CBRE Group, Inc. (CBRE) Q4 2012 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the CBRE Fourth Quarter Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I'll now turn the conference over to Nick Kormeluk, Investor Relations. Please go ahead, sir.

Thank you, and welcome to CBRE's Fourth Quarter 2012 Earnings Conference Call. About an hour ago, we issued a press release announcing our Q4 financial results. This release is available on the homepage of our website at cbre.com. This conference call is being webcast and is available on the Investor Relations section of our website. Also available is a presentation slide deck, which you can use to follow along with our prepared remarks. An archived audio of the webcast and a PDF version of the slide presentation will be posted to the website later today, and a transcript of our call will be posted tomorrow. Please turn to the slide labeled Forward-Looking Statements. This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum, operations, financial performance and business outlook. These statements should be considered as estimates only, and actual results may ultimately differ from these estimates. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements you may hear today. Please refer to our fourth quarter earnings report filed on Form 8-K, our current annual report on Form 10-K and our current quarterly report on Form 10-Q, in particular, any discussion of risk factors or forward-looking statements, which are filed with the SEC and available at the SEC's website, sec.gov, for a full discussion of the risks and other factors that may impact any estimates you may hear today. We may make certain statements during the course of this presentation, which include references to non-GAAP financial measures, as defined by SEC regulations. As required by these regulations, we have provided reconciliations of these measures to what we believe are the most directly comparable GAAP measures, which are attached hereto within the appendix. Participating with me today are Bob Sulentic, our President and Chief Executive Officer; Gil Borok, our Chief Financial Officer; and Bill Concannon, the Chief Executive Officer of our Global Corporate Services business. I'll now turn the call over to Bob.

Thanks, Nick, and please turn to Slide 4. CBRE's performance rebounded strongly in the final quarter of 2012. Following a sluggish Q3, activity improved in virtually all business lines, particularly our capital markets businesses. All 3 global operating regions delivered solid top line growth with especially strong results in the Americas. The positive turn in performance reflects improved market sentiment, which has fluctuated throughout the current recovery, as well as CBRE's distinct advantages as the global market leader. Revenue for the year set a new milestone at $6.5 billion, and both earnings and normalized EBITDA exhibited strong growth. Our full year normalized EBITDA margin of 14.1% was the highest since 2007 and increased 50 basis points over 2011. These achievements in a year of economic and market uncertainty are a testament to the strength and diversity that comes from our geographic footprint and broad product offering, our brand and our people's talents for collaborating to create value for our clients. Please turn to Slide 5. Global business line highlights for the quarter include: a 22% increase in global property sales revenue as we completed single-asset and portfolio sales valued at more than $1 billion in several markets, including Berlin and Frankfurt, Moscow, New York, Seattle and Silicon Valley. Sales activity was especially strong in the Americas, rising 32%. Despite Europe's weak economic growth and continued financial stress, property sales in EMEA rose 13%, aided by robust performance in the United Kingdom. Commercial mortgage brokerage revenue improved 38%, fueled by continued strong U.S. loan origination activity. In a generally soft market, leasing revenue grew 5%, led by the Americas and Asia Pacific. Outsourcing continued its strong growth. Overall revenue rose 13% as all 3 global regions posted double-digit increases. As you will hear from Bill Concannon shortly, we signed a record…

Thanks, Bob, and please turn to Slide 7. Global Corporate Services is CBRE's occupier outsourcing business. We provide these occupiers with tailored real estate solutions. Our clients include corporations ranging from the biggest Fortune 500 companies to growing mid-cap enterprises, health care providers, public sector institutions and others. We provide 4 core services for these occupier clients: portfolio and transaction services, facilities management, project management and strategic consulting. On our income statement, the variable portion of portfolio and transaction services rolls into our leasing and property sales revenue lines, while project management and facilities management, even the reimbursed portion of portfolio and transaction services, rolls into Property & Facilities Management revenue. Strategic consulting is a small contributor to all 3 revenue lines. We have more than 300 Global Corporate Services clients, all of them served under contracts of at least 1 year, and most for multiple years. We also enjoy a very high renewal rate with these clients. These clients' contracts range from integrated full-service global clients to a contract where we provide a single service for a period of 1 year or more, such as managing a complex construction project. We have a very strong leadership team and more than 13,000 employees in Global Corporate Services, many of them working on-site with our clients as an integral part of their real estate team. As Bob indicated, our business has been growing strongly, and 2012 was our best year ever for total contracts signed. We set new records for wins, expansions and renewals. We continue to sign new contracts at an impressive clip in the fourth quarter. Most notably, we completed the most contract expansions ever, both in a single quarter and full year, reflecting our sharp focus on broadening our scope of services for existing clients. Opportunities in newer,…

Thank you, Bill. Please advance to Slide 9. Total revenue was approximately $2 billion for the fourth quarter of 2012, up 14% from last year. This increase was driven by growth in virtually all businesses and service lines. Normalized EBITDA was $351.7 million in the fourth quarter of 2012, resulting in a normalized EBITDA margin of 17.5%. This margin is slightly lower than last year's fourth quarter, which benefited significantly from more sizable Development Services gains on project sales. Cost of services decreased to 56.4% of total revenue in the fourth quarter of 2012 versus 57.2% in the fourth quarter of 2011. Excluding $20 million of cost containment expenses in the fourth quarter of 2011, cost of services was 56.1% of revenue. Fourth quarter 2012 operating expenses were 29.8% of total revenue versus 34.2% in the fourth quarter of 2011. Excluding $45 million of integration and other costs related to the ING REIM acquisition and $11.1 million of cost containment expenses, fourth quarter 2011 operating expenses were 31% of revenue. Included in the fourth quarter 2012 operating expenses was $25 million of impairments of assets in our principle businesses involving final resolution of assets acquired before the financial crisis. Much of this was attributable to non-controlling interests, which substantially reduced the impact on normalized EBITDA. Interest expense was relatively flat in the quarter versus the fourth quarter of 2011. Our fourth quarter 2012 tax rate was approximately 33%. This lower tax rate was primarily the result of the benefit from previously unavailable foreign income tax credits that can be utilized to offset U.S. federal income taxes on foreign sourced earnings in the near future. We realized this outcome due to our continued focus on the tax efficiency of our legal entity and operating structure. Our full year 2012 tax rate…

Thanks, Gil. Please turn to Slide 23. Our performance in the fourth quarter and strong full year growth at a time of continuing economic challenges reflects the many strengths that have led CBRE to the market-leading position in our industry, including our deep pool of professional talent; our deep, diverse and loyal client base; our well-recognized and highly regarded brand; our unmatched geographic and service line footprint; and our capacity and willingness to make strategic investments that enhance our services to clients and position us for continued growth. With market conditions continuing to improve slowly and systemic threats to the global economy lessening, our view of 2013 is on the positive side of the lever -- ledger. It is also an opportune time to modestly increase investment in our platform. We expect to partly offset any above-normal platform investments through continued, rigorous management of our day-to-day cost structure, lower interest expense and tax savings. Accordingly, we expect the impact of these investments on the bottom line to be muted. These investments will enable our people to work more efficiently and collaborate more effectively and will help us sustain our growth for years to come. For 2013, we expect global revenue to increase at a mid- to high-single-digit rate, consistent with our long-term historical performance. We anticipate this growth to once again be paced by the Americas, with Asia Pacific rebounding and EMEA still being challenged by a weak macro environment. Among our global business lines, we expect moderate leasing growth to be closely tied to the performance of the global economy. We anticipate that property sales will increase in line with improving fundamentals, and outsourcing will continue to grow in the low double digits. In light of these expectations and factoring in anticipated higher depreciation and amortization expense, we anticipate generating full year 2013 EPS in the range of $1.40 to $1.45. This implies a solid growth rate of 15% to 20% as compared to 2012 while once again producing the industry-leading normalized EBITDA margins you have come to expect of us. With that, operator, we'll open the lines for questions.

[Operator Instructions] Our first question will come from Anthony Paolone with JPMorgan. Anthony Paolone - JP Morgan Chase & Co, Research Division: My first question is on leasing. It seemed like the evidence was that leasing volumes in general were down in the fourth quarter, but both you guys and JLL ended up doing pretty well. And it seemed like you picked up share. So I guess, a, is that really the case? And then b, where do you think that share came from? And how sustainable do you see that as being?

Anthony, this is Bob. The -- we do believe we picked up share. We do believe JLL probably picked up share as well. And where it came from probably is our smaller competitors. Whether or not it's sustainable depends on whether or not we can continue to do the kind of job we're doing on behalf of our clients. We're going to certainly try to do that. We're investing aggressively in the business to make sure we do that. We're supporting our professionals. We think we have the industry-leading professionals in that area. So we expect that we'll be able to continue the trend of growing our leasing business. I can tell you, it's certainly a big focus here, and we have the right people to get that done. Anthony Paolone - JP Morgan Chase & Co, Research Division: And on the leasing side, as you look into 2013, one thing we hear often times is in the office category, tenants increasingly pushing to cut costs, push more people into a given amount of space and so forth. Do you see that as being -- a, do you see it out there? And b, is that something you think is cyclical with just still a fairly tough macro backdrop? Or do you think that's a longer-term headwind we should watch for that could keep some lid on leasing?

Well, it's definitely cyclical. When companies are uncertain or companies feel like they're under pressure, they control costs more aggressively. And one of the costs they focus on is their leases. But in addition to that, there is no doubt that things are changing. What makes the notion of alternative workspace real is really 2 things: Number one, it's the notion of a more paperless world. And number two, it's the notion of connectivity and wirelessness on the technology side. And all of that stuff is happening. And so what you're seeing is people that are very mobile with their office space and coming up with alternative designs for office space that allow them to move around, share space, so on and so forth. So that's a very real trend. We see it with a lot of clients. We're doing it in our own spaces around the world. And by the way, I think the younger generation of workers coming in is pushing all of us in that direction. Anthony Paolone - JP Morgan Chase & Co, Research Division: Just a couple of other things as it relates to guidance. Can you comment at all on just things like backlog of development gains that may exist, that we may see a pickup in, say, 2013, that might be in the numbers? And along the same lines, in Investment Management, it seems like you guys have been booking some carried interest accruals on the expense side. But refresh my memory if you have booked anything on the revenue side or if those start to come in 2013, do they drop right to the bottom line?

Anthony, it's Gil. We have not booked any carried interest revenue in 2012, and our guidance would include any anticipated carried interest revenue that might come in '13. It will obviously come in the future. You see an accrued balance of $48 million of carried interest expense. So you can assume that carried interest revenue more or less double that will come in, in the future. But I'm not going to comment as to which year. Anthony Paolone - JP Morgan Chase & Co, Research Division: And similar, on the development backlog gains?

Well, Anthony, we're bringing on a good number of new projects. Obviously, you've observed, as we all have, that business over the years, and you know that the life cycle associated with harvesting those projects is fairly long. So I think what you're going to see in 2013 from us is likely less development profitability. Because what we've done is we've burned off the inventory of projects that we kind of carried for a long time through the downturn. And now we're reloading, and the gestation period of those projects suggests it'll be 2 or 3 years before a lot of them harvest. So I think we're going through now kind of a cyclical bottom, and then we'll be coming back out in terms of the profitability generated by that business. But we do -- to answer your question specifically, yes, we do see some nice new opportunities, and we're particularly encouraged by the fact that if you can find development opportunities and get them started, there's less competition now than there has been at many points in the past. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And then just last one. Any updated thoughts on how you look at your free cash flow as it relates to either dividend or stock buyback, just given how the business is strong and your net debt continues to whittle down?

Yes, Anthony, it's Gil. We look at it, and obviously, we like it. We do have the $450 million bonds that are callable in June of '13. And so we're obviously contemplating our options currently in terms of what we do with those. It may involve use of some cash, maybe all cash. But at the moment, what we've guided to is we know we can refinance those for about half the interest rate that they're currently at. So that's one alternative that fits into our overall strategy. The other thing is you've got to remember that even though there is about $1 billion of cash on the books at the moment, we're going into our seasonal usage period. And so in the first quarter and into the second quarter, you can anticipate us using between $400 million and $450 million of cash to pay bonuses, and we'll do that with cash and not have to draw on our revolver. So there's a big usage. The other thing you have to remember is that $300 million of that cash is overseas, $700 million give or take is domestic. And again, the overseas cash can be used for bonuses as well. So there are some uses coming up. There will be leftover, and it'll be part and parcel of our discussions around that $450 million call as to what we do with it at the moment.

Your next question is from Brandon Dobell with William Blair. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Just from a near-term perspective, should we expect much of an air pocket here in the first quarter in the capital markets business, given your comments and just kind of the finish to the year around investment sales and mortgage brokerage? Or would you expect typical seasonality, and no kind of exaggerated seasonality around it? And is there anything else -- I would imagine you saw it in any kind of pull forward in leasing or outsourcing, but I just want to make sure we get kind of the right staging or pacing here from Q4 into Q1?

Brandon, the -- I want to make sure I understand your question. So I'll give an answer, and if I don't answer the question you asked me, tell me. We really don't think there is any pull forward in leasing or outsourcing. So that's the easy part of your question. Whether or not there's an air pocket in the capital markets -- probably a little bit. There was an awful -- particularly here in the States, there was an awful lot of activity in Q4, and particularly in December, in response to the tax situation that we're all aware of. So we think we benefited from that. We don't think it's going to have an overwhelming or a dominant impact on Q1. And in fact, we think that 2013 is going to be a better year overall than 2012. But it wouldn't be surprising to see some impact from that. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Okay, fair enough. And then going back to the discussion around corporate services. As you look at the renewals and expansions, maybe some color around -- are those typically with more size and/or more services? And is there any difference between, let's say, EMEA and Americas in terms of what those renewals or expansions may look like?

Okay, Brandon, it's Bill here. Thank you for that question. I -- one of the things I'd say is the -- one of -- the #1 thing I like about our 2012 performance is that the expansions that we booked, 56 in total, show us that we've got good client satisfaction, show us that our people are focused, that shows us their clients trust us and therefore they're willing to work with us in more places. And in fact, when you look at the 2 cases highlighted on the slide, Microsoft and State Street, they were U.S. multinationals that expanded with us in EMEA and Asia Pacific. So the customer doesn't have to originate in EMEA and/or Asia Pacific. We can get a lot of expansion on a year-over-year basis with U.S. multinationals, which is a key part of our growth metric. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Okay. And Gil, maybe any color on what we should expect CapEx and additional co-investments to look like in '13?

Yes. On the CapEx front, we're probably looking at something a little north of $150 million, consistent with our moderate investment goals. And on the co-investment front, it's a little bit difficult to say because of -- what the net will be. But as Bob said, it is a time in the cycle where we think there's a good opportunity, and so that's going to be somewhere between $50 million and $100 million. But it's hard to give a tight range on it, Brandon. Brandon Burke Dobell - William Blair & Company L.L.C., Research Division: Okay. And then final question for you maybe, Gil, or even for Bob. As we think about the impact of headcount additions or technology spending, should we see that make a difference? Or should that show up more in the Americas than it should in Asia Pac and EMEA, i.e., should it not impact margin trajectories in the international markets? Or is it going to be spread evenly across the P&Ls?

We're making those investments around the world, Brandon. But importantly, I want to stress one thing as we said in our comments. The -- we're expecting our margin to continue to expand. So we're making these investments thoughtfully and cautiously, and they're all about enabling our professionals, technology, marketing, other things that are going to enable our professionals. And we're doing it around the world. I mean, we do the same products everywhere in the world. We do these processes that are very similar everywhere in the world. And increasingly, with those businesses, we're serving the same customers everywhere in the world. Bill, I don't know if you'd have an add-on to that.

No. I think that's it. That captures it.

We'll go next to Will Marks with JMP Securities.

I want to first ask -- I guess maybe some questions of, Gil, on the interest expense line. You gave -- you said it -- included, I guess, is some sort of benefit from refinancing in your guidance. Is that -- just to confirm that's correct?

That's correct. Yes.

Okay. And then -- I mean, what kind of run rate should we see on that line during the year? I guess I realize it will change in the second half of the year, but maybe to start the year?

Yes, it'll run -- with the assumptions I've given you, Will, it'll run about $40 million a quarter in the first half, dropping down to between $33 million and $35 million in the second half per quarter.

And then I guess same question. I was a little surprised at the D&A level in the fourth quarter. You made some comments, and I apologize if I missed what I'm asking, and that is the kind of guidance along those lines for 2013.

Yes. Two things that drive it: First of all, depreciation is going up along with capital expenditure increases. In the down, we didn't invest and since then, we have been investing incrementally. Some of those projects that were held as "construction in progress" have come online and are now starting to be depreciated. So that's what's caused an uptick in depreciation, or the depreciation part of it, certainly in the second half of the year. And then the other component is amortization, and that has to do with our mortgage brokerage business where we -- I think you know we capitalize upfront the servicing rights, which creates income upfront on the servicing rights we get when we originate loans. And that has to amortize into the P&L over time. So in a growing portfolio, you're getting gains and amortization. The amortization is less than the gains, but amortization goes through the amortization line. So a combination of those 2 factors is what's pushing it up. Before you ask it, for next year, the run rate per quarter is going to be around $38 million to $40 million in [indiscernible].

Okay. So it will drop substantially from that fourth quarter level. And I realize that things are seasonal, too. But...

If you're looking at the P&L and the income statement, remember that's not normalized. I'm giving you a normalized number.

Right. Sorry. Yes, fair enough. Okay. And then just moving on, the -- typically, there is a -- the net debt balance does go up in the first quarter. I'd expect -- or I should ask, should we expect the same in 2013 due to bonus?

Yes. Exactly. So yes, on a net debt basis, that's true. Yes.

We'll go next to David Ridley-Lane with Bank of America Merrill Lynch.

Sure. I wanted to ask a question about the -- on the investment sales side, particularly in the Americas. I was wondering if you were seeing investor interest sort of expand from Tier 1 Class A series event trading [ph] quite frequently over the last year or 2? And does your [ph] Tier 2 and Tier 3 fit in [ph]?

David, we're seeing that start to happen slowly and -- both in terms of moving out a little with the assets and moving out a little with the markets that investors are looking at.

Okay. So -- and that's -- sort of clear is that -- when you say moving out, is that the most that it's moved out this -- through this recovery? Or are we kind of getting back to sort of second quarter '12 before the eurozone crisis kind of hit us?

I would say we would expect it to be more than it's been prior to this, in the recovery in 2013. That's our expectation. And we're -- and again, we started to see that in the fourth quarter for sure.

Got it. And then if the EMEA revenue was flattish in 2013, would you expect the margins to be up or down in that region, i.e., have you made enough cost cuts to kind of keep things flat? Or will we still see some deleveraging there?

We made some cost cuts, and we're also going to make some incremental investments. It's hard to give you an exact answer at this point because if we didn't see things -- if we didn't start to be more optimistic, which I think we're going to be by the middle of the year, about EMEA, then we'd put a governor on the magnitude of the incremental investments, obviously. But my guess is those 2 things will kind of offset each other over the course of the year in EMEA. And we'll respond to the market in the second of the year as it unfolds.

You have a question from Todd Lukasik with Morningstar.

Just hoping to revisit some of the numbers you had given for the global corporate outsourcing business. I guess you referenced the McKinsey report, $50 billion potential market. If I understood correctly, current industry penetration of about $10 billion of which you guys are about 15% or $1.5 billion?

Yes. That's correct, Todd. I think that -- by the way, I think we think that's a conservative estimate by McKinsey. It's only in the service lines where we operate today. And so it doesn't include in vertical markets like higher education where we're not -- they're not really outsourcing yet today. But it does not include soft service providers. So it wouldn't include janitorial or security in many of the vendor spend categories that we manage as a facilities manager.

Okay. Got you. And then I was wondering if you could just comment a little bit on competition in that business. I'd assume that on a local or regional basis, there are a lot more competitors that can put in bids than could credibly for some of the global deals that you guys are bidding for. And I was particularly wondering if you guys have any information you could share in terms of percentage of business that you win, what you're bidding for and what percentage that you tend to win?

Well -- I mean, we have lots of metrics that we track in the business, Todd. One of them is obviously win rate, and we've got a very high win rate on the business that we choose to go after. I will tell you that this year -- I can't remember a year where the pace picked up, where we set records for the number of new contracts, one, and the number of new RFPs. RFPs were up almost 40% on a year-over-year basis. And so when these customers come out, they're not just vetting for cost anymore. They're vetting for -- in a very sophisticated RFP process with many times procurement and/or strategic sourcing at the table with these Fortune 500 companies. They're looking for profits improvement, they're looking for the access to talent that they can bring into their own company in terms of running the real estate, running the facilities, better compliance, better regulatory reporting. So this business, as it's gotten more sophisticated, as the selection process has gotten more difficult, it really bodes well for us, companies like ours. And so we very [ph] -- rarely would see a local or regional original player compete effectively on a large global deal or even an Americas-based deal.

Okay. And then I guess just one more. Do you have a sense as to -- or could you share sort of what percentage of that $1.5 billion that you guys are doing today is business with people or corporations on a global scale as opposed to a regional scale?

It's growing. 80% of our business is in the Americas today. So 20% is outside the Americas, but it is growing. In Asia Pacific and Latin America, to name 2 geographies, we saw a real jump in a year-over-year basis on our RFP count. And in fact, there's a lot of scrutiny in those regions of the world.

We have a follow-up from Anthony Paolone with JPMorgan. Anthony Paolone - JP Morgan Chase & Co, Research Division: In the mortgage origination business, is that -- I mean, do you think that's more correlated to, say, activity in CMBS? Or is it just more tied to general investment sales activity? Like how do we think about where that goes?

It's very tied to investment sales activity. And in our case, it's tied to multi-family investment sales activity far more than just CMBS. We provide mortgage origination for all types of different financings. So -- or for all types of different capital sources. So we wouldn't necessarily be driven more by CMBS or something else. I will tell you, we've done a lot of multi-family stuff, but we do a good amount of work, whether it's office, industrial or retail, in the mortgage brokerage business. So I would -- if you want to have a parameter, I would look at investment sales in general. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And what's -- any guidance as to what the incremental margins are for that business line? It seems they've gotten pretty big and has grown pretty nicely.

I'll just give you this. It is higher than the overall corporate margin. It does drive the margin up. Anthony Paolone - JP Morgan Chase & Co, Research Division: Okay. And then just for Bill on -- so is that -- when you think about just sort of the double-digit growth clip that, that business is running at, should we really think about that on the $1.5 billion as opposed to the entire, I think, $2.2 billion? Just wanted to understand that other $700 million. What's in that number again?

So there's another component to outsourcing, which is the asset services business, property management for landlords. That's the difference. Anthony Paolone - JP Morgan Chase & Co, Research Division: And is that -- should we think about that, though, as being more flat compared to what you're doing on the outsourcing side? Or...

It's slower growth, but still a growing business.

I think they're -- to specifically answer Anthony's question, in aggregate, the 2 grow north of 10%.

That's correct.

And Bill's business is the faster growing of the 2.

That's right.

So it's in the mid-teens and above.

Yes.

And not all parts of GCS, Anthony, flow through Property and the Facilities Management line. All right? So there are revenues that aren't captured in that business that's grown 10% year-over-year.

We also have a follow-up from Will Marks with JMP Securities.

I wanted to ask, Bob, on -- when you had your Business Review Day in early December, you chose not to address guidance. I'm just curious, and I can accept you not addressing my question about addressing, but was it an uncertain time? Was this just a decision that you made going forward to not do it during the Business Review Day?

It's the latter, Will. We just -- we do it. We have a specific time we do it with our kind of annual release calendar, and we didn't want to address it off cycle in essence.

Our next question will come from David Gold with Sidoti. David Gold - Sidoti & Company, LLC: Just a quick one for you. Can you address a little bit 2 factors that presumably affected the fourth quarter and affect on the first. One is I know you said you didn't think there was much by way of pull forward. But basically, on the capital gain side domestically, how much of an effect do you think that had loosely in the fourth quarter, a pick up on capital markets? And then also, on the fiscal cliff side or fears on that, how much do you think that weighed on leasing?

David, thanks for that question. I want to clarify, we did say that we thought there was in fact some pull forward due to the tax laws changes. We didn't quantify it. But what we do believe is that the capital markets business will be bigger for next year than it was this year. So that would tell you that we don't believe there was so much pull forward into '12 that '12 got bigger than '13. If -- does that answer your question? David Gold - Sidoti & Company, LLC: Yes. That's helpful. And I guess part 2 of that one, though, is to the extent there was pull forward, do you think we'll see a bigger effect in the first quarter, some slowdown there because maybe some business happened in the fourth versus the first?

Well, it'll impact the first quarter some. We don't think it's going to be a dramatic impact. And by the way, I don't think I answered your question about the impact on leasing of the fiscal cliff issue. I don't think it created any pull forward. I think what it did was it liberated leaders of businesses to make commitments that they were waiting to make. So I think we'll see the benefit from that. We probably saw a little benefit from that in Q4. I think we'll see the benefit from that from now forward through the rest of this year in all probability. David Gold - Sidoti & Company, LLC: So you think there was benefit from that rather than a detriment?

I think there was benefit, but I don't think it was pull forward benefit. I think it was just people that had been kind of on the sidelines deciding to start to come in and make some decisions.

And gentlemen, we have no one else in queue. Please go ahead with any closing remarks.

That's all, and we'll see you in 90 days to talk about the first quarter. Thanks very much.