116,072

3,467

119,539

Net proceeds from disposition of real estate held for investment

—

—

—

44,326

44,326

Increase in restricted cash

—

—

(545
)

(1,078
)

(1,623
)
Purchase of available for sale securities

—

—

(31,413
)

—

(31,413
)
Proceeds from the sale of available for sale securities

—

—

29,560

—

29,560

Other investing activities, net

—

—

10,677

13,508

24,185

Net cash provided by (used in) investing activities

—

—

8,306

(47,927
)

(39,621
)
CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of senior term loans

—

(23,125
)

—

—

(23,125
)
Proceeds from revolving credit facility

—

2,195,000

—

—

2,195,000

Repayment of revolving credit facility

—

(2,112,000
)

—

—

(2,112,000
)
Proceeds from notes payable on real estate held for investment

—

—

—

7,274

7,274

Repayment of notes payable on real estate held for investment

—

—

—

(33,516
)

(33,516
)
Proceeds from notes payable on real estate held for sale and
   under development

—

—

—

15,110

15,110

Repayment of notes payable on real estate held for sale and
   under development

—

—

—

(4,102
)

(4,102
)
Shares repurchased for payment of taxes on equity awards

(27,796
)

—

—

—

(27,796
)
Non-controlling interest contributions

—

—

—

1,478

1,478

Non-controlling interest distributions

—

—

—

(12,800
)

(12,800
)
Payment of financing costs

—

(5,460
)

—

(141
)

(5,601
)
(Increase) decrease in intercompany receivables, net

(39,019
)

(40,954
)

(50,454
)

130,427

—

Other financing activities, net

915

—

(1,173
)

(503
)

(761
)
Net cash (used in) provided by financing activities

(65,900
)

13,461

(51,627
)

103,227

(839
)
Effect of currency exchange rate changes on cash and cash
   equivalents

—

—

—

(408
)

(408
)
NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS

—

4,008

(123,395
)

25,330

(94,057
)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF
   PERIOD

5

8,479

147,410

384,509

540,403

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

$
5

$
12,487

$
24,015

$
409,839

$
446,346

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:

Cash paid during the period for:

Interest

$
—

$
115,698

$
—

$
2,574

$
118,272

Income taxes, net

$
—

$
—

$
123,231

$
101,898

$
225,129

~~CBRE GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

~~12.~~15. Subsequent ~~Event~~

Events

On ~~October 31, 2017, CBRE Services, our wholly-owned subsidiary,~~July 29, 2021, we entered into a ~~new Credit Agreement (the 2017 Credit Agreement),~~share purchase agreement to acquire a 60% ownership interest in Turner & Townsend Holdings Limited ("Turner & Townsend") for approximately $1.3 billion in cash, a portion of which ~~refinanced~~will be deferred. We plan to fund the purchase with cash on hand and ~~replaced the 2015 Credit Agreement (see Note 7).~~

~~The 2017 Credit Agreement is a senior unsecured credit facility that is jointly and severally guaranteed by us and certain of~~ our ~~subsidiaries. The 2017 Credit Agreement provides for the following credit facilities:~~

~~a $750.0 million delayed draw tranche A term loan facility; and~~

a revolving credit facility, if needed. Turner & Townsend, based in the U.K., is a global professional services company specializing in program management, project management, and cost consulting across the commercial real estate, infrastructure and natural resources sectors. The acquisition is expected to close in the fourth quarter of up2021, subject to ~~$2.8 billion (including an allowance for borrowings outside~~regulatory approvals and other customary closing conditions. Due to our majority interest and rights granted through our ownership, we will consolidate Turner & Townsend’s financial results in our Global Workplace Solutions segment upon completion of the ~~U.S.), which includes the capacity to obtain letters~~transaction.

Table of ~~credit~~contents

Item 2. Management’s Discussion and ~~swingline loans~~Analysis of Financial Condition and ~~matures on October 31, 2022.~~

Borrowings under the tranche A term loan facility bear interest, based at our option, on either (1) the applicable fixed rate plus 0.875% to 1.25% or (2) the daily rate plus 0.0% to 0.25%, in each case as determined by reference to our Credit Rating (as defined in the 2017 Credit Agreement). Borrowings under the tranche A term loan facility require quarterly payments, which begin on March 5, 2018 and continue through maturity on October 31, 2022, provided that in the event that our leverage ratio (as defined in the 2017 Credit Agreement) is less than or equal to 2.50 to 1.00 on the last dayResults of ~~the fiscal quarter immediately preceding any such payment date, no such quarterly principal payment shall be required on such date.~~

The revolving credit facility allows for borrowings outside of the U.S., with a $200.0 million sub-facility available to one of our Canadian subsidiaries, one of our Australian subsidiaries and one of our New Zealand subsidiaries and a $300.0 million sub-facility available to one of our U.K. subsidiaries. Borrowings under the revolving credit facility bear interest at varying rates, based at our option, on either (1) the applicable fixed rate plus 0.775% to 1.075% or (2) the daily rate plus 0.0% to 0.075%, in each case as determined by reference to our Credit Rating (as defined in the 2017 Credit Agreement). The 2017 Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused) and a ticking fee to the lenders under the tranche A term loan facility (commencing on January 30, 2018 and ending on July 31, 2018 (or such earlier date as the tranche A term loan facility is terminated or drawn in its entirety)).

On October 31, 2017, CBRE Services made an initial borrowing of (1) $200.0 million under the tranche A term loan facility (with the remaining $550.0 million available to be drawn under the tranche A term loan facility on one additional occasion on any date on or prior to July 31, 2018) and (2) $83.0 million under the revolving credit facility. These proceeds, in addition to cash on hand, were used to repay all amounts outstanding under the 2015 Credit Agreement.

Operations

~~Item 2.~~

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

This Quarterly Report on Form 10-Q (Quarterly Report) for CBRE Group, Inc. for the three months ended ~~September~~June 30, ~~2017~~2021 represents an update to the more detailed and comprehensive disclosures included in our Annual Report on Form ~~10‑K~~10-K for the fiscal year ended December 31, ~~2016.~~2020 (2020 Annual Report). Accordingly, you should read the following discussion in conjunction with the information included in our 2020 Annual Report ~~on Form 10-K for the year ended December 31, 2016~~ as well as the unaudited financial statements included elsewhere in this Quarterly Report.

In addition, the statements and assumptions in this Quarterly Report that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects as well as estimates of industry growth for the next quarter and beyond. For important information regarding these forward-looking statements, please see the discussion below under the caption “Cautionary Note on Forward-Looking Statements.”

Overview

CBRE Group, Inc. is a Delaware corporation. References to “CBRE,” “the company,” “we,” “us” and “our” refer to CBRE Group, Inc. and include all of its consolidated subsidiaries, unless otherwise indicated or the context requires otherwise.

We are the world’s largest commercial real estate services and investment firm, based on ~~2016~~2020 revenue, with leading ~~full-service operations~~global market positions in ~~major metropolitan areas throughout the world. We provide services in the office, retail, industrial, multifamily~~leasing, property sales, occupier outsourcing and ~~hotel sectors of commercial real estate.~~valuation businesses. As of December 31, ~~2016, we operated in approximately 450 offices worldwide with~~2020, the company has more than ~~75,000~~100,000 employees excluding independent affiliates, providing commercial real estate services under the “CBRE” brand name, investment management services under the “CBRE Global Investors” brand name and development services under the “Trammell Crow Company” brand name. (excluding affiliates) serving clients in more than 100 countries.

Our business is focused on ~~commercial property, corporate facilities, project~~providing services to real estate investors and ~~transaction management, tenant/occupier and property/agency leasing,~~occupiers. For investors, we provide capital markets ~~solutions~~ (property sales, ~~commercial~~ mortgage ~~brokerage, loan~~ origination, sales and servicing), ~~real estate~~property leasing, investment management, property management, valuation and development services, among others. For occupiers, we provide facilities management, project management, transaction (both property sales and ~~proprietary research.~~leasing) and consulting services, among others. We provide services under the following brand names: “CBRE” (real estate advisory and outsourcing services); “CBRE Global Investors” (investment management); “Trammell Crow Company” (U.S. development); “Telford Homes” (U.K. development) and “Hana” (flexible-space solutions). In 2020, CBRE sponsored a special purpose acquisition company, or SPAC, CBRE Acquisition Holdings, Inc., which trades on the NYSE under the symbols “CBAH,” “CBAH.U,” and “CBAH.WS.” On July 13, 2021, CBRE Acquisition Holdings, Inc. entered into a definitive merger agreement with Altus Power, Inc. that is expected to result in Altus Power, Inc. becoming a public company listed on the NYSE under the new ticker symbol “AMPS.” The transaction is expected to close in the fourth quarter of 2021.

Our revenue mix has shifted toward more stable revenue sources, particularly occupier outsourcing, and our dependence on highly cyclical property sales and lease transaction revenue has declined markedly over the past decade. We believe we are well-positioned to capture a substantial and growing share of market opportunities at a time when investors and occupiers increasingly prefer to purchase integrated, account-based services on a national and global basis. We generate revenue from both management fees (large multi-year portfolio and per-project contracts) and commissions on transactions.

In 2020, we generated revenue from a highly diversified base of clients, including more than 90 of the Fortune 100 companies. We have been ~~included~~an S&P 500 company since 2006 and in ~~the~~ ~~Fortune~~ ~~500 since 2008 (ranking #214 in 2017) and among the~~ ~~Fortune~~ Most Admired Companies in the real estate sector for five consecutive years, including 2017. Additionally, the International Association of Outsourcing Professionals (IAOP) has ranked us among the top few outsourcing service providers across all industries for six consecutive years, including 2017. In 2016,2021 we were ranked ~~by Forbes as~~to #122 on the 15^th ~~best employer in America, and we were one of two companies to be ranked~~Fortune 500. We have been voted the most recognized commercial real estate brand in the ~~top 12~~Lipsey Company survey for 20 years in a row (including 2021). We have also been rated a World’s Most Ethical Company by the Ethisphere Institute for eight consecutive years (including 2021), and are included in both the Dow Jones World Sustainability Index and the Bloomberg Gender-Equality Index for two years in a row.

The Covid-19 pandemic has primarily impacted the property sales and leasing lines of business in the ~~Barron’s 500~~Advisory Services segment. Many property owners and occupiers put transactions on hold and withdrew existing mandates, sharply reducing sales and leasing volumes. The effects of Covid-19 have eased in ~~each~~parts of ~~2014, 2015~~the world where progress has been made with vaccine distribution and ~~2016.~~

global economic conditions have improved. Nevertheless Covid-19 continues to pose public health challenges that impact our operations, particularly as new strains emerge and spread and vaccine administration is slow in parts of the world. As of the date of this Quarterly Report, the majority of workers remain out of their offices and occupier confidence in making long-term office leasing decisions has not returned to pre-pandemic levels.

Table of contents

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, which require us to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that we believe to be reasonable. Actual results may differ from those estimates. ~~Critical~~We believe that the following critical accounting policies represent the areas where more significant judgments and estimates are used in the preparation of our consolidated financial statements. A discussion of such critical accounting policies, which include revenue recognition, goodwill and other intangible assets, and income taxes can be found in our 2020 Annual Report ~~on Form 10-K for the year ended December 31, 2016.~~. There have been no material changes to these policies as of ~~September~~June 30, ~~2017.~~

2021.

New Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Seasonality

In a typical year, a significant portion of our revenue is seasonal, which an investor should keep in mind when comparing our financial condition and results of operations on a quarter-by-quarter basis. Historically, our revenue, operating income, net income and cash flow from operating activities ~~tend~~have tended to be lowest in the first quarter and highest in the fourth quarter of each year. Revenue, earnings and cash flow have generally been concentrated in the fourth calendar quarter due to the focus on completing sales, financing and leasing transactions prior to year-end.

The severe and ongoing impact of the Covid-19 pandemic may cause seasonality to deviate from historical patterns.

Inflation

Our commissions and other variable costs related to revenue are primarily affected by commercial real estate market supply and demand, which may be affected by inflation. However, to date, we ~~do not~~ believe that general inflation has not had a material impact upon our operations.

Items Affecting Comparability

When you read our financial statements and the information included in this Quarterly Report, you should consider that we have experienced, and continue to experience, several material trends and uncertainties (particularly those caused or exacerbated by Covid-19) that have affected our financial condition and results of operations that make it challenging to predict our future performance based on our historical results. We believe that the following material trends and uncertainties are crucial to an understanding of the variability in our historical earnings and cash flows and the potential for continued variability in the future.

Macroeconomic Conditions

Economic trends and government policies affect global and regional commercial real estate markets as well as our operations directly. These ~~include:~~include overall economic activity and employment ~~growth; interest rate levels~~growth, particularly office-based employment; current and changes in interest ~~rates;~~rate levels; the cost and availability of credit; and the impact of tax and regulatory policies. Periods of economic weakness or recession, significantly rising interest rates, fiscal uncertainty, declining employment levels, decreasing demand for commercial real estate, falling real estate values, disruption to ~~the~~ global capital ~~or credit~~ markets, or the public perception that any of these events may occur, will negatively affect the performance of certain portions of our ~~business.~~

business, with the greatest impact likely on some business lines within our Advisory segment.

Compensation is our largest expense and our sales and leasing professionals generally are paid on a commission and/or bonus basis that correlates with their revenue production. As a result, the negative ~~effect~~effects on our Advisory segment operating margins of difficult market conditions, ~~on our operating margins is~~such as current conditions resulting from the Covid-19 pandemic, are partially mitigated by the inherent variability of our compensation cost structure. In addition, when negative economic conditions have been particularly severe, like during the Covid-19 pandemic, we have moved decisively to lower operating expenses to improve financial performance, and ~~then have restored~~will restore certain expenses as economic conditions ~~improved.~~improve.

Additionally, our revenue has become more resilient, primarily as a result of the growth of our outsourcing business, which is largely contractual, and we believe this resilient revenue should help to offset the negative impacts that macroeconomic deterioration could have on other parts of our business. Nevertheless, adverse global and regional economic trends could pose significant risks to the performance of our consolidated operations and ~~our~~ financial condition.

Commercial real estate markets, most particularly in the United States, have generally been marked by increased demand for space, falling vacancies and higher rents since 2010. During this time, healthy U.S. property sales activity has been sustained by gradually improving market fundamentals, including low-cost credit availability and increased acceptance

Table of commercial real estate as an institutional asset class. Following years of strong growth, property sales volumes have slowed since early 2016, but the market has remained active. Commercial mortgage markets also have remained active, driven by low interest rates and a favorable lending environment. The U.S. Government Sponsored Enterprises continue to be a significant source of debt capital for multi-family properties.

European economies began to emerge from recession in 2013, with most countries returning to positive, albeit modest, economic growth. Sales and leasing activity has improved steadily across most of continental Europe for more than two years and this trend has continued in 2017. In the United Kingdom, sentiment has continued to improve since the June 2016 referendum to leave the European Union (EU), leading to higher property leasing and sales volumes. However, there continues to be uncertainty about both the withdrawal process and the United Kingdom’s future relationship with the EU.

contents

In Asia Pacific, real estate leasing and investment market activity has strengthened broadly since late 2016. Even as activity within the region has picked up, Asia Pacific investors remain a significant source of capital investing in real estate in other parts of the world.

Real estate investment management and property development markets have been generally favorable with abundant debt and equity capital flows into commercial real estate. Real estate equity securities have been pressured by a shift in investor preferences from active to passive portfolio strategies and concerns about potentially higher interest rates.

The performance of our global real estate services and real estate investment businesses depends on sustained economic growth and job creation; stable, healthy global credit markets; and continued positive business and investor sentiment.

Effects of Acquisitions

We have historically ~~have~~ made significant use of strategic acquisitions to add ~~new~~and enhance service ~~competencies, to increase our scale within existing competencies and to expand our presence in various geographic regions~~capabilities around the world. ~~On September 1, 2015, CBRE, Inc.~~During the first half of 2021, we completed our integration of Hana with Industrious National Management Company LLC (Industrious), increasing our ~~wholly-owned subsidiary, pursuant~~stake to 40% as of June 30, 2021. In October 2019, we acquired Telford Homes Plc (Telford), a ~~Stock and Asset Purchase Agreement with Johnson Controls, Inc. (JCI), acquired JCI’s Global Workplace Solutions (JCI-GWS) business (which we refer to as~~leading developer of multifamily residential properties in the ~~GWS Acquisition). The acquired JCI-GWS business was a market-leading provider of integrated facilities management solutions for major occupiers of commercial~~London area. Telford, which is reported in our Real Estate Investments segment, expanded our real estate ~~and had significant operations around~~development business outside the ~~world. The purchase price was $1.475 billion, paid in cash, plus adjustments totaling $46.5 million~~U.S. for ~~working capital and other items. We completed~~ the GWS Acquisition in order to advance our strategy of delivering globally integrated services to major occupiers in our Americas, EMEA and Asia Pacific segments. We merged the acquired JCI-GWS business with our existing occupier outsourcing business line, and the new combined business adopted the “Global Workplace Solutions” name.

first time.

Strategic in-fill acquisitions have also played a key role in ~~expanding our geographic coverage and broadening and~~ strengthening our service offerings. The companies we acquired have generally been regional or specialty firms that complement our existing platform, or independent affiliates, in which, in some cases, we held a small equity interest. During ~~2016,~~2020, we ~~acquired our independent affiliate~~completed six in-fill acquisitions: leading local facilities management firms in ~~Norway,~~Spain and Italy, a ~~London-based retail property advisor~~U.S. firm that helps companies reduce telecommunications costs, a technology-focused project management firm based in Florida, a firm specializing in ~~the luxury goods retail sector~~performing real estate valuations in South Korea, and a ~~leading provider~~facilities management and technical maintenance firm in Australia. In the first half of ~~retail~~2021, we completed four in-fill acquisitions: a construction management and project ~~management, shopping center development and tenant coordination services in the United States. We also made an equity investment in a property~~advisory services firm based in ~~Malaysia, acquiring~~Los Angeles; a 49% interest. During the nine months ended September 30, 2017, we acquired a leading Software as a Service (SaaS) platform that produces scalable interactive visualization technologies for commercial real estate, a technology company that provides mobiletechnical facilities services firm based in Denmark; an infrastructure and ~~SaaS technology solutions for facilities management operations, a healthcare-focused project manager~~development services firm based in Australia, a full-service brokerage and management boutique in South Florida, a technology-enabled national boutique commercial real estate finance and consulting firm in the United States, a retail consultancy in France and a ~~majority interest~~gaming sector advisory firm based in a Toronto-based investment management business specializing in private infrastructure and private equity investments. In addition, in October 2017, we acquired a San Francisco-based technology-focused boutique real estate brokerage firm and a project management and design engineering firm operating across the United States.

Las Vegas.

We believe ~~that~~ strategic acquisitions can significantly decrease the cost, time and ~~commitment of management~~ resources necessary to attain a meaningful competitive position – or expand our capabilities – within targeted markets or ~~to expand our presence within our current markets.~~business lines. In general, however, most acquisitions will initially have an adverse impact on our operating income and net income as a result of transaction-related ~~expenditures. These include~~expenditures, including severance, lease termination, transaction and deferred financing costs, ~~among others,~~as well as costs and ~~the~~ charges ~~and costs of~~associated with integrating the acquired business and integrating its financial and accounting systems into our own.

Our acquisition structures often include deferred and/or contingent purchase ~~price payments~~consideration in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of ~~September~~June 30, ~~2017,~~2021, we have accrued deferred purchase consideration totaling ~~$73.2~~$125.6 million, which is included in ~~accounts~~“Accounts payable and accrued ~~expenses~~expenses” and in ~~other~~“Other long-term ~~liabilities~~liabilities” in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report.

International Operations

We ~~are monitoring the economic~~conduct a significant portion of our business and ~~political developments related to the United Kingdom’s referendum to leave the European Union and the potential impact on our businesses in the United Kingdom and the rest~~employ a substantial number of ~~Europe, including, in particular, sales and leasing activity in the United Kingdom, as well as any associated currency volatility impact on our results of operations.~~

~~As we continue to increase our international operations through either acquisitions or organic growth, fluctuations in the value~~people outside of the U.S. ~~dollar relative~~and, as a result, we are subject to ~~the other currencies in which we may generate earnings could adversely affect our~~risks associated with doing business ~~financial condition and operating results.~~globally. Our ~~Global Investment Management business~~Real Estate Investments segment has a significant ~~amount of~~ euro-denominated assets under management, or AUM, as well as associated revenue and earnings in Europe. In addition, our Global Workplace Solutions ~~business~~segment also ~~has a~~derives significant ~~amount of its~~ revenue and earnings ~~denominated~~ in foreign currencies, ~~such as~~including the euro and ~~the~~ British pound ~~sterling, which has significantly declined in value as compared to the U.S. dollar and other currencies as a result of the United Kingdom’s referendum to leave the European Union.~~sterling. Fluctuations in foreign currency exchange rates have resulted and may continue to result in corresponding fluctuations in our AUM, revenue and earnings.

We are closely monitoring the impact of the Covid-19 pandemic on business conditions across all regions worldwide. Covid-19 has significantly impacted our operations and has the potential to further constrain our business activity, although its effects have eased in part of the world where vaccines have been administered and economic activity has recovered.

Our businesses could also suffer from political or economic disruptions (or the perception that such disruptions may occur) that affect interest rates or liquidity or create financial, market or regulatory uncertainty in the jurisdictions in which we operate. Any currency volatility associated with the Covid-19 pandemic, geopolitical or economic dislocations could impact our results of operations.

Table of contents

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, approximately ~~47%~~44.8% of our ~~business~~revenue was transacted in non-U.S. dollar currencies, the majority of which included the Australian dollar, Brazilian real, British pound sterling, Canadian dollar, Chinese yuan, Danish krone, euro, Hong Kong dollar, Indian rupee, Japanese yen, Mexican peso, Polish zloty, Singapore dollar, Swedish krona, Swiss franc and Thai baht.foreign currencies. The following table sets forth our revenue derived from our most significant currencies ~~(U.S. dollars~~(dollars in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
United States dollar	$	3,563,704	55.2	%	$	3,089,794	57.4	%	$	6,912,563	55.8	%	$	6,470,357	57.4	%
British pound sterling	832,938		12.9	%	677,880		12.6	%	1,609,981		13.0	%	1,451,895		12.9	%
euro	719,160		11.1	%	573,761		10.7	%	1,348,785		10.9	%	1,190,729		10.6	%
Canadian dollar	259,012		4.0	%	170,896		3.2	%	498,722		4.0	%	364,131		3.2	%
Australian dollar	161,240		2.5	%	93,923		1.7	%	271,293		2.2	%	188,064		1.7	%
Chinese yuan	112,372		1.7	%	90,375		1.7	%	210,586		1.7	%	165,831		1.5	%
Indian rupee	102,210		1.6	%	110,598		2.1	%	209,519		1.7	%	246,124		2.2	%
Swiss franc	98,172		1.5	%	78,411		1.5	%	189,988		1.5	%	154,088		1.4	%
Japanese yen	90,775		1.4	%	63,911		1.2	%	168,109		1.4	%	162,293		1.4	%
Singapore dollar	74,776		1.2	%	62,501		1.1	%	141,649		1.1	%	130,405		1.1	%
Other currencies (1)	444,254		6.9	%	369,334		6.8	%	836,297		6.7	%	746,635		6.6	%
Total revenue	$	6,458,613	100.0	%	$	5,381,384	100.0	%	$	12,397,492	100.0	%	$	11,270,552	100.0	%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

United States dollar

$
1,831,597

51.6
%

$
1,687,692

52.8
%

$
5,212,192

52.8
%

$
4,927,214

53.3
%
British pound sterling

528,462

14.9
%

486,195

15.2
%

1,447,535

14.7
%

1,453,854

15.7
%
euro

414,918

11.7
%

377,930

11.8
%

1,136,860

11.5
%

1,073,762

11.6
%
Australian dollar

104,704

2.9
%

91,138

2.9
%

281,368

2.8
%

250,323

2.7
%
Canadian dollar

100,844

2.8
%

80,822

2.5
%

253,813

2.6
%

220,833

2.4
%
Indian rupee

78,281

2.2
%

61,001

1.9
%

226,669

2.3
%

171,475

1.9
%
Chinese yuan

61,761

1.7
%

49,945

1.6
%

164,320

1.7
%

146,898

1.6
%
Japanese yen

59,365

1.7
%

51,641

1.6
%

153,731

1.6
%

140,412

1.5
%
Singapore dollar

53,787

1.5
%

44,266

1.4
%

162,600

1.6
%

122,422

1.3
%
Swiss franc

36,421

1.0
%

39,195

1.2
%

104,592

1.1
%

102,383

1.1
%
Hong Kong dollar

33,339

0.9
%

24,656

0.8
%

85,266

0.9
%

71,186

0.8
%
Brazilian real

32,067

0.9
%

23,580

0.7
%

70,215

0.7
%

54,536

0.6
%
Mexican peso

29,153

0.8
%

21,228

0.7
%

75,562

0.8
%

58,815

0.6
%
Polish zloty

19,227

0.5
%

15,861

0.5
%

43,995

0.4
%

46,203

0.5
%
Danish krone

18,531

0.5
%

18,061

0.6
%

53,435

0.5
%

48,501

0.5
%
Thai baht

14,568

0.4
%

9,612

0.3
%

36,738

0.4
%

28,164

0.3
%
Swedish krona

13,056

0.4
%

12,905

0.4
%

41,123

0.4
%

41,234

0.4
%
Other currencies

119,896

3.6
%

97,759

3.1
%

323,382

3.2
%

289,543

3.2
%
Total revenue

$
3,549,977

100.0
%

$
3,193,487

100.0
%

$
9,873,396

100.0
%

$
9,247,758

100.0
%
(1)Approximately 37 currencies comprise 6.9% and 6.7% of our revenues for the three and six months ended June 30, 2021, respectively, and approximately 37 currencies comprise 6.8% and 6.6% of our revenues for the three and six months ended June 30, 2020, respectively.

Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar may positively or negatively impact our reported results. For example, we estimate that had the British pound sterling-to-U.S. dollar exchange rates been 10% higher during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the net impact would have been an increase in pre-tax income of ~~$2.3~~$6.5 million. Had the euro-to-U.S. dollar exchange rates been 10% higher during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the net impact would have been an increase in pre-tax income of ~~$7.6~~$14.0 million. These hypothetical calculations estimate the impact of translating results into U.S. dollars and do not include an estimate of the impact that a 10% change in the U.S. dollar against other currencies would have had on our foreign operations.

For the past several years, we have entered into derivative financial instruments to attempt to protect the value or fix the amount of certain obligations in terms of our reporting currency, the U.S. dollar. As of September 30, 2017, we had no foreign currency exchange forward contracts outstanding as we made the decision to let our program expire at the end of 2016. Included in the consolidated statement of operations set forth in Item 1 of this Quarterly Report were net gains of $0.2 million and $1.2 million, respectively, from foreign currency exchange forward contracts, which hedged foreign currency denominated EBITDA for the three and nine months ended September 30, 2016. We do not intend to hedge our foreign currency denominated EBITDA in 2017.

Due to the constantly changing currency exposures to which we are subject and the volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In addition, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of our reported results of operations. Our international operations also are subject to, among other things, political instability and changing regulatory environments, which ~~affects~~affect the currency markets and which as a result may adversely affect our future financial condition and results of operations. We routinely monitor these risks and related costs and evaluate the appropriate amount of oversight to allocate towards business activities in foreign countries where such risks and costs are particularly significant.

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Results of Operations

The following table sets forth items derived from our consolidated statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (dollars in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenue:

Fee revenue (1):

Occupier outsourcing

$
628,348

17.7
%

$
553,197

17.3
%

$
1,794,046

18.2
%

$
1,664,687

18.0
%
Property management

137,618

3.9
%

123,501

3.9
%

393,714

4.0
%

370,158

4.0
%
Valuation

126,986

3.6
%

120,356

3.8
%

373,209

3.8
%

355,139

3.8
%
Loan servicing (2)

38,347

1.1
%

30,866

1.0
%

114,618

1.2
%

89,834

1.0
%
Investment management

92,122

2.6
%

91,807

2.9
%

274,451

2.8
%

277,924

3.0
%
Leasing

700,330

19.7
%

619,709

19.4
%

1,856,436

18.8
%

1,771,810

19.2
%
Capital Markets:

Sales

455,022

12.8
%

415,593

13.0
%

1,233,959

12.5
%

1,134,969

12.3
%
Commercial mortgage
   origination (2)

108,408

3.1
%

123,096

3.9
%

297,643

3.0
%

303,006

3.3
%
Other:

Development services

11,263

0.3
%

13,010

0.4
%

35,545

0.4
%

42,313

0.5
%
Other

22,890

0.6
%

22,771

0.6
%

61,142

0.5
%

60,690

0.5
%
Total fee revenue

2,321,334

65.4
%

2,113,906

66.2
%

6,434,763

65.2
%

6,070,530

65.6
%
Pass through costs also recognized
   as revenue

1,228,643

34.6
%

1,079,581

33.8
%

3,438,633

34.8
%

3,177,228

34.4
%
Total revenue

3,549,977

100.0
%

3,193,487

100.0
%

9,873,396

100.0
%

9,247,758

100.0
%

Costs and expenses:

Cost of services

2,513,377

70.8
%

2,252,783

70.5
%

6,919,018

70.1
%

6,520,629

70.5
%
Operating, administrative
   and other
��

704,898

19.9
%

686,530

21.5
%

2,023,503

20.5
%

2,010,338

21.7
%
Depreciation and amortization

102,591

2.8
%

92,725

2.9
%

297,014

3.0
%

269,987

3.0
%
Total costs and expenses

3,320,866

93.5
%

3,032,038

94.9
%

9,239,535

93.6
%

8,800,954

95.2
%
Gain on disposition of real estate

6,180

0.1
%

11,043

0.3
%

18,863

0.2
%

15,862

0.2
%
Operating income

235,291

6.6
%

172,492

5.4
%

652,724

6.6
%

462,666

5.0
%

Equity income from unconsolidated
   subsidiaries

67,834

1.9
%

24,672

0.8
%

158,236

1.6
%

116,902

1.3
%
Other income

1,768

0.0
%

1,356

0.0
%

9,069

0.1
%

8,453

0.1
%
Interest income

3,129

0.1
%

1,020

0.0
%

6,967

0.1
%

5,545

0.1
%
Interest expense

34,483

0.9
%

37,273

1.1
%

103,923

1.1
%

109,050

1.3
%
Income before provision for
   income taxes

273,539

7.7
%

162,267

5.1
%

723,073

7.3
%

484,516

5.2
%
Provision for income taxes

76,178

2.1
%

51,414

1.6
%

195,813

2.0
%

165,578

1.8
%
Net income

197,361

5.6
%

110,853

3.5
%

527,260

5.3
%

318,938

3.4
%
Less:  Net income attributable to
   non-controlling interests

1,044

0.1
%

6,690

0.2
%

4,181

0.0
%

10,940

0.1
%
Net income attributable to CBRE
   Group, Inc.

$
196,317

5.5
%

$
104,163

3.3
%

$
523,079

5.3
%

$
307,998

3.3
%

EBITDA

$
406,440

11.4
%

$
284,555

8.9
%

$
1,112,862

11.3
%

$
847,068

9.2
%
Adjusted EBITDA

$
411,574

11.6
%

$
349,384

10.9
%

$
1,127,331

11.4
%

$
992,518

10.7
%

~~(1)~~

~~Certain adjustments have been made to 2016 fee revenue to conform with current-year presentation.~~

~~(2)~~

~~Prior disclosure of fee~~
Three Months Ended June 30, Six Months Ended June 30,
2021
2020 (1)
2021
2020 (1)
Revenue:
Net revenue:
Facilities management $ 1,199,657 18.6 % $ 1,087,657 20.2 % $ 2,356,146 19.0 % $ 2,201,715 19.5 %
Property management 421,378 6.5 % 395,789 7.4 % 829,947 6.7 % 795,141 7.1 %
Project management 338,011 5.2 % 293,386 5.5 % 646,128 5.2 % 625,048 5.5 %
Valuation 181,226 2.8 % 131,837 2.4 % 340,816 2.7 % 279,575 2.5 %
Loan servicing 65,894 1.0 % 57,050 1.1 % 134,736 1.1 % 113,730 1.0 %
Advisory leasing 692,908 10.7 % 521,778 9.7 % 1,213,124 9.8 % 1,146,806 10.2 %
Capital markets:
Advisory sales 611,834 9.5 % 243,007 4.5 % 1,004,146 8.1 % 674,676 6.0 %
Commercial mortgage origination 161,879 2.5 % 100,450 1.9 % 301,743 2.4 % 223,541 2.0 %
Investment management 139,271 2.2 % 103,132 1.9 % 271,342 2.2 % 224,809 2.0 %
Development services 104,092 1.7 % 58,478 1.0 % 183,151 1.5 % 148,272 1.3 %
Corporate, other and eliminations (4,457) (0.1) % (4,892) (0.1) % (10,602) (0.1) % (14,410) (0.1) %
Total net revenue 3,911,693 60.6 % 2,987,672 55.5 % 7,270,677 58.6 % 6,418,903 57.0 %
Pass through costs also recognized as revenue 2,546,920 39.4 % 2,393,712 44.5 % 5,126,815 41.4 % 4,851,649 43.0 %
Total revenue 6,458,613 100.0 % 5,381,384 100.0 % 12,397,492 100.0 % 11,270,552 100.0 %
Costs and expenses:
Cost of revenue 5,016,759 77.7 % 4,399,537 81.8 % 9,736,305 78.5 % 9,112,211 80.8 %
Operating, administrative and other 957,216 14.8 % 770,806 14.3 % 1,785,543 14.4 % 1,560,872 13.8 %
Depreciation and amortization 119,085 1.8 % 116,384 2.1 % 241,163 2.0 % 230,178 2.1 %
Asset impairments — 0.0 % — 0.0 % — 0.0 % 75,171 0.7 %
Total costs and expenses 6,093,060 94.3 % 5,286,727 98.2 % 11,763,011 94.9 % 10,978,432 97.4 %
Gain (loss) on disposition of real estate 929 0.0 % (492) (0.1) % 1,085 0.0 % 22,335 0.2 %
Operating income 366,482 5.7 % 94,165 1.7 % 635,566 5.1 % 314,455 2.8 %
Equity income from unconsolidated subsidiaries 212,132 3.3 % 19,480 0.4 % 295,726 2.4 % 40,111 0.4 %
Other income 12,045 0.2 % 5,220 0.1 % 14,777 0.1 % 5,027 0.0 %
Interest expense, net of interest income 13,772 0.3 % 17,950 0.3 % 23,878 0.2 % 33,966 0.3 %
Income before provision for income taxes 576,887 8.9 % 100,915 1.9 % 922,191 7.4 % 325,627 2.9 %
Provision for income taxes 133,445 2.0 % 18,803 0.4 % 209,772 1.7 % 69,985 0.6 %
Net income 443,442 6.9 % 82,112 1.5 % 712,419 5.7 % 255,642 2.3 %
Less: Net income attributable to non-controlling interests 805 0.0 % 215 0.0 % 3,580 0.0 % 1,550 0.0 %
Net income attributable to CBRE Group, Inc. $ 442,637 6.9 % $ 81,897 1.5 % $ 708,839 5.7 % $ 254,092 2.3 %
Adjusted EBITDA $ 718,371 11.1 % $ 267,304 5.0 % $ 1,209,515 9.8 % $ 697,655 6.2 %
_______________________________

(1)See discussion in segment operations for organization changes effective January 1, 2021. Prior period results have been recast to conform with these changes.

Net revenue included loan servicing and commercial mortgage origination in one line item entitled “Commercial mortgage services”. Beginning in Q3 2017, we began to disclose recurring revenue from our loan servicing portfolio and revenue from commercial mortgage origination on separate lines.

~~Fee revenue, EBITDA~~ and adjusted EBITDA are not recognized measurements under GAAP. When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. We generally use these non-GAAP financial measures to evaluate operating performance and for other discretionary purposes. We believe these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they eliminate the impact of selected charges that may obscure trends in the underlying performance of our business. Because not all companies use identical calculations, our presentation of ~~fee~~net revenue ~~EBITDA~~ and adjusted EBITDA may not be comparable to similarly titled measures of other companies.

~~Fee~~

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Net revenue is gross revenue less ~~both client reimbursed~~ costs largely associated with ~~employees that are dedicated to client facilities and~~ subcontracted vendor work performed for ~~clients. We believe that investors may find this measure useful~~clients and generally has no margin. Prior to 2021, the company utilized fee revenue to analyze the ~~company’s~~ overall financial ~~performance because it excludes~~performance. This metric excluded additional reimbursed costs, ~~reimbursable by~~primarily related to employees dedicated to clients, ~~and~~some of which included minimal margin.

We use adjusted EBITDA as ~~such provides greater visibility into the underlying performance~~an indicator of ~~our business.~~

~~EBITDA~~consolidated financial performance. It 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~~amortization, asset impairments, adjustments related to ~~acquisitions, cost-elimination expenses and~~ certain carried interest incentive compensation expense (reversal) to align with the timing of associated ~~revenue.~~revenue, fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period, costs incurred related to legal entity restructuring, costs associated with workforce optimization efforts and integration and other costs related to acquisitions. We believe that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions, the effects of financings and income taxes and the accounting effects of capital spending.

Adjusted EBITDA ~~and adjusted EBITDA are~~is not intended to be ~~measures~~a measure of free cash flow for our discretionary use because ~~they do~~it does not consider certain cash requirements such as tax and debt service payments. ~~These measures~~This measure may also differ from the amounts calculated under similarly titled definitions in our credit facilities and debt instruments, which ~~amounts~~ are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional ~~debt and making certain restricted payments.~~debt. We also use adjusted EBITDA as a significant component when measuring our operating performance under our employee incentive compensation programs.

Adjusted EBITDA ~~and adjusted EBITDA are~~is calculated as follows (dollars in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income attributable to CBRE Group, Inc.	$	442,637	$	81,897	$	708,839	$	254,092
Add:
Depreciation and amortization	119,085		116,384		241,163		230,178
Asset impairments	—		—		—		75,171
Interest expense, net of interest income	13,772		17,950		23,878		33,966

Provision for income taxes	133,445		18,803		209,772		69,985



Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue	1,672		(7,500)		17,004		(15,284)
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in the period	(374)		1,247		725		7,000
Costs incurred related to legal entity restructuring	—		693		—		3,934
Integration and other costs related to acquisitions	8,134		236		8,134		1,019
Costs associated with workforce optimization efforts (1)	—		37,594		—		37,594


Adjusted EBITDA	$	718,371	$	267,304	$	1,209,515	$	697,655

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net income attributable to CBRE
   Group, Inc.

$
196,317

$
104,163

$
523,079

$
307,998

Add:

Depreciation and amortization

102,591

92,725

297,014

269,987

Interest expense

34,483

37,273

103,923

109,050

Provision for income taxes

76,178

51,414

195,813

165,578

Less:

Interest income

3,129

1,020

6,967

5,545

EBITDA

406,440

284,555

1,112,862

847,068

Adjustments:

Cost-elimination expenses (1)

—

38,877

—

78,456

Integration and other costs related
   to acquisitions

—

28,596

27,351

73,520

Carried interest incentive
   compensation expense (reversal)
   to align with the timing of
   associated revenue

5,134

(2,644
)

(12,882
)

(6,526
)
Adjusted EBITDA

$
411,574

$
349,384

$
1,127,331

$
992,518

~~(1)~~

(1)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. of the total costs, $7.4 million was included within the “Cost of revenue” line item and $30.2 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for both the three and six months ended June 30, 2020.

structure after several years of significant revenue and related cost growth. Cost-elimination expenses incurred during the three and nine months ended September 30, 2016 consisted of $36.7 million and $73.6 million, respectively, of severance costs related to headcount reductions in connection with the program and $2.2 million and $4.9 million, respectively, of third-party contract termination costs.

Three Months Ended ~~September~~June 30, ~~2017~~2021 Compared to the Three Months Ended ~~September~~June 30, ~~2016~~

2020

We reported consolidated net income of ~~$196.3~~$442.6 million for the three months ended ~~September~~June 30, ~~2017~~2021 on revenue of ~~$3.5~~$6.5 billion as compared to consolidated net income of ~~$104.2~~$81.9 million on revenue of ~~$3.2~~$5.4 billion for the three months ended ~~September~~June 30, ~~2016.~~

2020.

Our revenue on a consolidated basis for the three months ended ~~September~~June 30, ~~2017~~2021 increased by ~~$356.5 million,~~$1.1 billion, or ~~11.2%~~20.0%, as compared to the three months ended ~~September~~June 30, ~~2016.~~2020. The revenue increase reflects ~~strong organic~~ growth ~~fueled~~across the three business segments; increases in revenue in our Global Workplace Solutions segment due to growth in our facilities management and project management business, increases in our Advisory Services segment with notable growth in sales commission supported by ~~higher occupier outsourcing~~a moderate growth in other advisory services such as lease revenue, ~~(up 13.5%) and~~ property management ~~revenue (up 7.8%), increased leasing activity (up 12.4%)~~ and ~~sales activity (up 8.6%) as well as higher loan servicing revenue (up 24.3%).~~valuation services, and increases in asset management fees and development and construction revenue. Foreign currency translation had a ~~$26.3 million~~4.6% positive impact

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on total revenue during the three months ended ~~September~~June 30, ~~2017,~~2021, primarily driven by strength in the ~~euro. These increases were~~Canadian dollar, British pound sterling and euro, partially offset by ~~lower revenue from commercial mortgage origination (down 12.0%).~~

weakness in the Argentine peso, and Japanese Yen.

Our cost of ~~services~~revenue on a consolidated basis increased by ~~$260.6~~$617.2 million, or ~~11.6%~~14.0%, during the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016.~~2020. This increase was primarily due to higher costs associated with our ~~occupier outsourcing~~Global Workplace Solutions segment due to growth in our facilities management and project management business and higher ~~professional bonuses (particularly~~commission expense associated with our Advisory Services segment due to growth in ~~the United States~~our sales and ~~United Kingdom) resulting from improved operating performance.~~leasing business. In addition, our sales professionals generally are paid on a commission basis, which substantially correlates with our transaction revenue performance. Accordingly, the increase in sales and lease transaction revenue led to a corresponding increase in commission expense. Foreignforeign currency translation ~~also~~ had ~~an $18.5 million~~a 4.2% negative impact on total cost of ~~services~~revenue during the three months ended ~~September~~June 30, 2017. These items were partially offset by the impact of $14.7 million of costs incurred in the prior-year quarter in connection with our cost-elimination project that did not recur in the current year.2021. Cost of ~~services~~revenue as a percentage of revenue ~~was consistent at 70.5%~~decreased to 77.7% for the three months ended ~~September~~June 30, ~~2016 and 70.8%~~2021 from 81.8% for the three months ended ~~September~~June 30, ~~2017.~~

2020, primarily driven by the Advisory Services segment where revenue growth has outpaced fixed cost growth.

Our operating, administrative and other expenses on a consolidated basis increased by ~~$18.4~~$186.4 million, or ~~2.7%~~24.2%, during the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in 2020. The increase was primarily due to an increase in overall bonus accrual, other incentive compensation, and stock compensation expense tied to significant growth in performance this quarter as compared to the three months ended ~~September~~June 30, ~~2016. The increase was mostly driven~~2020 when the operating results were impacted by ~~higher payroll-related costs (including an increase in bonus and stock compensation expense driven by improved operating performance) and an increase in net carried interest expense incurred in~~ the ~~current year.~~pandemic. Foreign currency ~~also~~translation had a ~~net $3.6 million~~4.5% negative impact on total operating, administrative and other expenses during the three months ended ~~September~~June 30, 2017, including a $5.7 million negative impact from foreign currency translation, partially offset by $2.1 million of favorable foreign currency transaction activity over the same period in the prior year (part of which related to hedging activity in the prior year, which did not recur in the current year given that we discontinued our hedging program at the end of 2016). These items were partially offset by the impact of costs incurred in the third quarter of 2016 which did not recur in the current-year quarter, including $28.3 million of integration and other costs associated with the GWS Acquisition and $24.2 million in connection with our cost-elimination project. Such costs were the primary driver of operating2021. Operating expenses as a percentage of revenue ~~decreasing from 21.5%~~increased slightly to 14.8% for the three months ended ~~September~~June 30, ~~2016 to 19.9%~~2021 from 14.3% for the three months ended ~~September~~June 30, ~~2017.~~

2020.

Our depreciation and amortization expense on a consolidated basis increased by ~~$9.9~~$2.7 million, or ~~10.6%~~2.3%, during the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016.~~2020. This increase was primarily attributable to higher amortization expense associated with mortgage servicing rights. ~~A rise in depreciation expense~~

Our gain on disposition of ~~$4.3~~real estate on a consolidated basis was $0.9 million ~~during~~for the three months ended ~~September~~June 30, ~~2017 driven by technology-related capital expenditures also contributed to~~2021, which was an increase over the ~~increase.~~

prior year period. These gains resulted from property sales within our Real Estate Investments segment.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by ~~$43.2~~$192.7 million, or ~~174.9%~~989.0%, ~~for~~during the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016,~~2020, primarily driven by higher equity earnings associated with gains on property sales reported in our ~~Development Services~~Real Estate Investments segment and higher equity pick up associated with certain equity investments reported in our Corporate and other segment.

Our consolidated interest expense, net of interest income, decreased by ~~$2.8~~$4.2 million, or ~~7.5%~~23.3%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the ~~three months ended September 30, 2016.~~ same period in 2020. This decrease was primarily ~~driven by lower~~due to interest expense ~~due to lower net borrowings under our revolving credit facility~~associated with the 5.25% senior note which was fully paid off in December 2020, and ~~a decrease~~offset by interest expense associated with the 2.500% senior note issued in ~~notes payable on real estate during~~ the ~~third quarter~~first half of ~~2017.~~

2021.

Our provision for income taxes on a consolidated basis was ~~$76.2~~$133.4 million for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to ~~$51.4~~$18.8 million for the same period in ~~2016. Our effective~~2020. The increase in tax ~~rate, after adjusting pre-tax income to remove the portion attributable to non-controlling interests, decreased to 28.0%~~expense for the three months ended ~~September~~June 30, ~~2017 compared~~2021 of $114.6 million was primarily related to ~~33.0%~~the corresponding increase in our consolidated pre-tax book income. Our effective tax rate increased to 23.1% for the three months ended ~~September~~June 30, ~~2016. We benefited~~2021 from 18.6% for the three months ended June 30, 2020 primarily resulted from a ~~more~~percentage decrease of favorable ~~geographic mix of income, a re-measurement of income~~permanent book tax ~~exposures relating to prior periods~~differences and ~~excess~~ tax ~~benefits on share-based awards. A more favorable geographic mix of income contributed to the decrease~~credits in effective tax rate as greater income was generated from lower taxed jurisdictions. The tax rate can vary from quarter to quarter due to the timing of discrete items, such as the settlement of income tax audits and changes in tax laws.

~~Nine~~2021.

Six Months Ended ~~September~~June 30, ~~2017~~2021 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~

2020

We reported consolidated net income of ~~$523.1~~$708.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 on revenue of ~~$9.9~~$12.4 billion as compared to consolidated net income of ~~$308.0~~$254.1 million on revenue of ~~$9.2~~$11.3 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~

2020.

Our revenue on a consolidated basis for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 increased by ~~$625.6 million,~~$1.1 billion, or ~~6.8%~~10.0%, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. The revenue increase reflects ~~strong organic~~higher revenue in our Global Workplace Solutions segment (up 5.9%) led by growth ~~fueled~~in our facilities management line of business, driven by its contractual nature, an increase in higher revenue in our Advisory Services segment led primarily by higher ~~occupier outsourcing~~sales (increase of 48.8% as compared to the same period in 2020) with an overall increase in its other advisory services, and improved revenue in our Real Estate Investments segment (up ~~10.3%~~21.8%) largely due to an increase in sales in our development services line of business and ~~property~~investment management ~~revenue (up 7.8%), and increased sales activity (up 9.3%) and leasing activity (up 5.0%) as well as higher loan servicing revenue (up 28.4%). These increases were partially offset by foreign~~fees related to growth in AUM. Foreign currency translation ~~which~~ had a ~~$125.9 million negative~~3.3% positive impact on total revenue during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, primarily driven by strength in the Australian dollar, British pound sterling and euro, partially offset by weakness in the ~~British pound sterling.~~

Argentine peso and Brazilian real.

Table of contents

Our cost of ~~services~~revenue on a consolidated basis increased by ~~$398.4~~$624.1 million, or ~~6.1%~~6.8%, during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016.~~2020. This increase was primarily due to higher costs associated with our ~~occupier outsourcing~~Global Workplace Solutions segment due to growth in our facilities management and project management business ~~as well as~~and higher ~~professional bonuses (particularly~~costs associated with our Advisory Services segment due to growth in ~~the United Kingdom) resulting from improved operating performance. As previously mentioned,~~ our sales ~~professionals generally are paid on a commission basis, which substantially correlates with our transaction revenue performance. Accordingly, the increase in sales~~ and ~~lease transaction revenue led to a corresponding increase in commission expense. These increases were partially offset by foreign~~leasing business. Foreign currency translation ~~which~~ had a ~~$99.2 million positive~~3.1% negative impact on total cost of ~~services~~revenue during the ~~nine~~six months ended ~~September~~June 30, ~~2017. In addition, we incurred $37.1 million~~2021. Cost of ~~costs in the prior-year period in connection with our cost-elimination project that did not recur in the current year. The absence of such costs was the primary driver of cost of services~~revenue as a percentage of revenue ~~decreasing from 70.5%~~decreased to 78.5% for the ~~nine~~six months ended ~~September~~June 30, ~~2016 to 70.1%~~2021 from 80.8% for the ~~nine~~six months ended ~~September~~June 30, ~~2017. Higher transaction~~2020. This was primarily due to Advisory Services segment where revenue growth has outpaced increase in ~~certain countries that have a~~ fixed ~~compensation structure also contributed to the decrease in cost of services as a percentage of revenue for the nine months ended September 30, 2017.~~

costs.

Our operating, administrative and other expenses on a consolidated basis increased by ~~$13.2~~$224.7 million, or ~~0.7%~~14.4%, ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016.~~2020. The increase was ~~mostly driven by higher payroll-related costs (including~~primarily due to an increase in overall bonus accrual, other incentive compensation, and stock compensation expense ~~driven by improved operating performance). This increase was partially offset by a decrease of $46.6 million~~tied to significant improvement in ~~integration and other costs related to~~ the ~~GWS Acquisition incurred~~business performance during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as ~~well as the impact of $41.4 million of costs incurred during the nine~~compared to six months ended ~~September~~June 30, ~~2016 as part of our cost-elimination project, which did not recur in the current year.~~2020. Foreign currency translation also had a ~~$21.4 million positive~~3.5% negative impact on total operating expenses during the ~~nine~~six months ended ~~September~~June 30, 2017, including a $20.9 million positive impact from foreign currency translation and $0.5 million of favorable foreign currency transaction activity over the same period in the prior year (part of which related to net hedging activity in the prior year, which did not recur in the current year given that we discontinued our hedging program at the end of 2016).2021. Operating expenses as a percentage of revenue ~~decreased from 21.7%~~increased to 14.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2016 to 20.5%~~2021 from 13.8% for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, primarily due to increased performance driven incentive expense partially offset by ~~the aforementioned decline~~a decrease in ~~integration~~discretionary expense such as travel and ~~other costs related to the GWS Acquisition as well as the costs associated with our cost-elimination project in 2016.~~

marketing.

Our depreciation and amortization expense on a consolidated basis increased by ~~$27.0~~$11.0 million, or ~~10.0%~~4.8%, during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016.~~2020. This increase was primarily attributable to ~~higher~~a rise in amortization expense ~~associated with~~related to higher mortgage servicing ~~rights. A rise in depreciation expense of $9.0 million~~rights and loan payoffs.

We did not incur any asset impairments during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021. Our asset impairments on a consolidated basis totaled $75.2 million for the six months ended June 30, 2020 and consisted of a non-cash goodwill impairment charge of $25.0 million in our Real Estate Investments segment and $50.2 million of non-cash asset impairment charges in our Global Workplace Solutions segment. During 2020, we deemed there to be triggering events in the first quarter of 2020 that required testing of certain assets for impairment at that time. Based on these tests, we recorded the aforementioned non-cash impairment charges, which were driven by ~~technology-related capital expenditures also contributed~~lower anticipated cash flows in certain businesses directly resulting from a downturn in forecasts as well as increased forecast risk due to Covid-19.

Our gain on disposition of real estate on a consolidated basis decreased by $21.3 million, or 95.1%, during the six months ended June 30, 2021 as compared to the ~~increase.~~

same period in 2020. These gains resulted from decreased activity related to property sales within our Real Estate Investments segment.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by ~~$41.3~~$255.6 million, or ~~35.4%~~637.3%, during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016,~~2020, primarily driven by higher equity earnings associated with gains on property sales reported in our ~~Development Services~~Real Estate Investments segment and higher equity pick ups associated with certain equity investments reported in our Corporate and other segment.

Our consolidated interest expense, net of interest income, decreased by ~~$5.1~~$10.1 million, or ~~4.7%~~29.7%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the ~~nine months ended September 30, 2016.~~same period in 2020. This decrease was primarily ~~driven by lower~~due to interest expense ~~due to lower net borrowings under our revolving credit facility~~associated with the 5.25% senior note which was fully paid off in December 2020, and ~~a decrease~~offset by interest expense associated with the 2.500% senior note issued in ~~notes payable on real estate during~~ the first ~~nine months~~half of ~~2017.~~

2021.

Our provision for income taxes on a consolidated basis was ~~$195.8~~$209.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to ~~$165.6~~$70.0 million for the ~~same period~~six months ended June 30, 2020. The increase of approximately $139.8 million was primarily related to the corresponding increase in ~~2016.~~consolidated pre-tax book income. Our effective tax rate ~~after adjusting pre-tax income~~increased to ~~remove the portion attributable to non-controlling interests, decreased to 27.2%~~22.7% for the ~~nine~~six months ended ~~September~~June 30, ~~2017 compared to 35.0%~~2021 from 21.5% for the ~~nine~~six months ended ~~September~~June 30, ~~2016. We benefited~~2020 primarily resulted from a ~~more~~percentage decrease of favorable ~~geographic mix of income, a re-measurement of income~~permanent book tax ~~exposures relating to prior periods~~differences and ~~certain one-time benefits. The favorable impact from discrete items recorded~~tax credits in 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the ~~current-year period, primarily driven by the positive impact from the resolution of certain tax audits and the re-measurement of income tax exposures relating to prior periods, contributed~~United States in response to the ~~lower~~Covid-19 pandemic. The CARES Act has not had, nor is it expected to have, a significant impact on our effective tax rate for ~~the nine months ended September 30, 2017. In addition, a more favorable geographic mix~~2021.

Table of ~~income contributed to the decrease in effective tax rate as greater income was generated from lower taxed jurisdictions.~~

contents

Segment Operations

We organize our operations around, and publicly report our ~~operations through the following~~financial results on, three global business segments: (1) ~~Americas;~~Advisory Services; (2) ~~Europe, Middle East~~Global Workplace Solutions; and ~~Africa (EMEA);~~ (3) ~~Asia Pacific; (4)~~Real Estate Investments. Effective January 1, 2021, we have realigned our organizational structure and performance measure to how our chief operating decision maker views the company. This includes a “Corporate, other and eliminations” component and a segment measurement of profit and loss referred to as segment operating profit.

Advisory Services provides a comprehensive range of services globally, including property leasing, property sales, mortgage services, property management, and valuation. Global ~~Investment Management; and (5) Development Services. The Americas consists~~Workplace Solutions provides a broad suite of operations located in the United States, Canada and key markets in Latin America. EMEA mainly consists of operations in Europe, while Asia Pacific includes operations in Asia, Australia and New Zealand. The Global Investment Management business consists of investment management operations in North America, Europe and Asia Pacific. The Development Services business consistsintegrated, contractually-based outsourcing services to occupiers of real estate, including facilities management and project management. Effective January 1, 2021, transaction services was fully moved under the Advisory Services segment and project management was fully moved under the Global Workplace Solutions segment. Previously transaction services and project management were split between the Global Workplace Solutions segment and the Advisory Services segment. Real Estate Investments includes investment management services provided globally, development ~~and investment activities primarily~~services in the ~~United States.~~

U.S. and U.K. and flexible office space solutions. Corporate and other includes activities not attributed to our core business, primarily consisting of corporate headquarters costs for executive officers and certain other central functions. These costs are not allocated to the other business segments. It also includes eliminations related to inter-segment revenue. Prior period segment results for all of our reportable segments have been recast to conform to the above changes. For additional information on our segments, see Note 14 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Table of contents

Advisory Services

The following table summarizes our results of operations byfor our ~~Americas, EMEA, Asia Pacific, Global Investment Management and Development~~Advisory Services operating ~~segments~~segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (dollars in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Revenue:
Net revenue:
Property management	$	421,378	19.7	%	$	395,789	27.2	%	$	829,947	21.6	%	$	795,141	24.4	%
Valuation	181,226		8.5	%	131,837		9.1	%	340,816		8.9	%	279,575		8.6	%
Loan servicing	65,894		3.1	%	57,050		3.9	%	134,736		3.5	%	113,730		3.5	%
Advisory leasing	692,908		32.4	%	521,778		35.9	%	1,213,124		31.6	%	1,146,806		35.2	%
Capital markets:
Advisory sales	611,834		28.6	%	243,007		16.7	%	1,004,146		26.1	%	674,676		20.7	%
Commercial mortgage origination	161,879		7.6	%	100,450		6.9	%	301,743		7.8	%	223,541		6.9	%
Total segment net revenue	2,135,119		99.9	%	1,449,911		99.7	%	3,824,512		99.5	%	3,233,469		99.3	%
Pass through costs also recognized as revenue	1,866		0.1	%	4,321		0.3	%	20,485		0.5	%	23,450		0.7	%
Total segment revenue	2,136,985		100.0	%	1,454,232		100.0	%	3,844,997		100.0	%	3,256,919		100.0	%
Costs and expenses:
Cost of revenue	1,231,819		57.6	%	889,740		61.2	%	2,219,396		57.7	%	1,943,913		59.7	%
Operating, administrative and other	443,611		20.8	%	376,335		25.9	%	832,218		21.6	%	795,592		24.4	%
Depreciation and amortization	74,169		3.5	%	72,218		5.0	%	143,923		3.7	%	142,795		4.4	%
Operating income	387,386		18.1	%	115,939		7.9	%	649,460		17.0	%	374,619		11.5	%
Equity income from unconsolidated subsidiaries	2,149		0.1	%	1,293		0.1	%	2,899		0.2	%	2,328		0.1	%
Other income	801		0.0	%	185		0.0	%	802		0.0	%	3,096		0.1	%
Less: Net income attributable to non-controlling interests	208		0.0	%	182		0.0	%	487		0.0	%	421		0.0	%
Add-back: Depreciation and amortization	74,169		3.5	%	72,218		5.0	%	143,923		3.7	%	142,795		4.4	%

Adjustments:


Costs associated with workforce optimization efforts (1)	—		0.0	%	12,659		0.9	%	—		0.0	%	12,659		0.4	%


Segment operating profit and segment operating profit on revenue margin	$	464,297	21.7	%	$	202,112	13.9	%	$	796,597	20.7	%	$	535,076	16.4	%
Segment operating profit on net revenue margin			21.7	%			13.9	%			20.8	%			16.5	%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016 (1)

2017

2016 (1)

Americas

Revenue:

Fee revenue:

Occupier outsourcing

$
272,130

13.8
%

$
234,518

13.2
%

$
784,996

14.2
%

$
691,229

13.4
%
Property management

70,186

3.6
%

66,191

3.7
%

207,635

3.8
%

202,832

3.9
%
Valuation

59,009

3.0
%

62,212

3.5
%

177,789

3.2
%

178,446

3.5
%
Loan servicing (2)

36,032

1.8
%

28,345

1.6
%

106,746

1.9
%

81,313

1.6
%
Leasing

505,918

25.7
%

445,092

25.1
%

1,356,426

24.6
%

1,315,003

25.6
%
Capital Markets:

Sales

290,657

14.8
%

271,273

15.3
%

787,057

14.3
%

758,880

14.8
%
Commercial mortgage
   origination (2)

107,096

5.4
%

121,333

6.8
%

291,081

5.3
%

299,141

5.8
%
Other

14,187

0.7
%

11,789

0.7
%

38,271

0.6
%

35,609

0.7
%
Total fee revenue

1,355,215

68.8
%

1,240,753

69.9
%

3,750,001

67.9
%

3,562,453

69.3
%
Pass through costs also recognized
   as revenue

614,215

31.2
%

534,573

30.1
%

1,768,962

32.1
%

1,581,137

30.7
%
Total revenue

1,969,430

100.0
%

1,775,326

100.0
%

5,518,963

100.0
%

5,143,590

100.0
%
Costs and expenses:

Cost of services

1,394,731

70.8
%

1,256,268

70.8
%

3,848,207

69.7
%

3,594,638

69.9
%
Operating, administrative and other

340,190

17.3
%

335,839

18.9
%

1,013,478

18.4
%

994,439

19.3
%
Depreciation and amortization

73,768

3.7
%

62,549

3.5
%

214,061

3.9
%

186,352

3.6
%
Operating income

160,741

8.2
%

120,670

6.8
%

443,217

8.0
%

368,161

7.2
%
Equity income from unconsolidated
   subsidiaries

3,295

0.2
%

3,056

0.2
%

13,157

0.3
%

13,879

0.2
%
Other income (loss)

455

0.0
%

277

0.0
%

1,494

0.0
%

(204
)

0.0
%
Less: Net income attributable to
   non-controlling interests

—

0.0
%

1

0.0
%

—

0.0
%

—

0.0
%
Add-back: Depreciation and
   amortization

73,768

3.7
%

62,549

3.5
%

214,061

3.9
%

186,352

3.6
%
EBITDA

$
238,259

12.1
%

$
186,551

10.5
%

$
671,929

12.2
%

$
568,188

11.0
%
Adjusted EBITDA

$
238,259

12.1
%

$
222,043

12.5
%

$
689,068

12.5
%

$
636,668

12.4
%

(1)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. of the total costs, $6.3 million was included within the “Cost of revenue” line item and $6.4 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for both the three and six months ended June 30, 2020.

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016 (1)

2017

2016 (1)

EMEA

Revenue:

Fee revenue:

Occupier outsourcing

$
292,794

28.3
%

$
264,758

27.9
%

$
829,764

29.3
%

$
815,773

29.7
%
Property management

43,003

4.2
%

36,338

3.8
%

116,949

4.1
%

106,980

3.9
%
Valuation

39,462

3.8
%

31,071

3.3
%

109,200

3.9
%

96,954

3.5
%
Loan servicing (2)

2,315

0.2
%

2,521

0.3
%

7,872

0.3
%

8,521

0.3
%
Leasing

105,256

10.2
%

98,406

10.4
%

267,834

9.5
%

251,911

9.2
%
Capital Markets:

Sales

83,937

8.1
%

83,673

8.8
%

245,292

8.7
%

217,120

7.9
%
Commercial mortgage
   origination (2)

777

0.1
%

883

0.1
%

4,583

0.2
%

2,201

0.1
%
Other

6,768

0.7
%

6,817

0.7
%

16,383

0.4
%

16,286

0.7
%
Total fee revenue

574,312

55.6
%

524,467

55.3
%

1,597,877

56.4
%

1,515,746

55.3
%
Pass through costs also recognized
   as revenue

458,730

44.4
%

423,586

44.7
%

1,234,087

43.6
%

1,226,572

44.7
%
   Total revenue

1,033,042

100.0
%

948,053

100.0
%

2,831,964

100.0
%

2,742,318

100.0
%
Costs and expenses:

Cost of services

803,293

77.8
%

734,343

77.5
%

2,202,793

77.8
%

2,169,669

79.1
%
Operating, administrative and other

158,829

15.4
%

164,552

17.4
%

466,606

16.5
%

473,442

17.3
%
Depreciation and amortization

17,539

1.7
%

19,379

2.0
%

51,954

1.8
%

50,631

1.8
%
Operating income

$
53,381

5.1
%

$
29,779

3.1
%

$
110,611

3.9
%

$
48,576

1.8
%
Equity income from unconsolidated
   subsidiaries

399

0.1
%

483

0.1
%

1,218

0.1
%

1,226

0.1
%
Other (loss) income

(95
)

0.0
%

—

0.0
%

(72
)

0.0
%

10

0.0
%
Less: Net income (loss) attributable
   to non-controlling interests

55

0.0
%

431

0.0
%

(105
)

0.0
%

(358
)

0.0
%
Add-back: Depreciation and
   amortization

17,539

1.7
%

19,379

2.0
%

51,954

1.8
%

50,631

1.8
%
EBITDA

$
71,169

6.9
%

$
49,210

5.2
%

$
163,816

5.8
%

$
100,801

3.7
%
Adjusted EBITDA

$
71,169

6.9
%

$
61,777

6.5
%

$
173,610

6.1
%

$
148,842

5.4
%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016 (1)

2017

2016 (1)

Asia Pacific

Revenue:

Fee revenue:

Occupier outsourcing

$
63,424

14.4
%

$
53,921

14.9
%

$
179,286

14.9
%

$
157,685

15.3
%
Property management

22,092

5.0
%

18,337

5.1
%

61,785

5.1
%

53,743

5.2
%
Valuation

28,515

6.5
%

27,073

7.5
%

86,220

7.2
%

79,739

7.7
%
Leasing

88,576

20.1
%

75,906

21.0
%

230,719

19.2
%

203,742

19.7
%
Capital Markets:

Sales

80,158

18.2
%

60,098

16.6
%

200,645

16.7
%

157,876

15.3
%
Commercial mortgage
   origination (2)

535

0.1
%

880

0.2
%

1,989

0.2
%

1,664

0.2
%
Other

1,935

0.4
%

4,165

1.1
%

6,478

0.5
%

8,795

0.8
%
Total fee revenue

285,235

64.7
%

240,380

66.4
%

767,122

63.8
%

663,244

64.2
%
Pass through costs also recognized
   as revenue

155,698

35.3
%

121,422

33.6
%

435,584

36.2
%

369,519

35.8
%
   Total revenue

440,933

100.0
%

361,802

100.0
%

1,202,706

100.0
%

1,032,763

100.0
%
Costs and expenses:

Cost of services

315,353

71.5
%

262,172

72.5
%

868,018

72.2
%

756,322

73.2
%
Operating, administrative and other

82,610

18.7
%

72,656

20.1
%

228,705

19.0
%

217,982

21.1
%
Depreciation and amortization

4,657

1.1
%

4,481

1.2
%

13,360

1.1
%

12,963

1.3
%
Operating income

$
38,313

8.7
%

$
22,493

6.2
%

$
92,623

7.7
%

$
45,496

4.4
%
Equity income from unconsolidated
   subsidiaries

111

0.0
%

102

0.1
%

161

0.0
%

142

0.0
%
Less: Net income attributable to
   non-controlling interests

—

0.0
%

45

0.0
%

—

0.0
%

208

0.0
%
Add-back: Depreciation and
   amortization

4,657

1.1
%

4,481

1.2
%

13,360

1.1
%

12,963

1.3
%
EBITDA

$
43,081

9.8
%

$
27,031

7.5
%

$
106,144

8.8
%

$
58,393

5.7
%
Adjusted EBITDA

$
43,081

9.8
%

$
31,467

8.7
%

$
106,562

8.9
%

$
72,570

7.0
%

Global Investment Management

Revenue

$
92,122

100.0
%

$
91,807

100.0
%

$
274,451

100.0
%

$
277,924

100.0
%
Costs and expenses:

Operating, administrative and other

76,347

82.9
%

86,493

94.2
%

199,178

72.6
%

232,460

83.6
%
Depreciation and amortization

6,082

6.6
%

5,673

6.2
%

16,006

5.8
%

18,110

6.6
%
Operating income (loss)

$
9,693

10.5
%

$
(359
)

(0.4
%)

$
59,267

21.6
%

$
27,354

9.8
%
Equity income from unconsolidated
   subsidiaries

1,895

2.1
%

1,519

1.6
%

7,187

2.7
%

6,273

2.2
%
Other income

1,408

1.5
%

1,079

1.2
%

7,647

2.8
%

8,647

3.1
%
Less: Net income attributable to
   non-controlling interests

1,010

1.1
%

1,858

2.0
%

4,254

1.6
%

6,807

2.4
%
Add-back: Depreciation and
   amortization

6,082

6.6
%

5,673

6.2
%

16,006

5.8
%

18,110

6.6
%
EBITDA

$
18,068

19.6
%

$
6,054

6.6
%

$
85,853

31.3
%

$
53,577

19.3
%
Adjusted EBITDA

$
23,202

25.2
%

$
18,988

20.7
%

$
72,971

26.6
%

$
68,329

24.6
%

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016 (1)

2017

2016 (1)

Development Services

Revenue:

Property management

$
2,337

16.2
%

$
2,635

16.0
%

$
7,345

16.2
%

$
6,603

12.9
%
Leasing

580

4.0
%

305

1.8
%

1,457

3.2
%

1,154

2.3
%
Capital Markets:

Sales

270

1.9
%

549

3.3
%

965

2.1
%

1,093

2.1
%
Other:

Development services

11,263

77.9
%

13,010

78.9
%

35,545

78.5
%

42,313

82.7
%
Total revenue

14,450

100.0
%

16,499

100.0
%

45,312

100.0
%

51,163

100.0
%
Costs and expenses:

Operating, administrative and other

46,922

324.7
%

26,990

163.6
%

115,536

255.0
%

92,015

179.8
%
Depreciation and amortization

545

3.8
%

643

3.9
%

1,633

3.6
%

1,931

3.8
%
Gain on disposition of real estate

6,180

42.8
%

11,043

66.9
%

18,863

41.6
%

15,862

31.0
%
Operating loss

$
(26,837
)

(185.7
%)

$
(91
)

(0.6
%)

$
(52,994
)

(117.0
%)

$
(26,921
)

(52.6
%)
Equity income from unconsolidated
   subsidiaries

62,134

430.0
%

19,512

118.3
%

136,513

301.4
%

95,382

186.4
%
Less: Net (loss) income attributable
   to non-controlling interests

(21
)

(0.1
%)

4,355

26.4
%

32

0.1
%

4,283

8.4
%
Add-back: Depreciation and
   amortization

545

3.8
%

643

3.9
%

1,633

3.6
%

1,931

3.8
%
EBITDA and Adjusted EBITDA

$
35,863

248.2
%

$
15,709

95.2
%

$
85,120

187.9
%

$
66,109

129.2
%

~~(1)~~

~~(2)~~

Prior disclosure of fee revenue included loan servicing and commercial mortgage origination in one line item entitled “Commercial mortgage services”. Beginning in Q3 2017, we began to disclose recurring revenue from our loan servicing portfolio and revenue from commercial mortgage origination on separate lines.

Three Months Ended ~~September~~June 30, ~~2017~~2021 Compared to the Three Months Ended ~~September~~June 30, ~~2016~~

~~Americas~~

2020

Revenue increased by ~~$194.1~~$682.8 million, or ~~10.9%~~46.9%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the three months ended ~~September~~June 30, ~~2016.~~2020. The revenue increase primarily reflects ~~strong organic growth fueled by~~ higher ~~occupier outsourcing and property management revenue and improved~~ sales and leasing ~~activity~~revenue, as well as ~~higher loan servicing~~increase in commercial mortgage origination activity, property management fees and valuation revenue. Foreign currency translation ~~also~~ had a ~~$4.2 million~~5.2% positive impact on total revenue during the three months ended ~~September~~June 30, ~~2017,~~2021, primarily driven by strength in the ~~Canadian~~Australian dollar and ~~Mexican peso. These increases were~~euro, partially offset by ~~lower revenue from commercial mortgage origination.~~

weakness in the Japanese yen.

Cost of ~~services~~revenue increased by ~~$138.5~~$342.1 million, or ~~11.0%~~38.4%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016,~~2020, primarily due to higher costs associated with our occupier outsourcing business and higher professional bonuses in the United States resulting from improved operating performance. Also contributing to the variance was higherincreased commission expense resulting from ~~improved~~higher sales and ~~lease transaction~~leasing revenue. Foreign currency translation had a ~~$2.8 million~~4.8% negative impact on total cost of ~~services~~revenue during the three months ended ~~September~~June 30, 2017. These items were partially offset by the impact of $11.1 million of costs incurred in the prior-year quarter in connection with our cost-elimination project that did not recur in the current year.2021. Cost of ~~services~~revenue as a percentage of revenue ~~was consistent at 70.8%~~decreased to 57.6% for ~~both~~ the three months ended ~~September~~June 30, ~~2017 and 2016, with~~2021 versus 61.2% for the ~~impact~~same period in 2020 This increase in gross margin is primarily due to revenue growth outpacing fixed cost growth.

Table of ~~higher professional bonuses incurred in the current year offset by the impact of cost-elimination project costs that were only incurred in the prior year.~~

contents

Operating, administrative and other expenses increased by ~~$4.4~~$67.3 million, or ~~1.3%~~17.9%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the three months ended ~~September~~June 30, ~~2016. The~~2020. This increase was ~~partly driven by higher payroll-related costs (including an increase in~~primarily due to overall bonus accrual, other incentive compensation, and stock compensation expense ~~due~~tied to ~~improved~~better operating ~~performance).~~results this quarter as compared to three months ended June 30, 2020. In addition, there has been an increase in new hires to support the growth of the business. Foreign currency ~~also~~translation had a ~~$1.9 million~~4.9% negative impact on total operating expenses during the three months ended ~~September~~June 30, ~~2017, which included unfavorable foreign currency transaction activity, mostly hedging related, of $1.0 million and a negative impact from foreign currency translation of $0.9~~

2021.

million. These increases were partially offset by the impact of $17.2 million in integration and other costs related to the GWS Acquisition and $6.9 million associated with our cost-elimination project, both of which were incurred during the three months ended September 30, 2016 and did not recur in the third quarter of 2017.

In connection with the origination and sale of mortgage loans for which the company retains servicing rights, we record servicing assets or liabilities based on the fair value of the retained mortgage servicing rights (MSRs) on the date the loans are sold. ~~We also assume or purchase certain servicing assets.~~ Upon origination of a mortgage loan held for sale, the fair value of the mortgage servicing rights to be retained is included in the forecasted proceeds from the anticipated loan sale and results in a net gain (which is reflected in revenue). Subsequent to the initial recording, MSRs are amortized (within amortization expense) and carried at the lower of amortized cost or fair value in other intangible assets in the accompanying consolidated balance sheets. They are amortized in proportion to and over the estimated period that the servicing income is expected to be received. For the three months ended ~~September~~June 30, ~~2017,~~2021, MSRs contributed to operating income ~~$35.4~~$41.8 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by ~~$25.8~~$39.7 million of amortization of related intangible assets. For the three months ended ~~September~~June 30, ~~2016,~~2020, MSRs contributed to operating income ~~$48.9~~$37.7 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by ~~$18.0~~$31.9 million of amortization of related intangible assets.

~~EMEA~~

Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Revenue increased by ~~$85.0 million,~~$0.6 billion, or ~~9.0%~~18.1%, for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2021 as compared to the six months ended June 30, 2020. The revenue increase primarily reflects higher sales and leasing revenue, as well as increase in commercial mortgage origination activity, property management and valuation revenue. Foreign currency translation had a 3.4% positive impact on total revenue during the six months ended June 30, 2021, primarily driven by strength in Australian dollar, British pound sterling and euro, partially offset by weakness in the Brazilian real.

Cost of revenue increased by $275.5 million, or 14.2%, for the six months ended June 30, 2021 as compared to the same period in ~~2016. We achieved strong organic growth fueled by~~2020, primarily due to increased commission expense resulting from higher ~~occupier outsourcing and property management revenue, as well as increased~~ sales and leasing ~~activity.~~revenue and increased professional compensation to support the growth in the business. Foreign currency translation also had ~~an $18.5~~a 3.4% negative impact on total cost of revenue during the six months ended June 30, 2021. Cost of revenue as a percentage of revenue decreased slightly to 57.7% for the six months ended June 30, 2021 from 59.7% for the six months ended June 30, 2020.

Operating, administrative and other expenses increased by $36.6 million, or 4.6%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. This increase was primarily due to overall bonus accrual, other incentive compensation, and stock compensation expense tied to better operating results this period as compared to six months ended June 30, 2020. This was offset by a decrease in certain operating expenses such as travel and entertainment and salaries for office and administrative staff due to cost cutting measures that were implemented last year. Foreign currency translation also had a 3.5% negative impact on total operating expenses during the six months ended June 30, 2021.

For the six months ended June 30, 2021, MSRs contributed to operating income $92.1 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $75.5 million of amortization of related intangible assets. For the six months ended June 30, 2020, MSRs contributed to operating income $73.3 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $62.4 million of amortization of related intangible assets.

Table of contents

Global Workplace Solutions

The following table summarizes our results of operations for our Global Workplace Solutions operating segment for the three and six months ended June 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Revenue:
Net revenue:
Facilities management	$	1,199,657	29.4	%	$	1,087,657	28.8	%	$	2,356,146	29.1	%	$	2,201,715	28.8	%
Project management	338,011		8.3	%	293,386		7.8	%	646,128		8.0	%	625,048		8.1	%
Total segment net revenue	1,537,668		37.7	%	1,381,043		36.6	%	3,002,274		37.0	%	2,826,763		36.9	%
Pass through costs also recognized as revenue	2,545,054		62.3	%	2,389,390		63.4	%	5,106,331		63.0	%	4,828,199		63.1	%
Total segment revenue	4,082,722		100.0	%	3,770,433		100.0	%	8,108,605		100.0	%	7,654,962		100.0	%
Costs and expenses:
Cost of revenue	3,729,624		91.4	%	3,483,401		92.4	%	7,427,397		91.6	%	7,094,955		92.7	%
Operating, administrative and other	193,284		4.7	%	163,944		4.3	%	369,295		4.6	%	330,624		4.3	%
Depreciation and amortization	32,547		0.8	%	32,475		0.9	%	67,006		0.8	%	64,916		0.8	%
Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	50,171		0.7	%
Operating income	127,267		3.1	%	90,613		2.4	%	244,907		3.0	%	114,296		1.5	%
Equity income (loss) from unconsolidated subsidiaries	416		0.0	%	(401)		0.0	%	234		0.0	%	116		0.0	%
Other income (loss)	1,805		0.0	%	(54)		0.0	%	2,071		0.0	%	115		0.0	%
Less: Net income attributable to non-controlling interests	17		0.0	%	21		0.0	%	23		0.0	%	35		0.0	%
Add-back: Depreciation and amortization	32,547		0.8	%	32,475		0.9	%	67,006		0.8	%	64,916		0.8	%
Add-back: Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	50,171		0.7	%

Adjustments:

Costs associated with workforce optimization efforts (1)	—		0.0	%	4,878		0.1	%	—		0.0	%	4,878		0.1	%
Integration and other costs related to acquisitions	8,134		0.2	%	—		0.0	%	8,134		0.1	%	—		0.0	%

Segment operating profit and segment operating profit on revenue margin	$	170,152	4.1	%	$	127,490	3.4	%	$	322,329	3.9	%	$	234,457	3.1	%
Segment operating profit on net revenue margin			11.1	%			9.2	%			10.7	%			8.3	%

_______________________________

(1)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to this effort. of the total costs, $1.2 million was included within the “Cost of revenue” line item and $3.8 million was included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for both the three and six months ended June 30, 2020.

Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020

Revenue increased by $312.3 million, or 8.3%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. The increase was primarily attributable to growth in our facilities management line of business, which is contractual in nature. Foreign currency translation had a 4.0% positive impact on total revenue during the three months ended ~~September~~June 30, ~~2017,~~2021, primarily driven by weakness in the Argentine peso, partially offset by strength in the ~~euro, partially offset by weakness in the~~ British pound ~~sterling.~~

sterling and euro.

Cost of ~~services~~revenue increased by ~~$68.9~~$246.2 million, or ~~9.4%~~7.1%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the same period in ~~2016, primarily due~~2020, driven by the higher revenue leading to higher pass through costs ~~associated with our occupier outsourcing business as well as~~and higher professional ~~bonuses (particularly in the United Kingdom) resulting from improved operating performance. In addition, foreign~~compensation. Foreign currency translation had a ~~$13.4 million~~3.9% negative impact on total cost of ~~services~~revenue during the ~~third quarter of 2017.~~three months ended June 30, 2021. Cost of ~~services~~revenue as a percentage of revenue ~~was relatively consistent at 77.5%~~decreased slightly to 91.4% for the three months ended ~~September~~June 30, ~~2016 and 77.8%~~2021 from 92.4% for the ~~three months ended September 30, 2017.~~

same period in 2020.

Table of contents

Operating, administrative and other expenses ~~decreased~~increased by ~~$5.7~~$29.3 million, or ~~3.5%~~17.9%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the three months ended ~~September~~June 30, ~~2016.~~2020. This ~~decrease~~increase was ~~primarily driven by~~attributable to higher bonus accrual tied to segment and consolidated results and continued investments to sustain the ~~impact of $10.1 million of integration and other costs related to the GWS Acquisition incurred during the third quarter of 2016 that did not recur~~growth in the ~~current-year quarter. This was partially offset by foreign~~business. Foreign currency ~~which~~translation had a ~~net $2.6 million~~4.8% negative impact on total operating expenses during the three months ended ~~September~~June 30, ~~2017, including~~2021.

Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Revenue increased by $453.6 million, or 5.9%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. The increase was primarily attributable to growth in our facilities management line of business, which is contractual in nature. Foreign currency translation had a ~~$3.5 million negative~~3.0% positive impact ~~from foreign currency translation,~~on total revenue during the six months ended June 30, 2021, primarily driven by weakness in the Argentine peso and Brazilian real, partially offset by ~~$0.9~~strength in the British pound sterling and euro.

Cost of revenue increased by $332.4 million, or 4.7%, for the six months ended June 30, 2021 as compared to the same period in 2020, driven by the higher revenue leading to higher pass through costs and increased professional compensation. Foreign currency translation had a 2.9% negative impact on total cost of ~~favorable foreign~~revenue during the six months ended June 30, 2021. Cost of revenue as a percentage of revenue decreased slightly to 91.6% for the six months ended June 30, 2021 from 92.7% for the six months ended June 30, 2020.

Operating, administrative and other expenses increased by $38.7 million, or 11.7%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. This increase was attributable to higher bonus accrual tied to segment and consolidated results and continued investments to sustain the growth in the business in form of office management and administrative salaries. These increases were partially offset by benefits from targeted reduction in certain operating expenses, such as travel and entertainment costs, during the six months ended June 30, 2021. Foreign currency ~~transaction activity,~~translation also had a 3.6% negative impact on total operating expenses during the six months ended June 30, 2021.

Table of contents

Real Estate Investments

The following table summarizes our results of operations for our Real Estate Investments operating segment for the three and six months ended June 30, 2021 and 2020 (dollars in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Revenue:
Investment management	$	139,271	57.2	%	$	103,132	63.8	%	$	271,342	59.7	%	$	224,809	60.3	%
Development services	104,092		42.8	%	58,479		36.2	%	183,150		40.3	%	148,272		39.7	%
Total segment revenue	243,363		100.0	%	161,611		100.0	%	454,492		100.0	%	373,081		100.0	%
Costs and expenses:
Cost of revenue	56,970		23.4	%	30,021		18.6	%	97,960		21.6	%	85,070		22.8	%
Operating, administrative and other	235,275		96.7	%	127,618		79.0	%	416,255		91.6	%	277,778		74.5	%
Depreciation and amortization	5,523		2.3	%	4,693		2.8	%	15,953		3.5	%	9,137		2.4	%
Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	25,000		6.7	%
Gain (loss) on disposition of real estate	929		0.4	%	(492)		(0.3)	%	1,085		0.2	%	22,335		6.0	%
Operating loss	(53,476)		(22.0	%)	(1,213)		(0.7	%)	(74,591)		(16.5	%)	(1,569)		(0.4	%)
Equity income from unconsolidated subsidiaries	198,173		81.4	%	21,296		13.2	%	255,067		56.1	%	40,198		10.8	%
Other income (loss)	2,525		1.0	%	735		0.5	%	2,952		0.6	%	(1,904)		(0.5)	%
Less: Net income attributable to non-controlling interests	580		0.2	%	12		0.0	%	3,070		0.7	%	1,094		0.3	%
Add-back: Depreciation and amortization	5,523		2.3	%	4,693		2.9	%	15,953		3.5	%	9,137		2.4	%
Add-back: Asset impairments	—		0.0	%	—		0.0	%	—		0.0	%	25,000		6.7	%

Adjustments:
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue	1,672		0.7	%	(7,500)		(4.6	%)	17,004		3.7	%	(15,284)		(4.1	%)
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period	(374)		(0.2)	%	1,247		0.8	%	725		0.2	%	7,000		1.9	%
Integration and other costs related to acquisitions	—		0.0	%	236		0.1	%	—		0.0	%	1,019		0.3	%
Costs associated with workforce optimization efforts (1)	—		0.0	%	5,172		3.2	%	—		0.0	%	5,172		1.4	%

Segment operating profit	$	153,463	63.0	%	$	24,654	15.4	%	$	214,040	46.9	%	$	67,675	18.2	%

(1)Primarily represents costs incurred related to workforce optimization initiated and executed in the second quarter of 2020 as part of ~~which~~management’s cost containment efforts in response to the Covid-19 pandemic. The charges are cash expenditures primarily for severance costs incurred related to ~~hedging activities.~~

~~Asia Pacific~~

this effort and were included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for both the three and six months ended June 30, 2020.

Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020

Revenue increased by ~~$79.1~~$81.8 million, or ~~21.9%~~50.6%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the three months ended ~~September~~June 30, ~~2016. The revenue~~2020, primarily driven by an increase ~~reflects strong organic growth, fueled by higher occupier outsourcing and property management revenue as well as improved~~in real estate sales and ~~leasing activity.~~an increase in construction management fees in our development services line of business. Investment management fees increased due to growth in AUM. Foreign currency translation ~~also~~ had a ~~$2.5 million~~10.6% positive impact on total revenue during the three months ended ~~September~~June 30, ~~2017,~~2021, primarily driven by strength in the ~~Australian dollar~~British pound sterling and ~~Indian rupee, partially offset by weakness in the Japanese yen.~~

euro.

Cost of ~~services~~revenue increased by ~~$53.2~~$26.9 million, or ~~20.3%~~89.8%, for the three months ended ~~September~~June 30, ~~2017~~2021 as compared to the three months ended June 30, 2020, primarily driven by an increase in cost related to real estate development and construction services which is consistent with an increase in sales in our development service line of business. Foreign currency translation had a 20.4% negative impact on total cost of revenue during the three months ended June 30, 2021.

Operating, administrative and other expenses increased by $107.7 million, or 84.4%, for the three months ended June 30, 2021 as compared to the same period in 2016, driven by higher costs associated with our occupier outsourcing business. Also contributing to the variance was higher commission expense resulting from improved sales and lease transaction revenue. In addition, foreign currency translation had a $2.3 million negative impact on cost of services during the three months ended September 30, 2017. Cost of services as a percentage of revenue decreased from

~~72.5% for the three months ended September 30, 2016 to 71.5% for the three months ended September 30, 2017, partly~~2020, primarily due to ~~higher transaction revenue~~an increase in ~~certain countries that have a fixed compensation structure.~~

Operating, administrative and other expenses increased by $10.0 million, or 13.7%, for the three months ended September 30, 2017 as compared to the same period in 2016. We incurred higher payroll-related costs (including increased stock compensation and ~~bonus expense due to improved operating performance)~~bonuses in ~~the current year quarter. This was partially offset by foreign currency activity, which had an overall net positive impact~~our

Table of ~~$1.2 million for the three months ended September 30, 2017, due to favorable foreign currency transaction activity~~contents

development services and investment management line of ~~$1.6 million, mostly related to hedging, partly offset by a $0.4 million negative impact from foreign currency translation.~~

~~Global Investment Management~~

~~Revenue was~~business consistent ~~at $92.1 million for the three months ended September 30, 2017 and $91.8 million for the three months ended September 30, 2016.~~with higher revenue growth. Foreign currency translation had a ~~$1.1 million positive impact on total revenue during the three months ended September 30, 2017, primarily driven by strength in the euro.~~

Operating, administrative and other expenses decreased by $10.1 million, or 11.7%, for the three months ended September 30, 2017 as compared to the same period in 2016, primarily driven by the impact of $15.6 million of costs incurred in the third quarter of 2016 in connection with our cost-elimination project that did not recur in the current year. Foreign currency had a net $0.3 million6.5% negative impact on total operating expenses during the three months ended ~~September~~June 30, 2017, which included a $0.9 million negative impact from foreign currency translation, partially offset by $0.6 million of favorable foreign currency transaction activity over the same period in the prior year, part of which related to hedging activities. These items were partially offset by higher carried interest expense incurred during the three months ended September 30, 2017.

2021.

A roll forward of our AUM by product type for the three months ended ~~September~~June 30, ~~2017~~2021 is as follows (dollars in billions):

Separate

Funds

Accounts

Securities

Total

Balance at July 1, 2017

$
33.4

$
42.2

$
16.1

$
91.7

Inflows

1.5

9.5

0.3

11.3

Outflows

(0.7
)

(0.8
)

(1.6
)

(3.1
)
Market (depreciation) appreciation

(2.6
)

0.8

0.2

(1.6
)
Balance at September 30, 2017

$
31.6

$
51.7

$
15.0

$
98.3


	Funds		Separate Accounts		Securities		Total
Balance at March 31, 2021	$	47.8	$	68.4	$	8.3	$	124.5
Inflows	1.9		2.8		0.5		5.2
Outflows	(1.2)		(1.7)		(0.7)		(3.6)
Market appreciation	1.1		1.1		0.8		3.0
Balance at June 30, 2021	$	49.6	$	70.6	$	8.9	$	129.1

AUM generally refers to the properties and other assets with respect to which we provide (or participate in) oversight, investment management services and other advice, and which generally consist of real estate properties or loans, securities portfolios and investments in operating companies and joint ventures. Our AUM is intended principally to reflect the extent of our presence in the real estate market, not the basis for determining our management fees. Our assets under management consist of:

•the total fair market value of the real estate properties and other assets either wholly-owned or held by joint ventures and other entities in which our sponsored funds or investment vehicles and client accounts have invested or to which they have provided financing. Committed (but unfunded) capital from investors in our sponsored funds is not included in this component of our AUM. The value of development properties is included at estimated completion cost. In the case of real estate operating companies, the total value of real properties controlled by the companies, generally through joint ventures, is included in AUM; and

•the net asset value of our managed securities portfolios, including investments (which may be comprised of committed but uncalled capital) in private real estate funds under our fund of funds investments.

Our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.

~~Development Services~~

Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Revenue ~~decreased~~increased by ~~$2.0~~$81.4 million, or ~~12.4%~~21.8%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily driven by an increase in real estate sales in our development services line of business and investment management fees related to growth in AUM. Foreign currency translation had a 6.8% positive impact on total revenue during the six months ended June 30, 2021, primarily driven by strength in the British pound sterling and euro.

Cost of revenue increased by $12.9 million, or 15.2%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily driven by an increase in real estate development which is consistent with an increase in sales in our development service line of business. Foreign currency translation had a 9.6% negative impact on total cost of revenue during the three months ended ~~September~~June 30, ~~2017~~2021.

Operating, administrative and other expenses increased by $138.5 million, or 49.9%, for the six months ended June 30, 2021 as compared to the same period in ~~2016,~~2020, primarily ~~driven by lower rental revenue~~due to an increase in compensation and ~~development fees.~~

Operating, administrative and other expenses increased by $19.9 million, or 73.9%, for the three months ended September 30, 2017 as compared to the same period in 2016. This increase was primarily driven by higher bonuses in ~~the current three months due to improved~~our development services and investment management line of business consistent with higher revenue growth. These increases are partially offset by decreases in certain operating ~~performance (property sales reflected in equity income from unconsolidated subsidiaries were significantly higher in the current-year quarter).~~

Asexpenses, such as travel and entertainment costs, as a result of September 30, 2017, development projects in process totaled $5.9 billion, down $1.2 billion from the third quarter of 2016. The development pipeline totaled $5.4 billion, up $1.7 billion over the third quarter of 2016.

~~Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016~~

~~Americas~~

Revenue increased by $375.4 million, or 7.3%, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The revenue increase reflects strong organic growth fueled by higher occupier outsourcing and property management revenue and improved sales and leasing activity as well as higher loan servicing revenue.Covid-19. Foreign currency translation had a $2.1 million positive impact on revenue during the nine months ended September 30, 2017, primarily driven by strength in the Brazilian real and the Canadian dollar, partially offset by weakness in the Mexican peso and Venezuelan bolivar.

Cost of services increased by $253.6 million, or 7.1%, for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to higher costs associated with our occupier outsourcing business and higher professional bonuses in the United States. Also contributing to the variance was higher commission expense resulting from improved sales and lease transaction revenue. Foreign currency translation had a $0.1 million negative impact on cost of services during the nine months ended September 30, 2017. These items were partially offset by the impact of $11.9 million of costs incurred in the prior-year period in connection with our cost-elimination project that did not recur in the current year. Cost of services as a percentage of revenue was relatively consistent at 69.9% for the nine months ended September 30, 2016 and 69.7% for the nine months ended September 30, 2017, with the impact of higher professional bonuses in the current year offset by the impact of cost-elimination project costs that were only incurred in the prior year.

Operating, administrative and other expenses increased by $19.0 million, or 1.9%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The increase was partly driven by higher payroll-related costs (including an increase in bonus and stock compensation expense due to improved operating performance). Foreign currency also had a $6.9 million5.0% negative impact on total operating expenses during the ~~nine~~six months ended ~~September~~June 30, 2017, which included a negative impact from foreign currency translation of $2.0 million and unfavorable foreign currency transaction activity, mostly hedging related, of $4.9 million. These increases were partially offset by a decrease of $29.5 million in integration and other costs related to the GWS Acquisition incurred during the nine months ended September 30, 2017 as well as the impact of $10.4 million of costs incurred during the nine months ended September 30, 2016 as part of our cost-elimination project, which did not recur in the current year.

For the nine months ended September 30, 2017, MSRs contributed to operating income $96.0 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $72.5 million of amortization of related intangible assets. For the nine months ended September 30, 2016, MSRs contributed to operating income $104.0 million of gains recognized in conjunction with the origination and sale of mortgage loans, offset by $52.8 million of amortization of related intangible assets.

2021.

~~EMEA~~

Revenue increased by $89.6 million, or 3.3%, for the nine months ended September 30, 2017 as compared to the same period in 2016. We achieved strong organic growth fueled by higher occupier outsourcing and property management revenue, as well as higher sales and leasing activity. Such growth was partially offset by foreign currency translation, which had a $125.5 million negative impact on total revenue during the nine months ended September 30, 2017, primarily driven by weakness in the British pound sterling.

Cost of services increased by $33.1 million, or 1.5%, for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to higher costs associated with our occupier outsourcing business and higher professional bonuses, particularly in the United Kingdom resulting from improved operating performance. These items were partly offset by foreign currency translation, which had a $101.4 million positive impact on cost of services. In addition, we incurred $18.8 million of costs in the prior-year period in connection with our cost-elimination project that did not recur in the current year. The absence of such costs contributed to cost of services as a percentage of revenue decreasing from 79.1% for the nine months ended September 30, 2016 to 77.8% for the nine months ended September 30, 2017. In addition, higher transaction revenue in certain countries that have a fixed compensation structure also contributed to the decline in cost of services as a percentage of revenue.

Operating, administrative and other expenses decreased by $6.8 million, or 1.4%, for the nine months ended September 30, 2017 as compared to the same period in 2016. This decrease was primarily driven by a decrease of $12.7 million in integration and other costs related to the GWS Acquisition incurred during the nine months ended September 30, 2017 as well as the impact of $6.8 million of costs incurred during the nine months ended September 30, 2016 as part of our cost-elimination project, which did not recur in the current year. Foreign currency also had a $16.0 million net positive impact on total operating expenses during the nine months ended September 30, 2017, including a $19.7 million positive impact from foreign currency translation, partially offset by $3.7 million of unfavorable foreign currency transaction activity, part of which related to hedging activities. These favorable items were partially offset by higher payroll-related costs, including increased bonus and stock compensation expense due to improved operating performance during the nine months ended September 30, 2017.

~~Asia Pacific~~

Revenue increased by $169.9 million, or 16.5%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The revenue increase reflects strong organic growth, fueled by higher occupier outsourcing and property management revenue as well as improved sales and leasing activity. In addition, foreign currency translation had a $3.5 million positive impact on total revenue during the nine months ended September 30, 2017, primarily driven by strength in the Australian dollar and Indian rupee, largely offset by weakness in the Chinese yuan and Japanese yen.

Cost of services increased by $111.7 million, or 14.8%, for the nine months ended September 30, 2017 as compared to the same period in 2016, driven by higher costs associated with our occupier outsourcing business. Also contributing to the variance was higher commission expense resulting from improved sales and lease transaction revenue. In addition, foreign currency translation had a $2.1 million negative impact on cost of services during the nine months ended September 30, 2017. These items were partially offset by the impact of $6.4 million of costs incurred during the nine months ended September 30, 2016 in connection with our cost-elimination project that did not recur in the current year. The absence of such costs contributed to cost of services as a percentage of revenue decreasing from 73.2% for the nine months ended September 30, 2016 to 72.2% for the nine months ended September 30, 2017.

Operating, administrative and other expenses increased by $10.7 million, or 4.9%, for the nine months ended September 30, 2017 as compared to the same period in 2016. We incurred higher payroll-related costs (including increased stock compensation and bonus expense due to improved operating performance) during the nine months ended September 30, 2017. This was partially offset by a decrease of $4.4 million in integration and other costs related to the GWS Acquisition incurred during the nine months ended September 30, 2017 as well as the impact of $2.9 million of costs incurred during the nine months ended September 30, 2016 as part of our cost-elimination project, which did not recur in the current year. Foreign currency activity also had an overall net positive impact of $8.0 million for the nine months ended September 30, 2017, due to favorable foreign currency transaction activity of

~~$8.7 million, mostly related to hedging, partially offset by a $0.7 million negative impact from foreign currency translation.~~

~~Global Investment Management~~

Revenue decreased by $3.5 million, or 1.3%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Foreign currency translation had a $6.0 million negative impact on total revenue during the nine months ended September 30, 2017, primarily driven by weakness in the British pound sterling. This, coupled with lower asset management fees, was mostly offset by higher carried interest revenue in the current nine months.

Operating, administrative and other expenses decreased by $33.3 million, or 14.3%, for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily driven by the impact of $21.3 million of costs incurred in the nine months ended September 30, 2016 in connection with our cost-elimination project that did not recur in the current year. In addition, lower carried interest expense as well as lower payroll-related costs (including bonuses) contributed to the variance. Lastly, foreign currency had a $4.3 million positive impact on total operating expenses during the nine months ended September 30, 2017, which included a $3.9 million positive impact from foreign currency translation and $0.4 million of favorable foreign currency transaction activity over the same period in the prior year, part of which related to hedging activities.

A roll forward of our AUM by product type for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 is as follows (dollars in billions):

				Separate
	Funds			Accounts			Securities			Total				Funds		Separate Accounts		Securities		Total
Balance at December 31, 2016	$	31.6		$	37.5		$	17.5		$	86.6
Balance at January 1, 2021													Balance at January 1, 2021	$	47.2	$	67.9	$	7.6	$	122.7
Inflows		4.0			13.7			1.3			19.0		Inflows	3.1		4.6		1.0		8.7
Outflows		(4.7	)		(3.3	)		(4.6	)		(12.6	)	Outflows	(1.8)		(2.8)		(1.0)		(5.6)
Market appreciation		0.7			3.8			0.8			5.3		Market appreciation	1.1		0.9		1.3		3.3
Balance at September 30, 2017	$	31.6		$	51.7		$	15.0		$	98.3
Balance at June 30, 2021													Balance at June 30, 2021	$	49.6	$	70.6	$	8.9	$	129.1

Table of contents

We describe above how we calculate AUM. Also, as noted above, our calculation of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.

~~Development Services~~

Revenue decreased by $5.9 million, or 11.4%, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily driven by lower incentive and development fees in the current nine months.

Operating, administrative and other expenses increased by $23.5 million, or 25.6%, for the nine months ended September 30, 2017 as compared to the same period in 2016. This increase was primarily driven by higher payroll-related costs, including increased bonus expense in the current nine months due to improved operating performance (property sales reflected in equity income from unconsolidated subsidiaries were significantly higher in the current-year period).

Liquidity and Capital Resources

We believe that we can satisfy our working capital and funding requirements with internally generated cash flow and, as necessary, borrowings under our revolving credit facility. ~~Our expected~~We expect our capital requirements for ~~2017 include up~~2021 to ~~approximately $160~~be between $200 million and $240 million of anticipated capital expenditures, net of tenant concessions. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, we incurred ~~$86.9~~$63.1 million of capital expenditures, net of tenant concessions ~~received.~~received, which includes approximately $15.8 million related to technology enablement. As of ~~September~~June 30, ~~2017,~~2021, we had aggregate commitments of ~~$33.5~~$118.7 million to fund future co-investments in our ~~Global Investment Management~~Real Estate Investments business, ~~$6.9~~$25.4 million of which is expected to be funded in ~~2017.~~

2021. Additionally, as of ~~September~~June 30, ~~2017,~~2021, we are committed to fund ~~$20.4~~$55.5 million of additional capital to unconsolidated subsidiaries within our ~~Development Services~~Real Estate Investments business, which we may be required to fund at any time. As of ~~September~~June 30, ~~2017,~~2021, we had $2.8 billion of borrowings available under our ~~$2.8 billion~~ revolving credit ~~facility.~~

facility and $2.0 billion of cash and cash equivalents available for general corporate use. On July 9, 2021, the revolving credit facility was increased by $350.0 million.

We have historically relied on our internally generated cash flow and our revolving credit facility to fund our working capital, capital expenditure and general investment requirements (including strategic in-fill acquisitions) and have not sought other external sources of financing to help fund these requirements. In the absence of extraordinary events or a large strategic acquisition, we anticipate that our cash flow from operations and our revolving credit facility would be sufficient to meet our anticipated cash requirements for the foreseeable future, and at a minimum for the next 12 months. Given compensation is our largest expense and our sales and leasing professionals generally are paid on a commission and/or bonus basis that correlates with their revenue production, the negative effect of difficult market conditions is partially mitigated by the inherent variability of our compensation cost structure. In addition, when negative economic conditions have been particularly severe, we have moved decisively to lower operating expenses to improve financial performance, and then have restored certain expenses as economic conditions improved. We may seek to take advantage of market opportunities to refinance existing debt instruments, as we have done in the past, with new debt instruments at interest rates, maturities and terms we deem attractive. We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.

In December 2020, we redeemed the $425.0 million aggregate outstanding principal amount of our 5.25% senior notes due 2025 in full. We funded this redemption using cash on hand. In March 2021, we took advantage of favorable market conditions and low interest rates and conducted a new issuance for $500.0 million in aggregate principal amount of 2.500% senior notes due 2031. We may again seek to take advantage of market opportunities to refinance existing debt instruments with new debt instruments at interest rates, maturities and terms we deem attractive.

As noted above, we believe that any future significant acquisitions that we may make could require us to obtain additional debt or equity financing. In the past, we have been able to obtain such financing for material transactions on terms that we believed to be reasonable. However, it is possible that we may not be able to obtain acquisition financing on favorable terms, or at all, in the future if we decide to make any further significant acquisitions.

Our long-term liquidity needs, other than those related to ordinary course obligations and commitments such as operating leases, are generally comprised of ~~two~~three elements. The first is the repayment of the outstanding and anticipated principal amounts of our long-term indebtedness. ~~We are unable to project with certainty whether~~If our ~~long-term~~ cash flow ~~from operations will be sufficient~~is insufficient to repay our long-term debt when it comes ~~due. If our cash flow is insufficient,~~due, then we expect that we would need to refinance such indebtedness or otherwise amend its terms to extend the maturity dates. We cannot make any assurances that such refinancing or amendments would be available on attractive terms, if at all.

The second long-term liquidity need is the payment of obligations related to acquisitions. Our acquisition structures often include deferred and/or contingent purchase ~~price payments~~consideration in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of ~~September~~June 30, ~~2017 and December 31, 2016,~~2021, we had accrued ~~$73.2~~deferred purchase consideration totaling $125.6 million ($~~20.8 million of which was a current liability) and $91.0 million ($29.3~~36.0 million of which was a current liability), ~~respectively, of deferred purchase consideration,~~ which was included in ~~accounts~~“Accounts payable and accrued ~~expenses~~expenses” and in ~~other long-term liabilities~~“Other liabilities” in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report.

~~In addition, on October 27, 2016, we announced that~~

Lastly, as described in our 2020 Annual Report, our board of directors ~~had~~ authorized a program for the ~~company to~~ repurchase of up to ~~an aggregate of $250~~$500.0 million of our Class A common stock over three years. As of December 31, 2020, $350.0 million was available for share repurchases under the authorized repurchase program. During the three months ended March 31, 2021, we spent $64.1 million to repurchase, through a stock repurchase plan entered into pursuant to Rule 10b5-1 under the Exchange Act,

Table of contents

831,274 shares of our Class A common stock with an average price paid per share of $77.15. During the three months ended June 30, 2021, we spent $24.1 million to repurchase an additional 300,454 shares of our Class A common stock with an average price paid per share of $80.31. As of June 30, 2021, we had $261.7 million of capacity remaining under our repurchase program. Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash. We may utilize our stock repurchase program to continue offsetting the impact of our stock-based compensation program and on a more opportunistic basis if we believe our stock presents a compelling investment compared to other discretionary uses. The timing of ~~the repurchase~~any future repurchases and the actual ~~amount~~amounts repurchased will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and other factors. ~~We intend to fund the repurchases, if any, with cash on hand or borrowings under our revolving credit facility. As of September 30, 2017, the authorization remains unused.~~

Historical Cash Flows

Operating Activities

Net cash provided by operating activities totaled ~~$247.3~~$227.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, an increase of $203.0 million as compared to ~~net cash used in operating activities of $53.2 million for~~ the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. The primary drivers that contributed to the net increase were an overall improvement in ~~net cash provided by operating activities was primarily~~the company's performance and elevated distributions of earnings from unconsolidated subsidiaries (mainly due to ~~improved operating performance, lower net payments to vendors and lower net income taxes paid during~~certain transactions that occurred in second quarter in the ~~nine months ended September 30, 2017.~~REI segment). These ~~items~~ were partially offset by ~~higher~~increased outflows related to changes in net ~~receivables recorded~~working capital of approximately $124.6 million and an increase in real estate under development of approximately $28.6 million. The increased real estate development activities are due to better market opportunities as compared to a pandemic affected environment during the ~~current~~same period last year.

The impact from net working capital was largely attributable to an increase in accounts receivable, supplemented by a lower incentive compensation payout, partially offset by a larger net decrease in accounts payable and accrued expenses, and net income tax payment this period as compared to a net refund during the six months ended June 30, 2020.

Investing Activities

Net cash used in investing activities ~~was comparable at $33.8~~totaled $344.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017 versus $39.6 million for the nine months ended September 30, 2016.~~

~~Financing Activities~~

~~Net cash used in financing activities totaled $44.2 million for the nine months ended September 30, 2017,~~2021, an increase of ~~$43.3~~$208.5 million as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. This increase was primarily driven by our investment in Industrious, uptick in mergers and acquisitions related activities, and approximately $27.8 million in lower distributions received from unconsolidated subsidiaries compared to 2020.

Financing Activities

Net cash provided by financing activities totaled $379.0 million for the six months ended June 30, 2021, an increase of $20.2 million as compared to the six months ended June 30, 2020. The increase was primarily due to ~~lower~~the net ~~borrowings under~~proceeds of $492.3 million from the issuance of our 2.500% senior notes during 2021 as compared to net proceeds from our revolving credit facility ~~during~~of $451.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020. In addition, we received approximately $25.8 million from the issuance of note payables related to various real estate development activities during 2021, which was partially offset by additional funds that were used to repurchase shares during the ~~impact~~six months ended June 30, 2021 as compared to same period in 2020.

Table of ~~repayments of senior term loans, which did not recur in the current year.~~

contents

Indebtedness

Our level of indebtedness increases the possibility that we may be unable to pay the principal amount of our indebtedness and other obligations when due. In addition, we may incur additional debt from time to time to finance strategic acquisitions, investments, joint ventures or for other purposes, subject to the restrictions contained in the documents governing our indebtedness. If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase.

Long-Term Debt

We maintain credit facilities with third-party lenders, which we use for a variety of purposes. On ~~January 9, 2015,~~March 4, 2019, CBRE Services, Inc. (CBRE Services) entered into ~~our 2015~~an incremental assumption agreement with respect to its credit agreement, dated October 31, 2017 (such agreement, as amended by a December 20, 2018 incremental loan assumption agreement and such March 4, 2019 incremental assumption agreement, is collectively referred to in this Quarterly Report as the 2019 Credit Agreement with a syndicate of banks jointly led by Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Credit Suisse AG. On March 21, 2016, CBRE Services executed an amendment to our 2015 Credit Agreement that, among other things,Agreement), which (i) extended the maturity ~~on our revolving~~of the U.S. dollar tranche A term loans under such credit ~~facility to March 2021 and increased~~agreement, (ii) extended the ~~borrowing capacity under~~termination date of the revolving credit commitments available under such credit agreement and (iii) made certain changes to the interest rates and fees applicable to such tranche A term loans and revolving credit commitments under such credit agreement. The proceeds from the new tranche A term loan facility ~~by $200.0 million.~~

~~Our 2015~~under the 2019 Credit Agreement ~~was an~~were used to repay the $300.0 million of tranche A term loans outstanding under the credit agreement in effect prior to the entry into the 2019 incremental assumption agreement.

The 2019 Credit Agreement is a senior unsecured credit facility that ~~was jointly and severally~~is guaranteed by ~~us and substantially all~~us. As of ~~our material domestic subsidiaries. Our 2015~~June 30, 2021, the 2019 Credit Agreement provided for the following: (1) a $2.8 billion revolving credit facility, which included the capacity to obtain letters of credit and swingline loans and had a maturity date of March 21, 2021; (2) a $500.0 million tranche A term loan facility requiring quarterly principal payments, which began on June 30, 2015 and would have continued through maturity on January 9, 2020; (3) a $270.0 million tranche B-1 term loan facility requiring quarterly principal payments, which began on December 31, 2015 and would have continued through maturity on September 3, 2020; and (4) a $130.0 million tranche B-2 term loan facility requiring quarterly principal payments, which began on December 31, 2015 and would have continued through maturity on September 3, 2022. On November 1, 2016, we prepaid a total of $101.9 million of the 2017 and 2018 required amortization on our senior term loans, which included $59.4 million for the tranche A term loan facility, $28.7 million for the tranche B-1 term loan facility and $13.8 million for the tranche B-2 term loan facility.

~~On October 31, 2017, CBRE Services entered into a new Credit Agreement (2017 Credit Agreement), which refinanced and replaced our 2015 Credit Agreement.~~

Our 2017 Credit Agreement is a senior unsecured credit facility that is jointly and severally guaranteed by us and certain of our subsidiaries. Our 2017 Credit Agreement provides for the following credit facilities:

~~a $750.0 million delayed draw tranche A term loan facility; and~~

~~a revolving credit facility of up to $2.8 billion (including an allowance for borrowings outside of the U.S.), which~~ includes the capacity to obtain letters of credit and swingline loans and ~~matures~~terminates on ~~October 31, 2022.~~

~~On October 31, 2017, CBRE Services made an initial borrowing of (1) $200.0~~March 4, 2024; (2) a $300.0 million ~~under the~~ tranche A term loan facility ~~(with~~maturing on March 4, 2024, requiring quarterly principal payments unless our leverage ratio (as defined in the ~~remaining $550.0~~2019 Credit Agreement) is less than or equal to 2.50 to 1.00 on the last day of the fiscal quarter immediately preceding any such payment date and (3) a €400.0 million ~~available to be drawn under the tranche A~~ term loan facility due and payable in full at maturity on ~~one additional occasion~~December 20, 2023.

On March 18, 2021, CBRE Services issued $500.0 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 at a price equal to 98.451% of their face value (the 2.500% senior notes). The 2.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. Interest accrues at a rate of 2.500% per year and is payable semi-annually in arrears on ~~any date~~April 1 and October 1 of each year, beginning on October 1, 2021. The 2.500% senior notes are redeemable at our option, in whole or in part, on or after January 1, 2031 at a redemption price of 100% of the principal amount on that date, plus accrued and unpaid interest, if any, to, but excluding the date of redemption. At any time prior to ~~July 31, 2018)~~January 1, 2031, we may redeem all or a portion of the notes at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) ~~$83.0~~the sum of the present value at the date of redemption of the remaining scheduled payments of principal and interest thereon to January 1, 2031, assuming the notes matured on January 1, 2031, discounted to the date of redemption on a semi-annual basis at an adjusted rate equal to the treasury rate plus 20 basis points, minus accrued and unpaid interest to, but excluding, the date of redemption, plus, in either case, accrued and unpaid interest, if any, to, but not including, the redemption date. The amount of the 2.500% senior notes, net of unamortized discount and unamortized debt issuance costs, included in the accompanying consolidated balance sheet was $487.6 million ~~under~~at June 30, 2021.

On August 13, 2015, CBRE Services issued $600.0 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 (the 4.875% senior notes) at a price equal to 99.24% of their face value. The 4.875% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 4.875% senior notes are guaranteed on a senior basis by us. Interest accrues at a rate of 4.875% per year and is payable semi-annually in arrears on March 1 and September 1.

On September 26, 2014, CBRE Services issued $300.0 million in aggregate principal amount of 5.25% senior notes due March 15, 2025 (the 5.25% senior notes). On December 12, 2014, CBRE Services issued an additional $125.0 million in aggregate principal amount of 5.25% senior notes due March 15, 2025 at a price equal to 101.5% of their face value, plus interest deemed to have accrued from September 26, 2014. The 5.25% senior notes were unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 5.25% senior notes were jointly and severally guaranteed on a senior basis by us and certain of

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our subsidiaries. Interest accrued at a rate of 5.25% per year and was payable semi-annually in arrears on March 15 and September 15. We redeemed these notes in full on December 28, 2020 and incurred charges of $75.6 million, including a premium of $73.6 million and the ~~revolving credit~~

~~facility. These proceeds, in addition to~~write-off of $2.0 million of unamortized premium and debt issuance costs. We funded this redemption using cash on ~~hand,~~hand.

The indentures governing our 4.875% senior notes and 2.500% senior notes contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, enter into sale/leaseback transactions and enter into consolidations or mergers.

On May 21, 2021, we released all existing subsidiary guarantors from their guarantees of our 2019 Credit Agreement, 4.875% senior notes and 2.500% senior notes. Our 2019 Credit Agreement, 4.875% senior notes and 2.500% senior notes remain fully and unconditionally guaranteed by CBRE Group, Inc. Combined summarized financial information for CBRE Group, Inc. (parent) and CBRE Services (subsidiary issuer) is as follows (dollars in thousands):


	June 30, 2021		December 31, 2020 (1)
Balance Sheet Data:
Current assets	$	4,851	$	3,307,147
Noncurrent assets (2)	248,102		5,252,455
Total assets (2)	252,953		8,559,602

Current liabilities	$	14,077	$	3,241,264
Noncurrent liabilities	1,380,808		1,884,629
Total liabilities	1,394,885		5,125,893


	Six Months Ended June 30,
	2021		2020
Statement of Operations Data:
Revenue	$	—	$	6,332,337
Operating (loss) income	(986)		138,122
Net income	15,847		118,459

(1)Amounts include activity related to our subsidiaries that were ~~used to repay all amounts outstanding under our 2015 Credit Agreement.~~ still listed as guarantors for the period presented.

(2)Includes $237.1 million and $360.0 million of intercompany loan receivables from non-guarantor subsidiaries as of June 30, 2021 and December 31, 2020, respectively. All intercompany balances and transactions between CBRE Group, Inc., CBRE Services and the guarantor subsidiaries have been eliminated.

For additional information on all of our ~~2017 Credit Agreement,~~long-term debt, see Note 1211 of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2020 Annual Report and Note 8 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

In prior years, we also issued 5.00%, 4.875% and 5.25% senior notes that are due in 2023, 2026 and 2025, respectively. For additional information on all of our long-term debt, see Note 10 of the Notes to Consolidated Financial Statements set forth in Item 8 included in our Annual Report on Form 10‑K for the year ended December 31, 2016 and Note 7 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

Short-Term Borrowings

We maintain a ~~$2.8~~$3.15 billion (inclusive of the $350.0 million increase executed on July 9, 2021) revolving credit facility under ~~our 2017~~the 2019 Credit Agreement and warehouse lines of credit with certain third-party lenders. For additional information on all of our short-term borrowings, see Note 1011 of the Notes to Consolidated Financial Statements set forth in Item 8 included in our 2020 Annual Report ~~on Form 10‑K for the year ended December 31, 2016~~ and Notes 3 7 and 128 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report.

~~Interest Rate Swap Agreements~~

In March 2011, we entered into five interest rate swap agreements, all with effective dates in October 2011, and immediately designated them as cash flow hedges in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815, “~~Derivatives and Hedging~~.” The purpose of these interest rate swap agreements is to attempt to hedge potential changes to our cash flows due to the variable interest nature of our senior term loan facilities. The total notional amount of these interest rate swap agreements at September 30, 2017 was $400.0 million, with $200.0 million having expired on October 2, 2017 and $200.0 million expiring in September 2019. As of September 30, 2017 and December 31, 2016, the fair values of such interest rate swap agreements were reflected as a $6.6 million liability and a $13.2 million liability, respectively, and were included in other current and long-term liabilities in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report.

In July 2015, we entered into three interest rate swap agreements with an aggregate notional amount of $300.0 million, all with effective dates in August 2015, and designated them as cash flow hedges in accordance with FASB ASC Topic 815. In August 2015, we elected to terminate these agreements and paid a $6.2 million cash settlement, which has been recorded to accumulated other comprehensive loss in the accompanying consolidated balance sheets set forth in Item 1 of this Quarterly Report. This settlement fee is being amortized to interest expense throughout the remaining term of the terminated hedge transaction until August 2025.

Off –Balance Sheet Arrangements

Our off-balance sheet arrangements are described in Note 810 of the Notes to Consolidated Financial Statements (Unaudited) set forth in Item 1 of this Quarterly Report and are incorporated by reference herein.

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Cautionary Note on Forward-Looking Statements

This Quarterly Report ~~includes~~contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “anticipate,” “believe,” “could,” “should,” “propose,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases are used in this Quarterly Report to identify forward-looking statements. Except for historical information contained herein, the matters addressed in this Quarterly Report are forward-looking statements. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies.

These forward-looking statements are made based on our management’s expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These uncertainties and factors could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements.

The following factors are among those, but are not only those, that may cause actual results to differ materially from the forward-looking statements:

•disruptions in general economic, political and ~~business~~regulatory conditions and significant public health events, particularly in geographies or industry sectors where our business may be concentrated;

•volatility ~~and disruption of~~or adverse developments in the securities, capital ~~and~~or credit markets, interest rate increases and conditions affecting the ~~cost and availability~~value of ~~capital for investment in~~ real estate assets, inside and outside the U.S.;

•poor performance of real estate investments or other conditions that negatively impact clients’ willingness to make real estate or long-term contractual commitments and ~~other factors affecting~~ the ~~value~~cost and availability of capital for investment in real ~~estate assets, inside~~estate;

•foreign currency fluctuations and ~~outside~~changes in currency restrictions, trade sanctions and import/export and transfer pricing rules;

•disruptions to business, market and operational conditions related to the ~~United States;~~

Covid-19 pandemic and the impact of government rules and regulations intended to mitigate the effects of this pandemic, including, without limitation, rules and regulations that impact us as a loan originator and servicer for U.S. Government-Sponsored Enterprises (GSEs);

•our ability to compete globally, or in specific geographic markets or business segments that are material to us;

•our ability to identify, acquire and integrate accretive businesses;

•costs and potential future capital requirements relating to businesses we may acquire;

•integration challenges arising out of companies we may acquire;

•increases in unemployment and general slowdowns in commercial activity;

•trends in pricing and risk assumption for commercial real estate services;

•the effect of significant ~~movements~~changes in ~~average cap~~capitalization rates across different property types;

•a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect our revenues and operating performance;

•client actions to restrain project spending and reduce outsourced staffing levels;

~~declines in lending activity of U.S. Government Sponsored Enterprises, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market;~~

•our ability to further diversify our revenue model to offset cyclical economic trends in the commercial real estate industry;

•our ability to attract new user and investor clients;

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•our ability to retain major clients and renew related contracts;

•our ability to leverage our global services platform to maximize and sustain long-term cash flow;

•our ability ~~to maintain EBITDA and adjusted EBITDA margins that enable us~~ to continue investing in our platform and client service offerings;

•our ability to ~~control costs relative~~maintain expense discipline;

•the emergence of disruptive business models and technologies;

•negative publicity or harm to ~~revenue growth;~~

our brand and reputation;

~~economic volatility~~•the failure by third parties to comply with service level agreements or regulatory or legal requirements;

•the ability of our investment management business to maintain and ~~market uncertainty globally~~grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to uncertainty surrounding the implementation and effect of the United Kingdom’s referendum to leave the European Union, including uncertainty in relation to the legal and regulatory framework that would apply to the United Kingdom and its relationship with the remaining members of the European Union;

do so;

~~foreign currency fluctuations;~~

~~our ability to retain and incentivize key personnel;~~

~~our ability to compete globally, or in specific geographic markets or business segments that are material to us;~~

~~our ability to identify, acquire and integrate synergistic and accretive businesses;~~

~~costs and potential future capital requirements relating to businesses we may acquire;~~

~~integration challenges arising out of companies we may acquire;~~

•

the ability of our Global Investment Management business to maintain and grow assets under management and achieve desired investment returns for our investors, and any potential related litigation, liabilities or reputational harm possible if we fail to do so;

•our ability to manage fluctuations in net earnings and cash flow, which could result from poor performance in our investment programs, including our participation as a principal in real estate investments;

•the ability of CBRE Capital Markets to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit;

•declines in lending activity of U.S. GSEs, regulatory oversight of such activity and our mortgage servicing revenue from the commercial real estate mortgage market;

•changes in U.S. and international law and regulatory environments (including relating to anti-corruption, anti-money laundering, trade sanctions, tariffs, currency controls and other trade control laws), particularly in Asia, Africa, Russia, Eastern Europe and the Middle East, due to the level of political instability in those regions;

•litigation and its financial and reputational risks to us;

•our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms;

•our ability to retain and incentivize key personnel;

•our ability to manage organizational challenges associated with our size;

•liabilities under guarantees, or for construction defects, that we incur in our development services business;

•variations in historically customary seasonal patterns that cause our business not to perform as expected;

•our leverage under our debt instruments as well as the limited restrictions therein on our ability to incur additional debt, and the potential increased borrowing costs to us from a credit-ratings downgrade;

~~the ability of CBRE Capital Markets to periodically amend, or replace, on satisfactory terms, the agreements for its warehouse lines of credit;~~

~~variations in historically customary seasonal patterns that cause our business not to perform as expected;~~

~~litigation and its financial and reputational risks to us;~~

~~our exposure to liabilities in connection with real estate advisory and property management activities and our ability to procure sufficient insurance coverage on acceptable terms;~~

~~liabilities under guarantees, or for construction defects, that we incur in our Development Services business;~~

•our and our employees’ ability to execute on, and adapt to, information technology strategies and trends;

~~changes in domestic and international law and regulatory environments (including relating~~•cybersecurity threats or other threats to ~~anti-corruption, anti-money laundering, trade sanctions, currency controls and other trade control laws), particularly in Russia, Eastern Europe and~~our information technology networks, including the ~~Middle East, due to the level~~potential misappropriation of ~~political instability in those regions;~~

assets or sensitive information, corruption of data or operational disruption;

•our ability to comply with laws and regulations related to our global operations, including real estate licensure, tax, labor and employment laws and regulations, as well as the anti-corruption laws and trade sanctions of the U.S. and other countries;

~~our ability to maintain our effective tax rate at or below current levels;~~

•changes in applicable tax or accounting ~~requirements, including potential tax reform under the current U.S. administration;~~

requirements;

•any inability for us to implement and maintain effective internal controls over financial reporting;

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•the effect of implementation of new accounting rules and ~~standards;~~standards or the impairment of our goodwill and

intangible assets; and

•the other factors described elsewhere in this Quarterly Report on Form 10-Q, included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies,” “Quantitative and Qualitative Disclosures About Market Risk” and Part II, Item 1A, “Risk Factors” or as described in our 2020 Annual Report ~~on Form 10-K for the year ended December 31, 2016,~~, in particular in Part II, Item 1A “Risk Factors”, or as described in the other documents and reports we file with the Securities and Exchange ~~Commission.~~

Commission (SEC).

Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Additional information concerning these and other risks and uncertainties is contained in our other periodic filings with the ~~Securities~~SEC.

Investors and ~~Exchange Commission.~~

others should note that we routinely announce financial and other material information using our Investor Relations website (https://ir.cbre.com), SEC filings, press releases, public conference calls and webcasts. We use these channels of distribution to communicate with our investors and members of the public about our company, our services and other items of interest. Information contained on our website is not part of this Quarterly Report or our other filings with the SEC.

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information in this section should be read in connection with the information on market risk related to changes in interest rates and non-U.S. currency exchange rates in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~

2020.

Our exposure to market risk primarily consists of foreign currency exchange rate fluctuations related to our international operations and changes in interest rates on debt obligations. We manage such risk primarily by managing the amount, sources, and duration of our debt funding and by using derivative financial instruments. We apply Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815, “Derivatives and Hedging,” when accounting for derivative financial instruments. In all cases, we view derivative financial instruments as a risk management tool and, accordingly, do not use derivatives for trading or speculative purposes.

Exchange Rates

Our foreign operations expose us to fluctuations in foreign exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional (reporting) currency, which is the U.S. ~~dollars.~~dollar. See the discussion of international operations, which is included in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Items Affecting Comparability—International Operations” and is incorporated by reference herein.

Interest Rates

We manage our interest expense by using a combination of fixed and variable rate debt. ~~We enter~~Historically, we have entered into interest rate swap agreements to attempt to hedge the variability of future interest payments due to changes in interest rates. ~~See discussion~~As of ~~our~~June 30, 2021, we did not have any outstanding interest rate swap agreements, which is included in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Liquidity and Capital Resources—Indebtedness—Interest Rate Swap Agreements” and is incorporated by reference herein.

agreements.

The estimated fair value of our senior term loans was approximately ~~$750.8~~$770.4 million at ~~September~~June 30, ~~2017.~~2021. Based on dealers’ quotes, the estimated fair ~~values~~value of our ~~5.00% senior notes,~~ 4.875% senior notes and ~~5.25%~~2.500% senior notes ~~were $829.1 million, $646.6~~was $696.3 million and ~~$463.4~~$507.2 million, respectively, at ~~September~~June 30, ~~2017.~~

2021.

We utilize sensitivity analyses to assess the potential effect ofon our variable rate debt. If interest rates were to increase 100 basis points on our outstanding variable rate debt at ~~September~~June 30, ~~2017, excluding notes payable on real estate,~~2021, the net impact of the additional interest cost would be a decrease of ~~$2.6~~$7.5 million on pre-tax income and a decrease of ~~$2.6~~$7.5 million in cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~

2021.

~~Item 4.~~

~~Controls and Procedures~~

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

Rule 13a-15 of the Securities and Exchange Act of 1934, as amended, requires that we conduct an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report, and we have a disclosure policy in furtherance of the same. This evaluation is designed to ensure that all corporate disclosure is complete and accurate in all material respects. The evaluation is further designed to ensure that all information required to be disclosed in our SEC reports is accumulated and communicated to management to allow timely decisions regarding required disclosures and recorded, processed, summarized and reported within the time periods and in the manner specified in the SEC’s rules and forms. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our Chief Executive Officer and Chief Financial Officer supervise and participate in this evaluation, and they are assisted by ~~our Deputy Chief Financial Officer and Chief Accounting Officer and other~~ members of our Disclosure Committee. ~~In addition to our Deputy Chief Financial Officer and Chief Accounting Officer, our~~Our Disclosure Committee consists of our General Counsel, our ~~chief communication officer,~~Deputy CFO and Chief Accounting Officer, our ~~corporate controller,~~Chief Transformation Officer, our ~~head of Global~~Chief Communication Officer, our Senior Vice President, Risk and Assurance, ~~and Advisory,~~ our ~~senior officers~~Senior Officers of significant business lines and other select employees.

We conducted the required evaluation, and our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined by Securities Exchange Act Rule 13a-15(e)) were not effective as of ~~September~~June 30, ~~2017~~2021 due to ~~accomplish their objectives at~~ the ~~reasonable assurance level.~~

material weaknesses in internal control over financial reporting that were disclosed in our 2020 Annual Report.

Notwithstanding such material weaknesses in internal control over financial reporting, our management concluded that our consolidated financial statements in this Quarterly Report on Form 10-Q present fairly, in all material respects, the company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP.

Remediation

As previously described in Part II, Item 9A of our 2020 Annual Report, we continue to implement our remediation plans that address the material weaknesses in our internal controls over financial reporting. During the three months ended June 30, 2021, we pursued several activities to further our remediation efforts:

•Implemented mechanisms to provide close to real-time visibility into the results of the ongoing monitoring program to ensure immediate action on items requiring attention;

•Inventoried, baselined and rationalized key reports in the primary accounting system so as to have standard reports supporting the efficient execution of controls;

•Enhanced the framework around proper design and implementation of key balance sheet account reconciliations; and

•Continued to train employees responsible for control execution and oversight and established a control owner “certification” to promote awareness and underscore ownership and accountability.

Though further remediation efforts were made this quarter, the material weakness will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through formal testing, that these controls are operating effectively.

Changes in Internal ~~Controls~~Control Over Financial Reporting

Except for changes made in connection with our implementation of the remediation efforts mentioned above, there have been no changes in our internal control over financial reporting ~~occurred~~ during the fiscal quarter ended ~~September~~June 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

Item 1. Legal Proceedings

There have been no material changes to our legal proceedings as previously disclosed in our 2020 Annual Report ~~on Form 10-K for the fiscal year ended December 31, 2016.~~

~~Item 1A.~~

~~Risk Factors~~

Item 1A. Risk Factors

There have been no material changes to our risk factors as previously disclosed in our 2020 Annual Report ~~on Form 10-K~~.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Open market share repurchase activity during the three months ended June 30, 2021 was as follows (dollars in thousands, except per share amounts):


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
April 1, 2021 - April 30, 2021	300,454	$	80.31	300,454
May 1, 2021 - May 31, 2021	—	—		—
June 1, 2021 - June 30, 2021	—	—		—
	300,454	$	80.31	300,454	$	261,737

(1)During 2019, our board of directors authorized a program for the ~~fiscal year ended~~company to repurchase up to $500.0 million of our Class A common stock over three years, and during the second quarter of 2021, we repurchased $24.1 million of our common stock under this program. The remaining $261.7 million in the table represents the amount available to repurchase shares under the authorized repurchase program as of June 30, 2021.

Our repurchase programs do not obligate us to acquire any specific number of shares. Under these programs, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. The timing of any future repurchases and the actual amounts repurchased will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and other factors.

Item 5. Other Information

On July 28, 2021 (the “Transition Date”), the company’s board of directors appointed (i) Emma E. Giamartino as the company’s Global Group President, Chief Financial Officer and Chief Investment Officer and (ii) Madeleine Barber as the company’s Deputy Chief Financial Officer and Chief Accounting Officer.

Ms. Giamartino, age 38, has served as the company’s Global Chief Investment Officer since January 2021. Prior to that, Ms. Giamartino served as the company’s Executive Vice President of Corporate Development and Global Head of Mergers & Acquisitions from June 2020 to January 2021 and as Head of Mergers & Acquisitions in the Americas from February 2018 to June 2020. Prior to joining the company, Ms. Giamartino served as Director of Corporate Development at Verizon Communications from March 2016 to February 2018. She also worked in Nomura’s technology, media and telecommunication investment banking group from June 2010 to March 2016. She began her career at Assured Guaranty (formerly Financial Security Assurance), in the residential mortgage-backed securities group. Effective on the Transition Date, Ms. Giamartino will earn an annual base salary of $680,000 and will be eligible for an annual target bonus of $1,000,000 (prorated as of the Transition Date). Shortly after the Transition Date, Ms. Giamartino will also receive an additional equity award with a grant date value of $615,000. Beginning in 2022, she will be eligible to receive an annual equity award with a target grant date value of $1,820,000. Ms. Giamartino will also receive a one-time cash promotion award of $1,000,000. The cash promotion award will be subject to repayment under certain circumstances. As a condition of her appointment, Ms. Giamartino executed our standard Restrictive Covenants Agreements for senior executives.

Ms. Barber, age 57, has served as the company’s Senior Vice President, Corporate Finance and Chief Accounting, Tax and Treasury Officer since June 2020. Prior to that, Ms. Barber served as Senior Vice President, Corporate Finance from January 2020 to June 2020 and as Senior Vice President and Chief Tax Officer from December 2016 to June 2020. Prior to joining the company, Ms. Barber served in senior finance roles, each with increasing responsibility at Tyco International Plc for 12 years, including as Senior Vice President and Chief Tax Officer from October 2011 to November 2016. Prior to that, she served as Tax Partner at KPMG LLP from May 2002 to December 2004 and Tax Partner at Arthur Anderson LLP from August

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1988 to May 2002. Effective as of the Transition Date, Ms. Barber will earn an annual base salary of $550,000 and will be eligible for an annual target bonus of $550,000 (prorated as of the Transition Date). Beginning in 2022, she will be eligible for an annual equity award with a target grant date value of $600,000. Ms. Barber will also receive a one-time cash promotion award of $300,000. The cash promotion award will be subject to repayment under certain circumstances. As a condition of her appointment, Ms. Barber executed our standard Restrictive Covenants Agreements for senior executives.

There are no arrangements or understandings between Ms. Giamartino, Ms. Barber and any other persons pursuant to which they were selected for their respective positions with the company. There are no family relationships between Ms. Giamartino, Ms. Barber and any director or executive officer of the company. Ms. Giamartino and Ms. Barber do not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, nor are any such transactions currently proposed.

Leah C. Stearns, who served as the company’s Chief Financial Officer until July 28, 2021, will remain at the company through December 31, ~~2016.~~2021. Ms. Stearns will receive payments and benefits afforded to senior executives under the company’s Change in Control and Severance Plan for Senior Management, and will remain eligible to receive a pro rata portion of the outstanding one-time Strategic Equity Awards that were granted to Ms. Stearns when she joined the company, described under the heading “Executive Compensation—Employment Agreements” in the company’s Proxy Statement on Schedule 14A filed on April 5, 2021.

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Item 6. Exhibits

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

SEC File No.

Exhibit

Filing Date

Filed Herewith

2.1

Acquisition Agreement, dated as of July 26, 2021, among Turner & Townsend Partners LLP, CBRE Titan Acquisition Co. Limited, CBRE Group, Inc.

8-K

001-32205

2.1

07/29/2021

3.1

Amended and Restated Certificate of Incorporation of CBRE Group, Inc.

8-K

001-32205

3.1

05/23/2018

3.2

Amended and Restated By-Laws of CBRE Group, Inc.

8-K

001-32205

3.1

03/27/2020

10.1

Incremental Assumption Agreement, dated as of July 9, 2021, among CBRE Group, Inc., CBRE Services, Inc. CBRE Limited, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent

8-K

001-32205

10.1

07/13/2021

10.2

Employment and Transition Agreement, dated as of July 27, 2021, by and between CBRE, Inc. and Leah C. Stearns+

10.3

Letter agreement, dated as of July 28, 2021, by and between CBRE, Inc. and Emma Giamartino+

10.4

Form of Restrictive Covenants Agreement+

22.1

Subsidiary Issuers and Guarantors of CBRE Group, Inc.’s Registered Debt

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~Item 6.~~

~~Exhibits~~

Incorporated by Reference
Exhibit
No.

Exhibit Description

Form

SEC File No.

Exhibit

Filing Date

Filed
Herewith

    3.1

Amended and Restated Certificate of Incorporation of CBRE Group, Inc.

8-K

001-32205

3.1

05/19/2016

    3.2

Amended and Restated By-Laws of CBRE Group, Inc.

10-Q

001-32205

3.2

05/10/2017

    4.1

Form of Class A common stock certificate of CBRE Group, Inc.

10-Q

001-32205

4.1

08/08/2017

    4.2(a)

Indenture, dated as of March 14, 2013, among CBRE Group, Inc., CBRE Services, Inc., certain subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee

10-Q

001-32205

4.4(a)

05/10/2013

    4.2(b)

First Supplemental Indenture, dated as of March 14, 2013, between CBRE Services, Inc., CBRE Group, Inc., certain subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.00% Senior Notes Due 2023, including the Form of 5.00% Senior Notes due 2023

10-Q

001-32205

4.4(b)

05/10/2013

    4.2(c)

Form of Supplemental Indenture among certain subsidiary guarantors of CBRE Services, Inc., CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.00% Senior Notes due 2023

8-K

001-32205

4.3

04/16/2013

    4.2(d)

Second Supplemental Indenture, dated as of April 10, 2013, between CBRE/LJM- Nevada, Inc., CBRE Consulting, Inc., CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.00% Senior Notes due 2023

S-3ASR

333-201126

4.3(c)

12/19/2014

+    Denotes a management contract or compensatory arrangement

~~Incorporated by Reference~~

Exhibit
No.

~~Exhibit Description~~

~~Form~~

~~SEC File No.~~

~~Exhibit~~

~~Filing Date~~

Filed
Herewith

~~4.2(e)~~

Second Supplemental Indenture, dated as of September 26, 2014, between CBRE Services, Inc., CBRE Group, Inc., certain subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.25% Senior Notes due 2025, including the Form of 5.25% Senior Notes due 2025

~~8-K~~

~~001-32205~~

~~4.1~~

~~09/26/2014~~

~~4.2(f)~~

Third Supplemental Indenture, dated as of December 12, 2014, between CBRE Services, Inc., CBRE Group, Inc., certain subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the additional issuance of 5.25% Senior Notes due 2025

~~8-K~~

~~001-32205~~

~~4.1~~

~~12/12/2014~~

~~4.2(g)~~

Form of Supplemental Indenture among certain subsidiary guarantors of CBRE Services, Inc., CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.25% Senior Notes due 2025

~~S-3ASR~~

~~333-201126~~

~~4.3(h)~~

~~12/19/2014~~

~~4.2(h)~~

Fourth Supplemental Indenture, dated as of August 13, 2015, between CBRE Services, Inc., CBRE Group, Inc., certain subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the issuance of 4.875% Senior Notes due 2026, including the Form of 4.875% Senior Notes due 2026

~~8-K~~

~~001-32205~~

~~4.2~~

~~08/13/2015~~

~~4.2(i)~~

Fifth Supplemental Indenture, dated as of September 25, 2015, between CBRE GWS LLC, CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, relating to the 5.00% Senior Notes due 2023, the 5.25% Senior Notes due 2025 and the 4.875% Senior Notes due 2026

~~8-K~~

~~001-32205~~

~~4.1~~

~~09/25/2015~~

~~Statement concerning Computation of Per Share Earnings (filed as Note 9 of the Consolidated Financial Statements)~~

~~31.1~~

~~Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002~~

~~31.2~~

~~Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002~~

~~Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002~~

Table of contents

SIGNATURES

~~Incorporated by Reference~~

Exhibit
No.

~~Exhibit Description~~

~~Form~~

~~SEC File No.~~

~~Exhibit~~

~~Filing Date~~

Filed
Herewith

~~101.INS~~

~~XBRL Instance Document~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~

~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		CBRE GROUP, INC.

Date: ~~November 9, 2017~~ July 30, 2021			/s/ ~~James R. Groch~~ EMMA E. GIAMARTINO
			~~James R. Groch~~
	Emma E. Giamartino Global Group President, Chief Financial Officer ~~(principal financial officer)~~ and Chief Investment Officer (Principal Financial Officer)

Date: ~~November 9, 2017~~ July 30, 2021			/s/ ~~Gil Borok~~ MADELEINE BARBER
			~~Gil Borok~~
	Madeleine Barber Deputy Chief Financial Officer and Chief Accounting Officer ~~(principal accounting officer)~~ (Principal Accounting Officer)

	CBRE Group, Inc. Shareholders
								Accumulated
	Class A		Additional					other			Non-
	common		paid-in			Accumulated		comprehensive			controlling
	stock		capital			earnings		loss			interests			Total
Balance at December 31, 2016	$	3,373	$	1,145,226		$	2,656,906	$	(791,018	)	$	42,758		$	3,057,245
Net income		—		—			523,079		—			4,181			527,260
Non-cash issuance of common stock related to acquisition		5		7,586			—		—			—			7,591
Compensation expense for equity awards		—		68,975			—		—			—			68,975
Units repurchased for payment of taxes on equity awards		—		(29,549	)		—		—			—			(29,549	)
Foreign currency translation gain		—		—			—		203,784			363			204,147
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax		—		—			—		4,148			—			4,148
Unrealized gains on interest rate swaps, net of tax		—		—			—		102			—			102
Unrealized holding gains on available for sale securities, net of tax		—		—			—		2,239			—			2,239
Contributions from non- controlling interests		—		—			—		—			3,410			3,410
Distributions to non- controlling interests		—		—			—		—			(6,643	)		(6,643	)
Acquisition of non- controlling interests		—		—			—		—			12,671			12,671
Other		17		617			—		(20	)		(374	)		240
Balance at September 30, 2017	$	3,395	$	1,192,855		$	3,179,985	$	(580,765	)	$	56,366		$	3,851,836

Beginning balance at January 1, 2017	$	1,276,047
Origination of mortgage loans		11,441,884
Gains (premiums on loan sales)		32,711

Sale of mortgage loans		(11,283,330	)
Cash collections of premiums on loan sales		(32,711	)
Proceeds from sale of mortgage loans		(11,316,041	)

Net increase in mortgage servicing rights included in warehouse receivables		309
Ending balance at September 30, 2017	$	1,434,910

			September 30, 2017				December 31, 2016
			Maximum				Maximum
Lender	Current Maturity	Pricing	Facility Size		Carrying Value		Facility Size		Carrying Value
JP Morgan Chase Bank, N.A. (JP Morgan) (1)	2/28/2017	daily one-month LIBOR plus 1.45%	$	—	$	—	$	300,000	$	275,945
JP Morgan (2)	10/23/2017	daily one-month LIBOR plus 1.45%		800,000		704,908		700,000		—
JP Morgan (2)	10/23/2017	daily one-month LIBOR plus 2.75%		25,000		1,487		25,000		3,768
Bank of America (BofA) (1)	1/30/2017	daily one-month LIBOR plus 1.60%		—		—		300,000		300,000
BofA	6/5/2018	daily one-month LIBOR plus 1.40%		225,000		155,744		200,000		18,555
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (1)	1/17/2017	daily one-month LIBOR plus 1.35%, with a LIBOR floor of 0.35%		—		—		200,000		200,000
Fannie Mae ASAP Program	Cancelable anytime	daily one-month LIBOR plus 1.35%, with a LIBOR floor of 0.35%		450,000		94,250		450,000		111,160
TD Bank, N.A. (TD Bank) (1)	2/28/2017	daily one-month LIBOR plus 1.35%		—		—		375,000		154,032
TD Bank	6/30/2018	daily one-month LIBOR plus 1.25%		400,000		366,600		400,000		—
Capital One, N.A. (Capital One) (1)	1/23/2017	daily one-month LIBOR plus 1.45%		—		—		250,000		191,193
Capital One	7/27/2018	daily one-month LIBOR plus 1.40%		200,000		93,264		200,000		—
			$	2,100,000	$	1,416,253	$	3,400,000	$	1,254,653

	As of December 31, 2016
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	8,485	$	—	$	—	$	8,485
Debt securities issued by U.S. federal agencies		—		5,046		—		5,046
Corporate debt securities		—		17,094		—		17,094
Asset-backed securities		—		2,695		—		2,695
Collateralized mortgage obligations		—		1,010		—		1,010
Total debt securities		8,485		25,845		—		34,330
Equity securities		22,744		—		—		22,744
Total available for sale securities		31,229		25,845		—		57,074
Trading securities		52,629		—		—		52,629
Warehouse receivables		—		1,276,047		—		1,276,047
Foreign currency exchange forward contracts		—		1,471		—		1,471
Total assets at fair value	$	83,858	$	1,303,363	$	—	$	1,387,221
Liabilities
Interest rate swaps	$	—	$	13,162	$	—	$	13,162
Securities sold, not yet purchased		3,591		—		—		3,591
Total liabilities at fair value	$	3,591	$	13,162	$	—	$	16,753

			CBRE		Guarantor		Nonguarantor					Consolidated
	Parent		Services		Subsidiaries		Subsidiaries		Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	7	$	7,721	$	446,123	$	501,754	$	—		$	955,605
Restricted cash		—		—		2,048		82,746		—			84,794
Receivables, net		—		—		1,069,509		1,773,617		—			2,843,126
Warehouse receivables (1)		—		—		1,002,000		432,910		—			1,434,910
Income taxes receivable		587		4,399		—		61,425		(25	)		66,386
Prepaid expenses		—		—		77,336		140,713		—			218,049
Other current assets		—		—		60,622		141,242		—			201,864
Total Current Assets		594		12,120		2,657,638		3,134,407		(25	)		5,804,734
Property and equipment, net		—		—		400,273		173,993		—			574,266
Goodwill		—		—		1,684,808		1,450,400		—			3,135,208
Other intangible assets, net		—		—		753,706		646,993		—			1,400,699
Investments in unconsolidated subsidiaries		—		—		188,353		45,281		—			233,634
Investments in consolidated subsidiaries		5,143,175		4,988,534		2,807,898		—		(12,939,607	)		—
Intercompany loan receivable		—		2,690,873		700,000		—		(3,390,873	)		—
Deferred tax assets, net		—		—		30,673		94,250		(30,673	)		94,250
Other assets, net		—		18,306		275,452		115,465		—			409,223
Total Assets	$	5,143,769	$	7,709,833	$	9,498,801	$	5,660,789	$	(16,361,178	)	$	11,652,014
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	—	$	7,788	$	482,449	$	1,015,623	$	—		$	1,505,860
Compensation and employee benefits payable		—		626		412,761		350,167		—			763,554
Accrued bonus and profit sharing		—		—		413,826		313,240		—			727,066
Income taxes payable		—		—		34,581		47,550		(25	)		82,106
Short-term borrowings:										—
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) (1)		—		—		999,172		417,081		—			1,416,253
Other		—		—		16		—		—			16
Total short-term borrowings		—		—		999,188		417,081		—			1,416,269
Current maturities of long-term debt		—		—		—		10		—			10
Other current liabilities		—		84		40,500		15,928		—			56,512
Total Current Liabilities		—		8,498		2,383,305		2,159,599		(25	)		4,551,377
Long-Term Debt, net:
Long-term debt, net		—		2,551,568		—		—		—			2,551,568
Intercompany loan payable		1,348,299		—		1,826,325		216,249		(3,390,873	)		—
Total Long-Term Debt, net		1,348,299		2,551,568		1,826,325		216,249		(3,390,873	)		2,551,568
Deferred tax liabilities, net		—		—		—		156,455		(30,673	)		125,782
Non-current tax liabilities		—		—		16,037		1,814		—			17,851
Other liabilities		—		6,592		284,600		262,408		—			553,600
Total Liabilities		1,348,299		2,566,658		4,510,267		2,796,525		(3,421,571	)		7,800,178
Commitments and contingencies		—		—		—		—		—			—
Equity:
CBRE Group, Inc. Stockholders’ Equity		3,795,470		5,143,175		4,988,534		2,807,898		(12,939,607	)		3,795,470
Non-controlling interests		—		—		—		56,366		—			56,366
Total Equity		3,795,470		5,143,175		4,988,534		2,864,264		(12,939,607	)		3,851,836
Total Liabilities and Equity	$	5,143,769	$	7,709,833	$	9,498,801	$	5,660,789	$	(16,361,178	)	$	11,652,014

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017				2016				2017				2016
United States dollar	$	1,831,597	51.6	%	$	1,687,692	52.8	%	$	5,212,192	52.8	%	$	4,927,214	53.3	%
British pound sterling		528,462	14.9	%		486,195	15.2	%		1,447,535	14.7	%		1,453,854	15.7	%
euro		414,918	11.7	%		377,930	11.8	%		1,136,860	11.5	%		1,073,762	11.6	%
Australian dollar		104,704	2.9	%		91,138	2.9	%		281,368	2.8	%		250,323	2.7	%
Canadian dollar		100,844	2.8	%		80,822	2.5	%		253,813	2.6	%		220,833	2.4	%
Indian rupee		78,281	2.2	%		61,001	1.9	%		226,669	2.3	%		171,475	1.9	%
Chinese yuan		61,761	1.7	%		49,945	1.6	%		164,320	1.7	%		146,898	1.6	%
Japanese yen		59,365	1.7	%		51,641	1.6	%		153,731	1.6	%		140,412	1.5	%
Singapore dollar		53,787	1.5	%		44,266	1.4	%		162,600	1.6	%		122,422	1.3	%
Swiss franc		36,421	1.0	%		39,195	1.2	%		104,592	1.1	%		102,383	1.1	%
Hong Kong dollar		33,339	0.9	%		24,656	0.8	%		85,266	0.9	%		71,186	0.8	%
Brazilian real		32,067	0.9	%		23,580	0.7	%		70,215	0.7	%		54,536	0.6	%
Mexican peso		29,153	0.8	%		21,228	0.7	%		75,562	0.8	%		58,815	0.6	%
Polish zloty		19,227	0.5	%		15,861	0.5	%		43,995	0.4	%		46,203	0.5	%
Danish krone		18,531	0.5	%		18,061	0.6	%		53,435	0.5	%		48,501	0.5	%
Thai baht		14,568	0.4	%		9,612	0.3	%		36,738	0.4	%		28,164	0.3	%
Swedish krona		13,056	0.4	%		12,905	0.4	%		41,123	0.4	%		41,234	0.4	%
Other currencies		119,896	3.6	%		97,759	3.1	%		323,382	3.2	%		289,543	3.2	%
Total revenue	$	3,549,977	100.0	%	$	3,193,487	100.0	%	$	9,873,396	100.0	%	$	9,247,758	100.0	%