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Form 10-Q CBRE GROUP, INC. For: Sep 30

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November 10, 2014 3:24 PM EST
Table of Contents

�

�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

�

FORM 10-Q

�

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

For the quarterly period ended September�30, 2014

or

�

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

For the Transition Period from �������������������� to ��������������������

Commission File Number 001 � 32205

CBRE GROUP, INC.

(Exact name of Registrant as specified in its charter)

�

Delaware � 94-3391143

(State or other jurisdiction of

incorporation or organization)

 �

(I.R.S. Employer

Identification Number)

400 South Hope Street, 25th Floor

Los Angeles, California

 � 90071
(Address of principal executive offices) � (Zip Code)
(213) 613-3333 � Not applicable
(Registrant�s telephone number, including area code) �

(Former name, former address and

former fiscal year if changed since last report)

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��x����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��x����No���.

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

�

Large�accelerated�filer�� � x � �� Accelerated�filer � �
Non-accelerated filer � � � �� Smaller�reporting�company � �

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

The number of shares of Class�A common stock outstanding at October�31, 2014 was 332,866,965.

�

�

�

Table of Contents

FORM 10-Q

September�30, 2014

TABLE OF CONTENTS

�

PART I - FINANCIAL INFORMATION �� Page �

Item�1.

 � Financial Statements ��
� Consolidated Balance Sheets at September�30, 2014 (Unaudited) and December�31, 2013 �� � 3 ��
�

Consolidated Statements of Operations for the three and nine months ended September� 30, 2014 and 2013 (Unaudited)

 �� � 4 ��
�

Consolidated Statements of Comprehensive Income for the three and nine months ended September� 30, 2014 and 2013 (Unaudited)

 �� � 5 ��
�

Consolidated Statements of Cash Flows for the nine months ended September� 30, 2014 and 2013 (Unaudited)

 �� � 6 ��
�

Consolidated Statement of Equity for the nine months ended September�30, 2014 (Unaudited)

 �� � 7 ��
�

Notes to Consolidated Financial Statements (Unaudited)

 �� � 8 ��

Item�2.

 �

Management�s Discussion and Analysis of Financial Condition and Results of Operations

 �� � 42 ��

Item�3.

 �

Quantitative and Qualitative Disclosures About Market Risk

 �� � 69 ��

Item�4.

 �

Controls and Procedures

 �� � 70 ��

PART II - OTHER INFORMATION

��

Item�1.

 �

Legal Proceedings

 �� � 71 ��

Item�1A.

 �

Risk Factors

 �� � 71 ��

Item�2.

 �

Unregistered Sales of Equity Securities and Use of Proceeds

 �� � 71 ��

Item�6.

 �

Exhibits

 �� � 71 ��

Signatures

�� � 74 ��

�

2

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

�

� �� September�30,
2014		 � � December�31,
2013		 �
� �� (Unaudited) � � � �
ASSETS �� �

Current Assets:

 �� �

Cash and cash equivalents

 �� $ 615,358 �� � $ 491,912 ��

Restricted cash

 �� � 55,580 �� � � 61,155 ��

Receivables, less allowance for doubtful accounts of $43,621 and $40,262 at September�30, 2014 and December�31, 2013, respectively

 �� � 1,608,628 �� � � 1,486,489 ��

Warehouse receivables

 �� � 638,134 �� � � 381,545 ��

Trading securities

 �� � 69,500 �� � � 58,442 ��

Income taxes receivable

 �� � 58,705 �� � � ��� ��

Prepaid expenses

 �� � 123,746 �� � � 125,151 ��

Deferred tax assets, net

 �� � 174,271 �� � � 188,533 ��

Real estate and other assets held for sale

 �� � 32,846 �� � � ��� ��

Real estate under development

 �� � ��� �� � � 19,133 ��

Available for sale securities

 �� � 663 �� � � ��� ��

Other current assets

 �� � 83,606 �� � � 67,452 ��
��

�

�

 � �

�

�

 �

Total Current Assets

 �� � 3,461,037 �� � � 2,879,812 ��

Property and equipment, net

 �� � 455,859 �� � � 458,596 ��

Goodwill

 �� � 2,314,943 �� � � 2,290,474 ��

Other intangible assets, net of accumulated amortization of $440,436 and $348,566 at September�30, 2014 and December�31, 2013, respectively

 �� � 815,366 �� � � 841,228 ��

Investments in unconsolidated subsidiaries

 �� � 219,437 �� � � 198,696 ��

Real estate under development

 �� � 827 �� � � 822 ��

Real estate held for investment

 �� � 37,796 �� � � 106,999 ��

Available for sale securities

 �� � 65,147 �� � � 56,800 ��

Other assets, net

 �� � 159,542 �� � � 164,987 ��
��

�

�

 � �

�

�

 �

Total Assets

 �� $ 7,529,954 �� � $ 6,998,414 ��
��

�

�

 � �

�

�

 �
LIABILITIES AND EQUITY �� �

Current Liabilities:

 �� �

Accounts payable and accrued expenses

 �� $ 710,408 �� � $ 817,519 ��

Compensation and employee benefits payable

 �� � 554,161 �� � � 486,993 ��

Accrued bonus and profit sharing

 �� � 472,376 �� � � 612,114 ��

Income taxes payable

 �� � ��� �� � � 11,111 ��

Short-term borrowings:

 �� �

Warehouse lines of credit

 �� � 631,812 �� � � 374,597 ��

Revolving credit facility

 �� � 149,159 �� � � 142,484 ��

Other

 �� � 4,399 �� � � 16 ��
��

�

�

 � �

�

�

 �

Total short-term borrowings

 �� � 785,370 �� � � 517,097 ��

Current maturities of long-term debt

 �� � 42,375 �� � � 42,245 ��

Notes payable on real estate

 �� � 23,147 �� � � 62,017 ��

Liabilities related to real estate and other assets held for sale

 �� � 35,822 �� � � ��� ��

Other current liabilities

 �� � 53,350 �� � � 56,644 ��
��

�

�

 � �

�

�

 �

Total Current Liabilities

 �� � 2,677,009 �� � � 2,605,740 ��

Long-Term Debt:

 �� �

5.00% senior notes

 �� � 800,000 �� � � 800,000 ��

Senior secured term loans

 �� � 615,875 �� � � 645,613 ��

6.625% senior notes

 �� � 350,000 �� � � 350,000 ��

5.25% senior notes

 �� � 300,000 �� � � ��� ��

Other long-term debt

 �� � 1,452 �� � � 2,822 ��
��

�

�

 � �

�

�

 �

Total Long-Term Debt

 �� � 2,067,327 �� � � 1,798,435 ��

Notes payable on real estate

 �� � 16,886 �� � � 68,455 ��

Deferred tax liabilities, net

 �� � 125,945 �� � � 160,777 ��

Non-current tax liabilities

 �� � 65,036 �� � � 65,520 ��

Pension liability

 �� � 59,912 �� � � 68,012 ��

Other liabilities

 �� � 335,001 �� � � 295,469 ��
��

�

�

 � �

�

�

 �

Total Liabilities

 �� � 5,347,116 �� � � 5,062,408 ��

Commitments and contingencies

 �� � ��� �� � � ��� ��

Equity:

 �� �

CBRE Group, Inc. Stockholders� Equity:

 �� �

Class�A common stock; $0.01 par value; 525,000,000 shares authorized; 332,829,377 and 331,927,166 shares issued and outstanding at September�30, 2014 and December�31, 2013, respectively

 �� � 3,328 �� � � 3,319 ��

Additional paid-in capital

 �� � 1,022,986 �� � � 981,997 ��

Accumulated earnings

 �� � 1,336,818 �� � � 1,056,592 ��

Accumulated other comprehensive loss

 �� � (217,197 )� � � (146,123 )�
��

�

�

 � �

�

�

 �

Total CBRE Group, Inc. Stockholders� Equity

 �� � 2,145,935 �� � � 1,895,785 ��

Non-controlling interests

 �� � 36,903 �� � � 40,221 ��
��

�

�

 � �

�

�

 �

Total Equity

 �� � 2,182,838 �� � � 1,936,006 ��
��

�

�

 � �

�

�

 �

Total Liabilities and Equity

 �� $ 7,529,954 �� � $ 6,998,414 ��
��

�

�

 � �

�

�

 �

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

�

3

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share data)

�

� � Three Months Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� � 2014 � � 2013 � � 2014 � � 2013 �

Revenue

 � $ 2,275,076 �� � $ 1,733,866 �� � $ 6,262,724 �� � $ 4,950,943 ��

Costs and expenses:

 � � � �

Cost of services

 � � 1,428,986 �� � � 1,032,348 �� � � 3,904,919 �� � � 2,912,391 ��

Operating, administrative and other

 � � 601,026 �� � � 496,615 �� � � 1,695,623 �� � � 1,465,614 ��

Depreciation and amortization

 � � 67,159 �� � � 47,524 �� � � 195,657 �� � � 137,406 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total costs and expenses

 � � 2,097,171 �� � � 1,576,487 �� � � 5,796,199 �� � � 4,515,411 ��

Gain on disposition of real estate

 � � 7,235 �� � � 740 �� � � 37,102 �� � � 11,385 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Operating income

 � � 185,140 �� � � 158,119 �� � � 503,627 �� � � 446,917 ��

Equity income from unconsolidated subsidiaries

 � � 43,300 �� � � 13,347 �� � � 67,564 �� � � 29,640 ��

Other (loss) income

 � � (113 )� � � 5,125 �� � � 11,052 �� � � 9,352 ��

Interest income

 � � 1,598 �� � � 1,484 �� � � 4,321 �� � � 5,002 ��

Interest expense

 � � 27,841 �� � � 27,783 �� � � 84,326 �� � � 107,710 ��

Write-off of financing costs

 � � 23,087 �� � � ��� �� � � 23,087 �� � � 56,295 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income from continuing operations before provision for income taxes

 � � 178,997 �� � � 150,292 �� � � 479,151 �� � � 326,906 ��

Provision for income taxes

 � � 69,305 �� � � 56,126 �� � � 171,318 �� � � 120,945 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income from continuing operations

 � � 109,692 �� � � 94,166 �� � � 307,833 �� � � 205,961 ��

Income from discontinued operations, net of income taxes

 � � ��� �� � � ��� �� � � ��� �� � � 24,294 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � � 109,692 �� � � 94,166 �� � � 307,833 �� � � 230,255 ��

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

 � � 2,593 �� � � (278 )� � � 27,607 �� � � 28,363 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 107,099 �� � $ 94,444 �� � $ 280,226 �� � $ 201,892 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

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

 � � � �

Income from continuing operations attributable to CBRE Group, Inc.

 � $ 0.32 �� � $ 0.29 �� � $ 0.85 �� � $ 0.61 ��

Income from discontinued operations attributable to CBRE Group, Inc.

 � � ��� �� � � ��� �� � � ��� �� � � 0.01 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 0.32 �� � $ 0.29 �� � $ 0.85 �� � $ 0.62 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Weighted average shares outstanding for basic income per share

 � � 330,419,006 �� � � 328,307,961 �� � � 330,197,240 �� � � 327,502,672 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

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

 � � � �

Income from continuing operations attributable to CBRE Group, Inc.

 � $ 0.32 �� � $ 0.28 �� � $ 0.84 �� � $ 0.60 ��

Income from discontinued operations attributable to CBRE Group, Inc.

 � � ��� �� � � ��� �� � � ��� �� � � 0.01 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 0.32 �� � $ 0.28 �� � $ 0.84 �� � $ 0.61 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Weighted average shares outstanding for diluted income per share

 � � 334,293,046 �� � � 332,061,402 �� � � 333,855,131 �� � � 331,504,050 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Amounts attributable to CBRE Group, Inc. shareholders

 � � � �

Income from continuing operations, net of tax

 � $ 107,099 �� � $ 94,444 �� � $ 280,226 �� � $ 199,811 ��

Income from discontinued operations, net of tax

 � � ��� �� � � ��� �� � � ��� �� � � 2,081 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � $ 107,099 �� � $ 94,444 �� � $ 280,226 �� � $ 201,892 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

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

�

4

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

�

� �� Three Months Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� �� 2014 � � 2013 � � 2014 � � 2013 �

Net income

 �� $ 109,692 �� � $ 94,166 �� � $ 307,833 �� � $ 230,255 ��

Other comprehensive (loss) income:

 �� �

Foreign currency translation (loss) gain

 �� � (109,122 )� � � 45,684 �� � � (72,676 )� � � (1,631 )�

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

 �� � 1,844 �� � � 1,793 �� � � 5,470 �� � � 5,304 ��

Unrealized gains (losses) on interest rate swaps and interest rate caps, net

 �� � 854 �� � � (1,962 )� � � (3,460 )� � � 3,645 ��

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

 �� � 186 �� � � 23 �� � � (670 )� � � (361 )�

Other, net

 �� � 76 �� � � (852 )� � � 211 �� � � 344 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total other comprehensive (loss) income

 �� � (106,162 )� � � 44,686 �� � � (71,125 )� � � 7,301 ��

Comprehensive income

 �� � 3,530 �� � � 138,852 �� � � 236,708 �� � � 237,556 ��

Less: Comprehensive income (loss) attributable to non-controlling interests

 �� � 2,533 �� � � (296 )� � � 27,556 �� � � 27,587 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Comprehensive income attributable to CBRE Group, Inc.

 �� $ 997 �� � $ 139,148 �� � $ 209,152 �� � $ 209,969 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

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

�

5

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

�

� �� Nine Months Ended
September�30,		 �
� �� 2014 � � 2013 �

CASH FLOWS FROM OPERATING ACTIVITIES:

 �� �

Net income

 �� $ 307,833 �� � $ 230,255 ��

Adjustments to reconcile net income to net cash provided by operating activities:

 �� �

Depreciation and amortization

 �� � 195,657 �� � � 138,276 ��

Amortization and write-off of financing costs

 �� � 11,172 �� � � 27,022 ��

Amortization and write-off of debt discount

 �� � ��� �� � � 9,477 ��

Write-down of impaired assets

 �� � 8,615 �� � � ��� ��

Gain on sale of loans, servicing rights and other assets

 �� � (60,299 )� � � (65,820 )�

Net realized and unrealized gains from investments

 �� � (10,637 )� � � (9,352 )�

Gain on disposition of real estate held for investment

 �� � (28,005 )� � � (17,192 )�

Equity income from unconsolidated subsidiaries

 �� � (67,564 )� � � (29,640 )�

Provision for doubtful accounts

 �� � 6,425 �� � � 6,203 ��

Deferred income taxes

 �� � 6,304 �� � � (4,588 )�

Compensation expense related to stock options and non-vested stock awards

 �� � 44,130 �� � � 37,542 ��

Incremental tax benefit from stock options exercised

 �� � (803 )� � � (9,336 )�

Distribution of earnings from unconsolidated subsidiaries

 �� � 18,556 �� � � 15,114 ��

Tenant concessions received

 �� � 15,356 �� � � 10,658 ��

Purchase of trading securities

 �� � (50,973 )� � � (119,232 )�

Proceeds from sale of trading securities

 �� � 47,830 �� � � 157,770 ��

Proceeds from securities sold, not yet purchased

 �� � ��� �� � � 48,545 ��

Securities purchased to cover short sales

 �� � ��� �� � � (98,321 )�

(Increase) decrease in receivables

 �� � (138,937 )� � � 29,492 ��

Increase in prepaid expenses and other assets

 �� � (25,761 )� � � (11,591 )�

Decrease in real estate held for sale and under development

 �� � 16,417 �� � � 130,543 ��

Decrease in accounts payable and accrued expenses

 �� � (44,543 )� � � (44,522 )�

Decrease in compensation and employee benefits payable and accrued bonus and profit sharing

 �� � (74,914 )� � � (154,003 )�

Increase in income taxes receivable/payable

 �� � (99,872 )� � � (5,828 )�

Increase (decrease) in other liabilities

 �� � 421 �� � � (25,868 )�

Other operating activities, net

 �� � (7,930 )� � � (10,964 )�
��

�

�

 � �

�

�

 �

Net cash provided by operating activities

 �� � 68,478 �� � � 234,640 ��

CASH FLOWS FROM INVESTING ACTIVITIES:

 �� �

Capital expenditures

 �� � (92,618 )� � � (78,743 )�

Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired

 �� � (132,541 )� � � (63,603 )�

Contributions to unconsolidated subsidiaries

 �� � (40,103 )� � � (32,931 )�

Distributions from unconsolidated subsidiaries

 �� � 62,978 �� � � 38,847 ��

Net proceeds from disposition of real estate held for investment

 �� � 77,278 �� � � 110,818 ��

Additions to real estate held for investment

 �� � (5,043 )� � � (2,412 )�

Proceeds from the sale of servicing rights and other assets

 �� � 18,169 �� � � 26,226 ��

Decrease in restricted cash

 �� � 4,431 �� � � 22,134 ��

Purchase of available for sale securities

 �� � (68,984 )� � � (53,387 )�

Proceeds from the sale of available for sale securities

 �� � 61,357 �� � � 52,719 ��

Other investing activities, net

 �� � 570 �� � � 6,594 ��
��

�

�

 � �

�

�

 �

Net cash (used in) provided by investing activities

 �� � (114,506 )� � � 26,262 ��

CASH FLOWS FROM FINANCING ACTIVITIES:

 �� �

Proceeds from senior secured term loans

 �� � ��� �� � � 715,000 ��

Repayment of senior secured term loans

 �� � (29,738 )� � � (1,629,105 )�

Proceeds from revolving credit facility

 �� � 1,688,568 �� � � 399,127 ��

Repayment of revolving credit facility

 �� � (1,672,359 )� � � (382,414 )�

Proceeds from issuance of 5.25% senior notes

 �� � 300,000 �� � � ��� ��

Proceeds from issuance of 5.00% senior notes

 �� � ��� �� � � 800,000 ��

Repayment of 11.625% senior subordinated notes

 �� � ��� �� � � (450,000 )�

Proceeds from notes payable on real estate held for investment

 �� � 5,022 �� � � 2,473 ��

Repayment of notes payable on real estate held for investment

 �� � (27,241 )� � � (73,580 )�

Proceeds from notes payable on real estate held for sale and under development

 �� � 4,884 �� � � 6,015 ��

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

 �� � (44,959 )� � � (112,828 )�

Proceeds from short-term borrowings

 �� � 4,545 �� � � 4,724 ��

Shares repurchased for payment of taxes on stock awards

 �� � (16,656 )� � � (16,628 )�

Proceeds from exercise of stock options

 �� � 4,466 �� � � 4,924 ��

Incremental tax benefit from stock options exercised

 �� � 803 �� � � 9,336 ��

Non-controlling interests contributions

 �� � 1,415 �� � � 462 ��

Non-controlling interests distributions

 �� � (31,998 )� � � (84,918 )�

Payment of financing costs

 �� � (3,149 )� � � (29,322 )�

Other financing activities, net

 �� � (1,446 )� � � (2,910 )�
��

�

�

 � �

�

�

 �

Net cash provided by (used in) financing activities

 �� � 182,157 �� � � (839,644 )�

Effect of currency exchange rate changes on cash and cash equivalents

 �� � (12,683 )� � � (7,934 )�
��

�

�

 � �

�

�

 �

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 �� � 123,446 �� � � (586,676 )�

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD

 �� � 491,912 �� � � 1,089,297 ��
��

�

�

 � �

�

�

 �

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

 �� $ 615,358 �� � $ 502,621 ��
��

�

�

 � �

�

�

 �

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 �� �

Cash paid during the period for:

 �� �

Interest

 �� $ 80,636 �� � $ 96,238 ��
��

�

�

 � �

�

�

 �

Income tax payments, net

 �� $ 266,210 �� � $ 137,042 ��
��

�

�

 � �

�

�

 �

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

�

6

Table of Contents

CBRE GROUP, INC.

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

(Dollars in thousands)

�

� �� CBRE Group, Inc. Shareholders � � � � � � �
� �� Class A
common
stock		 � � Additional
paid-in
capital		 � � Accumulated
earnings		 � �� Accumulated
other
comprehensive
loss		 � � Non-
controlling
interests		 � � Total �

Balance at December�31, 2013

 �� $ 3,319 �� � $ 981,997 �� � $ 1,056,592 �� �� $ (146,123 )� � $ 40,221 �� � $ 1,936,006 ��

Net income

 �� � ��� �� � � ��� �� � � 280,226 �� �� � ��� �� � � 27,607 �� � � 307,833 ��

Stock options exercised (including tax benefit)

 �� � 4 �� � � 5,265 �� � � ��� �� �� � ��� �� � � ��� �� � � 5,269 ��

Restricted stock awards vesting (including tax benefit)

 �� � 7 �� � � 8,126 �� � � ��� �� �� � ��� �� � � ��� �� � � 8,133 ��

Compensation expense for stock options and non-vested stock awards

 �� � ��� �� � � 44,130 �� � � ��� �� �� � ��� �� � � ��� �� � � 44,130 ��

Shares repurchased for payment of taxes on stock awards

 �� � (2 )� � � (16,654 )� � � ��� �� �� � ��� �� � � ��� �� � � (16,656 )�

Foreign currency translation loss

 �� � ��� �� � � ��� �� � � ��� �� �� � (72,625 )� � � (51 )� � � (72,676 )�

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

 �� � ��� �� � � ��� �� � � ��� �� �� � 5,470 �� � � ��� �� � � 5,470 ��

Unrealized losses on interest rate swaps and interest rate caps, net

 �� � ��� �� � � ��� �� � � ��� �� �� � (3,460 )� � � ��� �� � � (3,460 )�

Unrealized holding losses on available for sale securities, net

 �� � ��� �� � � ��� �� � � ��� �� �� � (670 )� � � ��� �� � � (670 )�

Contributions from non-controlling interests

 �� � ��� �� � � ��� �� � � ��� �� �� � ��� �� � � 1,415 �� � � 1,415 ��

Distributions to non-controlling interests

 �� � ��� �� � � ��� �� � � ��� �� �� � ��� �� � � (31,998 )� � � (31,998 )�

Other

 �� � ��� �� � � 122 �� � � ��� �� �� � 211 �� � � (291 )� � � 42 ��
��

�

�

 � �

�

�

 � �

�

�

 � ��

�

�

 � �

�

�

 � �

�

�

 �

Balance at September�30, 2014

 �� $ 3,328 �� � $ 1,022,986 �� � $ 1,336,818 �� �� $ (217,197 )� � $ 36,903 �� � $ 2,182,838 ��
��

�

�

 � �

�

�

 � �

�

�

 � ��

�

�

 � �

�

�

 � �

�

�

 �

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

�

7

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying consolidated financial statements of CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as the �company�, �we�, �us� and �our�), 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 (GAAP) for annual financial statements. In the opinion of management, 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 management to make estimates and assumptions about future events. 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, 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 management�s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the current economic environment, and adjusts 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 2013 financial statements to conform with the 2014 presentation.

The results of operations for the three and nine months ended September�30, 2014 are not necessarily indicative of the results of operations to be expected for the year ending December�31, 2014. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended), which contains the latest available audited consolidated financial statements and notes thereto, which are as of and for the year ended December�31, 2013.

2. New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, �Revenue from Contracts with Customers (Topic 606).� This ASU 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. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective on January�1, 2017. This ASU permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of this ASU on our ongoing financial reporting.

3. Goodwill

On December�23, 2013, we acquired 100% of the outstanding stock of London-based Norland Managed Services, Ltd (Norland), which fortified our real estate outsourcing platform in Europe within our EMEA segment (Norland Acquisition). Norland is a premier provider of building technical engineering services that enables us to self-perform these services in Europe and adds to our expertise in the highly specialized critical environments market. The purchase price for the Norland Acquisition was approximately $474 million, with $433.9 million paid at closing and the remaining contingent consideration (described below) paid in July 2014. The Norland Acquisition was financed with cash on hand and borrowings under our revolving credit facility. On

�

8

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

December�23, 2013, we also issued an aggregate of 362,916 shares of non-vested Class�A common stock to certain members of senior management of Norland in connection with this acquisition.

The acquisition agreement provided for a contingent payment of up to 50.0�million British pounds sterling if certain performance criteria were met post-acquisition. In measuring the fair value of the contingent consideration at acquisition date, we assigned probabilities of achievement to the performance criteria, based on the nature of the performance criteria and our due diligence performed at the time of the acquisition. The fair value of this contingent consideration at acquisition date was based on the weighted probability of achievement of a certain earnings before interest, taxes, depreciation and amortization (EBITDA) level for the twelve months ended March�31, 2014, which ranged from 22.1�million to 35.0�million British pounds sterling. We valued this contingent payment at 25.5�million British pounds sterling (or $41.8 million) at acquisition date.

During the nine months ended September�30, 2014, the contingent payment was adjusted to 24.4�million British pounds sterling (or $40.0 million) based upon the EBITDA achieved for the twelve months ended March�31, 2014. The reduction of approximately 1.1�million British pounds sterling (or $1.8 million) from what was initially recorded at acquisition date was reflected in earnings for the nine months ended September�30, 2014 in the accompanying consolidated statements of operations. The finalized contingent consideration due of 24.4�million British pounds sterling (approximately $40.0 million) was paid in July 2014. No further amounts are due under the Norland Acquisition agreement.

The purchase accounting for the Norland Acquisition has been finalized. The excess purchase price over the estimated fair value of net assets acquired has been recorded to goodwill. The goodwill arising from the Norland Acquisition consists largely of the synergies and economies of scale expected from combining the operations acquired from Norland with ours. No goodwill recorded in connection with the Norland Acquisition is deductible for tax purposes.

Unaudited pro forma results, assuming the Norland Acquisition had occurred as of January�1, 2013 for purposes of the 2013 pro forma disclosures, are presented below. They include certain adjustments for the three and nine months ended September�30, 2013, including $9.5 million and $30.4 million, respectively, of increased amortization expense as a result of intangible assets acquired in the Norland Acquisition, $0.3 million and $0.9 million, respectively, of additional interest expense as a result of debt incurred to finance the Norland Acquisition, and the tax impact of the pro forma adjustments. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what operating results would have been had the Norland Acquisition occurred on January�1, 2013 and may not be indicative of future operating results (dollars in thousands, except share data):

�

� �� Three Months
Ended
September�30,�2013		 � �� Nine Months
Ended
September�30,�2013		 �

Revenue

 �� $ 1,885,915 �� �� $ 5,407,091 ��

Operating income

 �� $ 154,265 �� �� $ 433,508 ��

Net income attributable to CBRE Group, Inc.

 �� $ 90,601 �� �� $ 188,944 ��

Basic income per share

 �� $ 0.28 �� �� $ 0.58 ��

Weighted average shares outstanding for basic income per share

 �� � 328,307,961 �� �� � 327,502,672 ��

Diluted income per share

 �� $ 0.27 �� �� $ 0.57 ��

Weighted average shares outstanding for diluted income per share

 �� � 332,061,402 �� �� � 331,504,050 ��

�

9

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

During the nine months ended September�30, 2014, we completed eight in-fill acquisitions, most notably a commercial real estate service provider in Chicago, our former affiliate company in Thailand, a technical real estate consulting firm based in Germany, and project management companies in Germany and Australia.

4. Variable Interest Entities (VIEs)

A consolidated subsidiary (the Venture) in our Global Investment Management segment sponsored investments by third-party investors in certain commercial properties through the formation of tenant-in-common limited liability companies and Delaware Statutory Trusts (collectively referred to as the Entities) that were owned by the third-party investors. The Venture also formed and was a member of a limited liability company for each property that served as master tenant (Master Tenant). Each Master Tenant leased the property from the Entities through a master lease agreement. Pursuant to the master lease agreements, the Master Tenant had the power to direct the day-to-day asset management activities that most significantly impacted the economic performance of the Entities. As a result, the Entities were deemed to be VIEs since the third-party investors holding the equity investment at risk in the Entities did not direct the day-to-day activities that most significantly impacted the economic performance of the properties held by the Entities. The Venture made voluntary contributions to each of these properties to support their operations beyond the cash flow generated by the properties themselves and such financial support was significant enough that the Venture was deemed to be the primary beneficiary of each Entity. During the first half of 2014, the remaining two commercial properties were sold. As of September�30, 2014, we did not hold any interests in VIEs in which we were the primary beneficiary.

No financial support was provided by the Venture to the Entities during the nine months ended September�30, 2014 and 2013. The assets of the Entities were the sole collateral for the mortgage notes payable and other liabilities of the Entities and, as such, the creditors and equity investors of these Entities had no recourse to our assets held outside of these Entities.

Investments in real estate of $39.9 million and nonrecourse mortgage notes payable of $41.7 million ($0.9 million of which is current) attributable to the Entities were included in real estate assets held for sale or investment and notes payable on real estate, respectively, in the accompanying consolidated balance sheets as of December�31, 2013.�In addition, a non-controlling deficit of $1.8 million in the accompanying consolidated balance sheets as of December�31, 2013 was attributable to the Entities.

Operating results relating to the Entities for the three and nine months ended September�30, 2014 and 2013 include the following (dollars in thousands):

�

� �� Three�Months�Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� �� ���2014��� � �� ���2013��� � � 2014 � �� 2013 �

Revenue

 �� $ ��� �� �� $ 2,103 �� � $ 3,561 �� �� $ 6,132 ��

Operating, administrative and other expenses

 �� $ ��� �� �� $ 1,154 �� � $ 2,588 �� �� $ 3,200 ��

Gain on disposition of real estate

 �� $ ��� �� �� $ ��� �� � $ 23,028 �� �� $ ��� ��

Income from discontinued operations, net of income taxes

 �� $ ��� �� �� $ ��� �� � $ ��� �� �� $ 15,236 ��

Net (loss) income attributable to non-controlling interests

 �� $ ��� �� �� $ (399 )� � $ 21,724 �� �� $ 14,152 ��

We hold variable interests in certain VIEs in our Global Investment Management and Development Services segments 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.

�

10

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

As of September�30, 2014 and December�31, 2013, our maximum exposure to loss related to the VIEs which are not consolidated was as follows (dollars in thousands):

�

� �� September�30,
2014		 � �� December�31,
2013		 �

Investments in unconsolidated subsidiaries

 �� $ 28,245 �� �� $ 33,787 ��

Other assets, current

 �� � 3,855 �� �� � 3,547 ��

Co-investment commitments

 �� � 200 �� �� � 200 ��
��

�

�

 � ��

�

�

 �

Maximum exposure to loss

 �� $ 32,300 �� �� $ 37,534 ��
��

�

�

 � ��

�

�

 �

5. Fair Value Measurements

The �Fair Value Measurements and Disclosures� Topic of the FASB Accounting Standards Codification (ASC) (Topic 820) defines fair value as the exchange price that would be received for 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 and out of Level 1 and Level 2 during the three and nine months ended September�30, 2014 and 2013.

�

11

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�30, 2014 and December�31, 2013 (dollars in thousands):

�

� �� As of September�30, 2014 �
� �� Fair�Value�Measured�and�Recorded�Using � �� � �
� �� ����Level�1���� � �� ����Level�2���� � �� ����Level�3���� � �� Total �

Assets

 �� �� �� ��

Available for sale securities:

 �� �� �� ��

U.S. treasury securities

 �� $ 6,721 �� �� $ ��� �� �� $ ��� �� �� $ 6,721 ��

Debt securities issued by U.S. federal agencies

 �� � ��� �� �� � 6,820 �� �� � ��� �� �� � 6,820 ��

Corporate debt securities

 �� � ��� �� �� � 18,559 �� �� � ��� �� �� � 18,559 ��

Asset-backed securities

 �� � ��� �� �� � 5,641 �� �� � ��� �� �� � 5,641 ��

Collateralized mortgage obligations

 �� � ��� �� �� � 1,978 �� �� � ��� �� �� � 1,978 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total debt securities

 �� � 6,721 �� �� � 32,998 �� �� � ��� �� �� � 39,719 ��

Equity securities

 �� � 26,091 �� �� � ��� �� �� � ��� �� �� � 26,091 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total available for sale securities

 �� � 32,812 �� �� � 32,998 �� �� � ��� �� �� � 65,810 ��

Trading securities

 �� � 69,500 �� �� � ��� �� �� � ��� �� �� � 69,500 ��

Warehouse receivables

 �� � ��� �� �� � 638,134 �� �� � ��� �� �� � 638,134 ��

Foreign currency exchange forward contracts

 �� � ��� �� �� � 7,257 �� �� � ��� �� �� � 7,257 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total assets at fair value

 �� $ 102,312 �� �� $ 678,389 �� �� $ ��� �� �� $ 780,701 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Liabilities

 �� �� �� ��

Interest rate swaps

 �� $ ��� �� �� $ 25,837 �� �� $ ��� �� �� $ 25,837 ��

Foreign currency exchange forward contracts

 �� � ��� �� �� � 40 �� �� � ��� �� �� � 40 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total liabilities at fair value

 �� $ ��� �� �� $ 25,877 �� �� $ ��� �� �� $ 25,877 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

�

� �� As of December 31, 2013 �
� �� Fair�Value�Measured�and�Recorded�Using � �� � �
� �� ����Level�1���� � �� ����Level�2���� � �� ����Level�3���� � �� Total �

Assets

 �� �� �� ��

Available for sale securities:

 �� �� �� ��

U.S. treasury securities

 �� $ 3,688 �� �� $ ��� �� �� $ ��� �� �� $ 3,688 ��

Debt securities issued by U.S. federal agencies

 �� � ��� �� �� � 6,528 �� �� � ��� �� �� � 6,528 ��

Corporate debt securities

 �� � ��� �� �� � 17,456 �� �� � ��� �� �� � 17,456 ��

Asset-backed securities

 �� � ��� �� �� � 3,381 �� �� � ��� �� �� � 3,381 ��

Collateralized mortgage obligations

 �� � ��� �� �� � 2,720 �� �� � ��� �� �� � 2,720 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total debt securities

 �� � 3,688 �� �� � 30,085 �� �� � ��� �� �� � 33,773 ��

Equity securities

 �� � 23,027 �� �� � ��� �� �� � ��� �� �� � 23,027 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total available for sale securities

 �� � 26,715 �� �� � 30,085 �� �� � ��� �� �� � 56,800 ��

Trading securities

 �� � 58,442 �� �� � ��� �� �� � ��� �� �� � 58,442 ��

Warehouse receivables

 �� � ��� �� �� � 381,545 �� �� � ��� �� �� � 381,545 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total assets at fair value

 �� $ 85,157 �� �� $ 411,630 �� �� $ ��� �� �� $ 496,787 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Liabilities

 �� �� �� ��

Interest rate swaps

 �� $ ��� �� �� $ 29,034 �� �� $ ��� �� �� $ 29,034 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Total liabilities at fair value

 �� $ ��� �� �� $ 29,034 �� �� $ ��� �� �� $ 29,034 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

�

12

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

Fair value measurements for our available for sale securities are obtained from independent pricing services which utilize observable market data that may include quoted market prices, dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument�s terms and conditions.

The trading securities are primarily in the United States (U.S.) and are generally valued at the last reported sales price on the day of valuation or, if no sales occurred on the valuation date, at the mean of the bid and asked prices on such date.

The fair values of the warehouse receivables are calculated based on already locked in security buy prices.�At September�30, 2014 and December�31, 2013, 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. These assets are classified as Level 2 in the fair value hierarchy as all inputs are readily observable.

The valuation of interest rate swaps and foreign currency exchange forward contracts is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate and foreign currency exchange forward curves. The fair values of interest rate swaps and foreign currency exchange forward contracts are determined using the market standard methodology of netting the discounted future estimated cash payments/receipts.�The estimated cash flows are based on an expectation of future interest rates or foreign currency exchange rates using forward curves derived from observable market interest rate and foreign currency exchange forward curves. To comply with the provisions of Topic 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty�s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with our adoption of ASU 2011-04, �Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs,� we made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of September�30, 2014, we have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

There were no significant non-recurring fair value measurements recorded during the three and nine months ended September�30, 2013. The following non-recurring fair value measurements were recorded during the three and nine months ended September�30, 2014 (dollars in thousands):

�

� �� Net�Carrying� Value
as of
September�30,�2014		 � �� Fair�Value�Measured�and�Recorded�Using � �� Total� Impairment
Charges for�the
Three�and�Nine�Months
Ended
September�30,�2014		 �
�� �� ��
�� �� ��
�� �� ��
�� �� ��
�� �� Level�1 � �� Level�2 � �� Level�3 � ��

Property and equipment

 �� $ ��� �� �� $ ��� �� �� $ ��� �� �� $ ��� �� �� $ 8,615 ��
�� �� �� �� ��

�

�

 �

�

13

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

Property and Equipment

During the three and nine months ended September�30, 2014, we recorded an asset impairment of $8.6 million in our Americas segment. This non-cash write-off resulted from the decision (due to a change in strategy) to abandon a property database platform that was being developed in the U.S. This impairment charge was included within operating, administrative and other expenses in the accompanying consolidated statements of operations.

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 based on market prices at the balance sheet date.

Trading and Available for Sale Securities: These investments are carried at their fair value.

Foreign Currency Exchange Forward Contracts: These assets and 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 (see Note 6).

Short-Term Borrowings: The majority of this balance represents outstanding amounts under our warehouse lines of credit for CBRE Capital Markets, Inc. (CBRE Capital Markets) and revolving credit facility. Due to the short-term nature and variable interest rates of these instruments, fair value approximates carrying value.

Senior Secured 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 secured term loans was approximately $654.3 million and $687.6 million at September�30, 2014 and December�31, 2013, respectively. Their actual carrying value totaled $655.5 million and $685.3 million at September�30, 2014 and December�31, 2013, respectively (see Note 11).

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 (see Note 6).

5.00% Senior Notes: Based on dealers� quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our 5.00% senior notes was $793.9 million and $769.4 million at September�30, 2014 and December�31, 2013, respectively. Their actual carrying value totaled $800.0 million at both September�30, 2014 and December�31, 2013.

5.25% Senior Notes: On September�26, 2014, CBRE Services, Inc. (CBRE), our wholly-owned subsidiary, issued $300.0 million in aggregate principal amount of 5.25% senior notes due March�15, 2025 (see Note 11). Based on dealers� quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our 5.25% senior notes was $298.9 million at September�30, 2014. Their actual carrying value totaled $300.0 million at September�30, 2014.

�

14

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

6.625% Senior Notes: Based on dealers� quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our 6.625% senior notes was $368.1 million and $372.8 million at September�30, 2014 and December�31, 2013, respectively. Their actual carrying value totaled $350.0 million at both September�30, 2014 and December�31, 2013.

Notes Payable on Real Estate: As of September�30, 2014 and December�31, 2013, the carrying value of our notes payable on real estate was $75.0 million and $130.5 million, respectively (see Note 10). These borrowings generally have floating interest rates at spreads over a market rate index. It is likely that some portion of our notes payable on real estate have fair values lower than actual carrying values. Given our volume of notes payable and the cost involved in estimating their fair value, we determined it was not practicable to do so. Additionally, only $3.9 million and $4.0 million of these notes payable were recourse to us as of September�30, 2014 and December�31, 2013, respectively.

6. Derivative Financial Instruments

We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and by using derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known but uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. We do not net derivatives on our balance sheet. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy.

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 FASB 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 secured term loan facilities. The total notional amount of these interest rate swap agreements is $400.0 million, with $200.0 million expiring in October 2017 and $200.0 million expiring in September 2019. There was no significant hedge ineffectiveness for the three and nine months ended September�30, 2014 and 2013. We reclassified $3.0 million and $9.0 million for the three and nine months ended September�30, 2014, respectively, and $3.0 million and $8.8 million for the three and nine months ended September�30, 2013, respectively, from accumulated other comprehensive loss to interest expense. In addition, we recorded a net gain of $1.4 million and a net loss of $5.8 million during the three and nine months ended September�30, 2014, respectively, and a net loss of $3.4 million and a net gain of $5.9 million during the three and nine months ended September�30, 2013, respectively, to other comprehensive income/loss in relation to such interest rate swap agreements. As of September�30, 2014, we estimate that $11.6 million will be reclassified to interest expense during the next twelve months. As of September�30, 2014 and December�31, 2013, the fair values of such interest rate swap agreements were reflected as a $25.8 million liability and a $29.0 million liability, respectively, and were included in other long-term liabilities in the accompanying consolidated balance sheets.

Additionally, certain of 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 currency. We enter 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. In March 2014, we began a foreign currency exchange

�

15

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

forward hedging program by entering into 38 foreign currency exchange forward contracts, including agreements to buy U.S. dollars and sell Australian dollars, Canadian dollars, Japanese yen, Euros, and British pound sterling covering an initial notional amount of $209.7 million. The purpose of these forward contracts is to attempt to mitigate the risk of fluctuations in foreign currency exchange rates that would adversely impact our foreign currency denominated EBITDA. Hedge accounting was not elected for any of these contracts. As such, changes in the fair values of these contracts are recorded directly in earnings. Included in the consolidated statement of operations were net gains of $7.7 million and $4.5 million for the three and nine months ended September�30, 2014, respectively, resulting from net gains on foreign currency exchange forward contracts. As of September�30, 2014, we had nine foreign currency exchange forward contracts outstanding covering a notional amount of $91.6 million. As of September�30, 2014, the fair value of forward contracts with four counterparties aggregated to a $4.7 million asset position, which was included in other current assets in the accompanying consolidated balance sheets. As of September�30, 2014, the fair value of forward contracts with one counterparty aggregated to a $0.04 million liability position, which was included in other current liabilities in the accompanying consolidated balance sheets.

We also routinely monitor our exposure to currency exchange rate changes in connection with certain transactions and sometimes enter into foreign currency exchange option and forward contracts to limit our exposure to such transactions, as appropriate. In the normal course of business, we also sometimes utilize derivative financial instruments in the form of foreign currency exchange contracts to attempt to mitigate foreign currency exchange exposure resulting from intercompany loans. Included in the consolidated statements of operations were net gains of $3.1 million and $2.9 million for the three and nine months ended September�30, 2014, respectively, and net losses of $1.1 million and $1.6 million for the three and nine months ended September�30, 2013, respectively, resulting from net gains/losses on these foreign currency exchange option and forward contracts. As of September�30, 2014, the fair value of such contracts with two counterparties aggregated to a $2.6 million asset position, which was included in other current assets in the accompanying consolidated balance sheets. As of December�31, 2013, we did not have any such foreign currency exchange contracts outstanding.

�

16

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

7. Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Combined condensed financial information for these entities is as follows (dollars in thousands):

�

� �� Three Months Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� �� 2014 � �� 2013 � � 2014 � � 2013 �

Global Investment Management:

 �� ��

Revenue

 �� $ 211,357 �� �� $ 218,745 �� � $ 637,605 �� � $ 613,279 ��

Operating income (loss)

 �� $ 93,731 �� �� $ (41,654 )� � $ (228,168 )� � $ (135,790 )�

Net income (loss)

 �� $ 18,413 �� �� $ 37,430 �� � $ (235,559 )� � $ 54,739 ��

Development Services:

 �� ��

Revenue

 �� $ 11,248 �� �� $ 18,672 �� � $ 34,083 �� � $ 50,212 ��

Operating income

 �� $ 11,736 �� �� $ 14,848 �� � $ 30,143 �� � $ 15,987 ��

Net income

 �� $ 8,855 �� �� $ 11,396 �� � $ 24,066 �� � $ 18,748 ��

Other:

 �� �� � �

Revenue

 �� $ 42,106 �� �� $ 48,580 �� � $ 113,688 �� � $ 117,417 ��

Operating income

 �� $ 5,856 �� �� $ 9,294 �� � $ 19,200 �� � $ 20,754 ��

Net income

 �� $ 6,025 �� �� $ 9,273 �� � $ 19,411 �� � $ 20,817 ��

Total:

 �� �� � �

Revenue

 �� $ 264,711 �� �� $ 285,997 �� � $ 785,376 �� � $ 780,908 ��

Operating income (loss)

 �� $ 111,323 �� �� $ (17,512 )� � $ (178,825 )� � $ (99,049 )�

Net income (loss)

 �� $ 33,293 �� �� $ 58,099 �� � $ (192,082 )� � $ 94,304 ��

Our Global Investment Management segment invests our own capital in certain real estate investments with clients. We have provided investment management, property management, brokerage and other professional services in connection with these real estate investments on an arm�s length basis and earned revenues from these unconsolidated subsidiaries. We have also provided development, property management and brokerage services to certain of our unconsolidated subsidiaries in our Development Services segment on an arm�s length basis and earned revenues from these unconsolidated subsidiaries.

8. Real Estate and Other Assets Held for Sale and Related Liabilities

Real estate and other assets held for sale include completed real estate projects or land for sale in their present condition that have met all of the �held for sale� criteria of the �Property, Plant and Equipment� Topic of the FASB ASC (Topic 360) and other assets directly related to such projects. Liabilities related to real estate and other assets held for sale have been included as a single line item in the accompanying consolidated balance sheets.

�

17

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

There were no real estate assets classified as �held for sale� at December�31, 2013. Real estate and other assets held for sale and related liabilities were as follows at September�30, 2014 (dollars in thousands):

�

Assets:

 ��

Real estate held for sale (see Note 9)

 �� $ 29,994 ��

Other current assets

 �� � 433 ��

Property and equipment, net

 �� � 1,253 ��

Other assets

 �� � 1,166 ��
��

�

�

 �

Total real estate and other assets held for sale

 �� � 32,846 ��

Liabilities:

 ��

Notes payable on real estate held for sale (see Note 10)

 �� � 35,001 ��

Accounts payable and accrued expenses

 �� � 691 ��

Other current liabilities

 �� � 130 ��
��

�

�

 �

Total liabilities related to real estate and other assets held for sale

 �� � 35,822 ��
��

�

�

 �

Net liabilities related to real estate and other assets held for sale

 �� $ (2,976 )�
��

�

�

 �

9. Real Estate

We provide build-to-suit services for our clients and also develop or purchase certain projects which we intend to sell to institutional investors upon project completion or redevelopment. Therefore, we have ownership of real estate until such projects are sold or otherwise disposed. Certain real estate assets secure the outstanding balances of underlying mortgage or construction loans. Our real estate is reported in our Development Services and Global Investment Management segments and consisted of the following (dollars in thousands):

�

� �� September�30,
2014		 � �� December�31,
2013		 �

Real estate included in assets held for sale (see Note�8)

 �� $ 29,994 �� �� $ ��� ��

Real estate under development (current)

 �� � ��� �� �� � 19,133 ��

Real estate under development (non-current)

 �� � 827 �� �� � 822 ��

Real estate held for investment (1)

 �� � 37,796 �� �� � 106,999 ��
��

�

�

 � ��

�

�

 �

Total real estate (2)

 �� $ 68,617 �� �� $ 126,954 ��
��

�

�

 � ��

�

�

 �

�

(1) Net of accumulated depreciation of $12.5 million and $23.6 million at September�30, 2014 and December�31, 2013, respectively.
(2) Includes lease intangibles of $5.0 million at September�30, 2014 and lease intangibles and tenant origination costs of $5.3 million and $0.1 million, respectively, at December�31, 2013. We record lease intangibles and tenant origination costs upon acquiring real estate projects with in-place leases. The balances are shown net of amortization, which is recorded as an increase to, or a reduction of, rental income for lease intangibles and as amortization expense for tenant origination costs.

�

18

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

10. Notes Payable on Real Estate

We had loans secured by real estate, which consisted of the following (dollars in thousands):

�

� � September�30,
2014		 � � December�31,
2013		 �

Current portion of notes payable on real estate

 � $ 23,147 �� � $ 62,017 ��

Notes payable on real estate included in liabilities related to real estate and other assets held for sale (see Note 8)

 � � 35,001 �� � � ��� ��
�

�

�

 � �

�

�

 �

Total notes payable on real estate, current portion

 � � 58,148 �� � � 62,017 ��

Notes payable on real estate, non-current portion

 � � 16,886 �� � � 68,455 ��
�

�

�

 � �

�

�

 �

Total notes payable on real estate

 � $ 75,034 �� � $ 130,472 ��
�

�

�

 � �

�

�

 �

At September�30, 2014 and December�31, 2013, $3.9 million and $1.5 million, respectively, of the current portion of notes payable on real estate and at December�31, 2013, $2.5 million of the non-current portion of notes payable on real estate were recourse to us, in addition to being recourse to the single-purpose entity that held the real estate asset and was the primary obligor on the note payable.

11. Debt

Since 2001, we have maintained credit facilities with Credit Suisse Group AG (CS) and other lenders to fund strategic acquisitions and to provide for our working capital needs. On March�28, 2013, we entered into a new credit agreement (the Credit Agreement) with a syndicate of banks led by CS, as administrative and collateral agent, to completely refinance our previous credit agreement. During the nine months ended September�30, 2013, we completed a series of financing transactions, which included the repayment of $1.6 billion of our senior secured term loans under our previous credit agreement.

As of September�30, 2014, our Credit Agreement provides for the following: (1)�a $1.2 billion revolving credit facility, including revolving credit loans, letters of credit and a swingline loan facility, maturing on March�28, 2018; (2)�a $500.0 million tranche A term loan facility (of which $300.0 million was on an optional delayed-draw basis for up to 120 days from March�28, 2013, which we drew down in June 2013 to partially fund the redemption of our 11.625% senior subordinated notes) requiring quarterly principal payments, which began on June�30, 2013 and continue through maturity on March�28, 2018; and (3)�a $215.0 million tranche B term loan facility requiring quarterly principal payments, which began on June�30, 2013 and continue through December�31, 2020, with the balance payable at maturity on March�28, 2021.

The revolving credit facility allows for borrowings outside of the U.S., with a $10.0 million sub-facility available to one of our Canadian subsidiaries, a $35.0 million sub-facility available to one of our Australian subsidiaries and one of our New Zealand subsidiaries and a $150.0 million sub-facility available to one of our U.K. subsidiaries. Additionally, outstanding borrowings under these sub-facilities may be up to 5.0% higher as allowed under the currency fluctuation provision in the Credit Agreement. Borrowings under the revolving credit facility bear interest at varying rates, based at our option, on either the applicable fixed rate plus 1.15% to 2.25% or the daily rate plus 0.125% to 1.25% as determined by reference to our ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement). As of September�30, 2014 and December�31, 2013, we had $149.2 million and $142.5 million, respectively, of revolving credit facility principal outstanding with related weighted average interest rates of 1.7% and 2.2%, respectively, which are included in short-term borrowings in the accompanying consolidated balance sheets. As of September�30, 2014, letters of credit totaling $7.4 million

�

19

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

were outstanding under the revolving credit facility. These letters of credit, which reduce the amount we may borrow under the revolving credit facility, were primarily issued in the normal course of business as well as in connection with certain insurance programs.

Borrowings under the term loan facilities as of September�30, 2014 bear interest, based at our option, on the following: for the tranche A term loan facility, on either the applicable fixed rate plus 1.50% to 2.75% or the daily rate plus 0.50% to 1.75%, as determined by reference to our ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement) and for the tranche B term loan facility, on either the applicable fixed rate plus 2.75% or the daily rate plus 1.75%. As of September�30, 2014, we had $655.5 million of term loan facilities principal outstanding (consisting of $443.7 million of tranche A term loan facility and $211.8 million of tranche B term loan facility), which are included in the accompanying consolidated balance sheets. As of December�31, 2013, we had $685.3 million of term loan facilities principal outstanding (consisting of $471.9 million of tranche A term loan facility and $213.4 million of tranche B term loan facility), which are also included in the accompanying consolidated balance sheets.

The Credit Agreement is jointly and severally guaranteed by us and substantially all of our domestic subsidiaries. Borrowings under our Credit Agreement are secured by a pledge of substantially all of the capital stock of our U.S. subsidiaries and 65.0% of the capital stock of certain non-U.S. subsidiaries. Also, the Credit Agreement requires us to pay a fee based on the total amount (whether used or unused) of the revolving credit facility commitment.

On September�26, 2014, CBRE issued $300.0 million in aggregate principal amount of 5.25% senior notes due March�15, 2025. The 5.25% senior notes are unsecured obligations of CBRE, 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 are jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guarantees our Credit Agreement.�Interest accrues at a rate of 5.25%�per year and is payable semi-annually in arrears on March�15 and September�15, beginning on March�15, 2015. The 5.25% senior notes are redeemable at our option, in whole or in part, prior to December�15, 2024 at a redemption price equal to the greater of (1)�100% of the principal amount of the 5.25% senior notes to be redeemed and (2)�the sum of the present values of the remaining scheduled payments of principal and interest thereon to December�15, 2024 (not including any portions of payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semi-annual basis at the Adjusted Treasury Rate (as defined in the indenture governing these notes). In addition, at any time on or after December�15, 2024, the 5.25% senior notes may be redeemed by us, in whole or in part, at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, if any, to (but excluding) the date of redemption. If a change of control triggering event (as defined in the indenture governing these notes) occurs, we are obligated to make an offer to purchase the then outstanding 5.25% senior notes at a redemption price of 101.0% of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.�The amount of the 5.25% senior notes included in the accompanying consolidated balance sheets was $300.0 million at September�30, 2014.

On March�14, 2013, CBRE issued $800.0 million in aggregate principal amount of 5.00% senior notes due March�15, 2023. The 5.00% senior notes are unsecured obligations of CBRE, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 5.00% senior notes are jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guarantees our Credit Agreement.�Interest accrues at a rate of 5.00%�per year and is payable semi-annually in arrears on March�15 and September�15, beginning on September�15, 2013. The 5.00% senior notes are redeemable at our option, in whole or in part, on or after March�15, 2018 at a redemption price of 102.5% of the principal amount on that date and at declining prices thereafter. At any time prior to

�

20

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

March�15, 2016, we may redeem up to 35.0% of the original principal amount of the 5.00% senior notes using the net cash proceeds from certain public offerings. In addition, at any time prior to March�15, 2018, the 5.00% senior notes may be redeemed by us, in whole or in part, at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, and an applicable premium (as defined in the indenture governing these notes), which is based on the excess of the present value of the March�15, 2018 redemption price plus all remaining interest payments through March�15, 2018, over the principal amount of the 5.00% senior notes on such redemption date. If a change of control triggering event (as defined in the indenture governing these notes) occurs, we are obligated to make an offer to purchase the then outstanding 5.00% senior notes at a redemption price of 101.0% of the principal amount, plus accrued and unpaid interest, if any.�The amount of the 5.00% senior notes included in the accompanying consolidated balance sheets was $800.0 million at both September�30, 2014 and December�31, 2013.

On October�8, 2010, CBRE issued $350.0 million in aggregate principal amount of 6.625% senior notes due October�15, 2020. The 6.625% senior notes were unsecured obligations of CBRE, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 6.625% senior notes were jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guaranteed our Credit Agreement.�Interest accrued at a rate of 6.625%�per year and was payable semi-annually in arrears on April�15 and October�15, having commenced on April�15, 2011. The 6.625% senior notes were redeemable at our option, in whole or in part, on or after October�15, 2014 at a redemption price of 104.969% of the principal amount on that date and at declining prices thereafter. In addition, at any time prior to October�15, 2014, the 6.625% senior notes were redeemable by us, in whole or in part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable premium (as defined in the indenture governing these notes), which was based on the greater of 1.00% of the principal amount of the 6.625% senior notes and the excess of the present value of the October�15, 2014 redemption price plus all remaining interest payments through October�15, 2014, over the principal amount of the 6.625% senior notes on such redemption date. On September�26, 2014, we gave the 30-day notice required under the indenture of our intent to call all of the 6.625% senior notes. We redeemed these notes in full on October�27, 2014 in accordance with the provisions of the notes and associated indenture (see Note 18). In connection with this early redemption, we incurred charges of $23.1�million, including a premium of $17.4 million and the write-off of $5.7�million of unamortized deferred financing costs. Such charges were included in the write-off of financing costs for the three and nine months ended September�30, 2014 in the accompanying consolidated statements of operations. The amount of the 6.625% senior notes included in the accompanying consolidated balance sheets was $350.0 million at both September�30, 2014 and December�31, 2013.

Our Credit Agreement and the indentures governing our 5.00% senior notes, 5.25% senior notes and 6.625% senior notes contain numerous restrictive covenants that, among other things, limit 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 Credit Agreement also currently requires us to maintain a minimum coverage ratio of EBITDA (as defined in the Credit Agreement) to total interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement) of 4.25x. Our coverage ratio of EBITDA to total interest expense was 12.29x for the trailing twelve months ended September�30, 2014 and our leverage ratio of total debt less available cash to EBITDA was 1.45x as of September�30, 2014.

�

21

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

On June�18, 2009, CBRE issued $450.0 million in aggregate principal amount of 11.625% senior subordinated notes due June�15, 2017 for approximately $435.9 million, net of discount. The 11.625% senior subordinated notes were unsecured senior subordinated obligations of CBRE and were jointly and severally guaranteed on a senior subordinated basis by us and our domestic subsidiaries that guarantee our Credit Agreement.�Interest accrued at a rate of 11.625%�per year and was payable semi-annually in arrears on June�15 and December�15. As permitted by the indenture governing these notes, on June�15, 2013, we redeemed all of the 11.625% senior subordinated notes. In connection with this early redemption, we paid a premium of $26.2 million and wrote off $16.1 million of unamortized deferred financing costs and unamortized discount.

12. 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. Our management believes that any losses in excess of the amounts accrued arising from such lawsuits are unlikely to be significant, but that 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 that anticipated by management.

We had outstanding letters of credit totaling $22.9 million as of September�30, 2014, 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. These letters of credit are primarily executed by us in the ordinary course of business and expire at varying dates through September 2015.

We had guarantees totaling $16.7 million as of September�30, 2014, 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 operating leases. The $16.7 million mainly represents guarantees of obligations of unconsolidated subsidiaries, which expire at varying dates through August 2017, as well as various guarantees of management contracts in our operations overseas, which expire at the end of each of the respective agreements. The remainder of the guarantees consist of guarantees related to our defined benefit pension plans in the United Kingdom (U.K.) (in excess of our outstanding pension liability of $59.9 million as of September�30, 2014), which are continuous guarantees that will not expire until all amounts have been paid out for our pension liabilities.

In addition, as of September�30, 2014, we had numerous completion and budget guarantees relating to development projects. These guarantees are made by us in the ordinary course of our Development Services business. Each of these guarantees requires 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 have �guaranteed maximum price� contracts with reputable 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.

In January 2008, CBRE Multifamily Capital, Inc. (CBRE MCI), a wholly-owned subsidiary of CBRE Capital Markets, entered into an agreement with Fannie Mae, under Fannie Mae�s DUS 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, is subject to sharing up to one-third of any losses on loans originated under the DUS Program. CBRE MCI has funded loans subject to such loss sharing arrangements with unpaid principal balances of $9.2 billion at

�

22

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

September�30, 2014.�Additionally, CBRE MCI has funded loans under the DUS Program that are not subject to loss sharing arrangements with unpaid principal balances of approximately $365.9 million at September�30, 2014.�CBRE MCI, under its agreement with Fannie Mae, must post cash reserves under formulas established by Fannie Mae to provide for sufficient capital in the event losses occur.�As of September�30, 2014 and December�31, 2013, CBRE MCI had $25.1 million and $16.6 million, respectively, of cash deposited under this reserve arrangement, and had provided approximately $16.3 million and $13.8 million, respectively, of loan loss accruals. Fannie Mae�s recourse under the DUS Program is limited to the assets of CBRE MCI, which totaled approximately $293.4 million (including $137.1 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�30, 2014.

An important part of the strategy for our Global Investment Management business involves investing our capital in certain real estate investments with our clients. These co-investments typically range from 2.0% to 5.0% of the equity in a particular fund. As of September�30, 2014, we had aggregate commitments of $19.3 million to fund future co-investments.

Additionally, an important part of our Development Services business strategy is to invest in unconsolidated real estate subsidiaries as a principal (in most cases co-investing with our clients). As of September�30, 2014, we had committed to fund $26.5 million of additional capital to these unconsolidated subsidiaries.

13. Income Per Share Information

The following is a calculation of income per share (dollars in thousands, except share data):

�

� � Three Months Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� � 2014 � � 2013 � � 2014 � � 2013 �

Computation of basic income per share attributable to CBRE Group, Inc. shareholders:

 � � � �

Net income attributable to CBRE Group, Inc. shareholders

 � $ 107,099 �� � $ 94,444 �� � $ 280,226 �� � $ 201,892 ��

Weighted average shares outstanding for basic income per share

 � � 330,419,006 �� � � 328,307,961 �� � � 330,197,240 �� � � 327,502,672 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

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

 � $ 0.32 �� � $ 0.29 �� � $ 0.85 �� � $ 0.62 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

23

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

� �� Three Months Ended
September�30,		 � �� Nine Months Ended
September�30,		 �
� �� 2014 � �� 2013 � �� 2014 � �� 2013 �

Computation of diluted income per share attributable to CBRE Group, Inc. shareholders:

 �� �� �� ��

Net income attributable to CBRE Group, Inc. shareholders

 �� $ 107,099 �� �� $ 94,444 �� �� $ 280,226 �� �� $ 201,892 ��

Weighted average shares outstanding for basic income per share

 �� � 330,419,006 �� �� � 328,307,961 �� �� � 330,197,240 �� �� � 327,502,672 ��

Dilutive effect of contingently issuable shares

 �� � 3,478,244 �� �� � 3,172,943 �� �� � 3,239,528 �� �� � 3,216,664 ��

Dilutive effect of stock options

 �� � 395,796 �� �� � 580,498 �� �� � 418,363 �� �� � 784,714 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Weighted average shares outstanding for diluted income per share

 �� � 334,293,046 �� �� � 332,061,402 �� �� � 333,855,131 �� �� � 331,504,050 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

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

 �� $ 0.32 �� �� $ 0.28 �� �� $ 0.84 �� �� $ 0.61 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

For the three and nine months ended September�30, 2014, 47,639 of contingently issuable shares were excluded from the computation of diluted earnings per share because their inclusion would have had an anti-dilutive effect.

For the three and nine months ended September�30, 2014, options to purchase 582 shares of common stock were excluded from the computation of diluted earnings per share, and for the three and nine months ended September�30, 2013, options to purchase 54,958 shares of common stock were excluded from the computation of diluted earnings per share. These options were excluded because their inclusion would have had an anti-dilutive effect given that the options� exercise prices were greater than the average market price of our common stock for each period.

14. Pensions

We have two contributory defined benefit pension plans in the U.K., which we acquired in connection with previous acquisitions. Our subsidiaries based in the U.K. maintain the plans to provide retirement benefits to existing and former employees participating in these plans. During 2007, we reached agreements with the active members of these plans to freeze future pension plan benefits. In return, the active members became eligible to enroll in the CBRE Group Personal Pension Plan, a defined contribution plan in the U.K.

�

24

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

Net periodic pension (benefit) cost consisted of the following (dollars in thousands):

�

� �� Three�Months�Ended � � Nine Months Ended �
� �� September�30, � � September�30, �
� �� 2014 � � 2013 � � 2014 � � 2013 �

Interest cost

 �� $ 4,503 �� � $ 3,774 �� � $ 13,411 �� � $ 11,429 ��

Expected return on plan assets

 �� � (5,812 )� � � (3,848 )� � � (17,465 )� � � (11,585 )�

Amortization of unrecognized net loss

 �� � 673 �� � � 601 �� � � 2,003 �� � � 1,821 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net periodic pension (benefit) cost

 �� $ (636 )� � $ 527 �� � $ (2,051 )� � $ 1,665 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

We contributed $1.6 million and $4.7 million to fund our pension plans during the three and nine months ended September�30, 2014, respectively. We expect to contribute a total of $6.3 million to fund our pension plans for the year ending December�31, 2014.

15. Discontinued Operations

On January�1, 2014, we adopted ASU 2014-08 and as a result, no longer anticipate reporting discontinued operations in the ordinary course of our business. Prior to January�1, 2014, if in the ordinary course of business we disposed of real estate assets, or held real estate assets for sale, that were considered components of an entity in accordance with Topic 360, and if we did not have, or expect to have, significant continuing involvement with the operation of these real estate assets after disposition, we were required to recognize operating profits or losses and gains or losses on disposition of these assets as discontinued operations in our consolidated statements of operations in the periods in which they occurred. Real estate operations and dispositions accounted for as discontinued operations for the nine months ended September�30, 2013 were reported in our Global Investment Management and Development Services segments as follows (dollars in thousands):

�

Revenue

 �� $ 8,934 ��

Costs and expenses:

 ��

Operating, administrative and other

 �� � 4,899 ��

Depreciation and amortization

 �� � 870 ��
��

�

�

 �

Total costs and expenses

 �� � 5,769 ��

Gain on disposition of real estate

 �� � 25,640 ��
��

�

�

 �

Operating income

 �� � 28,805 ��

Interest expense

 �� � 3,147 ��
��

�

�

 �

Income from discontinued operations, before provision for income taxes

 �� � 25,658 ��

Provision for income taxes

 �� � 1,364 ��
��

�

�

 �

Income from discontinued operations, net of income taxes

 �� � 24,294 ��

Less: Income from discontinued operations attributable to non-controlling interests

 �� � 22,213 ��
��

�

�

 �

Income from discontinued operations attributable to CBRE Group, Inc.

 �� $ 2,081 ��
��

�

�

 �

16. Segments

We report our operations through the following segments: (1)�Americas, (2)�EMEA, (3)�Asia Pacific, (4)�Global Investment Management and (5)�Development Services.

�

25

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

The Americas segment is our largest segment of operations and provides a comprehensive range of services throughout the U.S. and in the largest regions of Canada and key markets in Latin America. The primary services offered consist of the following: real estate services, mortgage loan origination and servicing, valuation services, asset services and corporate services.

Our EMEA and Asia Pacific segments provide services similar to the Americas business segment. The EMEA segment has operations primarily in Europe, while the Asia Pacific segment has operations primarily in Asia, Australia and New Zealand.

Our Global Investment Management business provides investment management services to clients seeking to generate returns and diversification through direct and indirect investments in real estate in North America, Europe and Asia Pacific.

Our Development Services business consists of real estate development and investment activities primarily in the U.S.

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

�

� �� Three Months Ended
September�30,		 � �� Nine Months Ended
September�30,		 �
� �� 2014 � �� 2013 � �� 2014 � �� 2013 �

Revenue

 �� ��

Americas

 �� $ 1,325,875 �� �� $ 1,105,768 �� �� $ 3,583,276 �� �� $ 3,145,341 ��

EMEA

 �� � 574,493 �� �� � 285,496 �� �� � 1,604,159 �� �� � 784,407 ��

Asia Pacific

 �� � 253,742 �� �� � 202,701 �� �� � 690,599 �� �� � 617,262 ��

Global Investment Management

 �� � 105,012 �� �� � 127,337 �� �� � 343,789 �� �� � 369,088 ��

Development Services

 �� � 15,954 �� �� � 12,564 �� �� � 40,901 �� �� � 34,845 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �
�� $ 2,275,076 �� �� $ 1,733,866 �� �� $ 6,262,724 �� �� $ 4,950,943 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

�

� �� Three Months Ended
September�30,		 � �� Nine Months Ended
September�30,		 �
� �� 2014 � �� 2013 � �� 2014 � �� 2013 �

EBITDA

 �� ��

Americas

 �� $ 187,476 �� �� $ 132,195 �� �� $ 482,642 �� �� $ 401,852 ��

EMEA

 �� � 37,485 �� �� � 17,735 �� �� � 88,219 �� �� � 28,930 ��

Asia Pacific

 �� � 22,767 �� �� � 13,056 �� �� � 54,773 �� �� � 44,916 ��

Global Investment Management

 �� � 21,146 �� �� � 55,396 �� �� � 87,538 �� �� � 127,723 ��

Development Services

 �� � 24,019 �� �� � 6,011 �� �� � 37,121 �� �� � 21,206 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �
�� $ 292,893 �� �� $ 224,393 �� �� $ 750,293 �� �� $ 624,627 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

EBITDA represents earnings before net interest expense, write-off of financing costs, income taxes, depreciation and amortization. Our management believes EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result,

�

26

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

our management uses EBITDA as a measure to evaluate the operating performance of our various business segments and for other discretionary purposes, including as a significant component when measuring our operating performance under our employee incentive programs. Additionally, we believe EBITDA is useful to investors to assist them in getting a more complete picture of our results of operations.

However, EBITDA is not a recognized measurement under GAAP and when analyzing our operating performance, readers should use EBITDA in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management�s discretionary use, as it does not consider certain cash requirements such as tax and debt service payments. The amounts shown for EBITDA also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.

Net interest expense and write-off of financing costs have been expensed in the segment incurred. Provision for income taxes has been allocated among our segments by using applicable U.S. and foreign effective tax rates. EBITDA for our segments is calculated as follows (dollars in thousands):

�

� �� Three Months Ended
September�30,		 � � Nine Months Ended
September�30,		 �
� �� 2014 � � 2013 � � 2014 � � 2013 �

Americas

 �� � � �

Net income attributable to CBRE Group, Inc.

 �� $ 86,098 �� � $ 58,273 �� � $ 248,868 �� � $ 138,886 ��

Adjustments:

 �� � � �

Depreciation and amortization

 �� � 38,451 �� � � 30,281 �� � � 107,796 �� � � 84,838 ��

Interest expense, net

 �� � 3,361 �� � � 14,525 �� � � 12,321 �� � � 69,971 ��

Write-off of financing costs

 �� � 23,087 �� � � ��� �� � � 23,087 �� � � 56,295 ��

Royalty and management service income

 �� � (14,949 )� � � (816 )� � � (18,656 )� � � (20,226 )�

Provision for income taxes

 �� � 51,428 �� � � 29,932 �� � � 109,226 �� � � 72,088 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

EBITDA

 �� $ 187,476 �� � $ 132,195 �� � $ 482,642 �� � $ 401,852 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

EMEA

 �� � � �

Net (loss) income attributable to CBRE Group, Inc.

 �� $ (748 )� � $ 10,346 �� � $ (14,705 )� � $ 3,682 ��

Adjustments:

 �� � � �

Depreciation and amortization

 �� � 16,080 �� � � 4,194 �� � � 48,862 �� � � 13,101 ��

Interest expense (income), net

 �� � 13,145 �� � � 822 �� � � 37,488 �� � � (197 )�

Royalty and management service expense (income)

 �� � 8,249 �� � � (4,653 )� � � 1,294 �� � � 3,377 ��

Provision for income taxes

 �� � 759 �� � � 7,026 �� � � 15,280 �� � � 8,967 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

EBITDA

 �� $ 37,485 �� � $ 17,735 �� � $ 88,219 �� � $ 28,930 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Asia Pacific

 �� � � �

Net income attributable to CBRE Group, Inc.

 �� $ 5,398 �� � $ 771 �� � $ 9,400 �� � $ 10,053 ��

Adjustments:

 �� � � �

Depreciation and amortization

 �� � 4,178 �� � � 2,688 �� � � 10,617 �� � � 8,571 ��

Interest expense, net

 �� � 474 �� � � 902 �� � � 1,577 �� � � 2,144 ��

Royalty and management service expense

 �� � 5,636 �� � � 4,455 �� � � 13,898 �� � � 13,232 ��

Provision for income taxes

 �� � 7,081 �� � � 4,240 �� � � 19,281 �� � � 10,916 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

EBITDA

 �� $ 22,767 �� � $ 13,056 �� � $ 54,773 �� � $ 44,916 ��
��

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

27

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

� �� Three Months Ended
September�30,		 � �� Nine Months Ended
September�30,		 �
� �� 2014 � �� 2013 � �� 2014 � �� 2013 �

Global Investment Management

 �� �� �� ��

Net income attributable to CBRE Group, Inc.

 �� $ 3,075 �� �� $ 23,001 �� �� $ 18,137 �� �� $ 42,617 ��

Adjustments:

 �� �� �� ��

Depreciation and amortization (1)

 �� � 7,485 �� �� � 9,192 �� �� � 25,303 �� �� � 27,759 ��

Interest expense, net (2)

 �� � 8,331 �� �� � 8,819 �� �� � 25,917 �� �� � 28,364 ��

Royalty and management service expense

 �� � 1,064 �� �� � 1,014 �� �� � 3,464 �� �� � 3,617 ��

Provision for income taxes

 �� � 1,191 �� �� � 13,370 �� �� � 14,717 �� �� � 25,366 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

EBITDA (3)

 �� $ 21,146 �� �� $ 55,396 �� �� $ 87,538 �� �� $ 127,723 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

Development Services

 �� �� �� ��

Net income attributable to CBRE Group, Inc.

 �� $ 13,276 �� �� $ 2,053 �� �� $ 18,526 �� �� $ 6,654 ��

Adjustments:

 �� �� �� ��

Depreciation and amortization (4)

 �� � 965 �� �� � 1,169 �� �� � 3,079 �� �� � 4,007 ��

Interest expense, net (5)

 �� � 932 �� �� � 1,231 �� �� � 2,702 �� �� � 5,573 ��

Provision for income taxes (6)

 �� � 8,846 �� �� � 1,558 �� �� � 12,814 �� �� � 4,972 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

EBITDA (7)

 �� $ 24,019 �� �� $ 6,011 �� �� $ 37,121 �� �� $ 21,206 ��
��

�

�

 � ��

�

�

 � ��

�

�

 � ��

�

�

 �

�

(1) Includes depreciation and amortization expense related to discontinued operations of $0.5 million for the nine months ended September�30, 2013.
(2) Includes interest expense related to discontinued operations of $1.0 million for the nine months ended September�30, 2013.
(3) Includes EBITDA related to discontinued operations of $1.4 million for the nine months ended September�30, 2013.
(4) Includes depreciation and amortization expense related to discontinued operations of $0.4 million for the nine months ended September�30, 2013.
(5) Includes interest expense related to discontinued operations of $2.2 million for the nine months ended September�30, 2013.
(6) Includes provision for income taxes related to discontinued operations of $1.3 million for the nine months ended September�30, 2013.
(7) Includes EBITDA related to discontinued operations of $6.0 million for the nine months ended September�30, 2013.

17. Guarantor and Nonguarantor Financial Statements

The following condensed consolidating financial information includes:

(1) Condensed consolidating balance sheets as of September�30, 2014 and December�31, 2013; condensed consolidating statements of operations for the three and nine months ended September�30, 2014 and 2013; condensed consolidating statements of comprehensive income (loss) for the three and nine months ended September�30, 2014 and 2013; and condensed consolidating statements of cash flows for the nine months ended September�30, 2014 and 2013, of (a)�CBRE Group, Inc. as the parent, (b)�CBRE as the subsidiary issuer, (c)�the guarantor subsidiaries, (d)�the nonguarantor subsidiaries and (e)�CBRE Group, Inc. on a consolidated basis; and

(2) Elimination entries necessary to consolidate CBRE Group, Inc. as the parent, with CBRE and its guarantor and nonguarantor subsidiaries.

Investments in consolidated subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in consolidated subsidiaries and intercompany balances and transactions.

�

28

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Current Assets:

 � � � � � �

Cash and cash equivalents

 � $ 5 �� � $ 62,226 �� � $ 220,076 �� � $ 333,051 �� � $ ��� �� � $ 615,358 ��

Restricted cash

 � � ��� �� � � ��� �� � � 2,181 �� � � 53,399 �� � � ��� �� � � 55,580 ��

Receivables, net

 � � ��� �� � � ��� �� � � 609,027 �� � � 999,601 �� � � ��� �� � � 1,608,628 ��

Warehouse receivables (a)

 � � ��� �� � � ��� �� � � 468,248 �� � � 169,886 �� � � ��� �� � � 638,134 ��

Trading securities

 � � ��� �� � � ��� �� � � 107 �� � � 69,393 �� � � ��� �� � � 69,500 ��

Income taxes receivable

 � � 14,643 �� � � ��� �� � � 21,052 �� � � 40,822 �� � � (17,812 )� � � 58,705 ��

Prepaid expenses

 � � ��� �� � � ��� �� � � 53,582 �� � � 70,164 �� � � ��� �� � � 123,746 ��

Deferred tax assets, net

 � � ��� �� � � ��� �� � � 106,716 �� � � 67,555 �� � � ��� �� � � 174,271 ��

Real estate and other assets held for sale

 � � ��� �� � � ��� �� � � ��� �� � � 32,846 �� � � ��� �� � � 32,846 ��

Available for sale securities

 � � ��� �� � � ��� �� � � 663 �� � � ��� �� � � ��� �� � � 663 ��

Other current assets

 � � ��� �� � � 7,207 �� � � 41,765 �� � � 34,634 �� � � ��� �� � � 83,606 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Current Assets

 � � 14,648 �� � � 69,433 �� � � 1,523,417 �� � � 1,871,351 �� � � (17,812 )� � � 3,461,037 ��

Property and equipment, net

 � � ��� �� � � ��� �� � � 332,425 �� � � 123,434 �� � � ��� �� � � 455,859 ��

Goodwill

 � � ��� �� � � ��� �� � � 1,132,094 �� � � 1,182,849 �� � � ��� �� � � 2,314,943 ��

Other intangible assets, net

 � � ��� �� � � ��� �� � � 487,493 �� � � 327,873 �� � � ��� �� � � 815,366 ��

Investments in unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 171,651 �� � � 47,786 �� � � ��� �� � � 219,437 ��

Investments in consolidated subsidiaries

 � � 2,865,363 �� � � 2,940,873 �� � � 931,244 �� � � ��� �� � � (6,737,480 )� � � ��� ��

Intercompany loan receivable

 � � ��� �� � � 2,023,149 �� � � 700,000 �� � � ��� �� � � (2,723,149 )� � � ��� ��

Real estate under development

 � � ��� �� � � ��� �� � � 827 �� � � ��� �� � � ��� �� � � 827 ��

Real estate held for investment

 � � ��� �� � � ��� �� � � 2,556 �� � � 35,240 �� � � ��� �� � � 37,796 ��

Available for sale securities

 � � ��� �� � � ��� �� � � 62,953 �� � � 2,194 �� � � ��� �� � � 65,147 ��

Other assets, net

 � � ��� �� � � 34,183 �� � � 86,391 �� � � 38,968 �� � � ��� �� � � 159,542 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Assets

 � $ 2,880,011 �� � $ 5,067,638 �� � $ 5,431,051 �� � $ 3,629,695 �� � $ (9,478,441 )� � $ 7,529,954 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Current Liabilities:

 � � � � � �

Accounts payable and accrued expenses

 � $ ��� �� � $ 32,435 �� � $ 167,910 �� � $ 510,063 �� � $ ��� �� � $ 710,408 ��

Compensation and employee benefits payable

 � � ��� �� � � 626 �� � � 310,633 �� � � 242,902 �� � � ��� �� � � 554,161 ��

Accrued bonus and profit sharing

 � � ��� �� � � ��� �� � � 255,938 �� � � 216,438 �� � � ��� �� � � 472,376 ��

Income taxes payable

 � � ��� �� � � 17,812 �� � � ��� �� � � ��� �� � � (17,812 )� � � ��� ��

Short-term borrowings:

 � � � � � �

Warehouse lines of credit (a)

 � � ��� �� � � ��� �� � � 464,841 �� � � 166,971 �� � � ��� �� � � 631,812 ��

Revolving credit facility

 � � ��� �� � � 20,000 �� � � ��� �� � � 129,159 �� � � ��� �� � � 149,159 ��

Other

 � � ��� �� � � ��� �� � � 16 �� � � 4,383 �� � � ��� �� � � 4,399 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total short-term borrowings

 � � ��� �� � � 20,000 �� � � 464,857 �� � � 300,513 �� � � ��� �� � � 785,370 ��

Current maturities of long-term debt

 � � ��� �� � � 39,650 �� � � 2,700 �� � � 25 �� � � ��� �� � � 42,375 ��

Notes payable on real estate

 � � ��� �� � � ��� �� � � ��� �� � � 23,147 �� � � ��� �� � � 23,147 ��

Liabilities related to real estate and other assets held for sale

 � � ��� �� � � ��� �� � � ��� �� � � 35,822 �� � � ��� �� � � 35,822 ��

Other current liabilities

 � � ��� �� � � 40 �� � � 42,020 �� � � 11,290 �� � � ��� �� � � 53,350 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Current Liabilities

 � � ��� �� � � 110,563 �� � � 1,244,058 �� � � 1,340,200 �� � � (17,812 )� � � 2,677,009 ��

Long-Term Debt:

 � � � � � �

5.00% senior notes

 � � ��� �� � � 800,000 �� � � ��� �� � � ��� �� � � ��� �� � � 800,000 ��

Senior secured term loans

 � � ��� �� � � 615,875 �� � � ��� �� � � ��� �� � � ��� �� � � 615,875 ��

6.625% senior notes

 � � ��� �� � � 350,000 �� � � ��� �� � � ��� �� � � ��� �� � � 350,000 ��

5.25% senior notes

 � � ��� �� � � 300,000 �� � � ��� �� � � ��� �� � � ��� �� � � 300,000 ��

Other long-term debt

 � � ��� �� � � ��� �� � � 1,408 �� � � 44 �� � � ��� �� � � 1,452 ��

Intercompany loan payable

 � � 734,076 �� � � ��� �� � � 938,827 �� � � 1,050,246 �� � � (2,723,149 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Long-Term Debt

 � � 734,076 �� � � 2,065,875 �� � � 940,235 �� � � 1,050,290 �� � � (2,723,149 )� � � 2,067,327 ��

Notes payable on real estate

 � � ��� �� � � ��� �� � � ��� �� � � 16,886 �� � � ��� �� � � 16,886 ��

Deferred tax liabilities, net

 � � ��� �� � � ��� �� � � 40,461 �� � � 85,484 �� � � ��� �� � � 125,945 ��

Non-current tax liabilities

 � � ��� �� � � ��� �� � � 51,363 �� � � 13,673 �� � � ��� �� � � 65,036 ��

Pension liability

 � � ��� �� � � ��� �� � � ��� �� � � 59,912 �� � � ��� �� � � 59,912 ��

Other liabilities

 � � ��� �� � � 25,837 �� � � 214,061 �� � � 95,103 �� � � ��� �� � � 335,001 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Liabilities

 � � 734,076 �� � � 2,202,275 �� � � 2,490,178 �� � � 2,661,548 �� � � (2,740,961 )� � � 5,347,116 ��

Commitments and contingencies

 � � ��� �� � � ��� �� � � ��� �� � � ��� �� � � ��� �� � � ��� ��

Equity:

 � � � � � �

CBRE Group, Inc. Stockholders� Equity

 � � 2,145,935 �� � � 2,865,363 �� � � 2,940,873 �� � � 931,244 �� � � (6,737,480 )� � � 2,145,935 ��

Non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 36,903 �� � � ��� �� � � 36,903 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Equity

 � � 2,145,935 �� � � 2,865,363 �� � � 2,940,873 �� � � 968,147 �� � � (6,737,480 )� � � 2,182,838 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Liabilities and Equity

 � $ 2,880,011 �� � $ 5,067,638 �� � $ 5,431,051 �� � $ 3,629,695 �� � $ (9,478,441 )� � $ 7,529,954 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

(a) Although CBRE Capital Markets is included among our domestic subsidiaries that jointly and severally guarantee our 5.00% senior notes, 6.625% senior notes, 5.25�% senior notes and our Credit Agreement, a substantial majority of warehouse receivables funded under TD Bank, N.A. (TD Bank), Capital One, N.A. (Capital One), Bank of America (BofA), JP Morgan Chase Bank, N.A. (JP Morgan) and Fannie Mae As Soon As Pooled (ASAP) Program lines of credit are pledged to TD Bank, Capital One, BofA, JP Morgan and Fannie Mae, and accordingly, are not included as collateral for our notes or our other outstanding debt.

�

29

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Current Assets:

 � � � � � �

Cash and cash equivalents

 � $ 5 �� � $ 11,585 �� � $ 91,244 �� � $ 389,078 �� � $ ��� �� � $ 491,912 ��

Restricted cash

 � � ��� �� � � 6,871 �� � � 2,645 �� � � 51,639 �� � � ��� �� � � 61,155 ��

Receivables, net

 � � ��� �� � � ��� �� � � 487,514 �� � � 998,975 �� � � ��� �� � � 1,486,489 ��

Warehouse receivables (a)

 � � ��� �� � � ��� �� � � 148,497 �� � � 233,048 �� � � ��� �� � � 381,545 ��

Trading securities

 � � ��� �� � � ��� �� � � 100 �� � � 58,342 �� � � ��� �� � � 58,442 ��

Income taxes receivable

 � � 15,892 �� � � 18,246 �� � � ��� �� � � 28,617 �� � � (62,755 )� � � ��� ��

Prepaid expenses

 � � ��� �� � � ��� �� � � 57,592 �� � � 67,559 �� � � ��� �� � � 125,151 ��

Deferred tax assets, net

 � � ��� �� � � ��� �� � � 106,721 �� � � 81,812 �� � � ��� �� � � 188,533 ��

Real estate under development

 � � ��� �� � � ��� �� � � ��� �� � � 19,133 �� � � ��� �� � � 19,133 ��

Other current assets

 � � ��� �� � � ��� �� � � 34,768 �� � � 32,684 �� � � ��� �� � � 67,452 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Current Assets

 � � 15,897 �� � � 36,702 �� � � 929,081 �� � � 1,960,887 �� � � (62,755 )� � � 2,879,812 ��

Property and equipment, net

 � � ��� �� � � ��� �� � � 329,215 �� � � 129,381 �� � � ��� �� � � 458,596 ��

Goodwill

 � � ��� �� � � ��� �� � � 1,084,394 �� � � 1,206,080 �� � � ��� �� � � 2,290,474 ��

Other intangible assets, net

 � � ��� �� � � ��� �� � � 492,357 �� � � 348,871 �� � � ��� �� � � 841,228 ��

Investments in unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 136,225 �� � � 62,471 �� � � ��� �� � � 198,696 ��

Investments in consolidated subsidiaries

 � � 2,388,905 �� � � 2,408,755 �� � � 942,873 �� � � ��� �� � � (5,740,533 )� � � ��� ��

Intercompany loan receivable

 � � ��� �� � � 1,814,112 �� � � 700,000 �� � � ��� �� � � (2,514,112 )� � � ��� ��

Real estate under development

 � � ��� �� � � ��� �� � � 822 �� � � ��� �� � � ��� �� � � 822 ��

Real estate held for investment

 � � ��� �� � � ��� �� � � 1,503 �� � � 105,496 �� � � ��� �� � � 106,999 ��

Available for sale securities

 � � ��� �� � � ��� �� � � 54,108 �� � � 2,692 �� � � ��� �� � � 56,800 ��

Other assets, net

 � � ��� �� � � 41,724 �� � � 81,176 �� � � 42,087 �� � � ��� �� � � 164,987 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Assets

 � $ 2,404,802 �� � $ 4,301,293 �� � $ 4,751,754 �� � $ 3,857,965 �� � $ (8,317,400 )� � $ 6,998,414 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Current Liabilities:

 � � � � � �

Accounts payable and accrued expenses

 � $ ��� �� � $ 18,693 �� � $ 161,836 �� � $ 636,990 �� � $ ��� �� � $ 817,519 ��

Compensation and employee benefits payable

 � � ��� �� � � 626 �� � � 282,756 �� � � 203,611 �� � � ��� �� � � 486,993 ��

Accrued bonus and profit sharing

 � � ��� �� � � ��� �� � � 308,795 �� � � 303,319 �� � � ��� �� � � 612,114 ��

Income taxes payable

 � � ��� �� � � ��� �� � � 73,866 �� � � ��� �� � � (62,755 )� � � 11,111 ��

Short-term borrowings:

 � � � � � �

Warehouse lines of credit (a)

 � � ��� �� � � ��� �� � � 146,703 �� � � 227,894 �� � � ��� �� � � 374,597 ��

Revolving credit facility

 � � ��� �� � � 28,772 �� � � ��� �� � � 113,712 �� � � ��� �� � � 142,484 ��

Other

 � � ��� �� � � ��� �� � � 16 �� � � ��� �� � � ��� �� � � 16 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total short-term borrowings

 � � ��� �� � � 28,772 �� � � 146,719 �� � � 341,606 �� � � ��� �� � � 517,097 ��

Current maturities of long-term debt

 � � ��� �� � � 39,650 �� � � 2,568 �� � � 27 �� � � ��� �� � � 42,245 ��

Notes payable on real estate

 � � ��� �� � � ��� �� � � ��� �� � � 62,017 �� � � ��� �� � � 62,017 ��

Other current liabilities

 � � ��� �� � � ��� �� � � 51,366 �� � � 5,278 �� � � ��� �� � � 56,644 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Current Liabilities

 � � ��� �� � � 87,741 �� � � 1,027,906 �� � � 1,552,848 �� � � (62,755 )� � � 2,605,740 ��

Long-Term Debt:

 � � � � � �

5.00% senior notes

 � � ��� �� � � 800,000 �� � � ��� �� � � ��� �� � � ��� �� � � 800,000 ��

Senior secured term loans

 � � ��� �� � � 645,613 �� � � ��� �� � � ��� �� � � ��� �� � � 645,613 ��

6.625% senior notes

 � � ��� �� � � 350,000 �� � � ��� �� � � ��� �� � � ��� �� � � 350,000 ��

Other long-term debt

 � � ��� �� � � ��� �� � � 2,747 �� � � 75 �� � � ��� �� � � 2,822 ��

Intercompany loan payable

 � � 509,017 �� � � ��� �� � � 1,006,996 �� � � 998,099 �� � � (2,514,112 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Long-Term Debt

 � � 509,017 �� � � 1,795,613 �� � � 1,009,743 �� � � 998,174 �� � � (2,514,112 )� � � 1,798,435 ��

Notes payable on real estate

 � � ��� �� � � ��� �� � � ��� �� � � 68,455 �� � � ��� �� � � 68,455 ��

Deferred tax liabilities, net

 � � ��� �� � � ��� �� � � 69,137 �� � � 91,640 �� � � ��� �� � � 160,777 ��

Non-current tax liabilities

 � � ��� �� � � ��� �� � � 62,059 �� � � 3,461 �� � � ��� �� � � 65,520 ��

Pension liability

 � � ��� �� � � ��� �� � � ��� �� � � 68,012 �� � � ��� �� � � 68,012 ��

Other liabilities

 � � ��� �� � � 29,034 �� � � 174,154 �� � � 92,281 �� � � ��� �� � � 295,469 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Liabilities

 � � 509,017 �� � � 1,912,388 �� � � 2,342,999 �� � � 2,874,871 �� � � (2,576,867 )� � � 5,062,408 ��

Commitments and contingencies

 � � ��� �� � � ��� �� � � ��� �� � � ��� �� � � ��� �� � � ��� ��

Equity:

 � � � � � �

CBRE Group, Inc. Stockholders� Equity

 � � 1,895,785 �� � � 2,388,905 �� � � 2,408,755 �� � � 942,873 �� � � (5,740,533 )� � � 1,895,785 ��

Non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 40,221 �� � � ��� �� � � 40,221 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Equity

 � � 1,895,785 �� � � 2,388,905 �� � � 2,408,755 �� � � 983,094 �� � � (5,740,533 )� � � 1,936,006 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total Liabilities and Equity

 � $ 2,404,802 �� � $ 4,301,293 �� � $ 4,751,754 �� � $ 3,857,965 �� � $ (8,317,400 )� � $ 6,998,414 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

(a) Although CBRE Capital Markets is included among our domestic subsidiaries that jointly and severally guarantee our 5.00% senior notes, 6.625% senior notes and our Credit Agreement, a substantial majority of warehouse receivables funded under BofA, TD Bank, JP Morgan, Capital One, the JP Morgan Master Repurchase Agreement and Fannie Mae ASAP lines of credit are pledged to BofA, TD Bank, JP Morgan, Capital One and Fannie Mae, and accordingly, are not included as collateral for our notes or our other outstanding debt.

�

30

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Revenue

 � $ ��� �� � $ ��� �� � $ 1,231,633 �� � $ 1,043,443 �� � $ ��� �� � $ 2,275,076 ��

Costs and expenses:

 � � � � � �

Cost of services

 � � ��� �� � � ��� �� � � 789,931 �� � � 639,055 �� � � ��� �� � � 1,428,986 ��

Operating, administrative and other

 � � 18,934 �� � � (6,683 )� � � 291,206 �� � � 297,569 �� � � ��� �� � � 601,026 ��

Depreciation and amortization

 � � ��� �� � � ��� �� � � 33,120 �� � � 34,039 �� � � ��� �� � � 67,159 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total costs and expenses

 � � 18,934 �� � � (6,683 )� � � 1,114,257 �� � � 970,663 �� � � ��� �� � � 2,097,171 ��

Gain on disposition of real estate

 � � ��� �� � � ��� �� � � 35 �� � � 7,200 �� � � ��� �� � � 7,235 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Operating (loss) income

 � � (18,934 )� � � 6,683 �� � � 117,411 �� � � 79,980 �� � � ��� �� � � 185,140 ��

Equity income from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 35,177 �� � � 8,123 �� � � ��� �� � � 43,300 ��

Other income (loss)

 � � ��� �� � � ��� �� � � 894 �� � � (1,007 )� � � ��� �� � � (113 )�

Interest income

 � � ��� �� � � 49,971 �� � � 448 �� � � 1,150 �� � � (49,971 )� � � 1,598 ��

Interest expense

 � � ��� �� � � 25,739 �� � � 32,957 �� � � 19,116 �� � � (49,971 )� � � 27,841 ��

Write-off of financing costs

 � � ��� �� � � 23,087 �� � � ��� �� � � ��� �� � � ��� �� � � 23,087 ��

Royalty and management service (income) expense

 � � ��� �� � � ��� �� � � (20,336 )� � � 20,336 �� � � ��� �� � � ��� ��

Income from consolidated subsidiaries

 � � 118,981 �� � � 114,063 �� � � 28,313 �� � � ��� �� � � (261,357 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income before (benefit of) provision for income taxes

 � � 100,047 �� � � 121,891 �� � � 169,622 �� � � 48,794 �� � � (261,357 )� � � 178,997 ��

(Benefit of) provision for income taxes

 � � (7,052 )� � � 2,910 �� � � 55,559 �� � � 17,888 �� � � ��� �� � � 69,305 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � � 107,099 �� � � 118,981 �� � � 114,063 �� � � 30,906 �� � � (261,357 )� � � 109,692 ��

Less: Net income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 2,593 �� � � ��� �� � � 2,593 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 107,099 �� � $ 118,981 �� � $ 114,063 �� � $ 28,313 �� � $ (261,357 )� � $ 107,099 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

31

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Revenue

 � $ ��� �� � $ ��� �� � $ 1,045,380 �� � $ 688,486 �� � $ ��� �� � $ 1,733,866 ��

Costs and expenses:

 � � � � � �

Cost of services

 � � ��� �� � � ��� �� � � 654,432 �� � � 377,916 �� � � ��� �� � � 1,032,348 ��

Operating, administrative and other

 � � 13,782 �� � � 2,661 �� � � 241,964 �� � � 238,208 �� � � ��� �� � � 496,615 ��

Depreciation and amortization

 � � ��� �� � � ��� �� � � 27,129 �� � � 20,395 �� � � ��� �� � � 47,524 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total costs and expenses

 � � 13,782 �� � � 2,661 �� � � 923,525 �� � � 636,519 �� � � ��� �� � � 1,576,487 ��

Gain on disposition of real estate

 � � ��� �� � � ��� �� � � 1 �� � � 739 �� � � ��� �� � � 740 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Operating (loss) income

 � � (13,782 )� � � (2,661 )� � � 121,856 �� � � 52,706 �� � � ��� �� � � 158,119 ��

Equity income from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 11,873 �� � � 1,474 �� � � ��� �� � � 13,347 ��

Other income

 � � ��� �� � � ��� �� � � 2,403 �� � � 2,722 �� � � ��� �� � � 5,125 ��

Interest income

 � � ��� �� � � 28,218 �� � � 421 �� � � 1,060 �� � � (28,215 )� � � 1,484 ��

Interest expense

 � � ��� �� � � 24,557 �� � � 23,417 �� � � 8,024 �� � � (28,215 )� � � 27,783 ��

Royalty and management service (income) expense

 � � ��� �� � � ��� �� � � (2,687 )� � � 2,687 �� � � ��� �� � � ��� ��

Income from consolidated subsidiaries

 � � 103,088 �� � � 102,461 �� � � 25,957 �� � � ��� �� � � (231,506 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income before (benefit of) provision for income taxes

 � � 89,306 �� � � 103,461 �� � � 141,780 �� � � 47,251 �� � � (231,506 )� � � 150,292 ��

(Benefit of) provision for income taxes

 � � (5,138 )� � � 373 �� � � 39,319 �� � � 21,572 �� � � ��� �� � � 56,126 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � � 94,444 �� � � 103,088 �� � � 102,461 �� � � 25,679 �� � � (231,506 )� � � 94,166 ��

Less: Net loss attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � (278 )� � � ��� �� � � (278 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 94,444 �� � $ 103,088 �� � $ 102,461 �� � $ 25,957 �� � $ (231,506 )� � $ 94,444 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

32

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Revenue

 � $ ��� �� � $ ��� �� � $ 3,356,815 �� � $ 2,905,909 �� � $ ��� �� � $ 6,262,724 ��

Costs and expenses:

 � � � � � �

Cost of services

 � � ��� �� � � ��� �� � � 2,113,013 �� � � 1,791,906 �� � � ��� �� � � 3,904,919 ��

Operating, administrative and other

 � � 39,290 �� � � (1,031 )� � � 815,828 �� � � 841,536 �� � � ��� �� � � 1,695,623 ��

Depreciation and amortization

 � � ��� �� � � ��� �� � � 96,292 �� � � 99,365 �� � � ��� �� � � 195,657 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total costs and expenses

 � � 39,290 �� � � (1,031 )� � � 3,025,133 �� � � 2,732,807 �� � � ��� �� � � 5,796,199 ��

Gain on disposition of real estate

 � � ��� �� � � ��� �� � � 6,732 �� � � 30,370 �� � � ��� �� � � 37,102 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Operating (loss) income

 � � (39,290 )� � � 1,031 �� � � 338,414 �� � � 203,472 �� � � ��� �� � � 503,627 ��

Equity income from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 61,181 �� � � 6,383 �� � � ��� �� � � 67,564 ��

Other income

 � � ��� �� � � 1 �� � � 2,493 �� � � 8,558 �� � � ��� �� � � 11,052 ��

Interest income

 � � ��� �� � � 146,356 �� � � 1,579 �� � � 2,737 �� � � (146,351 )� � � 4,321 ��

Interest expense

 � � ��� �� � � 76,509 �� � � 97,671 �� � � 56,497 �� � � (146,351 )� � � 84,326 ��

Write-off of financing costs

 � � ��� �� � � 23,087 �� � � ��� �� � � ��� �� � � ��� �� � � 23,087 ��

Royalty and management service (income) expense

 � � ��� �� � � ��� �� � � (26,973 )� � � 26,973 �� � � ��� �� � � ��� ��

Income from consolidated subsidiaries

 � � 304,873 �� � � 274,893 �� � � 42,016 �� � � ��� �� � � (621,782 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income before (benefit of) provision for income taxes

 � � 265,583 �� � � 322,685 �� � � 374,985 �� � � 137,680 �� � � (621,782 )� � � 479,151 ��

(Benefit of) provision for income taxes

 � � (14,643 )� � � 17,812 �� � � 100,092 �� � � 68,057 �� � � ��� �� � � 171,318 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � � 280,226 �� � � 304,873 �� � � 274,893 �� � � 69,623 �� � � (621,782 )� � � 307,833 ��

Less: Net income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 27,607 �� � � ��� �� � � 27,607 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 280,226 �� � $ 304,873 �� � $ 274,893 �� � $ 42,016 �� � $ (621,782 )� � $ 280,226 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

33

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Revenue

 � $ ��� �� � $ ��� �� � $ 2,934,601 �� � $ 2,016,342 �� � $ ��� �� � $ 4,950,943 ��

Costs and expenses:

 � � � � � �

Cost of services

 � � ��� �� � � ��� �� � � 1,822,138 �� � � 1,090,253 �� � � ��� �� � � 2,912,391 ��

Operating, administrative and other

 � � 32,860 �� � � 5,695 �� � � 713,948 �� � � 713,111 �� � � ��� �� � � 1,465,614 ��

Depreciation and amortization

 � � ��� �� � � ��� �� � � 77,082 �� � � 60,324 �� � � ��� �� � � 137,406 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total costs and expenses

 � � 32,860 �� � � 5,695 �� � � 2,613,168 �� � � 1,863,688 �� � � ��� �� � � 4,515,411 ��

Gain on disposition of real estate

 � � ��� �� � � ��� �� � � 7,474 �� � � 3,911 �� � � ��� �� � � 11,385 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Operating (loss) income

 � � (32,860 )� � � (5,695 )� � � 328,907 �� � � 156,565 �� � � ��� �� � � 446,917 ��

Equity income (loss) from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 29,659 �� � � (19 )� � � ��� �� � � 29,640 ��

Other (loss) income

 � � ��� �� � � (7 )� � � 5,300 �� � � 4,059 �� � � ��� �� � � 9,352 ��

Interest income

 � � ��� �� � � 93,479 �� � � 1,728 �� � � 3,263 �� � � (93,468 )� � � 5,002 ��

Interest expense

 � � ��� �� � � 96,121 �� � � 84,753 �� � � 20,304 �� � � (93,468 )� � � 107,710 ��

Write-off of financing costs

 � � ��� �� � � 56,295 �� � � ��� �� � � ��� �� � � ��� �� � � 56,295 ��

Royalty and management service (income) expense

 � � ��� �� � � ��� �� � � (27,420 )� � � 27,420 �� � � ��� �� � � ��� ��

Income from consolidated subsidiaries

 � � 222,503 �� � � 263,048 �� � � 60,318 �� � � ��� �� � � (545,869 )� � � ��� ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income from continuing operations before (benefit of) provision for income taxes

 � � 189,643 �� � � 198,409 �� � � 368,579 �� � � 116,144 �� � � (545,869 )� � � 326,906 ��

(Benefit of) provision for income taxes

 � � (12,249 )� � � (24,094 )� � � 105,531 �� � � 51,757 �� � � ��� �� � � 120,945 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income from continuing operations

 � � 201,892 �� � � 222,503 �� � � 263,048 �� � � 64,387 �� � � (545,869 )� � � 205,961 ��

Income from discontinued operations, net of income taxes

 � � ��� �� � � ��� �� � � ��� �� � � 24,294 �� � � ��� �� � � 24,294 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income

 � � 201,892 �� � � 222,503 �� � � 263,048 �� � � 88,681 �� � � (545,869 )� � � 230,255 ��

Less: Net income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 28,363 �� � � ��� �� � � 28,363 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net income attributable to CBRE Group, Inc.

 � $ 201,892 �� � $ 222,503 �� � $ 263,048 �� � $ 60,318 �� � $ (545,869 )� � $ 201,892 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

34

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Net income

 � $ 107,099 �� � $ 118,981 �� � $ 114,063 �� � $ 30,906 �� � $ (261,357 )� � $ 109,692 ��

Other comprehensive income (loss) :

 � � � � � �

Foreign currency translation loss

 � � ��� �� � � ��� �� � � ��� �� � � (109,122 )� � � ��� �� � � (109,122 )�

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

 � � ��� �� � � 1,844 �� � � ��� �� � � ��� �� � � ��� �� � � 1,844 ��

Unrealized gains on interest rate swaps and interest rate caps, net

 � � ��� �� � � 854 �� � � ��� �� � � ��� �� � � ��� �� � � 854 ��

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

 � � ��� �� � � ��� �� � � 345 �� � � (159 )� � � ��� �� � � 186 ��

Other, net

 � � ��� �� � � ��� �� � � 76 �� � � ��� �� � � ��� �� � � 76 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total other comprehensive income (loss)

 � � ��� �� � � 2,698 �� � � 421 �� � � (109,281 )� � � ��� �� � � (106,162 )�

Comprehensive income (loss)

 � � 107,099 �� � � 121,679 �� � � 114,484 �� � � (78,375 )� � � (261,357 )� � � 3,530 ��

Less: Comprehensive income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 2,533 �� � � ��� �� � � 2,533 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Comprehensive income (loss) attributable to CBRE Group, Inc.

 � $ 107,099 �� � $ 121,679 �� � $ 114,484 �� � $ (80,908 )� � $ (261,357 )� � $ 997 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

35

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Net income

 � $ 94,444 �� � $ 103,088 �� � $ 102,461 �� � $ 25,679 �� � $ (231,506 )� � $ 94,166 ��

Other comprehensive (loss) income:

 � � � � � �

Foreign currency translation gain

 � � ��� �� � � ��� �� � � ��� �� � � 45,684 �� � � ��� �� � � 45,684 ��

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

 � � ��� �� � � 1,793 �� � � ��� �� � � ��� �� � � ��� �� � � 1,793 ��

Unrealized (losses) gains on interest rate swaps and interest rate caps, net

 � � ��� �� � � (2,035 )� � � ��� �� � � 73 �� � � ��� �� � � (1,962 )�

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

 � � ��� �� � � ��� �� � � (316 )� � � 339 �� � � ��� �� � � 23 ��

Other, net

 � � ��� �� � � ��� �� � � (1,106 )� � � 254 �� � � ��� �� � � (852 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total other comprehensive (loss) income

 � � ��� �� � � (242 )� � � (1,422 )� � � 46,350 �� � � ��� �� � � 44,686 ��

Comprehensive income

 � � 94,444 �� � � 102,846 �� � � 101,039 �� � � 72,029 �� � � (231,506 )� � � 138,852 ��

Less: Comprehensive loss attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � (296 )� � � ��� �� � � (296 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Comprehensive income attributable to CBRE Group, Inc.

 � $ 94,444 �� � $ 102,846 �� � $ 101,039 �� � $ 72,325 �� � $ (231,506 )� � $ 139,148 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

36

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Net income

 � $ 280,226 �� � $ 304,873 �� � $ 274,893 �� � $ 69,623 �� � $ (621,782 )� � $ 307,833 ��

Other comprehensive income (loss):

 � � � � � �

Foreign currency translation loss

 � � ��� �� � � ��� �� � � ��� �� � � (72,676 )� � � ��� �� � � (72,676 )�

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

 � � ��� �� � � 5,470 �� � � ��� �� � � ��� �� � � ��� �� � � 5,470 ��

Unrealized (losses) gains on interest rate swaps and interest rate caps, net

 � � ��� �� � � (3,521 )� � � ��� �� � � 61 �� � � ��� �� � � (3,460 )�

Unrealized holding losses on available for sale securities, net

 � � ��� �� � � ��� �� � � (495 )� � � (175 )� � � ��� �� � � (670 )�

Other, net

 � � ��� �� � � ��� �� � � 211 �� � � ��� �� � � ��� �� � � 211 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total other comprehensive income (loss)

 � � ��� �� � � 1,949 �� � � (284 )� � � (72,790 )� � � ��� �� � � (71,125 )�

Comprehensive income (loss)

 � � 280,226 �� � � 306,822 �� � � 274,609 �� � � (3,167 )� � � (621,782 )� � � 236,708 ��

Less: Comprehensive income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 27,556 �� � � ��� �� � � 27,556 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Comprehensive income (loss) attributable to CBRE Group, Inc.

 � $ 280,226 �� � $ 306,822 �� � $ 274,609 �� � $ (30,723 )� � $ (621,782 )� � $ 209,152 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

37

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Elimination � � Consolidated
Total		 �

Net income

 � $ 201,892 �� � $ 222,503 �� � $ 263,048 �� � $ 88,681 �� � $ (545,869 )� � $ 230,255 ��

Other comprehensive income (loss):

 � � � � � �

Foreign currency translation loss

 � � ��� �� � � ��� �� � � ��� �� � � (1,631 )� � � ��� �� � � (1,631 )�

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

 � � ��� �� � � 5,304 �� � � ��� �� � � ��� �� � � ��� �� � � 5,304 ��

Unrealized gains on interest rate swaps and interest rate caps, net

 � � ��� �� � � 3,606 �� � � ��� �� � � 39 �� � � ��� �� � � 3,645 ��

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

 � � ��� �� � � ��� �� � � (413 )� � � 52 �� � � ��� �� � � (361 )�

Other, net

 � � ��� �� � � ��� �� � � 90 �� � � 254 �� � � ��� �� � � 344 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Total other comprehensive income (loss)

 � � ��� �� � � 8,910 �� � � (323 )� � � (1,286 )� � � ��� �� � � 7,301 ��

Comprehensive income

 � � 201,892 �� � � 231,413 �� � � 262,725 �� � � 87,395 �� � � (545,869 )� � � 237,556 ��

Less: Comprehensive income attributable to non-controlling interests

 � � ��� �� � � ��� �� � � ��� �� � � 27,587 �� � � ��� �� � � 27,587 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Comprehensive income attributable to CBRE Group, Inc.

 � $ 201,892 �� � $ 231,413 �� � $ 262,725 �� � $ 59,808 �� � $ (545,869 )� � $ 209,969 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

38

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Consolidated
Total		 �

CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:

 � $ 20,732 �� � $ 83,198 �� � $ (9,694 )� � $ (25,758 )� � $ 68,478 ��

CASH FLOWS FROM INVESTING ACTIVITIES:

 � � � � �

Capital expenditures

 � � ��� �� � � ��� �� � � (63,544 )� � � (29,074 )� � � (92,618 )�

Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired

 � � ��� �� � � ��� �� � � (51,989 )� � � (80,552 )� � � (132,541 )�

Contributions to unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � (37,674 )� � � (2,429 )� � � (40,103 )�

Distributions from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 49,152 �� � � 13,826 �� � � 62,978 ��

Net proceeds from disposition of real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � 77,278 �� � � 77,278 ��

Additions to real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � (5,043 )� � � (5,043 )�

Proceeds from the sale of servicing rights and other assets

 � � ��� �� � � ��� �� � � 7,514 �� � � 10,655 �� � � 18,169 ��

Decrease (increase) in restricted cash

 � � ��� �� � � 6,871 �� � � 464 �� � � (2,904 )� � � 4,431 ��

Purchase of available for sale securities

 � � ��� �� � � ��� �� � � (68,984 )� � � ��� �� � � (68,984 )�

Proceeds from the sale of available for sale securities

 � � ��� �� � � ��� �� � � 61,357 �� � � ��� �� � � 61,357 ��

Other investing activities, net

 � � ��� �� � � ��� �� � � 570 �� � � ��� �� � � 570 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net cash provided by (used in) investing activities

 � � ��� �� � � 6,871 �� � � (103,134 )� � � (18,243 )� � � (114,506 )�

CASH FLOWS FROM FINANCING ACTIVITIES:

 � � � � �

Repayment of senior secured term loans

 � � ��� �� � � (29,738 )� � � ��� �� � � ��� �� � � (29,738 )�

Proceeds from revolving credit facility

 � � ��� �� � � 1,622,000 �� � � ��� �� � � 66,568 �� � � 1,688,568 ��

Repayment of revolving credit facility

 � � ��� �� � � (1,630,928 )� � � ��� �� � � (41,431 )� � � (1,672,359 )�

Proceeds from issuance of 5.25% senior notes

 � � ��� �� � � 300,000 �� � � ��� �� � � ��� �� � � 300,000 ��

Proceeds from notes payable on real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � 5,022 �� � � 5,022 ��

Repayment of notes payable on real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � (27,241 )� � � (27,241 )�

Proceeds from notes payable on real estate held for sale and under development

 � � ��� �� � � ��� �� � � ��� �� � � 4,884 �� � � 4,884 ��

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

 � � ��� �� � � ��� �� � � ��� �� � � (44,959 )� � � (44,959 )�

Proceeds from short-term borrowings, net

 � � ��� �� � � ��� �� � � ��� �� � � 4,545 �� � � 4,545 ��

Shares repurchased for payment of taxes on stock awards

 � � (16,656 )� � � ��� �� � � ��� �� � � ��� �� � � (16,656 )�

Proceeds from exercise of stock options

 � � 4,466 �� � � ��� �� � � ��� �� � � ��� �� � � 4,466 ��

Incremental tax benefit from stock options exercised

 � � 803 �� � � ��� �� � � ��� �� � � ��� �� � � 803 ��

Non-controlling interests contributions

 � � ��� �� � � ��� �� � � ��� �� � � 1,415 �� � � 1,415 ��

Non-controlling interests distributions

 � � ��� �� � � ��� �� � � ��� �� � � (31,998 )� � � (31,998 )�

Payment of financing costs

 � � ��� �� � � (3,045 )� � � ��� �� � � (104 )� � � (3,149 )�

(Increase) decrease in intercompany receivables, net

 � � (9,345 )� � � (297,717 )� � � 243,097 �� � � 63,965 �� � � ��� ��

Other financing activities, net

 � � ��� �� � � ��� �� � � (1,437 )� � � (9 )� � � (1,446 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net cash (used in) provided by financing activities

 � � (20,732 )� � � (39,428 )� � � 241,660 �� � � 657 �� � � 182,157 ��

Effect of currency exchange rate changes on cash and cash equivalents

 � � ��� �� � � ��� �� � � ��� �� � � (12,683 )� � � (12,683 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 � � ��� �� � � 50,641 �� � � 128,832 �� � � (56,027 )� � � 123,446 ��

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD

 � � 5 �� � � 11,585 �� � � 91,244 �� � � 389,078 �� � � 491,912 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

 � $ 5 �� � $ 62,226 �� � $ 220,076 �� � $ 333,051 �� � $ 615,358 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 � � � � �

Cash paid during the period for:

 � � � � �

Interest

 � $ ��� �� � $ 76,519 �� � $ 355 �� � $ 3,762 �� � $ 80,636 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income tax payments, net

 � $ ��� �� � $ ��� �� � $ 177,792 �� � $ 88,418 �� � $ 266,210 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

39

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(Dollars in thousands)

�

� � Parent � � CBRE � � Guarantor
Subsidiaries		 � � Nonguarantor
Subsidiaries		 � � Consolidated
Total		 �

CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:

 � $ 22,853 �� � $ (16,429 )� � $ 100,934 �� � $ 127,282 �� � $ 234,640 ��

CASH FLOWS FROM INVESTING ACTIVITIES:

 � � � � �

Capital expenditures

 � � ��� �� � � ��� �� � � (55,289 )� � � (23,454 )� � � (78,743 )�

Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired

 � � ��� �� � � ��� �� � � (17,193 )� � � (46,410 )� � � (63,603 )�

Contributions to unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � (33,353 )� � � 422 �� � � (32,931 )�

Distributions from unconsolidated subsidiaries

 � � ��� �� � � ��� �� � � 28,750 �� � � 10,097 �� � � 38,847 ��

Net proceeds from disposition of real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � 110,818 �� � � 110,818 ��

Additions to real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � (2,412 )� � � (2,412 )�

Proceeds from the sale of servicing rights and other assets

 � � ��� �� � � ��� �� � � 12,620 �� � � 13,606 �� � � 26,226 ��

(Increase) decrease in restricted cash

 � � ��� �� � � (3 )� � � 482 �� � � 21,655 �� � � 22,134 ��

Purchase of available for sale securities

 � � ��� �� � � ��� �� � � (53,387 )� � � ��� �� � � (53,387 )�

Proceeds from the sale of available for sale securities

 � � ��� �� � � ��� �� � � 52,719 �� � � ��� �� � � 52,719 ��

Other investing activities, net

 � � ��� �� � � ��� �� � � 4,515 �� � � 2,079 �� � � 6,594 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net cash (used in) provided by investing activities

 � � ��� �� � � (3 )� � � (60,136 )� � � 86,401 �� � � 26,262 ��

CASH FLOWS FROM FINANCING ACTIVITIES:

 � � � � �

Proceeds from senior secured term loans

 � � ��� �� � � 715,000 �� � � ��� �� � � ��� �� � � 715,000 ��

Repayment of senior secured term loans

 � � ��� �� � � (1,372,325 )� � � ��� �� � � (256,780 )� � � (1,629,105 )�

Proceeds from revolving credit facility

 � � ��� �� � � 311,000 �� � � ��� �� � � 88,127 �� � � 399,127 ��

Repayment of revolving credit facility

 � � ��� �� � � (311,000 )� � � ��� �� � � (71,414 )� � � (382,414 )�

Proceeds from issuance of 5.00% senior notes

 � � ��� �� � � 800,000 �� � � ��� �� � � ��� �� � � 800,000 ��

Repayment of 11.625% senior subordinated notes

 � � ��� �� � � (450,000 )� � � ��� �� � � ��� �� � � (450,000 )�

Proceeds from notes payable on real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � 2,473 �� � � 2,473 ��

Repayment of notes payable on real estate held for investment

 � � ��� �� � � ��� �� � � ��� �� � � (73,580 )� � � (73,580 )�

Proceeds from notes payable on real estate held for sale and under development

 � � ��� �� � � ��� �� � � ��� �� � � 6,015 �� � � 6,015 ��

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

 � � ��� �� � � ��� �� � � ��� �� � � (112,828 )� � � (112,828 )�

Proceeds from short-term borrowings

 � � ��� �� � � ��� �� � � ��� �� � � 4,724 �� � � 4,724 ��

Shares repurchased for payment of taxes on stock awards

 � � (16,628 )� � � ��� �� � � ��� �� � � ��� �� � � (16,628 )�

Proceeds from exercise of stock options

 � � 4,924 �� � � ��� �� � � ��� �� � � ��� �� � � 4,924 ��

Incremental tax benefit from stock options exercised

 � � 9,336 �� � � ��� �� � � ��� �� � � ��� �� � � 9,336 ��

Non-controlling interests contributions

 � � ��� �� � � ��� �� � � ��� �� � � 462 �� � � 462 ��

Non-controlling interests distributions

 � � ��� �� � � ��� �� � � ��� �� � � (84,918 )� � � (84,918 )�

Payment of financing costs

 � � ��� �� � � (28,995 )� � � ��� �� � � (327 )� � � (29,322 )�

(Increase) decrease in intercompany receivables, net

 � � (20,485 )� � � 400,356 �� � � (603,853 )� � � 223,982 �� � � ��� ��

Other financing activities, net

 � � ��� �� � � ��� �� � � (2,874 )� � � (36 )� � � (2,910 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Net cash (used in) provided by financing activities

 � � (22,853 )� � � 64,036 �� � � (606,727 )� � � (274,100 )� � � (839,644 )�

Effect of currency exchange rate changes on cash and cash equivalents

 � � ��� �� � � ��� �� � � ��� �� � � (7,934 )� � � (7,934 )�
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 � � ��� �� � � 47,604 �� � � (565,929 )� � � (68,351 )� � � (586,676 )�

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD

 � � 5 �� � � 18,312 �� � � 680,112 �� � � 390,868 �� � � 1,089,297 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

CASH AND CASH EQUIVALENTS, AT END OF PERIOD

 � $ 5 �� � $ 65,916 �� � $ 114,183 �� � $ 322,517 �� � $ 502,621 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 � � � � �

Cash paid during the period for:

 � � � � �

Interest

 � $ ��� �� � $ 84,987 �� � $ 450 �� � $ 10,801 �� � $ 96,238 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

Income tax payments, net

 � $ ��� �� � $ ��� �� � $ 76,234 �� � $ 60,808 �� � $ 137,042 ��
�

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 � �

�

�

 �

�

40

Table of Contents

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS���(Continued)

(Unaudited)

�

18. Subsequent Event

On October�27, 2014, we redeemed in full all of our outstanding 6.625% senior notes, which had a carrying value of $350.0 million as of September�30, 2014, in accordance with the provisions of the notes and associated indenture.

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ITEM�2. MANAGEMENT�S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q for CBRE Group, Inc. for the three months ended September�30, 2014 represents an update to the more detailed and comprehensive disclosures included in our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended). Accordingly, you should read the following discussion in conjunction with the information included in our Annual Report on Form 10-K as well as the unaudited financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In addition, the statements and assumptions in this Quarterly Report on Form 10-Q 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

We are the world�s largest commercial real estate services and investment firm, based on 2013 revenue, with leading full-service operations in major metropolitan areas throughout the world. We offer a full range of services to occupiers, owners, lenders and investors in office, retail, industrial, multifamily and other types of commercial real estate. As of December�31, 2013, excluding independent affiliates, we operated in approximately 350 offices worldwide, with approximately 44,000 employees 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� brand name. Our business is focused on several competencies, including commercial property and corporate facilities management, tenant/occupier and property/agency leasing, property sales, real estate investment management, valuation, commercial mortgage origination and servicing, debt and structured finance solutions, development services and proprietary research. We generate revenue from management fees on a contractual and per-project basis, and from commissions on transactions. In 2014, we were the highest ranked commercial real estate services company among the Fortune Most Admired Companies, and we ranked seventh among all companies on the Barron�s 500, which ranks companies on growth and financial performance. We have been the only commercial real estate services company included in the S&P 500 since 2006, and in the Fortune 500 since 2008. Additionally, the International Association of Outsourcing Professionals has included us among the top 100 global outsourcing companies across all industries for nine consecutive years. In 2014, the International Association of Outsourcing Professionals ranked us as a top three outsourcing services provider among all outsourcing companies globally and as the highest ranked commercial real estate services company.

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 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: overall economic activity and employment growth, interest 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 some of our business lines.

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Compensation is our largest expense and the sales and leasing professionals in our advisory services business generally are paid on a commission and bonus basis that correlates with their revenue production. As a result, the negative effect of difficult market conditions on our operating margins is partially mitigated by the inherent variability of our compensation cost structure. In addition, when negative economic conditions are particularly severe, we have moved decisively to lower operating expenses to improve financial performance, and then have restored certain expenses as economic conditions improved. Nevertheless, adverse global and regional economic trends could be significant risks to the performance of our operations and our financial condition.

Since the financial crisis in 2008 and 2009, commercial real estate markets have gradually recovered in step with the slow improvement in global economic activity, particularly in the United States. Since 2010, increased U.S. property sales activity has been sustained by gradually improving occupancy market conditions, including lower vacancy rates and higher rents, as well as the availability of low-cost credit and better investor sentiment. U.S. leasing markets have been slower to recover but have shown signs of improved sentiment and higher activity in 2014.

European economies began to emerge from recession in 2013, with most countries returning to positive, albeit very modest, economic growth. Reflecting the macro environment, investment sales across much of Europe were tepid until late 2012. Since then, sales activity has strengthened significantly, and this trend has continued in 2014. However, leasing markets in much of Europe have remained soft in 2014, as underlying economic conditions have not improved enough to translate into increased demand for space or higher rents.

In Asia Pacific, leasing activity has been subdued since late 2011, as multi-national corporations have been hesitant to expand in the region. Domestic demand in Asia Pacific has picked up in 2014, but strong construction activity limits rent growth. Investment markets have generally been stronger than leasing markets, and while investment levels have varied across the region, some countries like Australia and Japan have been notably strong.

Real estate investment management and property development activity were adversely affected by the global financial crisis, which lowered property values and constrained financing and disposition opportunities. However, the macro environment for these businesses has generally improved as the real estate credit and investment sales markets have recovered since 2010.

The performance of our global sales, leasing, investment management and development services operations depends on sustained economic growth, strong job creation, stable, healthy global credit markets, and continued improved business and investor sentiment.

Effects of Acquisitions

Our management historically has made significant use of strategic acquisitions to add new service competencies, to increase our scale within existing competencies and to expand our presence in various geographic regions around the world. In December 2013, we fortified our real estate outsourcing platform in Europe within our EMEA segment with the acquisition of London-based Norland Managed Services, Ltd (Norland) for approximately $474 million (the Norland Acquisition), with $433.9 million paid at closing and the remaining contingent consideration paid in July 2014. Norland is a premier provider of building technical engineering services that enables us to self-perform these services in Europe and adds to our expertise in the highly specialized critical environments market.

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 quality regional or specialty firms that complement our existing platform within a region, or affiliates in which, in some cases, we held a small equity interest. During 2013, we completed ten in-fill acquisitions, including a firm serving the London prime residential real estate market, a regional commercial real estate services firm based in San Francisco, a retail real estate services firm in the U.S. Mid-Atlantic region, a facility consulting and project

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advisory firm based in Virginia serving the healthcare industry, and two property management specialist firms, one in the Czech Republic and Slovakia and one in Belgium. During the nine months ended September�30, 2014, we completed eight in-fill acquisitions, including a commercial real estate service provider in Chicago, our former affiliate companies in Thailand, Greenville, South Carolina and Louisville, Kentucky, a technical real estate consulting firm based in Germany, a consulting and advisory firm in the U.S. hotels sector, and project management companies in Germany and Australia.

Although our management believes that strategic acquisitions can significantly decrease the cost, time and commitment of management resources necessary to attain a meaningful competitive position within targeted markets or to expand our presence within our current markets, in general, most acquisitions will initially have an adverse impact on our operating and net income, both as a result of transaction-related expenditures, which include severance, lease termination, transaction and deferred financing costs, among others, and the charges and costs of integrating the acquired business and its financial and accounting systems into our own. In addition, our acquisition structures often include deferred and/or contingent purchase price payments in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of September�30, 2014, we have accrued for deferred consideration totaling $66.8 million, which was included in accounts payable and accrued expenses and in other long-term liabilities in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form 10-Q.

International Operations

As we increase our international operations through either acquisitions or organic growth, fluctuations in the value of the U.S. dollar relative to the other currencies in which we may generate earnings could adversely affect our business, financial condition and operating results. Our Global Investment Management business has a significant amount of Euro-denominated assets under management, or AUM, as well as associated revenue and earnings in Europe, which has seen more pronounced movement in the value of the Euro against the U.S. dollar. Fluctuations in foreign currency exchange rates have resulted and may continue to result in corresponding fluctuations in our AUM, revenue and earnings.

Our management team generally seeks to mitigate our exposure by balancing assets and liabilities that are denominated in the same currency. Fluctuations in foreign currency exchange rates affect reported amounts of our total assets and liabilities, which are reflected in our financial statements as translated into U.S. dollars for each financial reporting period at the exchange rate in effect on the respective balance sheet dates, and our total revenue and expenses, which are reflected in our financial statements as translated into U.S. dollars for each financial reporting period at the monthly average exchange rate. During the nine months ended September�30, 2014, foreign currency translation had a $7.9 million positive impact on our total revenue and a $4.2 million negative impact on our total cost of services and operating, administrative and other expenses. In addition, from time to time we enter into foreign currency exchange contracts to attempt to mitigate some of our exposure to exchange rate changes related to particular transactions and to hedge risks associated with the translation of foreign currencies into U.S. dollars.

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During the nine months ended September�30, 2014, approximately 45% of our business was transacted in local currencies of foreign countries, the majority of which includes the Australian dollar, the British pound sterling, the Canadian dollar, the Chinese yuan, the Euro, the Indian rupee, the Japanese yen and the Singapore dollar. 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. The following table sets forth our revenue derived from our most significant currencies (dollars in thousands):

�

� �� Three Months Ended September�30, � � Nine Months Ended September�30, �
� �� 2014 � � 2013 � � 2014 � � 2013 �

United States dollar

 �� $ 1,267,982 �� �� � 55.7 %� � $ 1,074,335 �� �� � 62.0 %� � $ 3,455,655 �� �� � 55.2 %� � $ 3,032,328 �� �� � 61.2 %�

British pound sterling

 �� � 411,864 �� �� � 18.1 %� � � 148,142 �� �� � 8.5 %� � � 1,137,292 �� �� � 18.1 %� � � 409,972 �� �� � 8.3 %�

Euro

 �� � 184,213 �� �� � 8.1 %� � � 159,696 �� �� � 9.2 %� � � 530,340 �� �� � 8.5 %� � � 458,273 �� �� � 9.3 %�

Australian dollar

 �� � 91,843 �� �� � 4.0 %� � � 71,882 �� �� � 4.1 %� � � 254,491 �� �� � 4.1 %� � � 221,706 �� �� � 4.5 %�

Canadian dollar

 �� � 81,029 �� �� � 3.6 %� � � 79,050 �� �� � 4.6 %� � � 231,336 �� �� � 3.7 %� � � 227,577 �� �� � 4.6 %�

Japanese yen

 �� � 49,912 �� �� � 2.2 %� � � 36,431 �� �� � 2.1 %� � � 122,361 �� �� � 1.9 %� � � 108,160 �� �� � 2.2 %�

Indian rupee

 �� � 33,263 �� �� � 1.5 %� � � 29,619 �� �� � 1.7 %� � � 95,206 �� �� � 1.5 %� � � 87,095 �� �� � 1.7 %�

Chinese yuan

 �� � 25,400 �� �� � 1.1 %� � � 25,477 �� �� � 1.5 %� � � 77,561 �� �� � 1.2 %� � � 74,654 �� �� � 1.5 %�

Singapore dollar

 �� � 21,815 �� �� � 1.0 %� � � 20,831 �� �� � 1.2 %� � � 65,886 �� �� � 1.1 %� � � 65,388 �� �� � 1.3 %�

Other currencies

 �� � 107,755 �� �� � 4.7 %� � � 88,403 �� �� � 5.1 %� � � 292,596 �� �� � 4.7 %� � � 265,790 �� �� � 5.4 %�
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Total revenue

 �� $ 2,275,076 �� �� � 100.0 %� � $ 1,733,866 �� �� � 100.0 %� � $ 6,262,724 �� �� � 100.0 %� � $ 4,950,943 �� �� � 100.0 %�
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We estimate that had the British pound sterling-to-U.S. dollar exchange rates been 10% higher during the nine months ended September�30, 2014, the net impact would have been an increase in pre-tax income of $5.5 million. This hypothetical calculation estimates the impact of translating results into U.S. dollars and does not include an estimate of the impact a 10% change in the U.S. dollar against other currencies would have had on our foreign operations.

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 may adversely affect our future financial condition and results of operations. Our management routinely monitors these risks and related costs and evaluates the appropriate amount of resources to allocate towards business activities in foreign countries where such risks and costs are particularly significant.

Leverage

We are leveraged and have significant debt service obligations. As of September�30, 2014, our total debt���excluding our notes payable on real estate (which are generally nonrecourse to us) and warehouse lines of credit (which are recourse only to our wholly-owned subsidiary, CBRE Capital Markets, Inc., or CBRE Capital Markets, and are secured by our related warehouse receivables) � was approximately $2.3 billion.

Our level of indebtedness and the operating and financial restrictions in our debt agreements place some constraints on the operation of our business. Although our management believes that long-term indebtedness has been an important lever in the development of our business, including facilitating the acquisition of the majority of the real estate investment management business of Netherlands-based ING Group N.V. (the REIM Acquisitions) and the Norland Acquisition, the cash flow necessary to service this debt is not available for other general corporate purposes, which may limit our flexibility in planning for, or reacting to, changes in our business and in the commercial real estate services industry. Our management seeks to mitigate this exposure both through the refinancing of debt when available on attractive terms and through selective repayment and retirement of indebtedness.

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For example, during 2014, we completed two financing transactions that have extended debt maturities and lowered annual interest expense. These transactions were the issuance in September 2014 of $300.0 million aggregate principal amount of 5.25% senior notes due March�15, 2025 and the redemption in October 2014 of all of the then outstanding 6.625% senior notes (aggregate principal amount of $350.0 million). During the three months ended September�30, 2014, in connection with these financing activities, we incurred approximately $3.7 million of financing costs. In addition, we expensed $5.7 million of previously-deferred financing costs as well as a $17.4 million early extinguishment premium.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may differ from those estimates. 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, our consolidation policy, goodwill and other intangible assets, real estate and income taxes can be found in our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended). There have been no material changes to these policies as of September�30, 2014.

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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 months ended September�30, 2014 and 2013, presented in dollars and as a percentage of revenue (dollars in thousands):

�

� � Three Months Ended September�30, � � Nine Months Ended September�30, �
� � 2014 � � 2013 � � 2014 � � 2013 �

Revenue

 � $ 2,275,076 �� � � 100.0 %� � $ 1,733,866 �� � � 100.0 %� � $ 6,262,724 �� � � 100.0 %� � $ 4,950,943 �� � � 100.0 %�

Costs and expenses:

 � � � � � �

Cost of services

 � � 1,428,986 �� � � 62.8 �� � � 1,032,348 �� � � 59.5 �� � � 3,904,919 �� � � 62.4 �� � � 2,912,391 �� � � 58.8 ��

Operating, administrative and other

 � � 601,026 �� � � 26.4 �� � � 496,615 �� � � 28.6 �� � � 1,695,623 �� � � 27.1 �� � � 1,465,614 �� � � 29.6 ��

Depreciation and amortization

 � � 67,159 �� � � 3.0 �� � � 47,524 �� � � 2.8 �� � � 195,657 �� � � 3.1 �� � � 137,406 �� � � 2.8 ��
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Total costs and expenses

 � � 2,097,171 �� � � 92.2 �� � � 1,576,487 �� � � 90.9 �� � � 5,796,199 �� � � 92.6 �� � � 4,515,411 �� � � 91.2 ��

Gain on disposition of real estate

 � � 7,235 �� � � 0.3 �� � � 740 �� � � ��� �� � � 37,102 �� � � 0.6 �� � � 11,385 �� � � 0.2 ��
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Operating income

 � � 185,140 �� � � 8.1 �� � � 158,119 �� � � 9.1 �� � � 503,627 �� � � 8.0 �� � � 446,917 �� � � 9.0 ��

Equity income from unconsolidated subsidiaries

 � � 43,300 �� � � 1.9 �� � � 13,347 �� � � 0.8 �� � � 67,564 �� � � 1.1 �� � � 29,640 �� � � 0.6 ��

Other (loss) income

 � � (113 )� � � ��� �� � � 5,125 �� � � 0.3 �� � � 11,052 �� � � 0.2 �� � � 9,352 �� � � 0.2 ��

Interest income

 � � 1,598 �� � � 0.1 �� � � 1,484 �� � � 0.1 �� � � 4,321 �� � � 0.1 �� � � 5,002 �� � � 0.1 ��

Interest expense

 � � 27,841 �� � � 1.2 �� � � 27,783 �� � � 1.6 �� � � 84,326 �� � � 1.3 �� � � 107,710 �� � � 2.2 ��

Write-off of financing costs

 � � 23,087 �� � � 1.0 �� � � ��� �� � � ��� �� � � 23,087 �� � � 0.4 �� � � 56,295 �� � � 1.1 ��
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Income from continuing operations before provision for income taxes

 � � 178,997 �� � � 7.9 �� � � 150,292 �� � � 8.7 �� � � 479,151 �� � � 7.7 �� � � 326,906 �� � � 6.6 ��

Provision for income taxes

 � � 69,305 �� � � 3.1 �� � � 56,126 �� � � 3.3 �� � � 171,318 �� � � 2.8 �� � � 120,945 �� � � 2.4 ��
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Income from continuing operations

 � � 109,692 �� � � 4.8 �� � � 94,166 �� � � 5.4 �� � � 307,833 �� � � 4.9 �� � � 205,961 �� � � 4.2 ��

Income from discontinued operations, net of income taxes

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Net income

 � � 109,692 �� � � 4.8 �� � � 94,166 �� � � 5.4 �� � � 307,833 �� � � 4.9 �� � � 230,255 �� � � 4.7 ��

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

 � � 2,593 �� � � 0.1 �� � � (278 )� � � ��� �� � � 27,607 �� � � 0.4 �� � � 28,363 �� � � 0.6 ��
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Net income attributable to CBRE Group, Inc.

 � $ 107,099 �� � � 4.7 %� � $ 94,444 �� � � 5.4 %� � $ 280,226 �� � � 4.5 %� � $ 201,892 �� � � 4.1 %�
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EBITDA (1)

 � $ 292,893 �� � � 12.9 %� � $ 224,393 �� � � 12.9 %� � $ 750,293 �� � � 12.0 %� � $ 624,627 �� � � 12.6 %�
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EBITDA, as adjusted (1)

 � $ 292,189 �� � � 12.8 %� � $ 225,200 �� � � 13.0 %� � $ 753,719 �� � � 12.0 %� � $ 629,603 �� � � 12.7 %�
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(1) Includes EBITDA related to discontinued operations of $7.4 million for the nine months ended September�30, 2013.

EBITDA represents earnings before net interest expense, write-off of financing costs, income taxes, depreciation and amortization, while amounts shown for EBITDA, as adjusted, remove the impact of certain cash and non-cash charges related to acquisitions and cost containment expenses, as well as certain carried interest incentive compensation (reversal) expense. Our management believes that both of these measures are useful in evaluating our operating performance compared to that of other companies in our industry because the

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calculations of EBITDA and EBITDA, as adjusted, generally eliminate the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses these measures to evaluate operating performance and for other discretionary purposes, including as a significant component when measuring our operating performance under our employee incentive programs. Additionally, we believe EBITDA and EBITDA, as adjusted, are useful to investors to assist them in getting a more complete picture of our results of operations.

However, EBITDA and EBITDA, as adjusted, are not recognized measurements under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, readers should use EBITDA and EBITDA, as adjusted, in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA and EBITDA, as adjusted, may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA and EBITDA, as adjusted, are not intended to be measures of free cash flow for our management�s discretionary use, as they do not consider certain cash requirements such as tax and debt service payments. The amounts shown for EBITDA and EBITDA, as adjusted, also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.

EBITDA and EBITDA, as adjusted for selected charges are calculated as follows (dollars in thousands):

�

� �� Three Months Ended
September�30,		 � �� Nine Months Ended
September�30,		 �
� �� 2014 � � 2013 � �� 2014 � �� 2013 �

Net income attributable to CBRE Group, Inc.

 �� $ 107,099 �� � $ 94,444 �� �� $ 280,226 �� �� $ 201,892 ��

Add:

 �� � �� ��

Depreciation and amortization (1)

 �� � 67,159 �� � � 47,524 �� �� � 195,657 �� �� � 138,276 ��

Interest expense (2)

 �� � 27,841 �� � � 27,783 �� �� � 84,326 �� �� � 110,857 ��

Write-off of financing costs

 �� � 23,087 �� � � ��� �� �� � 23,087 �� �� � 56,295 ��

Provision for income taxes (3)

 �� � 69,305 �� � � 56,126 �� �� � 171,318 �� �� � 122,309 ��

Less:

 �� � �� ��

Interest income

 �� � 1,598 �� � � 1,484 �� �� � 4,321 �� �� � 5,002 ��
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EBITDA (4)

 �� $ 292,893 �� � $ 224,393 �� �� $ 750,293 �� �� $ 624,627 ��

Adjustments:

 �� � �� ��

Carried interest incentive compensation (reversal) expense

 �� � (704 )� � � 807 �� �� � 3,426 �� �� � 3,451 ��

Integration and other costs related to acquisitions

 �� � ��� �� � � ��� �� �� � ��� �� �� � 1,525 ��
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EBITDA, as adjusted (4)

 �� $ 292,189 �� � $ 225,200 �� �� $ 753,719 �� �� $ 629,603 ��
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(1) Includes depreciation and amortization expense related to discontinued operations of $0.9 million for the nine months ended September�30, 2013.
(2) Includes interest expense related to discontinued operations of $3.2 million for the nine months ended September�30, 2013.
(3) Includes provision for income taxes related to discontinued operations of $1.3 million for the nine months ended September�30, 2013.
(4) Includes EBITDA related to discontinued operations of $7.4 million for the nine months ended September�30, 2013.

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Three Months Ended September�30, 2014 Compared to the Three Months Ended September�30, 2013

We reported consolidated net income of $107.1 million for the three months ended September�30, 2014 on revenue of $2.3 billion as compared to consolidated net income of $94.4 million on revenue of $1.7 billion for the three months ended September�30, 2013.

Our revenue on a consolidated basis for the three months ended September�30, 2014 increased by $541.2 million, or 31.2%, as compared to the three months ended September�30, 2013. This increase was enhanced by contributions from the Norland Acquisition. However, the revenue increase also reflects strong organic growth, fueled by higher worldwide property, facilities and project management fees (excluding the impact of the Norland Acquisition) (up 18.7%), increased sales (up 31.9%) and leasing (up 14.1%) activity. Foreign currency translation had a $21.0 million positive impact on total revenue during the three months ended September�30, 2014, primarily driven by strength in the British pound sterling in the current year versus the prior year.

Our cost of services on a consolidated basis increased by $396.6 million, or 38.4%, during the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. This increase was primarily due to higher costs associated with our global property and facilities management contracts, particularly due to the Norland Acquisition. 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 accruals. Foreign currency translation had a $10.9 million negative impact on cost of services during the three months ended September�30, 2014. Cost of services as a percentage of revenue increased from 59.5% for the three months ended September�30, 2013 to 62.8% for the three months ended September�30, 2014, largely due to the Norland Acquisition. Excluding activity associated with Norland, cost of services as a percentage of revenue was 60.2% for the three months ended September�30, 2014, compared to 59.5% for the three months ended September�30, 2013.

Our operating, administrative and other expenses on a consolidated basis increased by $104.4 million, or 21.0%, during the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The increase was partially due to costs associated with the Norland Acquisition. Higher worldwide payroll-related costs (including bonuses) and an asset impairment charge of $8.6 million incurred in our Americas segment also contributed to the variance. Foreign currency translation had a $7.5 million negative impact on total operating expenses during the three months ended September�30, 2014. Operating expenses as a percentage of revenue decreased from 28.6% for the three months ended September�30, 2013 to 26.4% for the three months ended September�30, 2014, as a result of the Norland Acquisition. Excluding activity associated with Norland, operating expenses as a percentage of revenue were relatively consistent at 28.3% for the three months ended September�30, 2014, compared to 28.6% for the three months ended September�30, 2013.

Our depreciation and amortization expense on a consolidated basis increased by $19.6 million, or 41.3%, during the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. This increase was primarily attributable to higher amortization expense relative to intangibles acquired in the Norland Acquisition and in-fill acquisitions completed in 2014. A rise in depreciation expense in the current year driven by technology-related capital expenditures also contributed to the increase.

Our gain on disposition of real estate on a consolidated basis was $7.2 million for the three months ended September�30, 2014 as compared to $0.7 million for the three months ended September�30, 2013. These gains resulted from activity within our Development Services segment. The increase over the prior-year period is largely due to our adoption of Accounting Standards Update, or ASU, 2014-08, �Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity� effective January�1, 2014 and as a result, no longer reporting discontinued operations in the ordinary course of our business. Prior to January�1, 2014, if in the ordinary course of business we disposed of real estate assets, or held real estate assets for sale, that were

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considered components of an entity in accordance with Topic 360, and if we did not have, or expect to have, significant continuing involvement with the operation of these real estate assets after disposition, we were required to recognize operating profits or losses and gains or losses on disposition of these assets as discontinued operations in our consolidated statements of operations in the periods in which they occurred.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $30.0 million, or 224.4%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. This increase was primarily driven by higher equity earnings associated with gains on property sales within our Development Services segment and a gain on the sale of an equity investment in Canada (within our Americas segment) in the current year.

Our other loss on a consolidated basis was $0.1 million for the three months ended September�30, 2014 as compared to other income of $5.1 million for the three months ended September�30, 2013 and was primarily reported within our Global Investment Management segment. This activity primarily relates to net realized and unrealized gains and losses attributable to co-investments in our real estate securities business.

Our consolidated interest income was $1.6 million for the three months ended September�30, 2014 versus $1.5 million for the three months ended September�30, 2013.

Our consolidated interest expense was flat at $27.8 million for both the three months ended September�30, 2014 and 2013. During the third quarter, we issued an aggregate principal amount of $300.0 million of 5.25% senior notes due in 2025 and in October 2014, we used the note proceeds, together with cash on hand and borrowings under our revolving credit facility, to redeem in full the $350.0 million in aggregate principal amount of 6.625% senior notes due in 2020. This move is expected to lower annual interest expense by approximately $5 million.

Our write-off of financing costs on a consolidated basis was $23.1 million for the three months ended September�30, 2014, primarily related to costs associated with the redemption in full of our 6.625% senior notes, including a $17.4 million early extinguishment premium and the write-off of $5.7 million of previously deferred financing costs.

Our provision for income taxes on a consolidated basis was $69.3 million for the three months ended September�30, 2014 as compared to $56.1 million for the three months ended September�30, 2013. This increase was driven by the growth in pre-tax income in the current year. Our effective tax rate from continuing operations, after adjusting pre-tax income to remove the portion attributable to non-controlling interests, increased to 39.3% for the three months ended September�30, 2014 as compared to 37.3% for the three months ended September�30, 2013, primarily due to the impact of losses sustained in jurisdictions where no tax benefit could be provided. Excluding the impact of such losses, our effective rate was 37.4% and 37.3% for the three months ended September�30, 2014 and 2013, respectively. We anticipate our full year 2014 effective tax rate to be approximately 36%.

Our net income attributable to non-controlling interests on a consolidated basis was $2.6 million for the three months ended September�30, 2014 as compared to a net loss attributable to non-controlling interests of $0.3 million for the three months ended September�30, 2013. This activity primarily reflects our non-controlling interests� share of income/loss within our Global Investment Management and Development Services segments.

Nine Months Ended September�30, 2014 Compared to the Nine Months Ended September�30, 2013

We reported consolidated net income of $280.2 million for the nine months ended September�30, 2014 on revenue of $6.3 billion as compared to consolidated net income of $201.9 million on revenue of $5.0 billion for the nine months ended September�30, 2013.

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Our revenue on a consolidated basis for the nine months ended September�30, 2014 increased by $1.3 billion, or 26.5%, as compared to the nine months ended September�30, 2013. This increase was enhanced by contributions from the Norland Acquisition. However, the revenue increase also reflects strong organic growth, fueled by higher worldwide property, facilities and project management fees (excluding the impact of the Norland Acquisition) (up 15.6%), increased sales (up 21.2%) and leasing (up 12.9%) activity. Foreign currency translation had a $7.9 million positive impact on total revenue during the nine months ended September�30, 2014, primarily driven by strength in the British pound sterling and Euro, partially offset by weakness in the Australian dollar, Canadian dollar, Indian rupee and Japanese yen in the current year versus the prior year.

Our cost of services on a consolidated basis increased by $992.5 million, or 34.1%, during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This increase was primarily due to higher costs associated with our global property and facilities management contracts, particularly due to the Norland Acquisition. In addition, 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 accruals. Foreign currency translation had a $4.0 million positive impact on cost of services during the nine months ended September�30, 2014. Cost of services as a percentage of revenue increased from 58.8% for the nine months ended September�30, 2013 to 62.4% for the nine months ended September�30, 2014, largely due to the Norland Acquisition. Excluding activity associated with Norland, cost of services as a percentage of revenue was 59.6% for the nine months ended September�30, 2014, compared to 58.8% for the nine months ended September�30, 2013.

Our operating, administrative and other expenses on a consolidated basis increased by $230.0 million, or 15.7%, during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The increase was partly driven by costs associated with the Norland Acquisition. Also contributing to the variance were higher worldwide payroll-related costs (including bonuses), increased insurance and consulting costs, and an asset impairment charge of $8.6 million incurred in our Americas segment in the current year. Foreign currency translation had an $8.2 million negative impact on total operating expenses during the nine months ended September�30, 2014. Operating expenses as a percentage of revenue decreased from 29.6% for the nine months ended September�30, 2013 to 27.1% for the nine months ended September�30, 2014, as a result of the Norland Acquisition. Excluding activity associated with Norland, operating expenses as a percentage of revenue were 29.3% for the nine months ended September�30, 2014, compared to 29.6% for the nine months ended September�30, 2013.

Our depreciation and amortization expense on a consolidated basis increased by $58.3 million, or 42.4%, during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This increase was primarily attributable to higher amortization expense relative to intangibles acquired in the Norland Acquisition and in-fill acquisitions completed in 2014. A rise in depreciation expense in the current year driven by technology-related capital expenditures also contributed to the increase.

Our gain on disposition of real estate on a consolidated basis was $37.1 million for the nine months ended September�30, 2014 as compared to $11.4 million for the nine months ended September�30, 2013. These gains resulted from activity within our Global Investment Management and Development Services segments. The increase over the prior-year period is largely due to our adoption of ASU 2014-08.

Our equity income from unconsolidated subsidiaries on a consolidated basis increased by $37.9 million, or 127.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This increase was primarily driven by higher equity earnings associated with gains on property sales within our Development Services segment and a gain on the sale of an equity investment in Canada within our Americas segment in the current year.

Our other income on a consolidated basis increased by $1.7 million, or 18.2%, during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013 and was primarily reported

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within our Global Investment Management segment. This increase primarily relates to higher net realized and unrealized gains in the current year related to co-investments in our real estate securities business.

Our consolidated interest income was $4.3 million for the nine months ended September�30, 2014 versus $5.0 million for the nine months ended September�30, 2013.

Our consolidated interest expense decreased by $23.4 million, or 21.7%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, reflecting the effects of our refinancing activities in the first half of 2013.

Our write-off of financing costs on a consolidated basis was $23.1 million for the nine months ended September�30, 2014 as compared to $56.3 million for the nine months ended September�30, 2013. The write-off in the current year related to costs associated with the redemption in full of our 6.625% senior notes, including a $17.4 million early extinguishment premium and the write-off of $5.7 million of previously deferred financing costs. The write-off in the prior year primarily related to costs associated with the redemption in full of our 11.625% senior subordinated notes, including a $26.2 million early extinguishment premium and the write-off of $16.1 million of unamortized original issue discount and previously deferred financing costs. In addition, during the prior year, we wrote-off $10.4 million of unamortized deferred financing costs associated with our previous credit agreement and incurred fees of $3.6 million in connection with our new credit agreement and 5.00% senior notes.

Our provision for income taxes on a consolidated basis was $171.3 million for the nine months ended September�30, 2014 as compared to $120.9 million for the nine months ended September�30, 2013. This increase was driven by the significant growth in pre-tax income in the current year. Our effective tax rate from continuing operations, after adjusting pre-tax income to remove the portion attributable to non-controlling interests, was relatively consistent at 37.9% for the nine months ended September�30, 2014 as compared to 37.7% for the nine months ended September�30, 2013.

Our consolidated income from discontinued operations, net of income taxes, was $24.3 million for the nine months ended September�30, 2013. This income was reported in our Development Services and Global Investment Management segments and mostly related to gains from property sales, which were largely attributable to non-controlling interests. As previously mentioned, on January�1, 2014, we adopted ASU 2014-08 and as a result, no longer anticipate reporting discontinued operations in the ordinary course of our business.

Our net income attributable to non-controlling interests on a consolidated basis was $27.6 million for the nine months ended September�30, 2014 as compared to $28.4 million for the nine months ended September�30, 2013. This activity primarily reflects our non-controlling interests� share of income within our Global Investment Management and Development Services segments.

Segment Operations

We report our operations through the following segments: (1)�Americas, (2)�EMEA, (3)�Asia Pacific, (4)�Global Investment Management and (5)�Development Services. The Americas consists 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 consists of real estate development and investment activities primarily in the United States.

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The following table summarizes our revenue, costs and expenses and operating income (loss) by our Americas, EMEA, Asia Pacific, Global Investment Management and Development Services operating segments for the three and nine months ended September�30, 2014 and 2013 (dollars in thousands):

�

� � Three Months Ended September�30, � � Nine Months Ended September�30, �
� � 2014 � � 2013 � � 2014 � � 2013 �

Americas

 � � � � � � � �

Revenue

 � $ 1,325,875 �� � � 100.0 %� � $ 1,105,768 �� � � 100.0 %� � $ 3,583,276 �� � � 100.0 %� � $ 3,145,341 �� � � 100.0 %�

Costs and expenses:

 � � � � � � � �

Cost of services

 � � 869,889 �� � � 65.6 �� � � 726,876 �� � � 65.7 �� � � 2,332,470 �� � � 65.1 �� � � 2,034,040 �� � � 64.7 ��

Operating, administrative and other

 � � 281,433 �� � � 21.2 �� � � 252,219 �� � � 22.8 �� � � 792,577 �� � � 22.1 �� � � 723,451 �� � � 23.0 ��

Depreciation and amortization

 � � 38,451 �� � � 2.9 �� � � 30,281 �� � � 2.8 �� � � 107,796 �� � � 3.0 �� � � 84,838 �� � � 2.7 ��
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Operating income

 � $ 136,102 �� � � 10.3 %� � $ 96,392 �� � � 8.7 %� � $ 350,433 �� � � 9.8 %� � $ 303,012 �� � � 9.6 %�
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EBITDA (1)

 � $ 187,476 �� � � 14.1 %� � $ 132,195 �� � � 12.0 %� � $ 482,642 �� � � 13.5 %� � $ 401,852 �� � � 12.8 %�
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EMEA

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Revenue

 � $ 574,493 �� � � 100.0 %� � $ 285,496 �� � � 100.0 %� � $ 1,604,159 �� � � 100.0 %� � $ 784,407 �� � � 100.0 %�

Costs and expenses:

 � � � � � � � �

Cost of services

 � � 402,503 �� � � 70.1 �� � � 172,112 �� � � 60.3 �� � � 1,134,240 �� � � 70.7 �� � � 481,335 �� � � 61.4 ��

Operating, administrative and other

 � � 135,714 �� � � 23.6 �� � � 96,552 �� � � 33.8 �� � � 383,818 �� � � 23.9 �� � � 275,223 �� � � 35.1 ��

Depreciation and amortization

 � � 16,080 �� � � 2.8 �� � � 4,194 �� � � 1.5 �� � � 48,862 �� � � 3.1 �� � � 13,101 �� � � 1.6 ��
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Operating income

 � $ 20,196 �� � � 3.5 %� � $ 12,638 �� � � 4.4 %� � $ 37,239 �� � � 2.3 %� � $ 14,748 �� � � 1.9 %�
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EBITDA (1)

 � $ 37,485 �� � � 6.5 %� � $ 17,735 �� � � 6.2 %� � $ 88,219 �� � � 5.5 %� � $ 28,930 �� � � 3.7 %�
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Revenue

 � $ 253,742 �� � � 100.0 %� � $ 202,701 �� � � 100.0 %� � $ 690,599 �� � � 100.0 %� � $ 617,262 �� � � 100.0 %�

Costs and expenses:

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Cost of services

 � � 156,594 �� � � 61.7 �� � � 133,360 �� � � 65.8 �� � � 438,209 �� � � 63.5 �� � � 397,016 �� � � 64.3 ��

Operating, administrative and other

 � � 74,381 �� � � 29.3 �� � � 56,380 �� � � 27.8 �� � � 197,617 �� � � 28.6 �� � � 175,315 �� � � 28.4 ��

Depreciation and amortization

 � � 4,178 �� � � 1.7 �� � � 2,688 �� � � 1.3 �� � � 10,617 �� � � 1.5 �� � � 8,571 �� � � 1.4 ��
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Operating income

 � $ 18,589 �� � � 7.3 %� � $ 10,273 �� � � 5.1 %� � $ 44,156 �� � � 6.4 %� � $ 36,360 �� � � 5.9 %�
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EBITDA (1)

 � $ 22,767 �� � � 9.0 %� � $ 13,056 �� � � 6.4 %� � $ 54,773 �� � � 7.9 %� � $ 44,916 �� � � 7.3 %�
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Revenue

 � $ 105,012 �� � � 100.0 %� � $ 127,337 �� � � 100.0 %� � $ 343,789 �� � � 100.0 %� � $ 369,088 �� � � 100.0 %�

Costs and expenses:

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Operating, administrative and other

 � � 81,739 �� � � 77.8 �� � � 75,629 �� � � 59.4 �� � � 260,697 �� � � 75.8 �� � � 246,117 �� � � 66.7 ��

Depreciation and amortization

 � � 7,485 �� � � 7.2 �� � � 9,192 �� � � 7.2 �� � � 25,303 �� � � 7.4 �� � � 27,283 �� � � 7.4 ��

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 � $ 15,788 �� � � 15.0 %� � $ 42,516 �� � � 33.4 %� � $ 80,817 �� � � 23.5 %� � $ 95,688 �� � � 25.9 %�
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 � $ 21,146 �� � � 20.1 %� � $ 55,396 �� � � 43.5 %� � $ 87,538 �� � � 25.5 %� � $ 127,723 �� � � 34.6 %�
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Revenue

 � $ 15,954 �� � � 100.0 %� � $ 12,564 �� � � 100.0 %� � $ 40,901 �� � � 100.0 %� � $ 34,845 �� � � 100.0 %�

Costs and expenses:

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Operating, administrative and other

 � � 27,759 �� � � 174.0 �� � � 15,835 �� � � 126.0 �� � � 60,914 �� � � 148.9 �� � � 45,508 �� � � 130.6 ��

Depreciation and amortization

 � � 965 �� � � 6.0 �� � � 1,169 �� � � 9.3 �� � � 3,079 �� � � 7.5 �� � � 3,613 �� � � 10.4 ��

Gain on disposition of real estate

 � � 7,235 �� � � 45.3 �� � � 740 �� � � 5.9 �� � � 14,074 �� � � 34.4 �� � � 11,385 �� � � 32.7 ��
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Operating loss

 � $ (5,535 )� � � (34.7 )%� � $ (3,700 )� � � (29.4 )%� � $ (9,018 )� � � (22.0 )%� � $ (2,891 )� � � (8.3 )%�
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EBITDA (1)�(3)

 � $ 24,019 �� � � 150.6 %� � $ 6,011 �� � � 47.8 %� � $ 37,121 �� � � 90.8 %� � $ 21,206 �� � � 60.9 %�
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(1) See Note 16 of the Notes to Consolidated Financial Statements (Unaudited) for a reconciliation of segment EBITDA to the most comparable financial measure calculated and presented in accordance with GAAP, which is segment net income (loss) attributable to CBRE Group, Inc.

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(2) Includes EBITDA related to discontinued operations of $1.4 million for the nine months ended September�30, 2013.
(3) Includes EBITDA related to discontinued operations of $6.0 million for the nine months ended September�30, 2013.

Three Months Ended September�30, 2014 Compared to the Three Months Ended September�30, 2013

Americas

Revenue increased by $220.1 million, or 19.9%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. This improvement was primarily driven by higher property, facilities and project management fees as well as increased leasing, sales and commercial mortgage brokerage activity. Lending activity with Government Sponsored Entities, or GSEs, rebounded significantly compared with the third quarter of 2013, when these lenders faced regulatory limits on their mortgage origination volumes. Foreign currency translation had a $3.3�million negative impact on total revenue during the three months ended September�30, 2014, primarily driven by weakness in the Canadian dollar when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $143.0 million, or 19.7%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013, primarily due to increased commission expense resulting from higher sales and lease transaction revenue. Higher salaries and related costs associated with our property, facilities and project management contracts also contributed to an increase in cost of services in the current year. Foreign currency translation had a $2.4 million positive impact on cost of services during the three months ended September�30, 2014. Cost of services as a percentage of revenue was consistent at 65.6% for the three months ended September�30, 2014 as compared to 65.7% for the three months ended September�30, 2013.

Operating, administrative and other expenses increased by $29.2 million, or 11.6%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The increase was primarily driven by higher payroll-related costs (including bonuses). Also contributing to the variance was an asset impairment charge in the current year of $8.6 million, which resulted from the decision (due to a change in strategy) to abandon a property database platform that was being developed in the United States. Foreign currency translation had a $0.8 million positive impact on total operating expenses during the three months ended September�30, 2014.

EMEA

Revenue increased by $289.0 million, or 101.2%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The increase was enhanced by contributions from the Norland Acquisition. Excluding Norland, revenue was up 25.5% and growth was strong in property, facilities and project management, and sales activity. Leasing revenue showed modest growth, mainly driven by the United Kingdom and despite a significant decline in France, where leasing markets reflect sluggish economic conditions. Foreign currency translation had an $18.4 million positive impact on total revenue during the three months ended September�30, 2014, primarily driven by strength in the British pound sterling when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $230.4 million, or 133.9%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013 primarily due to higher costs associated with our global property and facilities management contracts, particularly due to the Norland Acquisition. Foreign currency translation had a $10.7 million negative impact on cost of services during the three months ended September�30, 2014. Cost of services as a percentage of revenue increased to 70.1% for the three months ended September�30, 2014 from 60.3% for the three months ended September�30, 2013, mainly due to the Norland Acquisition. Excluding activity associated with Norland, cost of services as a percentage of revenue was 59.7% for the three months ended September�30, 2014, an improvement over the 60.3% of revenue recorded in the year ago quarter, primarily driven by higher transaction revenue in the current year in certain countries that have a significant fixed compensation structure.

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Operating, administrative and other expenses increased by $39.2 million, or 40.6%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The increase was primarily driven by costs associated with the Norland Acquisition. Higher payroll-related costs (including bonuses), which resulted from increased headcount and improved operating performance, also contributed to the current year increase. Foreign currency translation had a $5.4 million negative impact on total operating expenses during the three months ended September�30, 2014.

Asia Pacific

Revenue increased by $51.0 million, or 25.2%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013, reflecting improved overall performance in several countries, most notably in Australia and Japan. Contributions from our acquisition of our former affiliate company in Thailand in June 2014 also added to the current year increase. Foreign currency translation had a $3.5 million positive impact on total revenue during the three months ended September�30, 2014, primarily driven by weakness in the Australian dollar when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $23.2 million, or 17.4%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013, driven by higher salaries and related costs associated with our property and facilities management contracts. Increased commission expense resulting from higher transaction revenue also contributed to an increase in cost of services in the current year. Foreign currency translation had a $2.6 million negative impact on cost of services during the three months ended September�30, 2014. Cost of services as a percentage of revenue decreased to 61.7% for the three months ended September�30, 2014 from 65.8% for the three months ended September�30, 2013, primarily driven by higher transaction revenue in the current year in certain countries that have a significant fixed cost compensation structure.

Operating, administrative and other expenses increased by $18.0 million, or 31.9%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The increase was primarily driven by higher payroll-related costs (including bonuses). Foreign currency translation had a $1.0 million negative impact on total operating expenses during the three months ended September�30, 2014.

Global Investment Management

Revenue decreased by $22.3 million, or 17.5%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. Prior quarter results included $29.9 million of carried interest revenue, while current quarter results only included nominal carried interest revenue. Foreign currency translation had a $2.4 million positive impact on total revenue during the three months ended September�30, 2014.

Operating, administrative and other expenses increased by $6.1 million, or 8.1%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013, primarily driven by higher payroll-related costs (including bonuses). Foreign currency translation had a $1.9 million negative impact on total operating expenses during the three months ended September�30, 2014.

Total AUM as of September�30, 2014 totaled $88.6 billion, down 1.0% from year-end 2013. This business is transitioning from gain-harvesting in 2013 to capital-deployment in 2014. A rollforward of our AUM by product type for the three months ended September�30, 2014 is as follows (dollars in billions):

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� �� Funds � � Separate
Accounts		 � � Securities � � Consolidated �

Balance at July�1, 2014

 �� $ 32.3 �� � $ 35.1 �� � $ 25.4 �� � $ 92.8 ��

Inflows

 �� � 1.1 �� � � 1.8 �� � � 1.2 �� � � 4.1 ��

Outflows

 �� � (2.2 )� � � (1.3 )� � � (1.6 )� � � (5.1 )�

Market depreciation

 �� � (1.3 )� � � (0.6 )� � � (1.3 )� � � (3.2 )�
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Balance at September�30, 2014

 �� $ 29.9 �� � $ 35.0 �� � $ 23.7 �� � $ 88.6 ��
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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 material assets under management consist of:

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� a) 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

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� b) 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 program.

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 increased by $3.4 million, or 27.0%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013, primarily driven by higher development fees in the current year due to an increase in new projects started.

Operating, administrative and other expenses increased by $11.9 million, or 75.3%, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. This increase was primarily driven by higher bonuses due to higher gains on property sales in the current year.

As of September�30, 2014, development projects in process totaled $5.1 billion, up 4%, or $200 million, from year-end 2013, and the inventory of pipeline deals totaled $2.9 billion, up 93%, or $1.4 billion, from year-end 2013.

Nine Months Ended September�30, 2014 Compared to the Nine Months Ended September�30, 2013

Americas

Revenue increased by $437.9 million, or 13.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This improvement was primarily driven by higher property, facilities and project management fees, as well as improved leasing, sales and commercial mortgage brokerage activity. Foreign currency translation had a $21.6 million negative impact on total revenue during the nine months ended September�30, 2014, primarily driven by weakness in the Canadian dollar when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $298.4 million, or 14.7%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, primarily due to increased commission expense resulting from higher sales and lease transaction revenue. Higher salaries and related costs associated with our property, facilities and project management contracts also contributed to an increase in cost of services in the current year. Foreign currency translation had a $14.1 million positive impact on cost of services during the nine months ended September�30, 2014. Cost of services as a percentage of revenue was relatively consistent at 65.1% for the nine months ended September�30, 2014 versus 64.7% for the nine months ended September�30, 2013.

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Operating, administrative and other expenses increased by $69.1 million, or 9.6%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The increase was primarily driven by higher payroll-related costs (including bonuses), which resulted from increased headcount, as well as higher insurance and consulting costs. Also contributing to the variance was the previously mentioned asset impairment charge in the current year of $8.6 million. Foreign currency translation had a $6.0 million positive impact on total operating expenses during the nine months ended September�30, 2014.

EMEA

Revenue increased by $819.8 million, or 104.5%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The increase was enhanced by contributions from the Norland Acquisition. Excluding Norland, revenue was up 24.3% and growth was strong in nearly all major business lines, most notably in property, facilities and project management, and sales and appraisal activity. Leasing revenue showed modest growth, mainly driven by the United Kingdom and despite a significant decline in France, where leasing markets reflect sluggish economic conditions. Foreign currency translation had a $50.1 million positive impact on total revenue during the nine months ended September�30, 2014, primarily driven by strength in the British pound sterling and Euro when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $652.9 million, or 135.6%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, primarily due to higher costs associated with our global property and facilities management contracts, particularly due to the Norland Acquisition. Foreign currency translation had a $28.5 million negative impact on cost of services during the nine months ended September�30, 2014. Cost of services as a percentage of revenue increased to 70.7% for the nine months ended September�30, 2014 from 61.4% for the nine months ended September�30, 2013, mainly due to the Norland Acquisition. Excluding activity associated with Norland, cost of services as a percentage of revenue was 60.4% for the nine months ended September�30, 2014, an improvement over the 61.4% of revenue recorded in the prior year quarter, primarily driven by higher transaction revenue in the current year in certain countries that have a significant fixed cost compensation structure.

Operating, administrative and other expenses increased by $108.6 million, or 39.5%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The increase was primarily driven by costs associated with the Norland Acquisition. Higher payroll-related costs (including bonuses), which resulted from increased headcount and improved operating performance, as well as increased consulting costs, also contributed to the current year increase. Foreign currency translation had a $15.6 million negative impact on total operating expenses during the nine months ended September�30, 2014.

Asia Pacific

Revenue increased by $73.3 million, or 11.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, reflecting improved overall performance in several countries, most notably in Australia, China, India and Japan, particularly in property, facilities and project management, sales and leasing activity. Contributions from our acquisition of our former affiliate company in Thailand in June 2014 also added to the current year increase. This increase was partially offset by foreign currency translation, which had a $28.4 million negative impact on total revenue during the nine months ended September�30, 2014, primarily driven by weakness in the Australian dollar, Japanese yen and Indian rupee when converting to U.S. dollars in the current year versus the prior year.

Cost of services increased by $41.2 million, or 10.4%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, driven by increased commission expense resulting from higher sales and lease transaction revenue as well as a concentration of commissions among higher producing professionals in Australia and Japan. Higher salaries and related costs associated with our property and facilities

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management contracts also contributed to an increase in cost of services in the current year. Foreign currency translation had an $18.4 million positive impact on cost of services during the nine months ended September�30, 2014. Cost of services as a percentage of revenue decreased to 63.5% for the nine months ended September�30, 2014 from 64.3% for the nine months ended September�30, 2013, primarily driven by higher transaction revenue in the current year in certain countries that have a significant fixed cost compensation structure.

Operating, administrative and other expenses increased by $22.3 million, or 12.7%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The increase was primarily driven by higher payroll-related (including bonuses), occupancy and consulting costs. Foreign currency translation had a $7.1 million positive impact on total operating expenses during the nine months ended September�30, 2014.

Global Investment Management

Revenue decreased by $25.3 million, or 6.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, primarily driven by reduced carried interest revenue. Lower asset management fees, which reflect the sale of assets in 2013 to harvest gains for fund investors, lower fees on some AUM in EMEA, and our exiting the management of a private REIT, also contributed to the decline in the current year. These reductions were partially offset by higher acquisitions fees in the current year as well as foreign currency translation, which had a $7.8 million positive impact on total revenue during the nine months ended September�30, 2014.

Operating, administrative and other expenses increased by $14.6 million, or 5.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, primarily due to higher carried interest expense incurred in the current year as well as higher payroll-related costs (including bonuses). Foreign currency translation also had a $5.7 million negative impact on total operating expenses during the nine months ended September�30, 2014. These increases were partially offset by lower costs due to the sale of assets and internalization of the management of a private REIT discussed above.

A rollforward of our AUM by product type for the nine months ended September�30, 2014 is as follows (dollars in billions):

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� �� Funds � � Separate
Accounts		 � � Securities � � Consolidated �

Balance at January�1, 2014

 �� $ 32.8 �� � $ 33.5 �� � $ 22.8 �� � $ 89.1 ��

Inflows

 �� � 1.8 �� � � 3.9 �� � � 3.6 �� � � 9.3 ��

Outflows

 �� � (4.1 )� � � (2.6 )� � � (4.3 )� � � (11.0 )�

Market (depreciation) appreciation

 �� � (0.6 )� � � 0.2 �� � � 1.6 �� � � 1.2 ��
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Balance at September�30, 2014

 �� $ 29.9 �� � $ 35.0 �� � $ 23.7 �� � $ 88.6 ��
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Development Services

Revenue increased by $6.1 million, or 17.4%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013, primarily due to higher development fees in the current year due to an increase in new projects started.

Operating, administrative and other expenses increased by $15.4 million, or 33.9%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This increase was primarily driven by higher bonuses as well as higher payroll-related costs attributable to an increase in headcount to support the growing business.

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Liquidity and Capital Resources

We believe that we can satisfy our working capital requirements and funding of investments with internally generated cash flow and, as necessary, borrowings under our revolving credit facility. Our expected capital requirements for 2014 include up to approximately $155 million of anticipated net capital expenditures. During the nine months ended September�30, 2014, we incurred $77.3 million of net capital expenditures. As of September�30, 2014, we had committed to fund $26.5 million of additional capital to unconsolidated subsidiaries within our Development Services business, which may be called at any time. Additionally, as of September�30, 2014, we had aggregate commitments of $19.3 million to fund future co-investments in our Global Investment Management business, $7.0 million of which is expected to be funded in 2014.

In December 2013, we fortified our real estate outsourcing platform in Europe with the acquisition of Norland for approximately $474 million, which was financed with cash on hand and borrowings under our revolving credit facility. During 2011, we required substantial amounts of debt financing to fund strategic acquisitions. We also conducted four debt offerings in recent years. The first, in 2009, was part of a capital restructuring in response to the global economic recession, the second, in 2010, was to take advantage of low interest rates and term availability, and the third and fourth, in March 2013 and September 2014, respectively, were also to take advantage of market conditions to refinance other debt. Absent extraordinary transactions such as these and the equity offerings we completed during the unprecedented global capital markets disruption in 2008 and 2009, we historically have not sought external sources of financing and have relied on our internally generated cash flow and our revolving credit facility to fund our working capital, capital expenditure and investment requirements. In the absence of such extraordinary events, 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, but at a minimum for the next 12 months. From time to time, we may again seek to take advantage of market opportunities to refinance existing debt securities with new debt securities at interest rates, maturities and terms we would deem attractive.

As evidenced above, from time to time, we consider potential strategic acquisitions. 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 find acquisition financing on favorable terms, or at all, in the future if we decide to make any further material acquisitions.

Our long-term liquidity needs, other than those related to ordinary course obligations and commitments such as operating leases, generally are comprised of 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 our long-term cash flow from operations will be sufficient to repay our long-term debt when it comes due. If our cash flow is insufficient, 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 repayment of obligations under our pension plans in the United Kingdom. Our subsidiaries based in the United Kingdom maintain two contributory defined benefit pension plans to provide retirement benefits to existing and former employees participating in the plans. With respect to these plans, our historical policy has been to contribute annually, an amount to fund pension cost as actuarially determined and as required by applicable laws and regulations. Our contributions to these plans are invested and, if these investments do not perform in the future as well as we expect, we will be required to provide additional funding to cover any shortfall. The underfunded status of our defined benefit pension plans included in pension liability in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form 10-Q was $59.9 million and $68.0 million at September�30, 2014 and December�31, 2013, respectively. We expect to contribute a total of $6.3 million to fund our pension plans for the year ending December�31, 2014, of which $4.7 million was funded as of September�30, 2014.

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The third long-term liquidity need is the payment of obligations related to acquisitions. Our acquisition structures often include deferred and/or contingent purchase price payments in future periods that are subject to the passage of time or achievement of certain performance metrics and other conditions. As of September�30, 2014 and December�31, 2013, we had accrued for $66.8 million and $86.9 million, respectively, of deferred purchase consideration, which was included in accounts payable and accrued expenses and in other long-term liabilities in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form�10-Q.

Historical Cash Flows

Operating Activities

Net cash provided by operating activities totaled $68.5 million for the nine months ended September�30, 2014, a decrease of $166.2 million as compared to the nine months ended September�30, 2013. This variance was primarily due to an increase in receivables in the current year and greater sales of real estate held for sale and under development in the prior year. In addition, higher bonuses, income taxes and commissions paid in the current year also contributed to the decrease. These items were partially offset by an increase in bonus accruals and improved operating performance in the current year.

Investing Activities

Net cash used in investing activities totaled $114.5 million for the nine months ended September�30, 2014 as compared to net cash provided by investing activities of $26.3 million for the nine months ended September�30, 2013. This variance was primarily driven by lower proceeds received from the sale of real estate held for investment in the current year, as well as greater amounts paid for in-fill acquisitions and capital expenditures in the current year. In addition, the lower decrease in restricted cash in the current year versus the prior year also contributed to the variance.

Financing Activities

Net cash provided by financing activities totaled $182.2 million for the nine months ended September�30, 2014 as compared to net cash used in financing activities of $839.6 million for the nine months ended September�30, 2013. This variance was primarily due to our refinancing efforts in the first half of 2013, including the net repayment of $914.1 million of senior secured term loans and the redemption of $450.0 million in aggregate principal amount of 11.625% senior subordinated notes. Proceeds from the issuance of the 5.25% senior notes due in 2025 in the current year and higher net repayments of notes payable on real estate within our Development Services segment in the prior year also contributed to the variance. These items were partially offset by the issuance of $800.0 million in aggregate principal amount of 5.00% senior notes in the prior year.

Significant 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.

Since 2001, we have maintained credit facilities with Credit Suisse Group AG, or CS, and other lenders to fund strategic acquisitions and to provide for our working capital needs. On March�28, 2013, we entered into a new credit agreement (the Credit Agreement) with a syndicate of banks led by CS, as administrative and collateral agent, to completely refinance our previous credit agreement. During the year ended December�31, 2013, we completed a series of financing transactions, which included the repayment of $1.6 billion of our senior secured term loans under our previous credit agreement.

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Our Credit Agreement currently provides for the following: (1)�a $1.2 billion revolving credit facility, including revolving credit loans, letters of credit and a swingline loan facility, maturing on March�28, 2018; (2)�a $500.0 million tranche A term loan facility (of which $300.0 million was on an optional delayed-draw basis for up to 120 days from March�28, 2013, which we drew down in June 2013 to partially fund the redemption of our 11.625% senior subordinated notes) requiring quarterly principal payments, which began on June�30, 2013 and continue through maturity on March�28, 2018; and (3)�a $215.0 million tranche B term loan facility requiring quarterly principal payments, which began on June�30, 2013 and continue through December�31, 2020, with the balance payable at maturity on March�28, 2021.

The revolving credit facility allows for borrowings outside of the United States, with a $10.0 million sub-facility available to one of our Canadian subsidiaries, a $35.0 million sub-facility available to one of our Australian subsidiaries and one of our New Zealand subsidiaries and a $150.0 million sub-facility available to one of our U.K. subsidiaries. Additionally, outstanding borrowings under these sub-facilities may be up to 5.0% higher as allowed under the currency fluctuation provision in the Credit Agreement. Borrowings under the revolving credit facility bear interest at varying rates, based at our option, on either the applicable fixed rate plus 1.15% to 2.25% or the daily rate plus 0.125% to 1.25% as determined by reference to our ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement). As of September�30, 2014 and December�31, 2013, we had $149.2 million and $142.5 million, respectively, of revolving credit facility principal outstanding with related weighted average interest rates of 1.7% and 2.2%, respectively, which are included in short-term borrowings in the consolidated balance sheets set forth in Item�1 of this Quarterly Report. As of September�30, 2014, letters of credit totaling $7.4 million were outstanding under the revolving credit facility. These letters of credit, which reduce the amount we may borrow under the revolving credit facility, were primarily issued in the normal course of business as well as in connection with certain insurance programs.

Borrowings under the term loan facilities as of September�30, 2014 bear interest, based at our option, on the following: for the tranche A term loan facility, on either the applicable fixed rate plus 1.50% to 2.75% or the daily rate plus 0.50% to 1.75%, as determined by reference to our ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement) and for the tranche B term loan facility, on either the applicable fixed rate plus 2.75% or the daily rate plus 1.75%. As of September�30, 2014, we had $655.5 million of term loan facilities principal outstanding (including $443.7 million of tranche A term loan facility and $211.8 million of tranche B term loan facility), which are included in the accompanying consolidated balance sheets. As of December�31, 2013, we had $685.3 million of term loan facilities principal outstanding (including $471.9 million of tranche A term loan facility and $213.4 million of tranche B term loan facility), which are also included in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report.

The Credit Agreement is jointly and severally guaranteed by us and substantially all of our domestic subsidiaries. Borrowings under our Credit Agreement are secured by a pledge of substantially all of the capital stock of our U.S. subsidiaries and 65.0% of the capital stock of certain non-U.S. subsidiaries. Also, the Credit Agreement requires us to pay a fee based on the total amount (whether used or unused) of the revolving credit facility commitment.

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, or FASB, Accounting Standards Codification, or 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 secured term loan facilities. The total notional amount of these interest rate swap agreements is $400.0 million, with $200.0 million expiring in October 2017 and $200.0 million expiring in September 2019. There was no significant hedge ineffectiveness for the three and nine months ended September�30, 2014 and 2013. As of September�30, 2014 and December�31, 2013, the fair values of such interest rate swap agreements were reflected as a $25.8 million liability and a $29.0 million liability, respectively, and were included in other long-term liabilities in the consolidated balance sheets set forth in Item�1 of this Quarterly Report.

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On September�26, 2014, CBRE Services, Inc., or CBRE, our wholly-owned subsidiary, issued $300.0 million in aggregate principal amount of 5.25% senior notes due March�15, 2025. The 5.25% senior notes are unsecured obligations of CBRE, 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 are jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guarantees our Credit Agreement.�Interest accrues at a rate of 5.25%�per year and is payable semi-annually in arrears on March�15 and September�15, beginning on March�15, 2015. The 5.25% senior notes are redeemable at our option, in whole or in part, prior to December�15, 2024 at a redemption price equal to the greater of (1)�100% of the principal amount of the 5.25% senior notes to be redeemed and (2)�the sum of the present values of the remaining scheduled payments of principal and interest thereon to December�15, 2024 (not including any portions of payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semi-annual basis at the Adjusted Treasury Rate (as defined in the indentures governing these notes). In addition, at any time on or after December�15, 2024, the 5.25% senior notes may be redeemed by us, in whole or in part, at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, if any, to (but excluding) the date of redemption. If a change of control triggering event (as defined in the indenture governing these notes) occurs, we are obligated to make an offer to purchase the then outstanding 5.25% senior notes at a redemption price of 101.0% of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.�The amount of the 5.25% senior notes included in the consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form 10-Q was $300.0 million at September�30, 2014.

On March�14, 2013, CBRE issued $800.0 million in aggregate principal amount of 5.00% senior notes due March�15, 2023. The 5.00% senior notes are unsecured obligations of CBRE, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 5.00% senior notes are jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guarantees our Credit Agreement.�Interest accrues at a rate of 5.00%�per year and is payable semi-annually in arrears on March�15 and September�15, beginning on September�15, 2013. The 5.00% senior notes are redeemable at our option, in whole or in part, on or after March�15, 2018 at a redemption price of 102.5% of the principal amount on that date and at declining prices thereafter. At any time prior to March�15, 2016, we may redeem up to 35.0% of the original principal amount of the 5.00% senior notes using the net cash proceeds from certain public offerings. In addition, at any time prior to March�15, 2018, the 5.00% senior notes may be redeemed by us, in whole or in part, at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, and an applicable premium (as defined in the indenture governing these notes), which is based on the excess of the present value of the March�15, 2018 redemption price plus all remaining interest payments through March�15, 2018, over the principal amount of the 5.00% senior notes on such redemption date. If a change of control triggering event (as defined in the indenture governing these notes) occurs, we are obligated to make an offer to purchase the then outstanding 5.00% senior notes at a redemption price of 101.0% of the principal amount, plus accrued and unpaid interest, if any.�The amount of the 5.00% senior notes included in the consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form 10-Q was $800.0 million at both September�30, 2014 and December�31, 2013.

On October�8, 2010, CBRE issued $350.0 million in aggregate principal amount of 6.625% senior notes due October�15, 2020. The 6.625% senior notes were unsecured obligations of CBRE, senior to all of its current and future subordinated indebtedness, but effectively subordinated to all of its current and future secured indebtedness. The 6.625% senior notes were jointly and severally guaranteed on a senior basis by us and each domestic subsidiary of CBRE that guarantees our Credit Agreement.�Interest accrued at a rate of 6.625%�per year and was payable semi-annually in arrears on April�15 and October�15, having commenced on April�15, 2011. The 6.625% senior notes were redeemable at our option, in whole or in part, on or after October�15, 2014 at a redemption price of 104.969% of the principal amount on that date and at declining prices thereafter. In addition, at any time prior to October�15, 2014, the 6.625% senior notes were redeemable by us, in whole or in part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable premium (as defined in the indenture governing these notes), which was based on the greater of 1.00% of the principal amount of the 6.625% senior notes and the excess of the present value of the October�15, 2014

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redemption price plus all remaining interest payments through October�15, 2014, over the principal amount of the 6.625% senior notes on such redemption date. On September�26, 2014, we gave the 30-day notice required under the indenture of our intent to call all of the 6.625% senior notes. We redeemed these notes in full on October�27, 2014 in accordance with the provisions of the notes and associated indenture. In connection with this early redemption, we incurred charges of $23.1�million, including a premium of $17.4 million and the write-off of $5.7�million of unamortized deferred financing costs. The amount of the 6.625% senior notes included in the consolidated balance sheets set forth in Item�1 of this Quarterly Report on Form 10-Q was $350.0 million at both September�30, 2014 and December�31, 2013.

Our Credit Agreement and the indentures governing our 5.00% senior notes, 5.25% senior notes and 6.625% senior notes contain numerous restrictive covenants that, among other things, limit 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 Credit Agreement also currently requires us to maintain a minimum coverage ratio of EBITDA (as defined in the Credit Agreement) to total interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to EBITDA (as defined in the Credit Agreement) of 4.25x. Our coverage ratio of EBITDA to total interest expense was 12.29x for the trailing twelve months ended September�30, 2014 and our leverage ratio of total debt less available cash to EBITDA was 1.45x as of September�30, 2014. We may from time to time, in our sole discretion, look for opportunities to refinance or reduce our outstanding debt under our Credit Agreement and under our 5.00% senior notes and 5.25% senior notes.

From time to time, our Credit Agreement indebtedness and some of our other indebtedness is rated by certain nationally recognized statistical rating organizations. The interest rates under our Credit Agreement would be positively impacted if our issuer or long-term debt ratings improved to investment grade. In addition, changes in these ratings could impact the terms and availability of any future indebtedness.

On June�18, 2009, CBRE issued $450.0 million in aggregate principal amount of 11.625% senior subordinated notes due June�15, 2017 for approximately $435.9 million, net of discount. The 11.625% senior subordinated notes were unsecured senior subordinated obligations of CBRE and were jointly and severally guaranteed on a senior subordinated basis by us and our domestic subsidiaries that guarantee our Credit Agreement.�Interest accrued at a rate of 11.625%�per year and was payable semi-annually in arrears on June�15 and December�15. As permitted by the indenture governing these notes, on June�15, 2013, we redeemed all of the 11.625% senior subordinated notes. In connection with this early redemption, we paid a premium of $26.2 million and wrote off $16.1 million of unamortized deferred financing costs and unamortized discount.

We had short-term borrowings of $785.4 million and $517.1 million as of September�30, 2014 and December�31, 2013, respectively, with related weighted average interest rates of 1.8% and 1.9%, respectively, which are included in the consolidated balance sheets set forth in Item�1 of this Quarterly Report.

On March�2, 2007, we entered into a $50.0 million credit note with Wells Fargo Bank for the purpose of purchasing eligible investments, which include cash equivalents, agency securities, A1/P1 commercial paper and eligible money market funds.�The proceeds of this note are not made generally available to us, but instead are deposited in an investment account maintained by Wells Fargo Bank and used and applied solely to purchase eligible investment securities. This agreement has been amended several times and currently provides for a $5.0 million revolving credit note, bears interest at 0.25% and has a maturity date of May�31, 2015.�As of September�30, 2014 and December�31, 2013, there were no amounts outstanding under this note.

On March�4, 2008, we entered into a $35.0 million credit and security agreement with Bank of America, or BofA, for the purpose of purchasing eligible financial instruments, which include A1/P1 commercial paper, U.S. Treasury securities, Government Sponsored Enterprise, or GSE, discount notes (as defined in the credit and security agreement) and money market funds. The proceeds of this loan are not made generally available to us,

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but instead are deposited in an investment account maintained by BofA and used and applied solely to purchase eligible financial instruments. This agreement has been amended several times and currently provides for a $5.0 million credit line, bears interest at 1% and has a maturity date of April�30, 2015. As of September�30, 2014 and December�31, 2013, there were no amounts outstanding under this agreement.

On August�19, 2008, we entered into a $15.0 million uncommitted facility with First Tennessee Bank for the purpose of purchasing investments, which included cash equivalents, agency securities, A1/P1 commercial paper and eligible money market funds. The proceeds of this facility were not made generally available to us, but instead were held in a collateral account maintained by First Tennessee Bank. This agreement provided for a $4.0 million credit line, bore interest at 0.25% and expired on August�31, 2014. As of September�30, 2014 and December�31, 2013, there were no amounts outstanding under this agreement.

Our wholly-owned subsidiary, CBRE Capital Markets, has the following warehouse lines of credit: credit agreements with JP Morgan Chase Bank, N.A., or JP Morgan, BofA, TD Bank, N.A., or TD Bank, and Capital One, N.A., or Capital One, for the purpose of funding mortgage loans that will be resold, and a funding arrangement with Federal National Mortgage Association, or Fannie Mae, for the purpose of selling a percentage of certain closed multifamily loans.

On November�15, 2005, CBRE Capital Markets entered into a secured credit agreement with JP Morgan to establish a warehouse line of credit. This agreement has been amended several times and currently provides for a $275.0 million line of credit and bears interest at the daily LIBOR plus 1.90%. A portion of the line of credit totaling $100.0 million matures on January�15, 2015. The remainder, or $175.0 million, has a maturity date of October�26, 2015.

On April�16, 2008, CBRE Capital Markets entered into a secured credit agreement with BofA to establish a warehouse line of credit. The senior secured revolving line of credit currently provides for a $200.0 million line of credit, bears interest at the daily one-month LIBOR plus 1.60% and has a maturity date of May�27, 2015.

In August 2009, CBRE Capital Markets entered into a funding arrangement with Fannie Mae under its Multifamily As Soon As Pooled Plus Agreement and its Multifamily As Soon As Pooled Sale Agreement, or ASAP Program. Under the ASAP Program, CBRE Capital Markets may elect, on a transaction by transaction basis, to sell a percentage of certain closed multifamily loans to Fannie Mae on an expedited basis. After all contingencies are satisfied, the ASAP Program requires that CBRE Capital Markets repurchase the interest in the multifamily loan previously sold to Fannie Mae followed by either a full delivery back to Fannie Mae via whole loan execution or a securitization into a mortgage backed security. Under this agreement, the maximum outstanding balance under the ASAP Program cannot exceed $200.0 million and, between the sale date to Fannie Mae and the repurchase date by CBRE Capital Markets, the outstanding balance bears interest and is payable to Fannie Mae at the daily LIBOR rate plus 1.35% with a LIBOR floor of 0.35%. This arrangement remains in place but is cancelable at any time by Fannie Mae with notice.

On December�21, 2010, CBRE Capital Markets entered into a secured credit agreement with TD Bank to establish a warehouse line of credit. The secured revolving line of credit has been amended several times and currently provides for a $300.0 million line of credit, bears interest at the daily one-month LIBOR plus 1.50% and has a maturity date of June�30, 2015.

On July�30, 2012, CBRE Capital Markets entered into a secured credit agreement with Capital One to establish a warehouse line of credit. This agreement provides for a $200.0 million senior secured revolving line of credit, bears interest at the daily one-month LIBOR plus 1.55% and has a maturity date of July�29, 2015.

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On March�17, 2014, CBRE Capital Markets� wholly-owned subsidiary, CBRE Business Lending, Inc., entered into a secured credit agreement with JP Morgan to establish a line of credit. This agreement provides for a $25.0 million secured revolving line of credit, bears interest at daily LIBOR plus 2.75% and has a maturity date of March�16, 2015.

During the nine months ended September�30, 2014, we had a maximum of $894.4 million of warehouse lines of credit principal outstanding. As of September�30, 2014 and December�31, 2013, we had $631.8 million and $374.6 million of warehouse lines of credit principal outstanding, respectively, which are included in short-term borrowings in the consolidated balance sheets set forth in Item�1 of this Quarterly Report. Additionally, we had $638.1 million and $381.5 million of mortgage loans held for sale (warehouse receivables), as of September�30, 2014 and December�31, 2013, respectively, which substantially represented mortgage loans funded through the lines of credit that, while committed to be purchased, had not yet been purchased and which are also included in the consolidated balance sheets set forth in Item�1 of this Quarterly Report.

A significant number of our subsidiaries in Europe have had a Euro cash pool loan since 2001, which is used to fund their short-term liquidity needs. The Euro cash pool loan is an overdraft line for our European operations issued by HSBC Bank. The Euro cash pool loan has no stated maturity date and bears interest at varying rates based on LIBOR or EDF plus 2.0%. As of September�30, 2014, there was $4.4 million of Euro cash pool loan outstanding, which has been included in short-term borrowings in the consolidated balance sheets set forth in Item�1 of this Quarterly Report. There were no amounts outstanding under this facility as of December�31, 2013.

Off-Balance Sheet Arrangements

We had outstanding letters of credit totaling $22.9 million as of September�30, 2014, 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. These letters of credit are primarily executed by us in the ordinary course of business and expire at varying dates through September 2015.

We had guarantees totaling $16.7 million as of September�30, 2014, 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 operating leases. The $16.7 million mainly represents guarantees of obligations of unconsolidated subsidiaries, which expire at varying dates through August 2017, as well as various guarantees of management contracts in our operations overseas, which expire at the end of each of the respective agreements. The remainder of the guarantees consist of guarantees related to our defined benefit pension plans in the United Kingdom (in excess of our outstanding pension liability of $59.9 million as of September�30, 2014), which are continuous guarantees that will not expire until all amounts have been paid out for our pension liabilities.

In addition, as of September�30, 2014, we had numerous completion and budget guarantees relating to development projects. These guarantees are made by us in the ordinary course of our Development Services business. Each of these guarantees requires 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 have �guaranteed maximum price� contracts with reputable 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.

In January 2008, CBRE Multifamily Capital, Inc., or 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, or DUS Program, to provide financing for multifamily housing with five or more

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units.�Under the DUS Program, CBRE MCI originates, underwrites, closes and services loans without prior approval by Fannie Mae, and in selected cases, is subject to sharing up to one-third of any losses on loans originated under the DUS Program. CBRE MCI has funded loans subject to such loss sharing arrangements with unpaid principal balances of $9.2 billion at September�30, 2014.�Additionally, CBRE MCI has funded loans under the DUS Program that are not subject to loss sharing arrangements with unpaid principal balances of approximately $365.9 million at September�30, 2014.�CBRE MCI, under its agreement with Fannie Mae, must post cash reserves under formulas established by Fannie Mae to provide for sufficient capital in the event losses occur.�As of September�30, 2014 and December�31, 2013, CBRE MCI had $25.1 million and $16.6 million, respectively, of cash deposited under this reserve arrangement, and had provided approximately $16.3 million and $13.8 million, respectively, of loan loss accruals. Fannie Mae�s recourse under the DUS Program is limited to the assets of CBRE MCI, which totaled approximately $293.4 million (including $137.1 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�30, 2014.

An important part of the strategy for our Global Investment Management business involves investing our capital in certain real estate investments with our clients. These co-investments typically range from 2.0% to 5.0% of the equity in a particular fund. As of September�30, 2014, we had aggregate commitments of $19.3 million to fund future co-investments, $7.0 million of which is expected to be funded in 2014. In addition to required future capital contributions, some of the co-investment entities may request additional capital from us and our subsidiaries holding investments in those assets and the failure to provide these contributions could have adverse consequences to our interests in these investments.

Additionally, an important part of our Development Services business strategy is to invest in unconsolidated real estate subsidiaries as a principal (in most cases co-investing with our clients). As of September�30, 2014, we had committed to fund $26.5 million of additional capital to these unconsolidated subsidiaries, which may be called at any time.

Seasonality

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 tends to be lower in the first two quarters and higher in the third and fourth quarters of each year. Earnings and cash flow have generally been concentrated in the fourth quarter due to the focus on completing sales, financing and leasing transactions prior to calendar year-end. This has historically resulted in lower profits or a loss in the first quarter, with revenue and profitability improving in each subsequent quarter.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, �Revenue from Contracts with Customers (Topic 606).� This ASU 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. The ASU will replace most existing revenue recognition guidance under accounting principles generally accepted in the United States, or GAAP, when it becomes effective on January�1, 2017. This ASU permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of this ASU on our ongoing financial reporting.

Cautionary Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section�27A of the Securities Act of 1933, as amended, and Section�21E of the Securities Exchange Act of 1934,

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as amended. 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 on Form 10-Q to identify forward-looking statements. Except for historical information contained herein, the matters addressed in this Quarterly Report on Form 10-Q 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:

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� � �

disruptions in general economic and business conditions, particularly in geographies where our business may be concentrated;

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volatility and disruption of the securities, capital and credit markets, interest rate increases, the cost and availability of capital for investment in real estate, clients� willingness to make real estate or long-term contractual commitments and other factors affecting the value of real estate assets, inside and outside the United States;

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our ability to control costs relative to revenue growth;

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our ability to retain and incentivize producers;

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

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

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integration challenges arising out of companies we may acquire;

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increases in unemployment and general slowdowns in commercial activity;

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

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

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

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foreign currency fluctuations;

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our ability to attract new user and investor clients;

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our ability to retain major clients and renew related contracts;

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

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

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changes in tax laws in the United States or in other jurisdictions in which our business may be concentrated that reduce or eliminate deductions or other tax benefits we receive;

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changes in international law (including anti-corruption, anti-money laundering and trade control law), particularly in Russia, Eastern Europe and the Middle East, due to the rising level of political instability in those regions;

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� � �

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

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

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

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

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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;

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

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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;

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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;

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

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our leverage and our ability to perform under our credit facilities;

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

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

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the effect of significant movements in average cap rates across different property types;

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the effect of implementation of new accounting rules and standards; and

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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� and �Quantitative and Qualitative Disclosures About Market Risk� or as described in our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended), in particular in �Item 1A, Risk Factors�, or in the other documents and reports we file with the Securities and Exchange Commission.

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 and Exchange Commission.

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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 year ended December�31, 2013 (as amended). Our exposure to market risk 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 the �Derivatives and Hedging� Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) (Topic 815) 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.

Certain of 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 currency. During the nine months ended September�30, 2014, approximately 45% of our business was transacted in local currencies of foreign countries, the majority of which includes the Australian dollar, the British pound sterling, the Canadian dollar, the Chinese yuan, the Euro, the Indian rupee, the Japanese yen and the Singapore dollar. We enter 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.

In March 2014, we began a foreign currency exchange forward hedging program by entering into 38 foreign currency exchange forward contracts, including agreements to buy U.S. dollars and sell Australian dollars, Canadian dollars, Japanese yen, Euros, and British pound sterling covering an initial notional amount of $209.7 million. The purpose of these forward contracts is to attempt to mitigate the risk of fluctuations in foreign currency exchange rates that would adversely impact our foreign currency denominated EBITDA. Hedge accounting was not elected for any of these contracts. As such, the changes in the fair values of these contracts are recorded directly in earnings. Included in the consolidated statement of operations set forth in Item�1 of this Quarterly Report were net gains of $7.7 million and $4.5 million for the three and nine months ended September�30, 2014, respectively, resulting from net gains on foreign currency exchange forward contracts. As of September�30, 2014, we had nine foreign currency exchange forward contracts outstanding covering a notional amount of $91.6 million. As of September�30, 2014, the fair value of forward contracts with four counterparties aggregated to a $4.7 million asset position, which was included in other current assets in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report. As of September�30, 2014, the fair value of forward contracts with one counterparty aggregated to a $0.04 million liability position, which was included in other current liabilities in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report.

We also routinely monitor our exposure to currency exchange rate changes in connection with certain transactions and sometimes enter into foreign currency exchange option and forward contracts to limit our exposure to such transactions, as appropriate. In the normal course of business, we also sometimes utilize derivative financial instruments in the form of foreign currency exchange contracts to attempt to mitigate foreign currency exchange exposure resulting from intercompany loans. Included in the consolidated statements of operations set forth in Item�1 of this Quarterly Report on Form 10-Q were net gains of $3.1 million and $2.9 million for the three and nine months ended September�30, 2014, respectively, and net losses of $1.1 million and $1.6 million for the three and nine months ended September�30, 2013, respectively, resulting from net gains/losses on foreign currency exchange option and forward contracts. As of September�30, 2014, the fair value of such contracts with two counterparties aggregated to a $2.6 million asset position, which was included in other current assets in the accompanying consolidated balance sheets set forth in Item�1 of this Quarterly Report. As of December�31, 2013, we did not have any such foreign currency exchange contracts outstanding.

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 Topic 815. The purpose of these

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interest rate swap agreements is to attempt to hedge potential changes to our cash flows due to the variable interest nature of our senior secured term loan facilities. The total notional amount of these interest rate swap agreements is $400.0 million, with $200.0 million expiring in October 2017 and $200.0 million expiring in September 2019. There was no significant hedge ineffectiveness for the three and nine months ended September�30, 2014 and 2013. As of September�30, 2014, the fair values of these interest rate swap agreements were reflected as a $25.8 million liability and were included in other long-term liabilities in the consolidated balance sheets set forth in Item�1 of this Quarterly Report.

The estimated fair value of our senior secured term loans was approximately $654.3 million at September�30, 2014. Based on dealers� quotes, the estimated fair values of our 5.00% senior notes, 5.25% senior notes and 6.625% senior notes were $793.9 million, $298.9 million and $368.1 million, respectively, at September�30, 2014.

We utilize sensitivity analyses to assess the potential effect of our variable rate debt. If interest rates were to increase by 10.0% on our outstanding variable rate debt, excluding notes payable on real estate, at September�30, 2014, the net impact of the additional interest cost would be a decrease of $2.2 million on pre-tax income and a decrease of $2.2 million on cash provided by operating activities for the nine months ended September�30, 2014.

We also have $75.0 million of notes payable on real estate as of September�30, 2014. Interest costs relating to notes payable on real estate include both interest that is expensed and interest that is capitalized as part of the cost of real estate. If interest rates were to increase by 10.0%, our total estimated interest cost related to notes payable would increase by approximately $0.2 million for the nine months ended September�30, 2014. From time to time, we enter into interest rate swap and cap agreements in order to limit our interest expense related to our notes payable on real estate. If any of these agreements are not designated as effective hedges, then they are marked to market each period with the change in fair value recognized in current period earnings. The net impact on our earnings resulting from gains and/or losses on interest rate swap and cap agreements associated with notes payable on real estate has not been significant.

We also enter into loan commitments that relate to the origination or acquisition of commercial mortgage loans that will be held for resale. FASB ASC Topic 815 requires that these commitments be recorded at their fair values as derivatives. The net impact on our financial position and earnings resulting from these derivatives contracts has not been significant.

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ITEM�4. CONTROLS AND PROCEDURES

Securities Exchange Act Rule 13a-15 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 and that all information required to be disclosed in our SEC reports is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods and in the manner specified in the SEC�s rules. Our Chief Executive Officer and Chief Financial Officer supervise and participate in this evaluation, and our Disclosure Committee assists them. This Committee consists of our principal accounting officer, general counsel, chief communication officer, 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 effective as of the end of the period covered by this quarterly report.

Additionally, we report that no changes in our internal control over financial reporting occurred during the fiscal quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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No changes in our internal control over financial reporting occurred during the fiscal quarter ended September�30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

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ITEM�1. LEGAL PROCEEDINGS

There have been no material changes to our legal proceedings as previously disclosed in our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended).

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ITEM�1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December�31, 2013 (as amended).

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ITEM�2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We may repurchase shares awarded to grant recipients under our various equity compensation plans to satisfy minimum statutory federal, state and local tax withholding obligations arising from the vesting of their equity awards. The following table presents information with respect to the repurchased shares relating thereto during each calendar month within the fiscal quarter ended September�30, 2014:

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Period

 �� Total�Number
of Shares
Purchased		 � �� Average
Price�Paid
per Share		 �

July�1, 2014 � July�31, 2014

 �� � ��� �� �� $ ��� ��

August�1, 2014 � August�31, 2014

 �� � ��� �� �� $ ��� ��

September�1, 2014 � September�30, 2014

 �� � 240,921 �� �� $ 31.33 ��
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Total

 �� � 240,921 �� �� $ 31.33 ��
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ITEM�6. EXHIBITS

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� � � �� Incorporated by Reference

Exhibit
No.

 �

Exhibit Description

 �� Form �� SEC File No. � �� Exhibit � �� Filing Date � �� Filed
Herewith
����3.1 � Restated Certificate of Incorporation of CBRE Group, Inc. filed on June 16, 2004, as amended by the Certificate of Amendment filed on June 4, 2009 and the Certificate of Ownership and Merger filed on October 3, 2011 �� 10-Q �� � 001-32205 �� �� � 3.1 �� �� � 11/9/2011 �� ��
����3.2 � Second Amended and Restated By-laws of CBRE Group, Inc. �� 8-K �� � 001-32205 �� �� � 3.2 �� �� � 10/3/2011 �� ��
����4.1 � Form of Class A common stock certificate of CB Richard Ellis Group, Inc. �� S-1/A#2 �� � 333-112867 �� �� � 4.1 �� �� � 4/30/2004 �� ��
����4.2(a) � Securityholders� Agreement, dated as of July�20, 2001 (�Securityholders� Agreement�), by and among, CB Richard Ellis Group, Inc., CB Richard Ellis Services, Inc., Blum Strategic Partners, L.P., Blum Strategic Partners II, L.P., Blum Strategic Partners II GmbH & Co. KG, FS Equity �� SC-13D �� � 005-61805 �� �� � 3 �� �� � 7/30/2001 �� ��

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� � � �� Incorporated by Reference

Exhibit
No.

 �

Exhibit Description

 �� Form �� SEC File No. � �� Exhibit � � Filing Date � �� Filed
Herewith
� Partners III, L.P., FS Equity Partners International, L.P., Credit Suisse First Boston Corporation, DLJ Investment Funding, Inc., The Koll Holding Company, Frederic V. Malek, the management investors named therein and the other persons from time to time party thereto �� �� �� � ��
����4.2(b) � Amendment and Waiver to Securityholders� Agreement, dated as of April 14, 2004, by and among, CB Richard Ellis Group, Inc., CB Richard Ellis Services, Inc. and the other parties to the Securityholders� Agreement �� S-1/A �� � 333-112867 �� �� � 4.2 (b)� � � 4/30/2004 �� ��
����4.2(c) � Second Amendment and Waiver to Securityholders� Agreement, dated as of November 24, 2004, by and among CB Richard Ellis Group, Inc., CB Richard Ellis Services, Inc. and certain of the other parties to the Securityholders� Agreement �� S-1/A �� � 333-120445 �� �� � 4.2 (c)� � � 11/24/2004 �� ��
����4.2(d) � Third Amendment and Waiver to Securityholders� Agreement, dated as of August 1, 2005, by and among CB Richard Ellis Group, Inc., CB Richard Ellis Services, Inc. and certain of the other parties to the Securityholders� Agreement �� 8-K �� � 001-32205 �� �� � 4.1 �� � � 8/2/2005 �� ��
����4.3(a) � Indenture, dated as of October 8, 2010, among CB Richard Ellis Services, Inc., CB Richard Ellis Group, Inc., the other guarantors party thereto and Wells Fargo Bank, National Association, as trustee, for the 6.625% Senior Notes Due October 15, 2020 �� 8-K �� � 001-32205 �� �� � 4.1 �� � � 10/12/2010 �� ��
����4.3(b) � Form of Supplemental Indenture among CB Richard Ellis Services, Inc., CB Richard Ellis Group, Inc., certain new U.S. subsidiaries from time-to-time, the other guarantors party thereto and Wells Fargo Bank, National Association, as trustee, for the 6.625% Senior Notes Due October�15, 2020 �� 8-K �� � 001-32205 �� �� � 4.2 �� � � 7/29/2011 �� ��
����4.4 � Form of Exchange Note relating to 6.625% Senior Notes due October 15, 2020 �� 8-K �� � 001-32205 �� �� � 4.41 �� � � 10/12/2010 �� ��
����4.5(a) � Indenture, dated as of March 14, 2013, among CBRE Group, Inc., CBRE Services, Inc., certain other subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.00% Senior Notes Due 2023 �� 10-Q �� � 001-32205 �� �� � 4.4 (a)� � � 5/10/2013 �� ��
����4.5(b) � First Supplemental Indenture, dated as of March 14, 2013, among CBRE Group, Inc., CBRE Services, Inc., certain other subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.00% Senior Notes Due 2023 �� 10-Q �� � 001-32205 �� �� � 4.4 (b)� � � 5/10/2013 �� ��

�

72

Table of Contents
� � � �� Incorporated by Reference �

Exhibit
No.

 �

Exhibit Description

 �� Form �� SEC�File�No. � �� Exhibit � �� Filing Date � �� Filed
Herewith		 �
����4.5(c) � Form of Supplemental Indenture among certain U.S. subsidiaries from time-to-time, 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 �� �� � 4/16/2013 �� ��
����4.5(d) � Second Supplemental Indenture, dated as of September 24, 2014, among CBRE Group, Inc., CBRE Services, Inc., certain other subsidiaries of CBRE Services, Inc. and Wells Fargo Bank, National Association, as trustee, for the 5.25% Senior Notes Due 2025 �� 8-K �� � 001-32205 �� �� � 4.1 �� �� � 9/26/2014 �� ��
����4.5(e) � Form of 5.25% Senior Notes due 2025 (included in Exhibit 4.5(d)) �� 8-K �� � 001-32205 �� �� � 4.2 �� �� � 9/26/2014 �� ��
��11 � Statement concerning Computation of Per Share Earnings (filed as Note 13 of the Consolidated Financial Statements) �� �� �� �� �� � X ��
��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 �� �� �� �� �� � X ��
��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 �� �� �� �� �� � X ��
��32 � 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 �� �� �� �� �� � X ��
101.INS � XBRL Instance Document �� �� �� �� �� � X ��
101.SCH � XBRL Taxonomy Extension Schema Document �� �� �� �� �� � X ��
101.CAL � XBRL Taxonomy Extension Calculation Linkbase Document �� �� �� �� �� � X ��
101.DEF � XBRL Taxonomy Extension Definition Linkbase Document �� �� �� �� �� � X ��
101.LAB � XBRL Taxonomy Extension Label Linkbase Document �� �� �� �� �� � X ��
101.PRE � XBRL Taxonomy Extension Presentation Linkbase Document �� �� �� �� �� � X ��

�

In the foregoing description of exhibits, references to CB Richard Ellis Group, Inc. are to CBRE Group, Inc., references to CB Richard Ellis Services, Inc. are to CBRE Services, Inc., and references to CB Richard Ellis, Inc. are to CBRE, Inc., in each case, prior to their respective name changes, which became effective October�3, 2011.

�

73

Table of Contents

SIGNATURES

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

�

� � CBRE GROUP, INC.
Date: November�10, 2014 � � /S/����JAMES R. GROCH��������
� �

�

James R. Groch

� � Chief Financial Officer (principal financial officer)

�

Date: November�10, 2014 � � /S/����GIL BOROK��������
� �

�

Gil Borok

� � Chief Accounting Officer (principal accounting officer)

�

74

EXHIBIT 31.1

CERTIFICATIONS

I, Robert E. Sulentic, certify that:

�

� 1) I have reviewed this quarterly report on Form 10-Q of CBRE Group, Inc.;

�

� 2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

� 3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

� 4) The registrant�s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

�

� a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

�

� b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

�

� c) Evaluated the effectiveness of the registrant�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

�

� d) Disclosed in this report any change in the registrant�s internal control over financial reporting that occurred during the registrant�s most recent fiscal quarter (the registrant�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant�s internal control over financial reporting; and

�

� 5) The registrant�s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of the registrant�s board of directors (or persons performing the equivalent functions):

�

� a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant�s ability to record, process, summarize and report financial information; and

�

� b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�10, 2014 �

/s/����ROBERT E. SULENTIC

� Robert E. Sulentic
� President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, James R. Groch, certify that:

�

� 1) I have reviewed this quarterly report on Form 10-Q of CBRE Group, Inc.;

�

� 2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

� 3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

� 4) The registrant�s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

�

� a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

�

� b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

�

� c) Evaluated the effectiveness of the registrant�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

�

� d) Disclosed in this report any change in the registrant�s internal control over financial reporting that occurred during the registrant�s most recent fiscal quarter (the registrant�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant�s internal control over financial reporting; and

�

� 5) The registrant�s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of the registrant�s board of directors (or persons performing the equivalent functions):

�

� a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant�s ability to record, process, summarize and report financial information; and

�

� b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�10, 2014 �

/s/����JAMES R. GROCH

� James R. Groch
� Chief Financial Officer

EXHIBIT 32

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

The undersigned, Robert E. Sulentic, Chief Executive Officer, and James R. Groch, Chief Financial Officer of CBRE Group, Inc. (the �Company�), hereby certify as of the date hereof, solely for the purposes of 18 U.S.C. �1350, that:

(i)��������the Quarterly Report on Form 10-Q for the period ended September�30, 2014, of the Company (the �Report�) fully complies with the requirements of Section�13(a) and 15(d), as applicable, of the Securities�Exchange Act of 1934; and

(ii)��������the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

�

Dated: November�10, 2014 �
� /s/ ROBERT E. SULENTIC
� Robert E. Sulentic
� President and Chief Executive Officer
� /s/ JAMES R. GROCH
� James R. Groch
� Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section�1350 and is not being filed as part of the Report or as a separate disclosure document.


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