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, 2019. The statement of operations data, the statement of cash flows data and the other data for the years ended December 31, 2019, 2018 and 2017 and the balance sheet data as of December 31, 2019 and 2018 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, 2016 and 2015, and the balance sheet data as of December 31, 2017, 2016 and 2015 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,
	2019 (1)			2018		2017		2016	2015 (2)
STATEMENTS OF OPERATIONS DATA:
Revenue	$	23,894,091	$	21,340,088	$	18,628,787	$	17,369,108	$	10,855,810
Operating income		1,259,875		1,087,989		1,078,682		816,831		835,944
Interest expense, net of interest income		85,754		98,685		126,961		136,800		112,569
Write-off of financing costs on extinguished debt		2,608		27,982		—		—		2,685
Net income		1,291,450		1,065,948		703,576		585,170		558,877
Net income attributable to non-controlling interests		9,093		2,729		6,467		12,091		11,745
Net income attributable to CBRE Group, Inc.		1,282,357		1,063,219		697,109		573,079		547,132
Income per share attributable to CBRE Group, Inc. (3)
Basic income per share	$	3.82	$	3.13	$	2.06	$	1.71	$	1.64
Diluted income per share		3.77		3.10		2.05		1.69		1.63
Weighted average shares:
Basic		335,795,654		339,321,056		337,658,017		335,414,831		332,616,301
Diluted		340,522,871		343,122,741		340,783,556		338,424,563		336,414,856

STATEMENTS OF CASH FLOWS DATA (4):
Net cash provided by operating activities	$	1,223,380		$	1,131,249		$	894,411		$	616,985		$	651,897
Net cash used in investing activities		(721,024	)		(560,684	)		(302,600	)		(150,524	)		(1,618,959	)
Net cash (used in) provided by financing activities		(271,949	)		(506,600	)		(627,742	)		(220,677	)		789,548

OTHER DATA:
Adjusted EBITDA (5)	$	2,063,783		$	1,905,168		$	1,716,774		$	1,562,347		$	1,412,724

BALANCE SHEET DATA:
Cash and cash equivalents	$	971,781		$	777,219		$	751,774		$	762,576		$	540,403
Total assets		16,197,196			13,456,793			11,718,396			10,994,338			11,017,943
Long-term debt, including current portion, net		1,763,059			1,770,406			1,999,611			2,548,137			2,679,539
Total liabilities		9,924,084			8,446,891			7,543,782			7,848,438			8,258,873
Total CBRE Group, Inc. stockholders’ equity		6,232,693			4,938,797			4,114,496			3,103,142			2,712,652

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

(1)

We adopted new lease accounting guidance in the first quarter of 2019 using the optional transitional method. Accordingly, no adjustments were made to the financial statements presented for prior periods. As a result of the adoption of the leasing guidance, the consolidated balance sheet as of January 1, 2019 reflected $1.2 billion of additional lease liabilities, along with corresponding right-of-use assets of $1.0 billion, reflecting adjustments for items such as prepaid and deferred rent, unamortized initial direct costs, and unamortized lease incentive balances. The adoption of the leasing guidance did not have a material impact on our consolidated statement of operations. See Note 3 of our Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report.

(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.

We also adopted new revenue recognition guidance in 2018 and restated 2017 and 2016 financial statements to conform with the new guidance. Amounts for the year ended December 31, 2015 have not been restated. See our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.

(3)	See Income Per Share information in Note 17 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 were made to the 2017 and 2016 statements of cash flows to conform with the 2018 presentation. Amounts for the year ended December 31, 2015 have not been reclassified.

(5)

Adjusted EBITDA is not a recognized measurement under accounting principles generally accepted in the United States, or GAAP. When analyzing our operating performance, investors should use this measure in addition to, and not as an alternative for, the most directly comparable financial measure calculated and presented in accordance with GAAP. We generally use this non-GAAP financial measure to evaluate operating performance and for other discretionary purposes. We believe this measure provides a more complete understanding of ongoing operations, enhances comparability of current results to prior periods and may be useful for investors to analyze our financial performance because it eliminates 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 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 and intangible asset impairments. Amounts shown for adjusted EBITDA further remove (from EBITDA) the impact of certain cash and non-cash items related to acquisitions, certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, costs associated with our reorganization, including cost-savings initiatives, cost-elimination expenses 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.

Adjusted EBITDA is not intended to be a measure of free cash flow for our discretionary use because it does not consider certain cash requirements such as tax and debt service payments. This measure may also differ from 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 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.

Adjusted EBITDA is calculated as follows (dollars in thousands):

	Year Ended December 31,
		2019		2018			2017			2016		2015 (2)
Net income attributable to CBRE Group, Inc.	$	1,282,357	$	1,063,219		$	697,109		$	573,079		$	547,132
Add:
Depreciation and amortization		439,224		451,988			406,114			366,927			314,096
Intangible asset impairment		89,787		—			—			—			—
Interest expense, net of interest income		85,754		98,685			126,961			136,800			112,569
Write-off of financing costs on extinguished debt		2,608		27,982			—			—			2,685
Provision for income taxes		69,895		313,058			467,757			296,900			320,853
EBITDA		1,969,625		1,954,932			1,697,941			1,373,706			1,297,335
Adjustments:
Costs associated with our reorganization, including cost-savings initiatives (i)		49,565		37,925			—			—			—
Integration and other costs related to acquisitions		15,292		9,124			27,351			125,743			48,865
Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue		13,101		(5,261	)		(8,518	)		(15,558	)		26,085
Impact of fair value adjustments to real estate assets acquired in the Telford Acquisition (purchase accounting) that were sold in period		9,301		—			—			—			—
Costs incurred related to legal entity restructuring		6,899		—			—			—			—
Costs incurred in connection with litigation settlement		—		8,868			—			—			—
One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired		—		(100,420	)		—			—			—
Cost-elimination expenses		—		—			—			78,456			40,439
Adjusted EBITDA	$	2,063,783	$	1,905,168		$	1,716,774		$	1,562,347		$	1,412,724

(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.

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