CBRE GROUP INC
For the period ended Sep 30, 2024. Filed Oct 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 24, 2024
CBRE$135.51-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0001138118-24-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-24.
0001138118-24-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 184 previous paragraphs and 184 current paragraphs.
103 unchanged; 77 reworded; 3 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
The operating environment for commercial real estate continued to improve in the third quarter of 2024. Most notably, office leasing activity accelerated in the third quarter as greater certainty about the economic outlook supports occupier decision making across primary and secondary markets, particularly in the U.S. and Europe. Increased liquidity, lower borrowing costs and improved investor sentiment resulted an increase in investment sales for the first time since 2022. As capital returns to real estate, opportunities to harvest gains from real estate development and investment management portfolios are expected to increase.
Current report
Operating, administrative and other expenses increased 8.6%, primarily due to higher employee compensation expenses, and restructuring expenses such as severance. Foreign currency translation had a negligible impact on total operating expenses during the quarter.
Current report
Operating, administrative and other expenses increased 49.7% primarily due to an increase in incentive compensation in our development services and investment management line of business consistent with higher revenue growth. Foreign currency translation had a 0.7% negative impact on total operating expenses.
Removed paragraphs (4)
Previous report
The overall operating environment for commercial real estate is improving. While the borrowing costs are still high, liquidity has improved across multiple sources of funding amid lower interest rate volatility. The decline in investment sales slowed in the second quarter. Capital has begun to return to real estate, and pipelines suggest increased opportunities to harvest gains from real estate development and investment management portfolios. Office leasing markets have continued to improve reflecting a resilient economy, coupled with many occupiers moving forward with expansion plans.
Previous report
Foreign currency translation had a 0.3% negative impact on total revenue during the six months ended June 30, 2024, primarily driven by weakness in the Argentina peso and Japanese yen, partially offset by strength in the British pound sterling.
Previous report
Operating, administrative and other expenses increased 15.6%, primarily due to restructuring and severance charges related to cost savings initiatives this quarter. Foreign currency translation had a 0.5% positive impact on total operating expenses during the quarter.
Previous report
Operating, administrative and other expenses decreased 4.5% primarily because of lower profit share expense, partially offset by higher equity incentive compensation expense in the current quarter. Foreign currency translation had a 0.1% positive impact on total operating expenses.
Reworded paragraphs (77)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides the reader with management’s perspective on our financial condition, results of operations, liquidity and certain other factors that may affect future results. The MD&A in this Quarterly Report on Form 10-Q (Quarterly Report) for CBRE Group, Inc. for the three and six months ended June 30, 2024 should be read in conjunction with our consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K (2023 Annual Report) as well as the unaudited financial statements included elsewhere in this Quarterly Report.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides the reader with management’s perspective on our financial condition, results of operations, liquidity and certain other factors that may affect future results. The MD&A in this Quarterly Report on Form 10-Q (Quarterly Report) for CBRE Group, Inc. for the three and nine months ended September 30, 2024 should be read in conjunction with our consolidated financial statements and related notes included in our 2023 Annual Report on Form 10-K (2023 Annual Report) as well as the unaudited financial statements included elsewhere in this Quarterly Report.
Previous wording
We invested approximately $339.3 million in the quarter in M&A and share repurchases, most notably our acquisition of a firm that specializes in delivering highly specialized facilities management services to data center owners and operators, while maintaining substantial liquidity to finance future growth. In the quarter, the company announced plans to combine its project management business with its Turner & Townsend subsidiary. The combined business, which the company will report as a separate business segment beginning in 2025, will create a premier provider of project, program and cost management services with more than 20,000 employees serving clients in over 60 countries.
Current wording
We used $62 million in the quarter for share repurchases, while maintaining substantial liquidity to finance future growth.
Previous wording
The following table sets forth items derived from our consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 (dollars in millions):
Current wording
The following table sets forth items derived from our consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):
Previous wording
We reported consolidated net income of $130.0 million for the quarter, a decrease of 35.5% from $201.4 million in the same period in 2023. Over the same time period, revenue rose 8.7% to $8.4 billion.
Current wording
We reported consolidated net income of $225 million for the quarter, an increase of 17.8% from $191 million in the same period in 2023. Over the same time period, revenue increased 14.8% to $9.0 billion.
Previous wording
The revenue increase reflected an increase across all lines of businesses in the Advisory Services segment, except sales, with strong growth in leasing, commercial mortgage origination, and property management, as well as continued strong growth in the Global Workplace Solutions (GWS) segment. Overall, revenue from our Resilient Businesses (comprised of facilities management, project management, property management, loan servicing, asset management fees in our investment management business and valuations), which generally grow across market cycles, increased approximately 9.5% in the quarter. Our Transactional Businesses (sales, leasing, mortgage origination, carried interest and incentive fees in our investment management business, and development fees), which are subject to market cycles, saw revenue edge up 5.2% in the quarter. Higher interest rates continued to weigh on property sales in the Advisory Services segment and investment and development activities in the Real Estate Investments (REI) segment, both of which are sensitive to market cycles.
Current wording
The revenue increase reflected an increase across all lines of businesses in the Advisory Services segment, with strong growth in leasing, particularly for office space, commercial mortgage origination, and property management, as well as continued strong growth in the Global Workplace Solutions (GWS) segment. Overall, revenue from our Resilient Businesses (comprised of facilities management, project management, property management, loan servicing, asset management fees in our investment management business and valuations), which generally grow across market cycles, increased approximately 12.6% in the quarter. Our Transactional Businesses (sales, leasing, mortgage origination, carried interest and incentive fees in our investment management business, and development fees), which are subject to market cycles, saw revenue increase 25.7% in the quarter. Lower interest rates drove an increase in property sales and commercial mortgage origination, along with leasing, which was up 19.0%, in the Advisory Services segment and investment and development activities in the Real Estate Investments (REI) segment, both of which are sensitive to market cycles and interest rate fluctuations.
Previous wording
Foreign currency translation had a 0.7% negative impact on revenue, reflecting the weakness in the Argentina peso and Japanese yen, partially offset by strength in the British pound sterling.
Current wording
Foreign currency translation had a 0.6% negative impact on revenue, reflecting the weakness in the Brazilian real, Canadian dollar and Mexican peso partially offset by strength in the British pound sterling.
Previous wording
Cost of revenue increased 9.9% during the quarter due to higher pass-through costs, higher compensation, and higher indirect reimbursed costs. Foreign currency translation had a 0.8% positive impact on total cost of revenue. Cost of revenue increased to 81.0% of total revenue from 80.0% in the second-quarter 2023, driven by higher cost to support growth in GWS revenues and a decline of higher-margin property sales in our Advisory Services segment.
Current wording
Cost of revenue increased 13.4% during the quarter due to the strong revenue growth noted previously, consisting of higher pass-through costs, higher compensation, higher transaction commissions, and higher indirect reimbursed costs. Foreign currency translation had a 0.5% positive impact on total cost of revenue. Cost of revenue decreased to 80.2% of total revenue from 81.3% in the third quarter 2023, driven by growth in our Advisory Services segment revenue that generally has higher gross margin.
Previous wording
Operating, administrative and other expenses increased by 9.3%, primarily due to $80.3 million of restructuring charges (employee separation benefits, contract termination fees, consulting charges, etc.) and indirect tax settlement accrual in the second quarter of 2024 versus $3.0 million recorded in the same period in the prior year. In addition, we recorded higher incentive compensation expense than the same quarter in the prior year to align with improved business performance. Foreign currency translation had a 0.4% positive impact on total operating, administrative and other expenses during the quarter. Operating expenses as a percentage of revenue slightly increased to 14.2% in the second-quarter 2024 from 14.1% in the 2023 quarter, reflecting higher operating expenses related to restructuring charges.
Current wording
Operating, administrative and other expenses increased by 16.9%, primarily due to $61 million of restructuring charges (employee separation benefits, contract termination fees, consulting charges, etc.) and an indirect tax accrual in the third quarter of 2024 versus $4 million recorded in the same period in the prior year. In addition, we recorded higher incentive compensation expense compared to the same quarter in the prior year to align with improved business performance. Foreign currency translation had a 0.3% positive impact on total operating, administrative and other expenses during the quarter. Operating expenses as a percentage of revenue slightly increased to 13.7% in the third quarter 2024 from 13.4% in the third quarter 2023, reflecting higher operating expenses related to restructuring charges and the indirect tax accrual.
Previous wording
Depreciation and amortization expense increased by 4.4% during the quarter, reflecting higher amortization expense related to intangibles from recent acquisitions such as J&J Worldwide Services.
Current wording
Depreciation and amortization expense increased by 19.5% during the quarter, reflecting higher amortization expense related to intangibles from recent acquisitions such as J&J Worldwide Services.
Previous wording
We incurred an equity loss of $14.9 million versus an equity loss of $7.5 million in last year’s second quarter. This was mainly due to higher unrealized losses related to our non-core strategic equity investment in Altus Power, Inc. (Altus) this quarter.
Current wording
We incurred an equity loss of $4 million versus an equity loss of $13 million in last year’s third quarter. This was mainly due to lower net unrealized losses related to equity investments.
Previous wording
Interest expense, net of interest income, increased by 45.6%, compared with the second-quarter 2023. This increase was primarily due to the impact of higher interest rates, increased borrowings on the revolving credit facilities, and the issuance of new debt in 2024 and in late second-quarter 2023.
Current wording
Interest expense, net of interest income, increased by 68.4%, compared with the third quarter 2023. This increase was primarily due to the impact of higher interest rates, increased borrowings on the revolving credit facilities, and the issuance of new debt in 2024.
Previous wording
Our provision for income taxes on a consolidated basis was $32.2 million for the three months ended June 30, 2024 as compared to a provision for income taxes of $55.4 million for the three months ended June 30, 2023. The decrease of $23.2 million is primarily related to a decrease in earnings. Our effective tax rate decreased to 18.5% for the three months ended June 30, 2024 from 21.2% for the three months ended June 30, 2023. Our effective tax rate for the three months ended June 30, 2024 was different than the U.S. federal statutory tax rate of 21.0%, primarily due to U.S. state taxes and favorable permanent book tax differences.
Current wording
Our provision for income taxes on a consolidated basis was $67 million for the three months ended September 30, 2024 as compared to a provision for income taxes of $31 million for the three months ended September 30, 2023. The increase of $36 million is primarily related to an increase in earnings. Our effective tax rate increased to 21.5% for the three months ended September 30, 2024 from 13.2% for the three months ended September 30, 2023. Our effective tax rate for the three months ended September 30, 2024 is different than the U.S. federal statutory tax rate of 21.0%, primarily due to U.S. state taxes and favorable permanent book tax differences.
Previous wording
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by-country profits for large multinational companies. European Union member states along with many other countries have adopted, or expect to adopt, the OECD Pillar Two Model effective January 1, 2024 or thereafter. The OECD and other countries continue to publish guidelines and legislation which include transition and safe harbor rules. The Pillar Two top-up taxes are not expected to have a material impact to our financial statements for 2024. However, we continue to monitor new legislative changes and assess the global impact of the Pillar Two Model Rules.
Current wording
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by-country profits for large multinational companies. European Union member states along with many other countries have adopted, or expect to adopt, the OECD Pillar Two Model effective January 1, 2024 or thereafter. The OECD and other countries continue to publish guidelines and legislation which include transition and safe harbor rules. The Pillar Two top-up taxes are not expected to have a material impact to our financial statements for 2024. However, we continue to monitor new legislative changes and assess the global impact of the Pillar Two Model Rules, including the potential applicability and impact of the under-taxed profits rule that is effective in 2025.
Previous wording
We reported consolidated net income of $256.2 million for the six months ended June 30, 2024 on revenue of $16.3 billion as compared to consolidated net income of $318.3 million on revenue of $15.1 billion for the six months ended June 30, 2023.
Current wording
We reported consolidated net income of $481 million for the nine months ended September 30, 2024 on revenue of $25.4 billion as compared to consolidated net income of $509 million on revenue of $23.0 billion for the nine months ended September 30, 2023.
Previous wording
The revenue increase reflected growth in leasing activity, particularly for office space, commercial mortgage origination, property management, loan servicing, and continued strong growth in the GWS segment. High interest rates continued to weigh on property sales in the Advisory Services segment and investment and development activities in the REI segment, both of which are sensitive to market cycles. Overall, revenue from our Resilient Businesses increased 8.8% for the period. Our Transactional Businesses saw revenue edge up 3.5%.
Current wording
The revenue increase reflected growth in property management, leasing activity, particularly for office space, commercial mortgage origination, loan servicing, and continued strong growth in the GWS segment. Although we began to see an increase in property sales in our Advisory Services segment due to lower interest rates in the third quarter of 2024, higher interest rates for the first half of 2024 continued to weigh on property sales in the Advisory Services segment and investment and development activities in the REI segment, both of which are sensitive to market cycles and interest rates. Overall, revenue from our Resilient Businesses increased 10.1% for the period. Our Transactional Businesses saw revenue edge up 11.0%.
Previous wording
Cost of revenue increased 8.9% during the six months ended June 30, 2024 as compared to the same period in 2023 due to higher pass-through costs, higher compensation, and higher indirect reimbursed costs. Foreign currency translation had a 0.2% positive impact on total cost of revenue. Cost of revenue increased to 81.2% of total revenue from 80.5%, driven by higher cost to support growth in GWS revenues and a decline of high-margin property sales in our Advisory Services segment.
Current wording
Cost of revenue increased 10.4% during the nine months ended September 30, 2024 as compared to the same period in 2023 due to revenue growth, consisting of higher pass-through costs, higher compensation, and higher indirect reimbursed costs. Foreign currency translation had a 0.4% positive impact on total cost of revenue. Cost of revenue increased slightly to 80.9% of total revenue from 80.8%, driven by higher cost to support growth in GWS revenues.
Previous wording
Operating, administrative and other expenses were relatively flat as compared to the same period last year. The company incurred approximately $109.6 million in restructuring and indirect tax settlement related charges this year. This was partially offset by bonus expense reversal as part of the restructuring activities and lower bonus expense related to the REI segment to align with overall expected segment performance. Foreign currency translation had a 0.1% positive impact on total operating expenses during the six months ended June 30, 2024. Operating expenses as a percentage of revenue decreased to 14.1% from 15.2%, given operating expenses were relatively flat and the overall revenue grew.
Current wording
Operating, administrative and other expenses increased 5.4% as compared to the same period last year. The company incurred approximately $171 million in restructuring and an indirect tax accrual this year versus $145 million recorded in the same period in the prior year, and higher compensation expense. This was partially offset by bonus expense reversal as part of the restructuring activities and lower bonus expense related to the REI segment to align with overall expected segment performance. Foreign currency translation had a 0.2% positive impact on total operating expenses during the nine months ended September 30, 2024. Operating expenses as a percentage of revenue decreased to 13.9% from 14.6%, as operating expenses grew slower than revenue.
Previous wording
Depreciation and amortization expense increased by 0.9% during the six months ended June 30, 2024 as compared to the same period in 2023, reflecting higher accelerated depreciation expense on certain assets as part of the cost savings initiative and increased amortization expense on intangibles related to the J&J acquisition.
Current wording
Depreciation and amortization expense increased by 6.9% during the nine months ended September 30, 2024 as compared to the same period in 2023, reflecting higher depreciation and amortization expense related to assets acquired from recent acquisitions such as J&J Worldwide Services.
Previous wording
We incurred an equity loss of $73.2 million versus equity income of $134.2 million during the six months ended June 30, 2024 as compared to the same period in 2023. This was mainly due to an unusually large development asset disposition in first-quarter 2023 that did not recur in 2024. In addition, we recorded higher unrealized loss related to our non-core strategic equity investment in Altus Power, Inc. (Altus).
Current wording
We incurred an equity loss of $77 million during the nine months ended September 30, 2024 compared to equity income of $121 million in the same period in 2023. This was mainly due to an unusually large development asset disposition in first-quarter 2023 that did not recur in 2024. In addition, we recorded higher unrealized losses related to our non-core strategic equity investment in Altus Power, Inc. (Altus) in the nine months ended September 30, 2024.
Previous wording
Other income increased to $15.3 million from $8.1 million, reflecting positive fair value adjustments on certain financial instruments related to our investment in Industrious this year as compared to the same period last year.
Current wording
Other income increased to $26 million from $22 million, reflecting positive fair value adjustments on certain financial instruments related to our investment in Industrious this year as compared to the same period last year.
Previous wording
Interest expense, net of interest income, increased by 38.7% for the six months ended June 30, 2024 as compared to the same period in 2023. This increase was primarily due to the impact of higher interest rates, increased borrowings on the revolving credit facilities, and the issuance of new debt during the first quarter of 2024 and in late second-quarter 2023.
Current wording
Interest expense, net of interest income, increased by 48.2% for the nine months ended September 30, 2024 as compared to the same period in 2023. This increase was primarily due to the impact of higher interest rates, during most of the period, increased borrowings on the revolving credit facilities, and the issuance of new debt during the first quarter of 2024 and in late second-quarter 2023.
Previous wording
Our provision for income taxes on a consolidated basis was $3.4 million for the six months ended June 30, 2024 as compared to a provision for income taxes of $84.0 million for the six months ended June 30, 2023. The decrease of $80.6 million is primarily related to a decrease in earnings and the reversal of unrecognized tax positions. Our effective tax rate decreased to 1.1% for the six months ended June 30, 2024 from 20.1% for the six months ended June 30, 2023. Our effective tax rate for the six months ended June 30, 2024 was different than the U.S. federal statutory tax rate of 21.0% primarily due to the reversal of unrecognized tax positions, U.S. state taxes, and favorable permanent book tax differences.
Current wording
Our provision for income taxes on a consolidated basis was $70 million for the nine months ended September 30, 2024 as compared to a provision for income taxes of $114 million for the nine months ended September 30, 2023. The decrease of $44 million is primarily related to the reversal of unrecognized tax positions. Our effective tax rate decreased to 11.6% for the nine months ended September 30, 2024 from 17.6% for the nine months ended September 30, 2023. Our effective tax rate for the nine months ended September 30, 2024 is different than the U.S. federal statutory tax rate of 21.0% primarily due to the reversal of unrecognized tax positions, U.S. state taxes, and favorable permanent book tax differences.
Previous wording
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by-country profits for large multinational companies. European Union member states along with many other countries have adopted, or expect to adopt, the OECD Pillar Two Model effective January 1, 2024 or thereafter. The OECD and other countries continue to publish guidelines and legislation which include transition and safe harbor rules. The Pillar Two top-up taxes are not expected to have a material impact to our financial statements for 2024. However, we continue to monitor new legislative changes and assess the global impact of the Pillar Two Model Rules.
Current wording
The Organization for Economic Co-operation & Development (OECD) Pillar Two Model Rules established a minimum global effective tax rate of 15% on country-by-country profits for large multinational companies. European Union member states along with many other countries have adopted, or expect to adopt, the OECD Pillar Two Model effective January 1, 2024 or thereafter. The OECD and other countries continue to publish guidelines and legislation which include transition and safe harbor rules. The Pillar Two top-up taxes are not expected to have a material impact to our financial statements for 2024. However, we continue to monitor new legislative changes and assess the global impact of the Pillar Two Model Rules, including the potential applicability and impact of the under-taxed profits rule that is effective in 2025.
Previous wording
On June 24, 2024, we announced plans to combine our project management business with our Turner & Townsend subsidiary and expect this transaction to close early 2025. We intend to organize our operations around, and publicly report our financial results on, four reportable segments in 2025. For the remainder of 2024, we will continue to report our financial results under our existing reportable segments given this is how the chief operating decision maker currently manages the business.
Current wording
On June 24, 2024, we announced plans to combine our project management business with our Turner & Townsend subsidiary and expect this transaction to close in early 2025. We intend to organize our operations around, and publicly report our financial results on, four reportable segments in 2025. For the remainder of 2024, we will continue to report our financial results under our existing reportable segments given this is how the chief operating decision maker currently manages the business.
Previous wording
The following table summarizes our results of operations for our Advisory Services operating segment for the three and six months ended June 30, 2024 and 2023 (dollars in millions):
Current wording
The following table summarizes our results of operations for our Advisory Services operating segment for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):
Previous wording
Revenue increased 8.6% during the quarter. Global leasing revenue rose 8.7%, driven by Americas which grew 12.4%, including 13.3% in the United States and Asia-Pacific (APAC), which grew 2.8%, with solid growth across most of the region. Property sales revenue was down 3.1%, reflecting continued high interest rates and difficult credit conditions. The company’s loan origination business benefited from 20% higher loan origination fees driven by increased refinancing activity from debt funds and a significant increase in interest earnings on escrow balances. Property management also grew solidly, fueled by the onboarding of the Brookfield 65 million sq. ft. U.S. office portfolio. Foreign currency translation had a 0.7% negative impact on total revenue during the quarter, primarily driven by weakness in the Japanese yen, partially offset by strength in the British pound sterling.
Current wording
Revenue increased 19.0% during the quarter. Global leasing revenue rose 19.0%, driven by Americas which grew 19.9%, including 24.1% in the United States and the United Kingdom, which grew 31.3%. Property sales revenue was up 14.1%, reflecting the impact of lower interest rates and improving credit conditions. The company’s loan origination business benefited from higher loan origination fees driven by increased financing activity, resulting from lower interest rates. Property management grew 22.3% fueled by growth across regions and in the U.S. and continued growth from the Brookfield portfolio. Foreign currency translation had a 0.5% negative impact on total revenue during the quarter, primarily driven by weakness in the Brazilian real, partially offset by strength in the British pound sterling.
Previous wording
Cost of revenue increased 10.1%, primarily reflecting business growth, higher pass-through costs in property management, higher professional compensation as bonuses reset and higher commission expense due to producers entering higher commission tranches. Foreign currency translation had a 0.7% positive impact on total cost of revenue. Cost of revenue increased to 61.3% of total revenue from 60.4% in the 2023 second-quarter, primarily due to producers earning commission at higher tranches and increased pass through costs related to growth in the property management line of business.
Current wording
Cost of revenue increased 18.0%, primarily reflecting business growth, higher reimbursable expenses in property management and higher professional compensation as bonuses reset. Foreign currency translation had a 0.4% positive impact on total cost of revenue. Cost of revenue decreased to 61.7% of total revenue from 62.3% in the 2023 third quarter, primarily due to growth in leasing and sales, which have higher margins.
Previous wording
Operating, administrative and other expenses increased by 3.4%, primarily due to incentive compensation expense reset in the current quarter to align with business performance. Foreign currency translation had a 0.5% positive impact on total operating expenses.
Current wording
Operating, administrative and other expenses increased by 4.0%, primarily due to incentive compensation expense increases in the current quarter to align with business performance. Foreign currency translation had a 0.8% positive impact on total operating expenses.
Previous wording
For the three months ended June 30, 2024, MSRs contributed $23.3 million to operating income, offset by $33.5 million of amortization of related intangible assets. The MSR contribution to second-quarter 2023 operating income was $21.1 million and amortization totaled $37.1 million.
Current wording
For the three months ended September 30, 2024, MSRs contributed $38 million to operating income, offset by $36 million of amortization of related intangible assets. The MSR contribution to third quarter 2023 operating income was $22 million and amortization totaled $35 million.
Previous wording
Depreciation and amortization expense decreased 11.1% primarily due to lower amortization of mortgage servicing rights as described above.
Current wording
Depreciation and amortization expense increased 6.1% primarily due to higher amortization of mortgage servicing rights as described above.
Previous wording
Revenue increased 5.8% for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Global leasing revenue rose 6.6%, driven by Americas which grew 8.3%, including 9.5% in the United States and APAC, which grew 5.3%, with solid growth across most of the region. Property sales revenue was down 7.0%, reflecting continued high interest rates and difficult credit conditions. The company’s loan origination business benefited from higher loan fees and a significant increase in interest earnings on escrow balances. Property management also grew solidly and was up 11.5%. Foreign currency translation had a 0.4% negative impact on total revenue during the six months ended June 30, 2024, primarily driven by weakness in Japanese yen, partially offset by strength in the British pound sterling.
Current wording
Revenue increased 10.3% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Global leasing revenue rose 10.9%, driven by Americas which grew 12.4%, including 14.6% in the United States and the United Kingdom, which grew 10.6%. Property sales revenue was down 0.2%, reflecting high interest rates and difficult credit conditions in the first half of 2024, offset by an increase in property sales in the third quarter 2024, driven by lower interest rates. The company’s loan origination business benefited from higher loan fees and a significant increase in interest earnings on escrow balances. Property management also grew solidly, up 15.1%. Foreign currency translation had a 0.5% negative impact on total revenue during the nine months ended September 30, 2024, primarily driven by weakness in Japanese yen, partially offset by strength in the British pound sterling.
Previous wording
Cost of revenue increased 6.2%, primarily reflecting business growth, higher pass-through costs, higher professional compensation and higher commission expense. Foreign currency translation had a 0.4% positive impact on total cost of revenue. Cost of revenue slightly increased to 60.9% of total revenue from 60.6% for the same period in 2023.
Current wording
Cost of revenue increased 10.3%, primarily reflecting business growth, higher reimbursable expenses in property management, higher professional compensation and higher commission expense. Foreign currency translation had a 0.4% positive impact on total cost of revenue. Cost of revenue slightly decreased to 61.1% of total revenue from 61.2% for the same period in 2023 due to growth in leasing and improving sales.
Previous wording
Operating, administrative and other expenses slightly decreased by 0.9% for the six months ended June 30, 2024 as compared to the same period in 2023. The Advisory Services segment recorded significant restructuring expenses during the six months ended June 30, 2023, as the segment went through rapid cost take out that did not recur this year at the same rate. Foreign currency translation also had a 0.2% positive impact on total operating expenses.
Current wording
Operating, administrative and other expenses slightly increased by 0.7% for the nine months ended September 30, 2024 as compared to the same period in 2023, driven by higher variable employee compensation costs. The increase was partially offset by lower restructuring expenses as the Advisory Services segment recorded significant restructuring expenses in the first half of 2023, as the segment went through rapid cost take out that did not recur this year. Foreign currency translation also had a 0.4% positive impact on total operating expenses.
Previous wording
For the six months ended June 30, 2024, MSRs contributed $35.9 million to operating income, offset by $68.0 million of amortization of related intangible assets. For the six months ended June 30, 2023, MSRs contributed $37.8 million to operating income, offset by $73.7 million of amortization of related intangible assets. The decline was associated with lower origination activity given the higher cost of debt.
Current wording
For the nine months ended September 30, 2024, MSRs contributed $74 million to operating income, offset by $104 million of amortization of related intangible assets. For the nine months ended September 30, 2023, MSRs contributed $60 million to operating income, offset by $109 million of amortization of related intangible assets. The increase was associated with higher origination activity given an increase in financing activities in the third quarter of 2024.
Previous wording
Depreciation and amortization expense decreased 11.9% primarily due to lower amortization of mortgage servicing rights as described above and due to accelerated depreciation expense recorded during the six months ended June 30, 2023, as part of cost savings initiatives that did not recur this year.
Current wording
Depreciation and amortization expense decreased 6.0% primarily due to lower amortization of mortgage servicing rights as described above and due to accelerated depreciation expense recorded in the first half of 2023, as part of cost savings initiatives that did not recur this year.
Previous wording
The following table summarizes our results of operations for our Global Workplace Solutions (GWS) operating segment for the three and six months ended June 30, 2024 and 2023 (dollars in millions):
Current wording
The following table summarizes our results of operations for our Global Workplace Solutions (GWS) operating segment for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):
Previous wording
(1)During the first quarter of 2024, we incurred integration and other costs related to acquisitions of $17.5 million in deal and integration costs, offset by reversal of $21.7 million in previously recognized transaction-related bonus expense due to change in estimate.
Current wording
(1)During the first quarter of 2024, we incurred integration and other costs related to acquisitions of $18 million in deal and integration costs, offset by reversal of $22 million in previously recognized transaction-related bonus expense due to change in estimate.
Previous wording
Revenue increased 9.5%, reflecting a double-digit increase in facilities management, led by the Local business and growth in project management due to continued strong growth from Turner & Townsend. Foreign currency translation had a 0.8% negative impact on total revenue during the quarter, primarily driven by weakness in the Argentina peso, partially offset by strength in the British pound sterling.
Current wording
Revenue increased 12.3%, reflecting a double-digit increase in facilities management, led by the Enterprise and Local businesses, and growth in project management due to continued strong performance from Turner & Townsend. Foreign currency translation had a 0.7% negative impact on total revenue during the quarter, primarily driven by weakness in the Mexican peso, partially offset by strength in the British pound sterling.
Previous wording
Cost of revenue increased 9.8%, driven by higher pass-through costs and increased professional compensation. Foreign currency translation had a 0.8% positive impact on total cost of revenue. Cost of revenue was 90.4% of total revenue, slightly changed from 90.3% in second-quarter 2023.
Current wording
Cost of revenue increased 12.0%, driven by higher pass-through costs and increased professional compensation. Foreign currency translation had a 0.6% positive impact on total cost of revenue. Cost of revenue was 90.1% of total revenue, slightly down from 90.3% in the third quarter 2023.
Previous wording
Depreciation and amortization expense increased 23.2% reflecting higher amortization expense related to intangibles from recent acquisitions such as J&J Worldwide Services.
Current wording
Depreciation and amortization expense increased 36.4%, reflecting higher amortization expense related to intangibles from recent acquisitions such as J&J Worldwide Services.
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Current report — wording carried from elsewhere
Foreign currency translation had a 0.4% negative impact on total revenue during the nine months ended September 30, 2024, primarily driven by weakness in the Japanese yen, partially offset by strength in the British pound sterling.