MADISON, N.J., Feb. 23,
2021 /PRNewswire/ -- Realogy Holdings Corp. (NYSE: RLGY), the
largest full-service residential real estate services company in
the United States, today reported
financial results for the fourth quarter and full year ended
December 31, 2020.
"Realogy had an outstanding 2020, delivering $726 million in Operating EBITDA, $555 million in free cash flow, 13% homesale
transaction volume growth, and substantial capital structure
improvements," said Ryan Schneider,
Realogy's chief executive officer and president. "In an
extraordinary year, we were able to capitalize on the dynamic
housing market, accelerate our strategic progress, and capture
significant incremental transaction economics. With our strategic
success and strong momentum, we believe Realogy is well-positioned
to lead into the future. 2021 is off to a very strong start, and we
are excited as we look ahead."
"2020 was a year of tremendous operational and financial
execution for Realogy," said Charlotte
Simonelli, Realogy's executive vice president, chief
financial officer, and treasurer. "In the year we delivered
top-line growth, cost efficiencies, impressive profitability, and
greater simplification while continuing to invest in the business.
We seized market opportunities to improve our capital structure,
including significantly reducing net debt and net leverage, which
further strengthened Realogy's financial profile."
Fourth Quarter 2020 Highlights
- Generated revenue of $1.9
billion, an increase of 36% or $497
million year-over-year.
- Reported Net income of $18
million and basic earnings per share of $0.16, an increase of $63
million vs. prior year or $0.55 per share.
- Generated Operating EBITDA of $206
million, an increase of $80
million year-over-year, driven by higher transaction volume,
strong performance at our mortgage JV, and ongoing cost management
(See Table 5a).
- Title and mortgage continued to contribute meaningfully to our
business results, generating approximately $58 million in fourth quarter Operating EBITDA
(See Table 5a).
- Combined closed transaction volume increased 45% year-over-year
in the fourth quarter driving market share gains for the second
consecutive quarter.
- Generated Free Cash Flow of $268
million vs. $77 million for
the corresponding quarter last year (See Table 7).
Full Year 2020 Highlights
- Generated revenue of $6.2
billion, an increase of 6% or $351
million year-over-year.
- Reported Net loss of $360 million
and net loss per share of $3.13
includes non-cash impairment charges of $682
million largely attributable to the COVID-19 crisis.
- Generated Operating EBITDA of $726
million, an increase of $136
million year-over-year, driven by higher transaction volume,
strong performance at our mortgage JV, and strong cost management
both temporary and permanent (See Table 5b).
- Title and mortgage continued to contribute meaningfully to our
business results, generating approximately $226 million in Operating EBITDA (See Table
5b).
- Increased combined closed transaction volume 13% year-over-year
with improvement across both Brokerage and Franchise businesses and
held market share steady in 2020 vs. 2019.
- Generated Free Cash Flow of $555
million, up $329 million vs.
last year (See Table 7).
- Strengthened the balance sheet reducing net debt by
$493 million from December 31, 2019 with the Net Debt Leverage
Ratio declining to 3.4x (See Table 8b) and senior secured leverage ratio of 1.70x
(See Table 8a).
- Grew Brokerage agents 2% year-over-year and had continued
improving retention.
Q4 and Full Year 2020 Financial Highlights
The following tables set forth Realogy's financial highlights
for the periods presented (in millions, except per share data)
(unaudited):
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
|
Change
|
|
%
Change
|
Revenue
|
$
|
1,889
|
|
|
$
|
1,392
|
|
|
$
|
497
|
|
|
36
|
%
|
Operating EBITDA
1
|
206
|
|
|
126
|
|
|
80
|
|
|
63
|
|
Net income (loss)
attributable to Realogy
|
18
|
|
|
(45)
|
|
|
63
|
|
|
140
|
|
Adjusted net income
2
|
79
|
|
|
(18)
|
|
|
97
|
|
|
539
|
|
Earnings (loss) per
share
|
0.16
|
|
|
(0.39)
|
|
|
0.55
|
|
|
141
|
|
Adjusted earnings
(loss) per share 2
|
0.68
|
|
|
(0.16)
|
|
|
0.84
|
|
|
525
|
|
Free Cash Flow
3
|
268
|
|
|
77
|
|
|
191
|
|
|
248
|
|
Net cash provided by
operating activities
|
$
|
330
|
|
|
$
|
141
|
|
|
$
|
189
|
|
|
134
|
%
|
|
|
|
|
|
|
|
|
Select Key
Drivers
|
|
|
|
|
|
|
|
Realogy Franchise
Group 4 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
312,335
|
|
|
257,524
|
|
|
|
|
21
|
%
|
Average homesale
price
|
$
|
389,555
|
|
|
$
|
322,713
|
|
|
|
|
21
|
%
|
Realogy Brokerage
Group 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
97,930
|
|
|
77,560
|
|
|
|
|
26
|
%
|
Average homesale
price
|
$
|
590,351
|
|
|
$
|
523,024
|
|
|
|
|
13
|
%
|
Realogy Title
Group
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
42,586
|
|
|
34,345
|
|
|
|
|
24
|
%
|
Refinance title and
closing units
|
20,490
|
|
|
9,294
|
|
|
|
|
120
|
%
|
|
Year
Ended
|
|
2020
|
|
2019
|
|
Change
|
|
%
Change
|
Revenue
|
$
|
6,221
|
|
|
$
|
5,870
|
|
|
$
|
351
|
|
|
6
|
%
|
Operating EBITDA
1
|
726
|
|
|
590
|
|
|
136
|
|
|
23
|
|
Net loss attributable
to Realogy
|
(360)
|
|
|
(188)
|
|
|
(172)
|
|
|
(91)
|
|
Adjusted net income
2
|
231
|
|
|
73
|
|
|
158
|
|
|
216
|
|
Loss per
share
|
(3.13)
|
|
|
(1.65)
|
|
|
(1.48)
|
|
|
(90)
|
|
Adjusted earnings per
share 2
|
2.01
|
|
|
0.64
|
|
|
1.37
|
|
|
214
|
|
Free Cash Flow
3
|
555
|
|
|
226
|
|
|
329
|
|
|
146
|
|
Net cash provided by
operating activities
|
$
|
748
|
|
|
$
|
371
|
|
|
$
|
377
|
|
|
102
|
%
|
|
|
|
|
|
|
|
|
Select Key
Drivers
|
|
|
|
|
|
|
|
Realogy Franchise
Group 4 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
1,090,345
|
|
|
1,061,500
|
|
|
|
|
3
|
%
|
Average homesale
price
|
$
|
355,214
|
|
|
$
|
314,769
|
|
|
|
|
13
|
%
|
Realogy Brokerage
Group 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
333,736
|
|
|
325,652
|
|
|
|
|
2
|
%
|
Average homesale
price
|
$
|
553,081
|
|
|
$
|
522,282
|
|
|
|
|
6
|
%
|
Realogy Title
Group
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
149,126
|
|
|
146,210
|
|
|
|
|
2
|
%
|
Refinance title and
closing units
|
65,324
|
|
|
26,589
|
|
|
|
|
146
|
%
|
_______________
|
Footnotes:
|
* not
meaningful
|
1
See Tables 5a and 5b. Operating EBITDA is defined as net
income (loss) before depreciation and amortization, interest
expense, net (other than relocation services interest for
securitization assets and securitization obligations), income
taxes, and other items that are not core to the operating
activities of the Company such as restructuring charges, former
parent legacy items, gains or losses on the early extinguishment of
debt, impairments, gains or losses on discontinued operations and
gains or losses on the sale of investments or other
assets.
|
2
See Table 1a. Adjusted Net income (loss) is defined as net income
(loss) before mark-to-market interest rate swap adjustments, former
parent legacy items, restructuring charges, (gain) loss on the
early extinguishment of debt, impairments and the tax effect of the
foregoing adjustments. Adjusted earnings (loss) per share is
Adjusted net income (loss) divided by the weighted average common
and common equivalent shares outstanding.
|
3
See Table 7. Free Cash Flow is defined as net income (loss)
attributable to Realogy before income tax expense (benefit), net of
payments, net interest expense, cash interest payments,
depreciation and amortization, capital expenditures, restructuring
costs and former parent legacy costs (benefits), net of payments,
impairments, (gain) loss on the early extinguishment of debt,
working capital adjustments and relocation receivables (assets),
net of change in securitization obligations.
|
4
Includes all franchisees except for Realogy Brokerage
Group.
|
5
The Company's combined homesale transaction volume growth
(transaction sides multiplied by average sale price) increased 45%
compared with the fourth quarter of 2019 and increased 13% compared
with the year ended 2019.
|
The results of Cartus Relocation Services have been reclassified
from discontinued operations to continuing operations within
Realogy Franchise Group for all periods presented.
Balance Sheet and Capital Allocation
The Company ended the year with cash and cash equivalents of
$520 million*. Total corporate debt,
including the short-term portion, net of cash and cash equivalents
(net corporate debt), totaled $2.8
billion at December 31, 2020. The Company's Net
Debt Leverage Ratio was 3.4x at December 31, 2020 (see Table
8b).
In January and February 2021, the
Company issued $900 million 5.75%
Senior Notes due 2029. The Company used $250
million of the proceeds from these issuances to repay a
portion of outstanding borrowings under the Term Loan A Facility
and $655 million of the remaining
proceeds to repay a portion of outstanding borrowings under the
Term Loan B Facility. Furthermore, in January 2021, the Company entered into amendments
to the Senior Secured Credit Agreement and Term Loan A Agreement,
which, among other things, (i) provide for the extension of the
maturity of a portion of the commitments under the Revolving Credit
Facility and a portion of the outstanding loans under the Term Loan
A facility from 2023 to 2025, subject to certain earlier springing
maturity dates, (ii) lowered the required senior secured leverage
ratio level under the Senior Secured Credit Agreement and Term Loan
A Agreement, including a requirement that the senior secured
leverage not exceed 5.25 to 1.00 for the trailing twelve-month
period ended December 31, 2020, and
(iii) provided for an amortization schedule applicable to the
portion of the Term Loan A Facility that was extended pursuant to
the amendments (with no amortization payments required on the
portion of the Term Loan A Facility that was not extended).
A consolidated balance sheet is included as Table 2 of this
press release.
______________
|
* excludes restricted
cash
|
Investor Conference Call
Today, February 23, at 8:30 a.m.
(ET), Realogy will hold a conference call via webcast to
review its full year 2020 results and provide a business update.
The webcast will be hosted by Ryan
Schneider, chief executive officer and president, and
Charlotte Simonelli, chief financial
officer, and will conclude with an investor Q&A period with
management.
Investors may access the conference call live via webcast at
ir.realogy.com or by dialing (833) 646-0499 (toll free);
international participants should dial (918) 922-3007. Please dial
in at least 5 to 10 minutes prior to start time. A webcast replay
also will be available on the website.
About Realogy Holdings Corp.
Realogy Holdings Corp. (NYSE: RLGY) is the leading and most
integrated provider of U.S. residential real estate services,
encompassing franchise, brokerage, relocation, and title and
settlement businesses as well as a mortgage joint venture.
Realogy's diverse brand portfolio includes some of the most
recognized names in real estate: Better Homes and Gardens® Real
Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®,
Corcoran®, ERA®, and Sotheby's International Realty®. Using
innovative technology, data and marketing products, high-quality
lead generation programs, and best-in-class learning and support
services, Realogy fuels the productivity of independent sales
agents, helping them build stronger businesses and best serve
today's consumers. Realogy's affiliated brokerages operate around
the world with approximately 190,700 independent sales agents in
the United States and nearly
130,000 independent sales agents in 115 other countries and
territories. Recognized for ten consecutive years as one of the
World's Most Ethical Companies, Realogy has also been designated a
Great Place to Work three years in a row and one of Forbes' Best
Employers for Diversity. Realogy is headquartered in Madison, New Jersey.
Forward-Looking Statements
Certain statements in this press release constitute
"forward-looking statements." Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Realogy Holdings Corp. to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Statements preceded by, followed by or
that otherwise include the words "believes", "expects",
"anticipates", "intends", "projects", "estimates", "potential" and
"plans" and similar expressions or future or conditional verbs such
as "will", "should", "would", "may" and "could" are generally
forward-looking in nature and not historical facts. Any statements
that refer to expectations or other characterizations of future
events, circumstances or results are forward-looking
statements.
The following include some, but not all, of the factors that
could affect our future results and cause actual results to differ
materially from those expressed in the forward-looking statements:
adverse developments or the absence of sustained improvement in the
U.S. residential real estate markets, either regionally or
nationally, which could include, but are not limited to: meaningful
decreases in the average broker commission rate, continued or
accelerated declines in inventory, increases in mortgage rates, and
other factors that impact homesale transaction volume, including a
reduction in housing affordability, a decline or lack of
improvement in the number of homesales, stagnant or declining home
prices, and changes in consumer preferences, including weakening in
the consumer trends that benefited us in the second half of 2020;
adverse developments or the absence of sustained improvement in
macroeconomic conditions (such as business, economic or political
conditions) on a global, domestic or local basis, which could
include, but are not limited to intensifying or continued economic
contraction in the U.S. economy, including the impact of
recessions, slow economic growth, or a deterioration in other
economic factors (including potential consumer, business or
governmental defaults or delinquencies due to the COVID-19 crisis
or otherwise) and fiscal and monetary policies of the federal
government and its agencies, particularly those that may result in
unfavorable changes to the interest rate environment; adverse
impacts from the COVID-19 crisis, including amplification of risks
to our business and worsening economic consequences of the crisis
or the reinstatement of significant limitations on normal business
operations; our ability to execute our business strategy and
achieve growth, including our efforts to: recruit and retain
productive independent sales agents, attract and retain franchisees
or renew existing franchise agreements without reducing contractual
royalty rates or increasing the amount and prevalence of sales
incentives, alleviate or control the erosion of our share of the
commission income generated by homesale transactions or compete for
real estate services business, develop or procure products,
services and technology that supports our strategic initiatives,
realize the expected benefits from our mortgage origination joint
venture or from other existing or future strategic partnerships,
achieve or maintain a beneficial cost structure or savings and
other benefits from our cost-saving initiatives, generate a
meaningful number of high-quality leads for independent sales
agents and franchisees, complete or integrate acquisitions and
joint ventures into our existing operations, or to complete or
effectively manage divestitures or other corporate transactions;
our geographic and high-end market concentration; the operating
results of affiliated franchisees; continued consolidation among
our top 250 franchisees; negligence or intentional actions of
affiliated franchisees and their independent sales agents or
independent sales agents engaged by our company owned brokerages;
difficulties in the business or changes in the licensing strategy
of the owners of the two brands we do not own; the loss of our
largest real estate benefit program client or multiple significant
relocation clients; continued reductions in corporate relocations
or relocation benefits; the failure of third-party vendors or
partners to perform as expected or our failure to adequately
monitor such third-parties; interruptions in information technology
used to operate our business and maintain our competitiveness;
increases in mortgage rates, tightened mortgage underwriting
standards or reductions in refinancing activity; actions taken by
listing aggregators to monetize their concentration and market
power; industry structure changes (as a result of new laws,
regulations or administrative policies, the rules of multiple
listing services, or otherwise) that disrupt the functioning of the
residential real estate market; adverse effects on our operations
or liquidity due to our indebtedness, including with respect to:
interest obligations and the negative covenant restrictions
contained in our debt agreements, our ability to fund our
operations, invest in our business or pursue growth opportunities,
react to changes in the economy or our industry, or incur
additional borrowings under our existing facilities, an event of
default under our debt agreements, or our ability to refinance or
repay our indebtedness or incur additional indebtedness; our
failure or alleged failure to comply with laws, regulations and
regulatory interpretations and any changes or stricter
interpretations of any of the foregoing (whether through private
litigation or governmental action), including but not limited to:
(1) state or federal employment laws or regulations that would
require reclassification of independent contractor sales agents to
employee status, (2) privacy or data security laws and regulations,
(3) the Real Estate Settlement Procedures Act ("RESPA") or other
federal or state consumer protection or similar laws, and (4)
antitrust laws and regulations; significant claims relating to
operations, and losses resulting from fraud, defalcation or
misconduct; the weakening or unavailability of our intellectual
property rights; cybersecurity incidents; impairment of our
goodwill and other long-lived assets; failure of banks to honor our
escrow and trust deposits; and severe weather events or natural
disasters, including increasing severity or frequency of such
events due to climate change or otherwise, or other catastrophic
events, including public health crises, such as pandemics and
epidemics. Consideration should be given to the areas of risk
described above, as well as those risks set forth under the
headings "Forward-Looking Statements" and "Risk Factors" in our
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2020, and our other filings made
from time to time, in connection with considering any
forward-looking statements that may be made by us and our
businesses generally. We undertake no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events except
as required by law.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures as
defined under SEC rules. As required by SEC rules,
important information regarding such measures is contained in the
Tables attached to this release. See
Tables 1a, 8a and 9 for definitions of these non-GAAP
financial measures and Tables 1a, 5a, 5b, 6a, 6b, 7, 8a
and 8b for reconciliations of the
historical non-GAAP financial measures to their most comparable
GAAP terms.
Investor
Contacts:
|
Media
Contacts:
|
Alicia
Swift
|
Trey
Sarten
|
(973)
407-4669
|
(973)
407-2162
|
alicia.swift@realogy.com
|
trey.sarten@realogy.com
|
|
|
Danielle
Kloeblen
|
Gabriella
Chiera
|
(973)
407-2148
|
(973)
407-5236
|
danielle.kloeblen@realogy.com
|
Gabriella.Chiera@realogy.com
|
Table
1
|
|
REALOGY HOLDINGS
CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In
millions, except per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
Gross commission
income
|
$
|
1,442
|
|
|
$
|
1,020
|
|
|
$
|
4,669
|
|
|
$
|
4,330
|
|
Service
revenue
|
281
|
|
|
231
|
|
|
983
|
|
|
941
|
|
Franchise
fees
|
130
|
|
|
96
|
|
|
419
|
|
|
386
|
|
Other
|
36
|
|
|
45
|
|
|
150
|
|
|
213
|
|
Net
revenues
|
1,889
|
|
|
1,392
|
|
|
6,221
|
|
|
5,870
|
|
Expenses
|
|
|
|
|
|
|
|
Commission and other
agent-related costs
|
1,107
|
|
|
751
|
|
|
3,527
|
|
|
3,156
|
|
Operating
|
405
|
|
|
373
|
|
|
1,473
|
|
|
1,531
|
|
Marketing
|
60
|
|
|
62
|
|
|
215
|
|
|
264
|
|
General and
administrative
|
147
|
|
|
82
|
|
|
412
|
|
|
344
|
|
Former parent legacy
cost, net
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Restructuring costs,
net
|
20
|
|
|
20
|
|
|
67
|
|
|
52
|
|
Impairments
|
72
|
|
|
28
|
|
|
682
|
|
|
271
|
|
Depreciation and
amortization
|
52
|
|
|
46
|
|
|
186
|
|
|
195
|
|
Interest expense,
net
|
38
|
|
|
40
|
|
|
246
|
|
|
250
|
|
Loss (gain) on the
early extinguishment of debt
|
—
|
|
|
—
|
|
|
8
|
|
|
(5)
|
|
Other income,
net
|
(5)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
Total
expenses
|
1,896
|
|
|
1,402
|
|
|
6,812
|
|
|
6,059
|
|
Loss before income
taxes, equity in earnings and noncontrolling
interests
|
(7)
|
|
|
(10)
|
|
|
(591)
|
|
|
(189)
|
|
Income tax expense
(benefit)
|
6
|
|
|
37
|
|
|
(104)
|
|
|
14
|
|
Equity in earnings of
unconsolidated entities
|
(33)
|
|
|
(3)
|
|
|
(131)
|
|
|
(18)
|
|
Net income
(loss)
|
20
|
|
|
(44)
|
|
|
(356)
|
|
|
(185)
|
|
Less: Net income
attributable to noncontrolling interests
|
(2)
|
|
|
(1)
|
|
|
(4)
|
|
|
(3)
|
|
Net income (loss)
attributable to Realogy Holdings
|
$
|
18
|
|
|
$
|
(45)
|
|
|
$
|
(360)
|
|
|
$
|
(188)
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share attributable to Realogy Holdings
shareholders:
|
|
|
|
|
Basic earnings (loss)
per share
|
$
|
0.16
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.13)
|
|
|
$
|
(1.65)
|
|
Diluted earnings
(loss) per share
|
$
|
0.15
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.13)
|
|
|
$
|
(1.65)
|
|
Weighted average
common and common equivalent shares of Realogy Holdings
outstanding:
|
Basic
|
115.5
|
|
|
114.3
|
|
|
115.2
|
|
|
114.2
|
|
Diluted
|
118.2
|
|
|
114.3
|
|
|
115.2
|
|
|
114.2
|
|
Table
1a
|
|
REALOGY HOLDINGS
CORP. NON-GAAP RECONCILIATION ADJUSTED NET
INCOME (LOSS) AND ADJUSTED EARNINGS (LOSS) PER SHARE (In
millions, except per share data)
|
|
We present Adjusted
net income (loss) and Adjusted earnings (loss) per share because we
believe these measures are useful as supplemental measures in
evaluating the performance of our operating businesses and provides
greater transparency into our operating results.
|
|
Adjusted net income
(loss) is defined by us as net income (loss) before: (a)
mark-to-market interest rate swap adjustments, whose fair value is
subject to movements in LIBOR and the forward yield curve and
therefore are subject to significant fluctuations; (b) former
parent legacy items, which pertain to liabilities of the former
parent for matters prior to mid-2006 and are non-operational in
nature; (c) restructuring charges as a result of initiatives
currently in progress; (d) impairments; (e) the (gain) loss on the
early extinguishment of debt that results from refinancing and
deleveraging debt initiatives and (f) the tax effect of the
foregoing adjustments. The gross amounts for these items as
well as the adjustment for income taxes are shown in the table
below.
|
|
Adjusted earnings
(loss) per share is Adjusted net income (loss) divided by the
weighted average common and common equivalent shares
outstanding.
|
|
Set forth in the
table below is a reconciliation of Net income (loss) to
Adjusted net income (loss) for the three-month periods and years
ended December 31, 2020 and 2019:
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income (loss)
attributable to Realogy Holdings
|
$
|
18
|
|
|
$
|
(45)
|
|
|
$
|
(360)
|
|
|
$
|
(188)
|
|
Addback:
|
|
|
|
|
|
|
|
Mark-to-market
interest rate swap losses
|
(8)
|
|
|
(11)
|
|
|
51
|
|
|
39
|
|
Former parent legacy
cost, net
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Restructuring costs,
net
|
20
|
|
|
20
|
|
|
67
|
|
|
52
|
|
Impairments (a)
(b)
|
72
|
|
|
28
|
|
|
682
|
|
|
271
|
|
Loss (gain) on the
early extinguishment of debt
|
—
|
|
|
—
|
|
|
8
|
|
|
(5)
|
|
Adjustments for tax
effect (c)
|
(23)
|
|
|
(10)
|
|
|
(218)
|
|
|
(97)
|
|
Adjusted net
income (loss) attributable to Realogy Holdings
|
$
|
79
|
|
|
$
|
(18)
|
|
|
$
|
231
|
|
|
$
|
73
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share attributable to Realogy Holdings:
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
$
|
0.16
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.13)
|
|
|
$
|
(1.65)
|
|
Diluted earnings
(loss) per share:
|
$
|
0.15
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.13)
|
|
|
$
|
(1.65)
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) per share attributable to Realogy Holdings:
|
|
|
|
|
|
|
Adjusted basic
earnings (loss) per share:
|
$
|
0.68
|
|
|
$
|
(0.16)
|
|
|
$
|
2.01
|
|
|
$
|
0.64
|
|
Adjusted diluted
earnings (loss) per share:
|
$
|
0.67
|
|
|
$
|
(0.16)
|
|
|
$
|
2.01
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
Weighted average
common and common equivalent shares outstanding:
|
|
|
Basic:
|
115.5
|
|
|
114.3
|
|
|
115.2
|
|
|
114.2
|
|
Diluted:
|
118.2
|
|
|
114.3
|
|
|
115.2
|
|
|
114.2
|
|
_______________
|
(a)
|
Non-cash impairments
for the three months ended December 31, 2020 primarily include a
goodwill impairment charge of $22 million related to Cartus
Relocation Services during the fourth quarter of 2020 and an
impairment charge of $34 million related to Cartus Relocation
Services' trademarks during the fourth quarter of 2020.
|
|
Non-cash impairments
for the three months ended December 31, 2019 primarily include a
$22 million reduction to record net assets held for sale at the
lower of carrying value or fair value, less costs to sell, for
Cartus Relocations Services which was presented as held for sale at
December 31, 2019.
|
(b)
|
Non-cash impairments
for the year ended December 31, 2020 primarily
include:
|
|
- a goodwill impairment charge of $413 million
related to Realogy Brokerage Group during the first quarter of
2020;
- an impairment charge of $30 million related
to Realogy Franchise Group's trademarks during the first quarter of
2020;
- $133 million of reserves recorded during the
nine months ended September 30, 2020 (while Cartus Relocation
Services was held for sale) to reduce the net assets to the
estimated proceeds which were included in Impairments in connection
with the reclassification of Cartus Relocation Services as
continuing operations during the fourth quarter of 2020;
- a goodwill impairment charge of $22 million
related to Cartus Relocation Services during the fourth quarter of
2020; and
- an impairment charge of $34 million related
to Cartus Relocation Services' trademarks during the fourth quarter
of 2020.
|
|
|
|
|
|
Non-cash impairments
for the year ended December 31, 2019 primarily include:
|
|
- a goodwill
impairment charge of $237 million related to Realogy Brokerage
Group during the third quarter; and
- a $22 million
reduction to record net assets held for sale at the lower of
carrying value or fair value, less costs to sell, for Cartus
Relocations Services which was presented as held for sale at
December 31, 2019.
|
|
(c)
|
Reflects tax effect
of adjustments at the Company's blended state and federal statutory
rate.
|
Table
2
|
|
REALOGY HOLDINGS
CORP. CONSOLIDATED BALANCE SHEETS (In millions,
except share data)
|
|
|
December
31,
2020
|
|
December
31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
520
|
|
|
$
|
263
|
|
Restricted
cash
|
3
|
|
|
3
|
|
Trade receivables (net
of allowance for doubtful accounts of $13 and $11)
|
128
|
|
|
125
|
|
Relocation
receivables
|
139
|
|
|
203
|
|
Other current
assets
|
154
|
|
|
158
|
|
Total current
assets
|
944
|
|
|
752
|
|
Property and
equipment, net
|
317
|
|
|
342
|
|
Operating lease
assets, net
|
450
|
|
|
550
|
|
Goodwill
|
2,910
|
|
|
3,460
|
|
Trademarks
|
685
|
|
|
749
|
|
Franchise agreements,
net
|
1,088
|
|
|
1,160
|
|
Other intangibles,
net
|
188
|
|
|
225
|
|
Other non-current
assets
|
352
|
|
|
305
|
|
Total
assets
|
$
|
6,934
|
|
|
$
|
7,543
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
128
|
|
|
$
|
137
|
|
Securitization
obligations
|
106
|
|
|
206
|
|
Current portion of
long-term debt
|
62
|
|
|
234
|
|
Current portion of
operating lease liabilities
|
129
|
|
|
128
|
|
Accrued expenses and
other current liabilities
|
600
|
|
|
405
|
|
Total current
liabilities
|
1,025
|
|
|
1,110
|
|
Long-term
debt
|
3,145
|
|
|
3,211
|
|
Long-term operating
lease liabilities
|
430
|
|
|
496
|
|
Deferred income
taxes
|
276
|
|
|
390
|
|
Other non-current
liabilities
|
291
|
|
|
240
|
|
Total
liabilities
|
5,167
|
|
|
5,447
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Realogy Holdings
preferred stock: $0.01 par value; 50,000,000 shares authorized,
none issued and outstanding at December 31, 2020 and
December 31, 2019
|
—
|
|
|
—
|
|
Realogy Holdings
common stock: $0.01 par value; 400,000,000 shares authorized,
115,457,067 shares issued and outstanding at December 31, 2020
and 114,355,519 shares issued and outstanding at December 31,
2019
|
1
|
|
|
1
|
|
Additional paid-in
capital
|
4,876
|
|
|
4,842
|
|
Accumulated
deficit
|
(3,055)
|
|
|
(2,695)
|
|
Accumulated other
comprehensive loss
|
(59)
|
|
|
(56)
|
|
Total stockholders'
equity
|
1,763
|
|
|
2,092
|
|
Noncontrolling
interests
|
4
|
|
|
4
|
|
Total
equity
|
1,767
|
|
|
2,096
|
|
Total liabilities
and equity
|
$
|
6,934
|
|
|
$
|
7,543
|
|
Table
3
|
|
REALOGY HOLDINGS
CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (In
millions)
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
Net loss
|
$
|
(356)
|
|
|
$
|
(185)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
186
|
|
|
195
|
|
Deferred income
taxes
|
(114)
|
|
|
3
|
|
Impairments
|
682
|
|
|
271
|
|
Amortization of
deferred financing costs and debt discount
|
11
|
|
|
10
|
|
Loss (gain) on the
early extinguishment of debt
|
8
|
|
|
(5)
|
|
Equity in earnings of
unconsolidated entities
|
(131)
|
|
|
(18)
|
|
Stock-based
compensation
|
39
|
|
|
30
|
|
Mark-to-market
adjustments on derivatives
|
51
|
|
|
39
|
|
Other adjustments to
net loss
|
(5)
|
|
|
(4)
|
|
Net change in assets
and liabilities, excluding the impact of acquisitions and
dispositions:
|
|
|
|
Trade
receivables
|
(4)
|
|
|
22
|
|
Relocation
receivables
|
64
|
|
|
29
|
|
Other
assets
|
29
|
|
|
4
|
|
Accounts payable,
accrued expenses and other liabilities
|
220
|
|
|
(22)
|
|
Dividends received
from unconsolidated entities
|
101
|
|
|
3
|
|
Other, net
|
(33)
|
|
|
(1)
|
|
Net cash provided
by operating activities
|
748
|
|
|
371
|
|
Investing
Activities
|
|
|
|
Property and
equipment additions
|
(95)
|
|
|
(119)
|
|
Proceeds from the
sale of assets
|
23
|
|
|
—
|
|
Investment in
unconsolidated entities
|
(5)
|
|
|
(12)
|
|
Other, net
|
(13)
|
|
|
3
|
|
Net cash used in
investing activities
|
(90)
|
|
|
(128)
|
|
Financing
Activities
|
|
|
|
Net change in
Revolving Credit Facility
|
(190)
|
|
|
(80)
|
|
Proceeds from
issuance of Senior Secured Lien Notes
|
550
|
|
|
—
|
|
Proceeds from
issuance of Senior Notes
|
—
|
|
|
550
|
|
Redemption and
repurchase of Senior Notes
|
(550)
|
|
|
(533)
|
|
Amortization payments
on term loan facilities
|
(43)
|
|
|
(30)
|
|
Net change in
securitization obligations
|
(99)
|
|
|
(26)
|
|
Debt issuance
costs
|
(15)
|
|
|
(9)
|
|
Cash paid for fees
associated with early extinguishment of debt
|
(7)
|
|
|
(5)
|
|
Repurchase of common
stock
|
—
|
|
|
(20)
|
|
Dividends paid on
common stock
|
—
|
|
|
(31)
|
|
Taxes paid related to
net share settlement for stock-based compensation
|
(5)
|
|
|
(6)
|
|
Payments of
contingent consideration related to acquisitions
|
(2)
|
|
|
(3)
|
|
Other, net
|
(41)
|
|
|
(22)
|
|
Net cash used in
financing activities
|
(402)
|
|
|
(215)
|
|
Effect of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
1
|
|
|
—
|
|
Net increase in cash,
cash equivalents and restricted cash
|
257
|
|
|
28
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
266
|
|
|
238
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
523
|
|
|
$
|
266
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
Interest payments
(including securitization interest of $5 and $8
respectively)
|
$
|
209
|
|
|
$
|
210
|
|
Income tax refunds,
net
|
—
|
|
|
(3)
|
|
Table
4a
|
|
REALOGY HOLDINGS
CORP. 2020 KEY DRIVERS
|
|
|
|
Quarter
ended
|
|
Year
Ended
|
|
|
March 31,
2020
|
|
June 30,
2020
|
|
September 30,
2020
|
|
December 31,
2020
|
|
December 31,
2020
|
Realogy Franchise
Group (a)
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
|
203,188
|
|
|
238,085
|
|
|
336,737
|
|
|
312,335
|
|
|
1,090,345
|
|
Average homesale
price
|
|
$
|
322,465
|
|
|
$
|
321,308
|
|
|
$
|
367,095
|
|
|
$
|
389,555
|
|
|
$
|
355,214
|
|
Average homesale
broker commission rate
|
|
2.47
|
%
|
|
2.49
|
%
|
|
2.48
|
%
|
|
2.46
|
%
|
|
2.48
|
%
|
Net royalty per
side
|
|
$
|
316
|
|
|
$
|
324
|
|
|
$
|
367
|
|
|
$
|
383
|
|
|
$
|
353
|
|
Realogy Brokerage
Group
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
|
62,541
|
|
|
71,375
|
|
|
101,890
|
|
|
97,930
|
|
|
333,736
|
|
Average homesale
price
|
|
$
|
533,813
|
|
|
$
|
503,935
|
|
|
$
|
563,513
|
|
|
$
|
590,351
|
|
|
$
|
553,081
|
|
Average homesale
broker commission rate
|
|
2.41
|
%
|
|
2.43
|
%
|
|
2.44
|
%
|
|
2.42
|
%
|
|
2.43
|
%
|
Gross commission
income per side
|
|
$
|
13,597
|
|
|
$
|
12,863
|
|
|
$
|
14,315
|
|
|
$
|
14,725
|
|
|
$
|
13,990
|
|
Realogy Title
Group
|
|
|
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
|
28,724
|
|
|
32,028
|
|
|
45,788
|
|
|
42,586
|
|
|
149,126
|
|
Refinance title and
closing units
|
|
8,899
|
|
|
17,548
|
|
|
18,387
|
|
|
20,490
|
|
|
65,324
|
|
Average fee per
closing unit
|
|
$
|
2,269
|
|
|
$
|
2,062
|
|
|
$
|
2,239
|
|
|
$
|
2,272
|
|
|
$
|
2,213
|
|
_______________
|
(a) Includes
all franchisees except for Realogy Brokerage Group.
|
Table
4b
|
|
REALOGY HOLDINGS
CORP. 2019 KEY DRIVERS
|
|
|
|
Quarter
Ended
|
|
Year
Ended
|
|
|
March 31,
2019
|
|
June 30,
2019
|
|
September
30,
2019
|
|
December
31,
2019
|
|
December
31,
2019
|
Realogy Franchise
Group (a)
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
|
202,662
|
|
|
301,377
|
|
|
299,937
|
|
|
257,524
|
|
|
1,061,500
|
|
Average homesale
price
|
|
$
|
298,361
|
|
|
$
|
318,799
|
|
|
$
|
314,984
|
|
|
$
|
322,713
|
|
|
$
|
314,769
|
|
Average homesale
broker commission rate
|
|
2.48
|
%
|
|
2.47
|
%
|
|
2.47
|
%
|
|
2.46
|
%
|
|
2.47
|
%
|
Net royalty per
side
|
|
$
|
303
|
|
|
$
|
331
|
|
|
$
|
329
|
|
|
$
|
338
|
|
|
$
|
327
|
|
Realogy Brokerage
Group
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
|
60,442
|
|
|
95,251
|
|
|
92,399
|
|
|
77,560
|
|
|
325,652
|
|
Average homesale
price
|
|
$
|
511,922
|
|
|
$
|
540,725
|
|
|
$
|
509,425
|
|
|
$
|
523,024
|
|
|
$
|
522,282
|
|
Average homesale
broker commission rate
|
|
2.41
|
%
|
|
2.41
|
%
|
|
2.41
|
%
|
|
2.39
|
%
|
|
2.41
|
%
|
Gross commission
income per side
|
|
$
|
13,212
|
|
|
$
|
13,758
|
|
|
$
|
13,000
|
|
|
$
|
13,147
|
|
|
$
|
13,296
|
|
Realogy Title
Group
|
|
|
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
|
28,044
|
|
|
42,202
|
|
|
41,619
|
|
|
34,345
|
|
|
146,210
|
|
Refinance title and
closing units
|
|
4,011
|
|
|
5,270
|
|
|
8,014
|
|
|
9,294
|
|
|
26,589
|
|
Average fee per
closing unit
|
|
$
|
2,267
|
|
|
$
|
2,356
|
|
|
$
|
2,288
|
|
|
$
|
2,267
|
|
|
$
|
2,297
|
|
_______________
|
(a) Includes
all franchisees except for Realogy Brokerage Group.
|
Table
5a
|
|
REALOGY HOLDINGS
CORP. NON-GAAP RECONCILIATION - OPERATING
EBITDA THREE MONTHS ENDED DECEMBER 31, 2020 AND
2019 (In millions)
|
|
Set forth in the
tables below is a reconciliation of Net income (loss)
attributable to Realogy Holdings to Operating EBITDA for the
three-month periods ended December 31, 2020 and
2019:
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
Net income (loss)
attributable to Realogy Holdings
|
$
|
18
|
|
|
$
|
(45)
|
|
Income tax
expense
|
6
|
|
|
37
|
|
Income (loss) before
income taxes
|
24
|
|
|
(8)
|
|
Add:
Depreciation and amortization
|
52
|
|
|
46
|
|
Interest expense,
net
|
38
|
|
|
40
|
|
Restructuring costs,
net (a)
|
20
|
|
|
20
|
|
Impairments
(b)
|
72
|
|
|
28
|
|
Operating
EBITDA
|
$
|
206
|
|
|
$
|
126
|
|
The following table reflects Revenue, Operating EBITDA and
Operating EBITDA margin by reportable segments:
|
Revenues
(c)
|
|
$
Change
|
|
%
Change
|
|
Operating
EBITDA
|
|
$
Change
|
|
%
Change
|
|
Operating EBITDA
Margin
|
|
Change
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
Realogy Franchise
Group
|
$
|
298
|
|
|
$
|
269
|
|
|
$
|
29
|
|
|
11
|
%
|
|
$
|
173
|
|
|
$
|
147
|
|
|
$
|
26
|
|
|
18
|
%
|
|
58
|
%
|
|
55
|
%
|
|
3
|
|
Realogy Brokerage
Group
|
1,461
|
|
|
1,040
|
|
|
421
|
|
|
40
|
|
|
23
|
|
|
(12)
|
|
|
35
|
|
|
292
|
|
|
2
|
|
|
(1)
|
|
|
3
|
|
Realogy Title
Group
|
226
|
|
|
152
|
|
|
74
|
|
|
49
|
|
|
58
|
|
|
14
|
|
|
44
|
|
|
314
|
|
|
26
|
|
|
9
|
|
|
17
|
|
Corporate and
Other
|
(96)
|
|
|
(69)
|
|
|
(27)
|
|
|
*
|
|
|
(48)
|
|
|
(23)
|
|
|
(25)
|
|
|
*
|
|
|
|
|
|
|
|
Total
Company
|
$
|
1,889
|
|
|
$
|
1,392
|
|
|
$
|
497
|
|
|
36
|
%
|
|
$
|
206
|
|
|
$
|
126
|
|
|
$
|
80
|
|
|
63
|
%
|
|
11
|
%
|
|
9
|
%
|
|
2
|
|
The following table reflects Realogy Franchise and Brokerage
Groups' results before the intercompany royalties and marketing
fees, as well as on a combined basis to show the Operating EBITDA
contribution of these business units to the overall Operating
EBITDA of the Company:
|
|
Revenues
|
|
$
Change
|
|
%
Change
|
|
Operating
EBITDA
|
|
$
Change
|
|
%
Change
|
|
Operating EBITDA
Margin
|
|
Change
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
Realogy Franchise
Group (d)
|
$
|
202
|
|
|
$
|
200
|
|
|
$
|
2
|
|
|
1
|
%
|
|
$
|
77
|
|
|
$
|
78
|
|
|
$
|
(1)
|
|
|
(1)
|
%
|
|
38
|
%
|
|
39
|
%
|
|
(1)
|
|
Realogy Brokerage
Group (d)
|
1,461
|
|
|
1,040
|
|
|
421
|
|
|
40
|
|
|
119
|
|
|
57
|
|
|
62
|
|
|
109
|
|
|
8
|
|
|
5
|
|
|
3
|
|
Realogy Franchise and
Brokerage Groups Combined
|
$
|
1,663
|
|
|
$
|
1,240
|
|
|
$
|
423
|
|
|
34
|
%
|
|
$
|
196
|
|
|
$
|
135
|
|
|
$
|
61
|
|
|
45
|
%
|
|
12
|
%
|
|
11
|
%
|
|
1
|
|
_______________
|
*
|
not
meaningful.
|
(a)
|
Restructuring charges
incurred for the three months ended December 31, 2020 include
$5 million at Realogy Franchise Group, $5 million at Realogy
Brokerage Group, $1 million at Realogy Title Group and $9 million
at Corporate and Other. Restructuring charges incurred for
the three months ended December 31, 2019 include $8 million at
Realogy Franchise Group, $7 million at Realogy Brokerage Group, $1
million at Realogy Title Group and $4 million at Corporate and
Other.
|
(b)
|
Non-cash impairments
for the three months ended December 31, 2020 include a
goodwill impairment charge of $22 million related to Cartus
Relocation Services, an impairment charge of $34 million related to
Cartus Relocation Services' trademarks and $16 million of other
impairment charges primarily related to lease asset
impairments.
|
|
Non-cash impairments
for the three months ended December 31, 2019 include a $22 million
reduction to record net assets held for sale at the lower of
carrying value or fair value, less costs to sell, for Cartus
Relocations Services which was presented as held for sale at
December 31, 2019 and $6 million of other impairment charges
primarily related to lease asset impairments.
|
(c)
|
Includes the
elimination of transactions between segments, which consists of
intercompany royalties and marketing fees paid by Realogy Brokerage
Group of $96 million and $69 million during the three months ended
December 31, 2020 and 2019, respectively.
|
(d)
|
The segment numbers
noted above do not reflect the impact of intercompany royalties and
marketing fees paid by Realogy Brokerage Group to Realogy Franchise
Group of $96 million and $69 million during the three months ended
December 31, 2020 and 2019, respectively.
|
Table
5b
|
|
REALOGY HOLDINGS
CORP. NON-GAAP RECONCILIATION - OPERATING
EBITDA FOR THE YEARS ENDED DECEMBER 31, 2020 AND
2019 (In millions)
|
|
Set forth in the
tables below is a reconciliation of Net loss attributable to
Realogy Holdings to Operating EBITDA for the years ended
December 31, 2020 and 2019:
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
Net loss attributable
to Realogy Holdings
|
$
|
(360)
|
|
|
$
|
(188)
|
|
Income tax (benefit)
expense
|
(104)
|
|
|
14
|
|
Loss before income
taxes
|
(464)
|
|
|
(174)
|
|
Add:
Depreciation and amortization
|
186
|
|
|
195
|
|
Interest expense,
net
|
246
|
|
|
250
|
|
Restructuring costs,
net (a)
|
67
|
|
|
52
|
|
Impairments
(b)
|
682
|
|
|
271
|
|
Former parent legacy
cost, net (c)
|
1
|
|
|
1
|
|
Loss (gain) on the
early extinguishment of debt (c)
|
8
|
|
|
(5)
|
|
Operating
EBITDA
|
$
|
726
|
|
|
$
|
590
|
|
The following table reflects Revenue, Operating EBITDA and
Operating EBITDA margin by reportable segments:
|
Revenues
(d)
|
|
$
Change
|
|
%
Change
|
|
Operating
EBITDA
|
|
$
Change
|
|
%
Change
|
|
Operating EBITDA
Margin
|
|
Change
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
Realogy Franchise
Group
|
$
|
1,059
|
|
|
$
|
1,158
|
|
|
$
|
(99)
|
|
|
(9)
|
%
|
|
$
|
594
|
|
|
$
|
616
|
|
|
$
|
(22)
|
|
|
(4)
|
%
|
|
56
|
%
|
|
53
|
%
|
|
3
|
|
Realogy Brokerage
Group
|
4,742
|
|
|
4,409
|
|
|
333
|
|
|
8
|
|
|
48
|
|
|
4
|
|
|
44
|
|
|
1,100
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Realogy Title
Group
|
736
|
|
|
596
|
|
|
140
|
|
|
23
|
|
|
226
|
|
|
68
|
|
|
158
|
|
|
232
|
|
31
|
|
|
11
|
|
|
20
|
|
Corporate and
Other
|
(316)
|
|
|
(293)
|
|
|
(23)
|
|
|
*
|
|
(142)
|
|
|
(98)
|
|
|
(44)
|
|
|
*
|
|
|
|
|
|
|
Total
Company
|
$
|
6,221
|
|
|
$
|
5,870
|
|
|
$
|
351
|
|
|
6
|
%
|
|
$
|
726
|
|
|
$
|
590
|
|
|
$
|
136
|
|
|
23
|
%
|
|
12
|
%
|
|
10
|
%
|
|
2
|
|
The following table reflects Realogy Franchise and Brokerage
Groups' results before the intercompany royalties and marketing
fees, as well as on a combined basis to show the Operating EBITDA
contribution of these business units to the overall Operating
EBITDA of the Company:
|
Revenues
|
|
$
Change
|
|
%
Change
|
|
Operating
EBITDA
|
|
$
Change
|
|
%
Change
|
|
Operating EBITDA
Margin
|
|
Change
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
Realogy Franchise
Group (e)
|
$
|
743
|
|
|
$
|
865
|
|
|
$
|
(122)
|
|
|
(14)
|
%
|
|
$
|
278
|
|
|
$
|
323
|
|
|
$
|
(45)
|
|
|
(14)
|
%
|
|
37
|
%
|
|
37
|
%
|
|
—
|
|
Realogy Brokerage
Group (e)
|
4,742
|
|
|
4,409
|
|
|
333
|
|
|
8
|
|
|
364
|
|
|
297
|
|
|
67
|
|
|
23
|
|
|
8
|
|
|
7
|
|
|
1
|
|
Realogy Franchise and
Brokerage Groups Combined
|
$
|
5,485
|
|
|
$
|
5,274
|
|
|
$
|
211
|
|
|
4
|
%
|
|
$
|
642
|
|
|
$
|
620
|
|
|
$
|
22
|
|
|
4
|
%
|
|
12
|
%
|
|
12
|
%
|
|
—
|
|
_______________
|
*
|
not
meaningful.
|
(a)
|
Restructuring charges
incurred for the year ended December 31, 2020 include $15
million at Realogy Franchise Group, $37 million at Realogy
Brokerage Group, $4 million at Realogy Title Group and $11 million
at Corporate and Other. Restructuring charges incurred for
the year ended December 31, 2019 include $14 million at
Realogy Franchise Group, $25 million at Realogy Brokerage Group, $3
million at Realogy Title Group and $10 million at Corporate and
Other.
|
(b)
|
Non-cash impairments
for the year ended December 31, 2020 include:
|
|
- a goodwill
impairment charge of $413 million related to Realogy Brokerage
Group during the first quarter of 2020;
- an impairment
charge of $30 million related to Realogy Franchise Group's
trademarks during the first quarter of 2020;
- $133 million of
reserves recorded during the nine months ended September 30, 2020
(while Cartus Relocation Services was held for sale) to reduce the
net assets to the estimated proceeds which were included in
Impairments in connection with the reclassification of Cartus
Relocation Services as continuing operations during the fourth
quarter of 2020;
- a goodwill
impairment charge of $22 million related to Cartus Relocation
Services during the fourth quarter of 2020;
- an impairment
charge of $34 million related to Cartus Relocation Services'
trademarks during the fourth quarter of 2020; and
- other asset
impairments of $50 million primarily related to lease asset
impairments.
|
|
|
|
|
|
|
Non-cash impairments
for the year ended December 31, 2019 include a goodwill
impairment charge of $237 million related to Realogy Brokerage
Group, a $22 million reduction to record net assets held for sale
at the lower of carrying value or fair value, less costs to sell,
for Cartus Relocation Services which was presented as held for sale
at December 31, 2019 and $12 million of other impairment charges
primarily related to lease asset impairments.
|
(c)
|
Former parent legacy
items and Loss (gain) on the early extinguishment of debt are
recorded in Corporate and Other. During the year ended
December 31, 2019, the Company recorded a net gain on the early
extinguishment of debt of $5 million which consisted of a $10
million gain as a result of the repurchase of Senior Notes
completed in the third quarter of 2019, partially offset by a $5
million loss as a result of the refinancing transactions in the
first quarter of 2019.
|
(d)
|
Includes the
elimination of transactions between segments, which consists of
intercompany royalties and marketing fees paid by Realogy Brokerage
Group of $316 million and $293 million during the year ended
December 31, 2020 and 2019, respectively.
|
(e)
|
The segment numbers
noted above do not reflect the impact of intercompany royalties and
marketing fees paid by Realogy Brokerage Group to Realogy Franchise
Group of $316 million and $293 million during the years ended
December 31, 2020 and 2019, respectively.
|
Table
6a
|
|
REALOGY HOLDINGS
CORP. SELECTED 2020 FINANCIAL DATA (In
millions)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Net revenues
(a)
|
|
|
|
|
|
|
|
|
|
Realogy Franchise
Group
|
$
|
220
|
|
|
$
|
227
|
|
|
$
|
314
|
|
|
$
|
298
|
|
|
$
|
1059
|
|
Realogy Brokerage
Group
|
869
|
|
|
933
|
|
|
1,479
|
|
|
1,461
|
|
|
4,742
|
|
Realogy Title
Group
|
137
|
|
|
160
|
|
|
213
|
|
|
226
|
|
|
736
|
|
Corporate and
Other
|
(58)
|
|
|
(65)
|
|
|
(97)
|
|
|
(96)
|
|
|
(316)
|
|
Total
Company
|
$
|
1,168
|
|
|
$
|
1,255
|
|
|
$
|
1,909
|
|
|
$
|
1,889
|
|
|
$
|
6,221
|
|
|
|
|
|
|
|
|
|
|
|
Operating
EBITDA
|
|
|
|
|
|
|
|
|
|
Realogy Franchise
Group
|
$
|
96
|
|
|
$
|
125
|
|
|
$
|
200
|
|
|
$
|
173
|
|
|
$
|
594
|
|
Realogy Brokerage
Group
|
(51)
|
|
|
15
|
|
|
61
|
|
|
23
|
|
|
48
|
|
Realogy Title
Group
|
12
|
|
|
61
|
|
|
95
|
|
|
58
|
|
|
226
|
|
Corporate and
Other
|
(25)
|
|
|
(26)
|
|
|
(43)
|
|
|
(48)
|
|
|
(142)
|
|
Total
Company
|
$
|
32
|
|
|
$
|
175
|
|
|
$
|
313
|
|
|
$
|
206
|
|
|
$
|
726
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation - Operating EBITDA
|
|
|
|
|
|
|
|
|
|
Total Company
Operating EBITDA
|
$
|
32
|
|
|
$
|
175
|
|
|
$
|
313
|
|
|
$
|
206
|
|
|
$
|
726
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Depreciation and amortization
|
45
|
|
|
46
|
|
|
43
|
|
|
52
|
|
|
186
|
|
Interest expense,
net
|
101
|
|
|
59
|
|
|
48
|
|
|
38
|
|
|
246
|
|
Income tax (benefit)
expense
|
(141)
|
|
|
(5)
|
|
|
36
|
|
|
6
|
|
|
(104)
|
|
Restructuring costs,
net (b)
|
12
|
|
|
18
|
|
|
17
|
|
|
20
|
|
|
67
|
|
Impairments
(c)
|
477
|
|
|
63
|
|
|
70
|
|
|
72
|
|
|
682
|
|
Former parent legacy
cost, net (d)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Loss on the early
extinguishment of debt (d)
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Net (loss) income
attributable to Realogy Holdings
|
$
|
(462)
|
|
|
$
|
(14)
|
|
|
$
|
98
|
|
|
$
|
18
|
|
|
$
|
(360)
|
|
_______________
|
(a)
|
Transactions between
segments are eliminated in consolidation. Revenues for
Realogy Franchise Group include intercompany royalties and
marketing fees paid by Realogy Brokerage Group of $58 million, $65
million, $97 million and $96 million for the three months ended
March 31, 2020, June 30, 2020, September 30, 2020 and
December 31, 2020, respectively. Such amounts are
eliminated through Corporate and Other.
|
(b)
|
Includes
restructuring charges broken down by business unit as
follows:
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Realogy Franchise
Group
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
15
|
|
Realogy Brokerage
Group
|
9
|
|
|
12
|
|
|
11
|
|
|
5
|
|
|
37
|
|
Realogy Title
Group
|
1
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
4
|
|
Corporate and
Other
|
—
|
|
|
—
|
|
|
2
|
|
|
9
|
|
|
11
|
|
Total
Company
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
20
|
|
|
$
|
67
|
|
(c)
|
Non-cash impairments
include:
|
|
- a goodwill
impairment charge of $413 million related to Realogy Brokerage
Group and an impairment charge of $30 million related to Realogy
Franchise Group's trademarks during the three months ended March
31, 2020;
- $30 million, $44
million and $59 million of reserves recorded during the three
months ended March 31, 2020, June 30, 2020 and September 30, 2020,
respectively, (while Cartus Relocation Services was held for sale)
to reduce the net assets to the estimated proceeds which were
included in Impairments in connection with the reclassification of
Cartus Relocation Services as continuing operations during the
fourth quarter of 2020;
- a goodwill
impairment charge of $22 million related to Cartus Relocation
Services and an impairment charge of $34 million related to Cartus
Relocation Services' trademarks during the three months ended
December 31, 2020; and
- $4 million, $19
million, $11 million and $16 million of other impairment charges
primarily related to lease asset impairments incurred during the
three months ended March 31, 2020, June 30, 2020, September 30,
2020 and December 31, 2020, respectively.
|
|
|
|
(d)
|
Former parent legacy
items and Loss on the early extinguishment of debt are recorded in
Corporate and Other.
|
Table
6b
|
|
REALOGY HOLDINGS
CORP. SELECTED 2019 FINANCIAL DATA (In
millions)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
Net revenues
(a)
|
|
|
|
|
|
|
|
|
|
Realogy Franchise
Group
|
$
|
239
|
|
|
$
|
331
|
|
|
$
|
319
|
|
|
$
|
269
|
|
|
$
|
1,158
|
|
Realogy Brokerage
Group
|
816
|
|
|
1,331
|
|
|
1,222
|
|
|
1,040
|
|
|
4,409
|
|
Realogy Title
Group
|
114
|
|
|
160
|
|
|
170
|
|
|
152
|
|
|
596
|
|
Corporate and
Other
|
(55)
|
|
|
(87)
|
|
|
(82)
|
|
|
(69)
|
|
|
(293)
|
|
Total
Company
|
$
|
1,114
|
|
|
$
|
1,735
|
|
|
$
|
1,629
|
|
|
$
|
1,392
|
|
|
$
|
5,870
|
|
|
|
|
|
|
|
|
|
|
|
Operating
EBITDA
|
|
|
|
|
|
|
|
|
|
Realogy Franchise
Group
|
$
|
92
|
|
|
$
|
190
|
|
|
$
|
187
|
|
|
$
|
147
|
|
|
$
|
616
|
|
Realogy Brokerage
Group
|
(62)
|
|
|
47
|
|
|
31
|
|
|
(12)
|
|
|
4
|
|
Realogy Title
Group
|
(9)
|
|
|
32
|
|
|
31
|
|
|
14
|
|
|
68
|
|
Corporate and
Other
|
(25)
|
|
|
(24)
|
|
|
(26)
|
|
|
(23)
|
|
|
(98)
|
|
Total
Company
|
$
|
(4)
|
|
|
$
|
245
|
|
|
$
|
223
|
|
|
$
|
126
|
|
|
$
|
590
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation - Operating EBITDA
|
|
|
|
|
|
|
|
|
|
Total Company
Operating EBITDA
|
$
|
(4)
|
|
|
$
|
245
|
|
|
$
|
223
|
|
|
$
|
126
|
|
|
$
|
590
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Depreciation and amortization
|
49
|
|
|
50
|
|
|
50
|
|
|
46
|
|
|
195
|
|
Interest expense,
net
|
63
|
|
|
81
|
|
|
66
|
|
|
40
|
|
|
250
|
|
Income tax (benefit)
expense
|
(35)
|
|
|
34
|
|
|
(22)
|
|
|
37
|
|
|
14
|
|
Restructuring costs,
net (b)
|
12
|
|
|
9
|
|
|
11
|
|
|
20
|
|
|
52
|
|
Impairments
(c)
|
1
|
|
|
2
|
|
|
240
|
|
|
28
|
|
|
271
|
|
Former parent legacy
cost, net (d)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Loss (gain) on the
early extinguishment of debt (d)
|
5
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(5)
|
|
Net (loss) income
attributable to Realogy Holdings
|
$
|
(99)
|
|
|
$
|
69
|
|
|
$
|
(113)
|
|
|
$
|
(45)
|
|
|
$
|
(188)
|
|
_______________
|
(a)
|
Transactions between
segments are eliminated in consolidation. Revenues for
Realogy Franchise Group include intercompany royalties and
marketing fees paid by Realogy Brokerage Group of $55 million, $87
million, $82 million and $69 million for the three months ended
March 31, 2019, June 30, 2019, September 30, 2019 and
December 31, 2019, respectively. Such amounts are
eliminated through Corporate and Other.
|
(b)
|
Includes
restructuring charges broken down by business unit as
follows:
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
Realogy Franchise
Group
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
14
|
|
Realogy Brokerage
Group
|
4
|
|
|
6
|
|
|
8
|
|
|
7
|
|
|
25
|
|
Realogy Title
Group
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
3
|
|
Corporate and
Other
|
4
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
10
|
|
Total
Company
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
11
|
|
|
$
|
20
|
|
|
$
|
52
|
|
(c)
|
Non-cash impairments
for the three months ended September 30, 2019 and the year ended
December 31, 2019 include a goodwill impairment charge of $237
million related to Realogy Brokerage Group. Non-cash
impairments for the three months and year ended December 31, 2019
include a $22 million adjustment to record assets and liabilities
held for sale at the lower of carrying value or fair value less any
costs to sell related to Cartus Relocations Services which was
presented as held for sale at December 31, 2019. In addition,
the three months ended March 31, 2019, June 30, 2019, September 30,
2019 and December 31, 2019 include other impairment charges
primarily related to lease asset impairments of $1 million, $2
million, $3 million and $6 million, respectively.
|
(d)
|
Former parent legacy
items and Loss (gain) on the early extinguishment of debt are
recorded in Corporate and Other.
|
Table
6c
|
|
REALOGY HOLDINGS
CORP. 2020 CONSOLIDATED STATEMENTS OF
OPERATIONS (In millions, except per share
data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Revenues
|
|
|
|
|
|
|
|
|
|
Gross commission
income
|
$
|
850
|
|
|
$
|
919
|
|
|
$
|
1,458
|
|
|
$
|
1,442
|
|
|
$
|
4,669
|
|
Service
revenue
|
202
|
|
|
219
|
|
|
281
|
|
|
281
|
|
|
983
|
|
Franchise
fees
|
71
|
|
|
85
|
|
|
133
|
|
|
130
|
|
|
419
|
|
Other
|
45
|
|
|
32
|
|
|
37
|
|
|
36
|
|
|
150
|
|
Net
revenues
|
1,168
|
|
|
1,255
|
|
|
1,909
|
|
|
1,889
|
|
|
6,221
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Commission and other
agent-related costs
|
630
|
|
|
685
|
|
|
1,105
|
|
|
1,107
|
|
|
3,527
|
|
Operating
|
368
|
|
|
320
|
|
|
380
|
|
|
405
|
|
|
1,473
|
|
Marketing
|
59
|
|
|
41
|
|
|
55
|
|
|
60
|
|
|
215
|
|
General and
administrative
|
88
|
|
|
69
|
|
|
108
|
|
|
147
|
|
|
412
|
|
Former parent legacy
cost, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Restructuring costs,
net
|
12
|
|
|
18
|
|
|
17
|
|
|
20
|
|
|
67
|
|
Impairments
|
477
|
|
|
63
|
|
|
70
|
|
|
72
|
|
|
682
|
|
Depreciation and
amortization
|
45
|
|
|
46
|
|
|
43
|
|
|
52
|
|
|
186
|
|
Interest expense,
net
|
101
|
|
|
59
|
|
|
48
|
|
|
38
|
|
|
246
|
|
Loss on the early
extinguishment of debt
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Other expense,
net
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(5)
|
|
Total
expenses
|
1,780
|
|
|
1,309
|
|
|
1,827
|
|
|
1,896
|
|
|
6,812
|
|
(Loss) income
before income taxes, equity in earnings and noncontrolling
interests
|
(612)
|
|
|
(54)
|
|
|
82
|
|
|
(7)
|
|
|
(591)
|
|
Income tax (benefit)
expense
|
(141)
|
|
|
(5)
|
|
|
36
|
|
|
6
|
|
|
(104)
|
|
Equity in earnings of
unconsolidated entities
|
(9)
|
|
|
(36)
|
|
|
(53)
|
|
|
(33)
|
|
|
(131)
|
|
Net (loss)
income
|
(462)
|
|
|
(13)
|
|
|
99
|
|
|
20
|
|
|
(356)
|
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(4)
|
|
Net (loss) income
attributable to Realogy Holdings
|
$
|
(462)
|
|
|
$
|
(14)
|
|
|
$
|
98
|
|
|
$
|
18
|
|
|
$
|
(360)
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share attributable to Realogy Holdings
shareholders:
|
|
|
Basic (loss) earnings
per share
|
$
|
(4.03)
|
|
|
$
|
(0.12)
|
|
|
0.85
|
|
|
0.16
|
|
|
(3.13)
|
|
Diluted (loss) earnings
per share
|
$
|
(4.03)
|
|
|
$
|
(0.12)
|
|
|
$
|
0.84
|
|
|
$
|
0.15
|
|
|
$
|
(3.13)
|
|
Weighted average
common and common equivalent shares of Realogy Holdings
outstanding:
|
|
|
|
|
Basic
|
114.7
|
|
|
115.4
|
|
|
115.4
|
|
|
115.5
|
|
|
115.2
|
|
Diluted
|
114.7
|
|
|
116.2
|
|
|
116.7
|
|
|
118.2
|
|
|
115.2
|
|
Table
6d
|
|
REALOGY HOLDINGS
CORP. 2019 CONSOLIDATED STATEMENTS OF
OPERATIONS (In millions, except per share
data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
|
Gross commission
income
|
$
|
799
|
|
|
$
|
1,310
|
|
|
$
|
1,201
|
|
|
$
|
1,020
|
|
|
$
|
4,330
|
|
Service
revenue
|
188
|
|
|
253
|
|
|
269
|
|
|
231
|
|
|
941
|
|
Franchise
fees
|
70
|
|
|
112
|
|
|
108
|
|
|
96
|
|
|
386
|
|
Other
|
57
|
|
|
60
|
|
|
51
|
|
|
45
|
|
|
213
|
|
Net
revenues
|
1,114
|
|
|
1,735
|
|
|
1,629
|
|
|
1,392
|
|
|
5,870
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Commission and other
agent-related costs
|
575
|
|
|
955
|
|
|
875
|
|
|
751
|
|
|
3,156
|
|
Operating
|
380
|
|
|
390
|
|
|
388
|
|
|
373
|
|
|
1,531
|
|
Marketing
|
69
|
|
|
69
|
|
|
64
|
|
|
62
|
|
|
264
|
|
General and
administrative
|
95
|
|
|
82
|
|
|
85
|
|
|
82
|
|
|
344
|
|
Former parent legacy
cost, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Restructuring costs,
net
|
12
|
|
|
9
|
|
|
11
|
|
|
20
|
|
|
52
|
|
Impairments
|
1
|
|
|
2
|
|
|
240
|
|
|
28
|
|
|
271
|
|
Depreciation and
amortization
|
49
|
|
|
50
|
|
|
50
|
|
|
46
|
|
|
195
|
|
Interest expense,
net
|
63
|
|
|
81
|
|
|
66
|
|
|
40
|
|
|
250
|
|
Loss (gain) on the
early extinguishment of debt
|
5
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(5)
|
|
Total
expenses
|
1,249
|
|
|
1,638
|
|
|
1,770
|
|
|
1,402
|
|
|
6,059
|
|
(Loss) income
before income taxes, equity in earnings and noncontrolling
interests
|
(135)
|
|
|
97
|
|
|
(141)
|
|
|
(10)
|
|
|
(189)
|
|
Income tax (benefit)
expense
|
(35)
|
|
|
34
|
|
|
(22)
|
|
|
37
|
|
|
14
|
|
Equity in earnings of
unconsolidated entities
|
(1)
|
|
|
(7)
|
|
|
(7)
|
|
|
(3)
|
|
|
(18)
|
|
Net (loss)
income
|
(99)
|
|
|
70
|
|
|
(112)
|
|
|
(44)
|
|
|
(185)
|
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(3)
|
|
Net (loss) income
attributable to Realogy Holdings
|
$
|
(99)
|
|
|
$
|
69
|
|
|
$
|
(113)
|
|
|
$
|
(45)
|
|
|
$
|
(188)
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share attributable to Realogy Holdings
shareholders:
|
|
|
Basic (loss) earnings
per share
|
$
|
(0.87)
|
|
|
$
|
0.60
|
|
|
(0.99)
|
|
|
(0.39)
|
|
|
(1.65)
|
|
Diluted (loss) earnings
per share
|
$
|
(0.87)
|
|
|
$
|
0.60
|
|
|
$
|
(0.99)
|
|
|
$
|
(0.39)
|
|
|
$
|
(1.65)
|
|
Weighted average
common and common equivalent shares of Realogy Holdings
outstanding:
|
|
|
|
|
Basic
|
114.0
|
|
|
114.3
|
|
|
114.3
|
|
|
114.3
|
|
|
114.2
|
|
Diluted
|
114.0
|
|
|
114.9
|
|
|
114.3
|
|
|
114.3
|
|
|
114.2
|
|
Table
7
|
|
REALOGY HOLDINGS
CORP. NON-GAAP RECONCILIATION - FREE CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In millions)
|
|
A reconciliation of
net income (loss) attributable to Realogy Holdings to Free Cash
Flow is set forth in the following table:
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income (loss)
attributable to Realogy Holdings
|
$
|
18
|
|
|
$
|
(45)
|
|
|
$
|
(360)
|
|
|
$
|
(188)
|
|
Income tax (benefit)
expense, net of payments
|
(3)
|
|
|
47
|
|
|
(104)
|
|
|
17
|
|
Interest expense,
net
|
38
|
|
|
40
|
|
|
246
|
|
|
250
|
|
Cash interest
payments
|
(76)
|
|
|
(80)
|
|
|
(209)
|
|
|
(210)
|
|
Depreciation and
amortization
|
52
|
|
|
46
|
|
|
186
|
|
|
195
|
|
Capital
expenditures
|
(26)
|
|
|
(41)
|
|
|
(95)
|
|
|
(119)
|
|
Restructuring costs
and former parent legacy items, net of payments
|
11
|
|
|
5
|
|
|
26
|
|
|
5
|
|
Impairments
|
72
|
|
|
28
|
|
|
682
|
|
|
271
|
|
Loss (gain) on the
early extinguishment of debt
|
—
|
|
|
—
|
|
|
8
|
|
|
(5)
|
|
Working capital
adjustments
|
157
|
|
|
33
|
|
|
210
|
|
|
7
|
|
Relocation
receivables (assets), net of securitization obligations
|
25
|
|
|
44
|
|
|
(35)
|
|
|
3
|
|
Free Cash
Flow
|
$
|
268
|
|
|
$
|
77
|
|
|
$
|
555
|
|
|
$
|
226
|
|
A reconciliation of net cash provided by operating activities to
Free Cash Flow is set forth in the following table:
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided
by operating activities
|
$
|
330
|
|
|
$
|
141
|
|
|
$
|
748
|
|
|
$
|
371
|
|
Property and
equipment additions
|
(26)
|
|
|
(41)
|
|
|
(95)
|
|
|
(119)
|
|
Net change in
securitization
|
(37)
|
|
|
(23)
|
|
|
(99)
|
|
|
(26)
|
|
Effect of exchange
rates on cash and cash equivalents
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Free Cash
Flow
|
$
|
268
|
|
|
$
|
77
|
|
|
$
|
555
|
|
|
$
|
226
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(6)
|
|
|
$
|
(42)
|
|
|
$
|
(90)
|
|
|
$
|
(128)
|
|
Net cash used in
financing activities
|
$
|
(199)
|
|
|
$
|
(111)
|
|
|
$
|
(402)
|
|
|
$
|
(215)
|
|
Table
8a
|
|
NON-GAAP
RECONCILIATION - SENIOR SECURED LEVERAGE RATIO FOR THE
YEAR ENDED DECEMBER 31, 2020 (In
millions)
|
|
The senior secured
leverage ratio is tested quarterly pursuant to the terms of the
senior secured credit facilities*. For the trailing
twelve-month period ended December 31, 2020, Realogy Group LLC
was required to maintain a senior secured leverage ratio not to
exceed 5.25 to 1.00. The senior secured leverage ratio is
measured by dividing Realogy Group LLC's total senior secured net
debt by the trailing four quarters EBITDA calculated on a Pro Forma
Basis, as those terms are defined in the Senior Secured Credit
Agreement. Total senior secured net debt does not include the
7.625% Senior Secured Second Lien Notes, our unsecured
indebtedness, including the Unsecured Notes, or the securitization
obligations. EBITDA calculated on a Pro Forma Basis, as
defined in the Senior Secured Credit Agreement, includes
adjustments to Operating EBITDA for retention and disposition
costs, non-cash charges and incremental securitization interest
costs, as well as pro forma cost savings for restructuring
initiatives, the pro forma effect of business optimization
initiatives and the pro forma effect of acquisitions and new
franchisees, in each case calculated as of the beginning of the
trailing twelve-month period. The Company was in compliance
with the senior secured leverage ratio covenant at
December 31, 2020 with a ratio of 1.70 to 1.00.
|
|
A reconciliation of
net loss attributable to Realogy Group to Operating EBITDA and
EBITDA calculated on a Pro Forma Basis, as those terms are defined
in the Senior Secured Credit Agreement, for the twelve months ended
December 31, 2020 is set forth in the following
table:
|
|
|
For the Year
Ended
December 31, 2020
|
Net loss attributable
to Realogy Group (a)
|
$
|
(360)
|
|
Income tax
benefit
|
(104)
|
|
Loss before income
taxes
|
(464)
|
|
Depreciation and
amortization
|
186
|
|
Interest expense,
net
|
246
|
|
Restructuring costs,
net
|
67
|
|
Impairments
|
682
|
|
Former parent legacy
cost, net
|
1
|
|
Loss on the early
extinguishment of debt
|
8
|
|
Operating
EBITDA (b)
|
726
|
|
Bank covenant
adjustments:
|
|
Pro forma effect of
business optimization initiatives (c)
|
50
|
|
Non-cash charges
(d)
|
35
|
|
Pro forma effect of
acquisitions and new franchisees (e)
|
5
|
|
Incremental
securitization interest costs (f)
|
3
|
|
EBITDA as
defined by the Senior Secured Credit Agreement*
|
$
|
819
|
|
Total senior secured
net debt (g)
|
$
|
1,395
|
|
Senior secured
leverage ratio*
|
1.70
|
x
|
_______________
|
(a)
|
Net loss attributable
to Realogy consists of: (i) loss of $462 million for the first
quarter of 2020, (ii) loss of $14 million for the second quarter of
2020, (iii) income of $98 million for the third quarter of 2020 and
(iv) income of $18 million for the fourth quarter of
2020.
|
(b)
|
Operating EBITDA
consists of: (i) $32 million for the first quarter of 2020, (ii)
$175 million for the second quarter of 2020, (iii) $313 million for
the third quarter of 2020 and (iv) $206 million for the fourth
quarter of 2020.
|
(c)
|
Represents the
twelve-month pro forma effect of business optimization
initiatives.
|
(d)
|
Represents the
elimination of non-cash expenses including $39 million of
stock-based compensation expense and $3 million for the change in
the allowance for doubtful accounts and notes reserves less $5
million of other items and $2 million of foreign exchange benefits
for the twelve months ended December 31, 2020.
|
(e)
|
Represents the
estimated impact of acquisitions and franchise sales activity, net
of brokerages that exited our franchise system as if these changes
had occurred on January 1, 2020. Franchisee sales
activity is comprised of new franchise agreements as well as growth
through acquisitions and independent sales agent recruitment by
existing franchisees with our assistance. We have made a
number of assumptions in calculating such estimates and there can
be no assurance that we would have generated the projected levels
of Operating EBITDA had we owned the acquired entities or entered
into the franchise contracts as of January 1, 2020.
|
(f)
|
Incremental borrowing
costs incurred as a result of the securitization facilities
refinancing for the twelve months ended December 31,
2020.
|
(g)
|
Represents total
borrowings under the senior secured credit facilities (including
the Revolving Credit Facility and Term Loan B Facility) and Term
Loan A Facility and borrowings secured by a first priority lien on
our assets of $1,732 million plus $32 million of finance lease
obligations less $369 million of readily available cash as of
December 31, 2020. Pursuant to the terms of our senior
secured credit facilities, total senior secured net debt does not
include our securitization obligations, 7.625% Senior Secured
Second Lien Notes or unsecured indebtedness, including the
Unsecured Notes.
|
|
|
*
|
Our senior secured
credit facilities include the facilities under our Amended and
Restated Credit Agreement dated as of March 5, 2013, as amended
from time to time (the "Senior Secured Credit Agreement"), and the
Term Loan A Agreement dated as of October 23, 2015 (the "Term Loan
A Agreement"), as amended from time to time. Our Senior
Secured Second Lien Notes include our 7.625% Senior Secured Second
Lien Notes due 2025.
|
|
On July 24, 2020,
Realogy Group LLC entered into amendments to the Senior Secured
Credit Agreement and Term Loan A Agreement (referred to
collectively herein as the "2020 Amendments"), pursuant to which
the senior secured leverage ratio (the financial covenant under
such agreements) has been temporarily eased and certain other
covenants have been temporarily tightened during the covenant
period. See the Company's Current Report on Form 8-K filed on
July 30, 2020 for additional information.
|
|
On January 27, 2021,
Realogy Group LLC entered into amendments to the Senior Secured
Credit Agreement and Term Loan A Agreement which, among other
things, reduced the maximum permitted senior secured leverage ratio
below the levels that had been permitted under the 2020
Amendments. See the Company's Current Report on Form 8-K
filed on January 27, 2021 for additional information.
|
Table
8b
|
|
NET DEBT LEVERAGE
RATIO FOR THE YEAR ENDED DECEMBER 31,
2020 (In millions)
|
|
Net corporate debt
(excluding securitizations) divided by EBITDA calculated on a Pro
Forma Basis, as those terms are defined in the senior secured
credit facilities, for the year ended December 31, 2020
(referred to as net debt leverage ratio) is set forth in the
following table:
|
|
|
|
As of December 31,
2020
|
Revolver
|
|
$
|
—
|
|
Term Loan
A
|
|
684
|
|
Term Loan
B
|
|
1,048
|
|
7.625% Senior Secured
Second Lien Notes
|
|
550
|
|
4.875% Senior
Notes
|
|
407
|
|
9.375% Senior
Notes
|
|
550
|
|
Finance lease
obligations
|
|
32
|
|
Corporate Debt
(excluding securitizations)
|
|
3,271
|
|
Less: Cash and cash
equivalents
|
|
520
|
|
Net Corporate Debt
(excluding securitizations)
|
|
$
|
2,751
|
|
|
|
|
EBITDA as defined by
the Senior Secured Credit Agreement (a)
|
|
$
|
819
|
|
|
|
|
Net Debt
Leverage Ratio(b)
|
|
3.4
|
x
|
_______________
|
(a)
|
See Table 8a for a
reconciliation of Net loss attributable to Realogy Group to EBITDA
as defined by the Senior Secured Credit Agreement.
|
(b)
|
Net Debt Leverage
Ratio is substantially similar to Consolidated Leverage Ratio (as
defined under the indentures governing the 9.375% Notes and 7.625%
Senior Secured Second Lien Notes), except that when the
Consolidated Leverage Ratio is measured at March 31 of any given
year, the calculation includes a positive $200 million seasonality
adjustment to cash and cash equivalents. In addition, the
indentures do not allow for the adjustment to Consolidated Net
Income (as defined in the indentures) described in the asterisk
footnote to Table 8a.
|
Table 9
Non-GAAP Definitions
Adjusted net income (loss) is defined by us as net income (loss)
before mark-to-market interest rate swap adjustments, former parent
legacy items, restructuring charges, the (gain) loss on the early
extinguishment of debt, impairments, the tax effect of the
foregoing adjustments. The gross amounts for these items as
well as the adjustment for income taxes are presented.
Operating EBITDA is defined by us as net income (loss) before
depreciation and amortization, interest expense, net (other than
relocation services interest for securitization assets and
securitization obligations), income taxes, and other items that are
not core to the operating activities of the Company such as
restructuring charges, former parent legacy items, gains or losses
on the early extinguishment of debt, impairments, gains or losses
on discontinued operations and gains or losses on the sale of
investments or other assets. Operating EBITDA is our primary
non-GAAP measure.
We present Operating EBITDA because we believe it is useful as a
supplemental measure in evaluating the performance of our operating
businesses and provides greater transparency into our results of
operations. Our management, including our chief operating
decision maker, uses Operating EBITDA as a factor in evaluating the
performance of our business. Operating EBITDA should not be
considered in isolation or as a substitute for net income or other
statement of operations data prepared in accordance with GAAP.
We believe Operating EBITDA facilitates company-to-company
operating performance comparisons by backing out potential
differences caused by variations in capital structures (affecting
net interest expense), taxation, the age and book depreciation of
facilities (affecting relative depreciation expense) and the
amortization of intangibles, as well as other items that are not
core to the operating activities of the Company such as
restructuring charges, gains or losses on the early extinguishment
of debt, former parent legacy items, impairments, gains or losses
on discontinued operations and gains or losses on the sale of
investments or other assets, which may vary for different companies
for reasons unrelated to operating performance. We further
believe that Operating EBITDA is frequently used by securities
analysts, investors and other interested parties in their
evaluation of companies, many of which present an Operating EBITDA
measure when reporting their results.
Operating EBITDA has limitations as an analytical tool, and you
should not consider Operating EBITDA either in isolation or as a
substitute for analyzing our results as reported under GAAP.
Some of these limitations are:
- this measure does not reflect changes in, or cash required for,
our working capital needs;
- this measure does not reflect our interest expense (except for
interest related to our securitization obligations), or the cash
requirements necessary to service interest or principal payments on
our debt;
- this measure does not reflect our income tax expense or the
cash requirements to pay our taxes;
- this measure does not reflect historical cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often require
replacement in the future, and this measure does not reflect any
cash requirements for such replacements; and
- other companies may calculate this measure differently so they
may not be comparable.
Free Cash Flow is defined as net income (loss) attributable to
Realogy before income tax expense (benefit), net of payments,
interest expense, net, cash interest payments, depreciation and
amortization, capital expenditures, restructuring costs and former
parent legacy costs (benefits), net of payments, impairments,
(gain) loss on the early extinguishment of debt, working
capital adjustments and relocation receivables (assets), net
of change in securitization obligations. We use Free Cash
Flow in our internal evaluation of operating effectiveness and
decisions regarding the allocation of resources, as well as
measuring the Company's ability to generate cash. Since Free
Cash Flow can be viewed as both a performance measure and a cash
flow measure, the Company has provided a reconciliation to both net
income attributable to Realogy Holdings and net cash provided by
operating activities. Free Cash Flow is not defined by GAAP
and should not be considered in isolation or as an alternative to
net income (loss), net cash provided by (used in) operating,
investing and financing activities or other financial data prepared
in accordance with GAAP or as an indicator of the Company's
operating performance or liquidity. Free Cash Flow may differ
from similarly titled measures presented by other companies.
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SOURCE Realogy Holdings Corp.