CBRE HOLDING INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2003

o 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 000 - 32983

CBRE HOLDING, 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)

865 South Figueroa Street, Suite 3400 Los Angeles, California		90017
(Address of principal executive offices)		(Zip Code)

(213) 613-3226		355 South Grand Avenue, Suite 3100 Los Angeles, CA 90071
(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 ý No o.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No ý.

The number of shares of Class A and Class B common stock outstanding at July 31, 2003 was 2,567,814 and 19,271,948, respectively.

CBRE HOLDING, INC.

FORM 10-Q

June 30, 2003

TABLE OF CONTENTS

			PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets at June 30, 2003 (Unaudited) and December 31, 2002	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002 (Unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Disclosure Controls and Procedures	30

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	31
Item 6.	Exhibits and Reports on Form 8-K	31
Signature		32

CBRE HOLDING, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

	June 30, 2003 (Unaudited)			December 31, 2002
ASSETS
Current Assets:
Cash and cash equivalents	$	23,018		$	79,701
Receivables, less allowance for doubtful accounts of $11,478 and $10,892 at June 30, 2003 and December 31, 2002, respectively	154,224			166,213
Warehouse receivable	138,240			63,140
Prepaid expenses	19,623			9,748
Deferred tax assets, net	19,758			18,723
Other current assets	14,143			8,415
Total current assets	369,006			345,940
Property and equipment, net	68,959			66,634
Goodwill	577,137			577,137
Other intangible assets, net of accumulated amortization of $10,193 and $7,739 at June 30, 2003 and December 31, 2002, respectively	89,494			91,082
Deferred compensation assets	69,533			63,642
Investments in and advances to unconsolidated subsidiaries	57,691			50,208
Deferred tax assets, net	35,972			36,376
Cash held in escrow	200,000			—
Other assets	94,109			93,857
Total assets	$	1,561,901		$	1,324,876
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	98,096		$	102,415
Compensation and employee benefits payable	61,491			63,734
Accrued bonus and profit sharing	49,853			103,858
Income taxes payable	—			15,451
Short-term borrowings:
Warehouse line of credit	138,240			63,140
Revolver and swingline credit facility.	11,250			—
Other	56,149			47,925
Total short-term borrowings	205,639			111,065
Current maturities of long-term debt	10,760			10,711
Total current liabilities	425,839			407,234
Long-Term Debt:
11¼% senior subordinated notes, net of unamortized discount of $2,945 and $3,057 at June 30, 2003 and December 31, 2002, respectively	226,055			225,943
Senior secured term loans	206,013			211,000
9¾% senior notes	200,000			—
16% senior notes, net of unamortized discount of $4,971 and $5,107 at June 30, 2003 and December 31, 2002, respectively	63,344			61,863
Other long-term debt	12,320			12,327
Total long-term debt	707,732			511,133
Deferred compensation liability	112,741			106,252
Other liabilities	56,836			43,301
Total liabilities	1,303,148			1,067,920
Minority interest	6,081			5,615
Commitments and contingencies
Stockholders’ Equity:
Class A common stock; $0.01 par value; 75,000,000 shares authorized; 1,835,123 and 1,793,254 shares issued and outstanding (including treasury shares) at June 30, 2003 and December 31, 2002, respectively	18			17
Class B common stock; $0.01 par value; 25,000,000 shares authorized; 12,624,813 shares issued and outstanding at June 30, 2003 and December 31, 2002	127			127
Additional paid-in capital	241,475			240,574
Notes receivable from sale of stock	(4,762		)	(4,800		)
Accumulated earnings	39,978			36,153
Accumulated other comprehensive loss	(22,272		)	(18,998		)
Treasury stock at cost, 120,174 and 110,174 shares at June 30, 2003 and December 31, 2002, respectively	(1,892		)	(1,732		)
Total stockholders’ equity	252,672			251,341
Total liabilities and stockholders’ equity	$	1,561,901		$	1,324,876

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

CBRE HOLDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share data)

Three Months Ended June 30,

Six Months Ended June 30,

2003

2002

2003

2002

Revenue

321,717

284,893