Item 6. Selected Financial Data

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Item 6. Selected Financial Data

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The following table sets forth our selected historical consolidated financial information for each of the five years in the period ended December 31, 2018. The statement of operations data, the statement of cash flows data and the other data for the years ended December 31, 2018, 2017 and 2016 and the balance sheet data as of December 31, 2018 and 2017 were derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K (Annual Report). The statement of operations data, the statement of cash flows data and the other data for the years ended December 31, 2015 and 2014, and the balance sheet data as of December 31, 2016, 2015 and 2014 were derived from our audited consolidated financial statements that are not included in this Annual Report.

The selected financial data presented below is not necessarily indicative of results of future operations and should be read in conjunction with our consolidated financial statements and the information included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report (dollars in thousands, except share data).

	Year Ended December 31,
		2018	2017 (1)		2016 (1)		2015 (2)			2014
			(As Adjusted)		(As Adjusted)
STATEMENTS OF OPERATIONS DATA:
Revenue	$	21,340,088	$	18,628,787	$	17,369,108	$	10,855,810	$	9,049,918
Operating income		1,087,989		1,078,682		816,831		835,944		792,254
Interest income		8,585		9,853		8,051		6,311		6,233
Interest expense		107,270		136,814		144,851		118,880		112,035
Write-off of financing costs on extinguished debt		27,982		—		—		2,685		23,087
Net income		1,065,948		703,576		585,170		558,877		513,503
Net income attributable to non-controlling interests		2,729		6,467		12,091		11,745		29,000
Net income attributable to CBRE Group, Inc.		1,063,219		697,109		573,079		547,132		484,503
Income per share attributable to CBRE Group, Inc. (3):
Basic income per share	$	3.13	$	2.06	$	1.71	$	1.64	$	1.47
Diluted income per share		3.10		2.05		1.69		1.63		1.45
Weighted average shares:
Basic		339,321,056		337,658,017		335,414,831		332,616,301		330,620,206
Diluted		343,122,741		340,783,556		338,424,563		336,414,856		334,171,509

STATEMENTS OF CASH FLOWS DATA (4):
Net cash provided by operating activities	$	1,131,249		$	894,411		$	616,985		$	651,897		$	661,780
Net cash used in investing activities		(560,684	)		(302,600	)		(150,524	)		(1,618,959	)		(151,556	)
Net cash (used in) provided by financing activities		(506,600	)		(627,742	)		(220,677	)		789,548			(232,069	)

OTHER DATA:
EBITDA (5)	$	1,954,932		$	1,697,941		$	1,373,706		$	1,297,335		$	1,142,252
Adjusted EBITDA (5)		1,905,168			1,716,774			1,562,347			1,412,724			1,166,125

BALANCE SHEET DATA:
Cash and cash equivalents	$	777,219		$	751,774		$	762,576		$	540,403		$	740,884
Total assets (6)		13,456,793			11,718,396			10,994,338			11,017,943			7,568,010
Long-term debt, including current portion, net (6)		1,770,406			1,999,611			2,548,137			2,679,539			1,851,012
Notes payable on real estate, net (6)		6,304			17,872			25,969			38,258			41,445
Total liabilities (6)		8,446,891			7,543,782			7,848,438			8,258,873			5,266,612
Total CBRE Group, Inc. stockholders’ equity		4,938,797			4,114,496			3,103,142			2,712,652			2,259,830

Note: We have not declared any cash dividends on common stock for the periods shown.

(1)

We adopted new revenue recognition guidance in the first quarter of 2018. Certain restatements have been made to the 2017 and 2016 financial statements to conform with the 2018 presentation. See Notes 2 and 3 of our Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report. Amounts for the years ended December 31, 2015 and 2014 have not been restated to conform with the presentation for the years ended December 31, 2018, 2017 and 2016.

(2)	On September 1, 2015, CBRE, Inc., our wholly-owned subsidiary, closed on a Stock and Asset Purchase Agreement with Johnson Controls, Inc. (JCI) to acquire JCI’s Global Workplace Solutions (JCI-GWS) business (which we refer to as the GWS Acquisition). The results for the year ended December 31, 2015 include the operations of JCI-GWS from September 1, 2015, the date such business was acquired.

(3)	See Income Per Share information in Note 16 of our Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.

(4)

In the first quarter of 2018, we adopted Accounting Standards Updated (ASU) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” Certain reclassifications have been made to the 2017 and 2016 statements of cash flows to conform with the 2018 presentation. Amounts for the years ended December 31, 2015 and 2014 have not been reclassified to conform with the presentation for the years ended December 31, 2018, 2017 and 2016.

(5)

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

EBITDA represents earnings before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of certain cash and non-cash items related to acquisitions, costs associated with our reorganization, including cost-savings initiatives, cost-elimination expenses, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue and other non-recurring costs. We believe that investors may find these measures useful in evaluating our operating performance compared to that of other companies in our industry because their calculations generally eliminate the effects of acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions, the effects of financings and income taxes and the accounting effects of capital spending.

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

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

	Year Ended December 31,
		2018			2017			2016			2015		2014
				(As Adjusted) (1)			(As Adjusted) (1)
Net income attributable to CBRE Group, Inc.	$	1,063,219		$	697,109		$	573,079		$	547,132	$	484,503
Add:
Depreciation and amortization		451,988			406,114			366,927			314,096		265,101
Interest expense		107,270			136,814			144,851			118,880		112,035
Write-off of financing costs on extinguished debt		27,982			—			—			2,685		23,087
Provision for income taxes		313,058			467,757			296,900			320,853		263,759
Less:
Interest income		8,585			9,853			8,051			6,311		6,233
EBITDA		1,954,932			1,697,941			1,373,706			1,297,335		1,142,252
Adjustments:
Costs associated with our reorganization, including cost-savings initiatives (i)		37,925			—			—			—		—
Integration and other costs related to acquisitions		9,124			27,351			125,743			48,865		—
Costs incurred in connection with litigation settlement		8,868			—			—			—		—
Carried interest incentive compensation (reversal) expense to align with the timing of associated revenue		(5,261	)		(8,518	)		(15,558	)		26,085		23,873
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired		(100,420	)		—			—			—		—
Cost-elimination expenses		—			—			78,456			40,439		—
Adjusted EBITDA	$	1,905,168		$	1,716,774		$	1,562,347		$	1,412,724	$	1,166,125

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

(6)

In the third quarter of 2015, we elected to early adopt the provisions of ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability instead of separately being recorded in other assets. As of December 31, 2014, deferred financing costs totaling $25.6 million were reclassified from other assets and netted against the related debt liabilities to conform with the 2015 presentation.

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