Delaware | 001-35674 | 20-8050955 | ||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Delaware | 333-179896 | 20-4381990 | ||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
175 Park Avenue | ||||||
Madison, NJ | 07940 | |||||
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Press Release dated July 24, 2013. |
REALOGY HOLDINGS CORP. | ||
By: | /s/ Anthony E. Hull | |
Anthony E. Hull, Executive Vice President, Chief Financial Officer and Treasurer |
REALOGY GROUP LLC | ||
By: | /s/ Anthony E. Hull | |
Anthony E. Hull, Executive Vice President, Chief Financial Officer and Treasurer |
Number | Exhibit | |
99.1 | Press Release dated July 24, 2013. |
• | Realogy's net revenue for second quarter 2013 was $1.53 billion, a 17% increase compared to the same period in 2012. |
• | The Company's Adjusted EBITDA1 was $278 million in the second quarter, an increase of 27% year-over-year. |
• | Net income attributable to the Company in the second quarter was $84 million, an improvement of $109 million compared to the second quarter of 2012. Net income includes $67 million of interest expense, $44 million of depreciation and amortization, $43 million of debt extinguishment charges and $26 million of compensation expense relating to the April 2013 issuance of common stock under the phantom value plan. |
• | Basic earnings per share for the quarter was $0.58, or, excluding the loss on early extinguishment of debt and phantom value plan compensation expense, would have been $1.05. |
• | The Company also retired $330 million of high cost debt and refinanced $492 million of 11.5% debt with $500 million of 3.375% debt, reducing its annual cash interest expense run rate to approximately $255 million per year. |
Investor Contacts: | Media Contact: | |
Alicia Swift | Mark Panus | |
(973) 407-4669 | (973) 407-7215 | |
alicia.swift@realogy.com | mark.panus@realogy.com | |
Jennifer Pepper | ||
(973) 407-7487 | ||
jennifer.pepper@realogy.com |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues | |||||||||||||||
Gross commission income | $ | 1,169 | $ | 983 | $ | 1,845 | $ | 1,589 | |||||||
Service revenue | 233 | 208 | 416 | 380 | |||||||||||
Franchise fees | 91 | 76 | 148 | 130 | |||||||||||
Other | 40 | 42 | 81 | 85 | |||||||||||
Net revenues | 1,533 | 1,309 | 2,490 | 2,184 | |||||||||||
Expenses | |||||||||||||||
Commission and other agent-related costs | 800 | 662 | 1,254 | 1,064 | |||||||||||
Operating | 353 | 325 | 680 | 643 | |||||||||||
Marketing | 49 | 52 | 99 | 103 | |||||||||||
General and administrative | 93 | 79 | 160 | 156 | |||||||||||
Former parent legacy costs (benefit), net | (2 | ) | — | (1 | ) | (3 | ) | ||||||||
Restructuring costs | 4 | 2 | 4 | 5 | |||||||||||
Depreciation and amortization | 44 | 44 | 86 | 89 | |||||||||||
Interest expense, net | 67 | 176 | 156 | 346 | |||||||||||
Loss on the early extinguishment of debt | 43 | — | 46 | 6 | |||||||||||
Other (income)/expense, net | — | — | — | 1 | |||||||||||
Total expenses | 1,451 | 1,340 | 2,484 | 2,410 | |||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests | 82 | (31 | ) | 6 | (226 | ) | |||||||||
Income tax expense | 9 | 8 | 16 | 15 | |||||||||||
Equity in earnings of unconsolidated entities | (13 | ) | (15 | ) | (22 | ) | (25 | ) | |||||||
Net income (loss) | 86 | (24 | ) | 12 | (216 | ) | |||||||||
Less: Net income attributable to noncontrolling interests | (2 | ) | (1 | ) | (3 | ) | (1 | ) | |||||||
Net income (loss) attributable to Realogy Holdings | $ | 84 | $ | (25 | ) | $ | 9 | $ | (217 | ) | |||||
Earnings (loss) per share | |||||||||||||||
Basic earnings (loss) per share: | $ | 0.58 | $ | (3.12 | ) | $ | 0.06 | $ | (27.07 | ) | |||||
Diluted earnings (loss) per share: | $ | 0.57 | $ | (3.12 | ) | $ | 0.06 | $ | (27.07 | ) | |||||
Weighted average common and common equivalent shares outstanding: | |||||||||||||||
Basic: | 145.4 | 8.0 | 145.2 | 8.0 | |||||||||||
Diluted: | 146.6 | 8.0 | 146.4 | 8.0 |
June 30, 2013 | December 31, 2012 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 187 | $ | 376 | |||
Trade receivables (net of allowance for doubtful accounts of $44 and $51) | 134 | 122 | |||||
Relocation receivables | 406 | 324 | |||||
Relocation properties held for sale | 7 | 9 | |||||
Deferred income taxes | 52 | 54 | |||||
Other current assets | 93 | 93 | |||||
Total current assets | 879 | 978 | |||||
Property and equipment, net | 187 | 188 | |||||
Goodwill | 3,308 | 3,304 | |||||
Trademarks | 732 | 732 | |||||
Franchise agreements, net | 1,596 | 1,629 | |||||
Other intangibles, net | 382 | 399 | |||||
Other non-current assets | 215 | 215 | |||||
Total assets | $ | 7,299 | $ | 7,445 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 207 | $ | 148 | |||
Securitization obligations | 260 | 261 | |||||
Due to former parent | 67 | 69 | |||||
Revolving credit facilities and current portion of long-term debt | 161 | 110 | |||||
Accrued expenses and other current liabilities | 402 | 427 | |||||
Total current liabilities | 1,097 | 1,015 | |||||
Long-term debt | 3,995 | 4,256 | |||||
Deferred income taxes | 453 | 444 | |||||
Other non-current liabilities | 208 | 211 | |||||
Total liabilities | 5,753 | 5,926 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at June 30, 2013 and December 31, 2012. | — | — | |||||
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 145,787,068 shares outstanding at June 30, 2013 and 145,369,453 shares outstanding at December 31, 2012. | 1 | 1 | |||||
Additional paid-in capital | 5,613 | 5,591 | |||||
Accumulated deficit | (4,036 | ) | (4,045 | ) | |||
Accumulated other comprehensive loss | (34 | ) | (31 | ) | |||
Total stockholders' equity | 1,544 | 1,516 | |||||
Noncontrolling interests | 2 | 3 | |||||
Total equity | 1,546 | 1,519 | |||||
Total liabilities and equity | $ | 7,299 | $ | 7,445 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||
Real Estate Franchise Services (a) | |||||||||||||||||||||
Closed homesale sides (b) | 302,420 | 273,771 | 10 | % | 512,200 | 471,229 | 9 | % | |||||||||||||
Average homesale price | $ | 236,590 | $ | 214,547 | 10 | % | $ | 226,076 | $ | 205,967 | 10 | % | |||||||||
Average homesale broker commission rate | 2.55 | % | 2.55 | % | — | 2.55 | % | 2.55 | % | — | |||||||||||
Net effective royalty rate | 4.51 | % | 4.64 | % | (13) bps | 4.53 | % | 4.68 | % | (15) bps | |||||||||||
Royalty per side | $ | 281 | $ | 263 | 7 | % | $ | 272 | $ | 256 | 6 | % | |||||||||
Company Owned Real Estate Brokerage Services | |||||||||||||||||||||
Closed homesale sides (b) | 92,878 | 82,768 | 12 | % | 150,938 | 138,041 | 9 | % | |||||||||||||
Average homesale price | $ | 478,280 | $ | 446,732 | 7 | % | $ | 458,867 | $ | 429,267 | 7 | % | |||||||||
Average homesale broker commission rate | 2.49 | % | 2.49 | % | — | 2.50 | % | 2.50 | % | — | |||||||||||
Gross commission income per side | $ | 12,598 | $ | 11,856 | 6 | % | $ | 12,226 | $ | 11,497 | 6% | ||||||||||
Relocation Services | |||||||||||||||||||||
Initiations | 51,311 | 48,698 | 5 | % | 87,262 | 86,168 | 1 | % | |||||||||||||
Referrals | 26,258 | 22,039 | 19 | % | 41,935 | 36,305 | 16 | % | |||||||||||||
Title and Settlement Services | |||||||||||||||||||||
Purchase title and closing units | 34,157 | 29,973 | 14 | % | 55,663 | 50,538 | 10 | % | |||||||||||||
Refinance title and closing units | 23,123 | 17,766 | 30 | % | 47,623 | 39,782 | 20 | % | |||||||||||||
Average price per closing unit | $ | 1,490 | $ | 1,450 | 3 | % | $ | 1,415 | $ | 1,350 | 5 | % |
(a) | Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment. |
(b) | Assuming all else remains equal, the gain or loss of one business day in the quarter can increase or reduce homesale sides by approximately 2 percentage points at both RFG and NRT. The impact on homesale sides for a six month period is approximately 1 percentage point at both RFG and NRT. The six months ended June 30, 2013 contained one less business day than the six months ended June 30, 2012. |
Quarter Ended | Year Ended | |||||||||||||||||||
March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | December 31, 2012 | ||||||||||||||||
Real Estate Franchise Services (a) | ||||||||||||||||||||
Closed homesale sides | 197,458 | 273,771 | 265,828 | 251,567 | 988,624 | |||||||||||||||
Average homesale price | $ | 194,071 | $ | 214,547 | $ | 218,866 | $ | 222,234 | $ | 213,575 | ||||||||||
Average homesale broker commission rate | 2.56 | % | 2.55 | % | 2.53 | % | 2.53 | % | 2.54 | % | ||||||||||
Net effective royalty rate | 4.75 | % | 4.64 | % | 4.65 | % | 4.53 | % | 4.63 | % | ||||||||||
Royalty per side | $ | 248 | $ | 263 | $ | 268 | $ | 265 | $ | 262 | ||||||||||
Company Owned Real Estate Brokerage Services | ||||||||||||||||||||
Closed homesale sides | 55,273 | 82,768 | 79,383 | 71,985 | 289,409 | |||||||||||||||
Average homesale price | $ | 403,115 | $ | 446,732 | $ | 442,212 | $ | 476,789 | $ | 444,638 | ||||||||||
Average homesale broker commission rate | 2.51 | % | 2.49 | % | 2.50 | % | 2.48 | % | 2.49 | % | ||||||||||
Gross commission income per side | $ | 10,959 | $ | 11,856 | $ | 11,786 | $ | 12,501 | $ | 11,826 | ||||||||||
Relocation Services | ||||||||||||||||||||
Initiations | 37,470 | 48,698 | 38,696 | 33,298 | 158,162 | |||||||||||||||
Referrals | 14,266 | 22,039 | 24,082 | 18,940 | 79,327 | |||||||||||||||
Title and Settlement Services | ||||||||||||||||||||
Purchase title and closing units | 20,565 | 29,973 | 28,927 | 25,691 | 105,156 | |||||||||||||||
Refinance title and closing units | 22,016 | 17,766 | 24,168 | 25,270 | 89,220 | |||||||||||||||
Average price per closing unit | $ | 1,237 | $ | 1,450 | $ | 1,378 | $ | 1,366 | $ | 1,362 |
(a) | Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment. |
For the Three Months Ended | For the Three Months Ended | |||||
March 31, | June 30, | |||||
Revenue (a) | 2013 | 2013 | ||||
Real Estate Franchise Services | $ | 135 | $ | 193 | ||
Company Owned Real Estate Brokerage Services | 686 | 1,182 | ||||
Relocation Services | 87 | 108 | ||||
Title and Settlement Services | 100 | 130 | ||||
Corporate and Other | (51 | ) | (80 | ) | ||
Total Company | $ | 957 | $ | 1,533 | ||
EBITDA (b) (c) | ||||||
Real Estate Franchise Services | $ | 72 | $ | 133 | ||
Company Owned Real Estate Brokerage Services | (8 | ) | 102 | |||
Relocation Services | 10 | 27 | ||||
Title and Settlement Services | 4 | 20 | ||||
Corporate and Other | (15 | ) | (78 | ) | ||
Total Company | $ | 63 | $ | 204 | ||
Less: | ||||||
Depreciation and amortization | 42 | 44 | ||||
Interest expense, net | 89 | 67 | ||||
Income tax expense | 7 | 9 | ||||
Net income (loss) attributable to Realogy Holdings | $ | (75 | ) | $ | 84 |
(a) | Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of $51 million and $80 million for the three months ended March 31, 2013 and June 30, 2013, respectively. Such amounts are eliminated through the Corporate and Other line. |
(b) | The three months ended March 31, 2013 includes $3 million related to the loss on early extinguishment of debt and $1 million of former parent legacy costs. The three months ended June 30, 2013 includes $43 million related to the loss on early extinguishment of debt, $26 million related to the Phantom Value Plan and $4 million restructuring costs, partially offset by a net benefit of $2 million of former parent legacy items. |
(c) | The three months ended March 31, 2013 reflects $13 million of employee-related costs due to the 2013 bonus plan. The three months ended March 31, 2012 reflected $11 million of expense being recognized for the two year retention plan that was implemented in November 2010 and $13 million of expense related to the 2012 bonus plan. As a result, there is $11 million of lower employee related costs in the first quarter of 2013 compared to the first quarter of 2012. The three months ended June 30, 2013 reflects $15 million of employee-related costs due to the 2013 bonus plan. The three months ended June 30, 2012 reflected $10 million of expense being recognized for the two year retention plan that was implemented in November 2010 and $15 million of expense related to the 2012 bonus plan. As a result, there is $10 million of lower employee related costs in the second quarter of 2013 compared to the second quarter of 2012. The retention plan was put in place to retain key employees during a period when there was not an annual bonus plan. |
For the Three Months Ended | For the Year Ended | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||
Revenue (a) | 2012 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||
Real Estate Franchise Services | $ | 129 | $ | 170 | $ | 161 | $ | 144 | $ | 604 | |||||||||
Company Owned Real Estate Brokerage Services | 617 | 994 | 948 | 910 | 3,469 | ||||||||||||||
Relocation Services | 88 | 109 | 124 | 102 | 423 | ||||||||||||||
Title and Settlement Services | 88 | 106 | 114 | 113 | 421 | ||||||||||||||
Corporate and Other | (47 | ) | (70 | ) | (66 | ) | (62 | ) | (245 | ) | |||||||||
Total Company | $ | 875 | $ | 1,309 | $ | 1,281 | $ | 1,207 | $ | 4,672 | |||||||||
EBITDA (b) (c) | |||||||||||||||||||
Real Estate Franchise Services | $ | 61 | $ | 99 | $ | 107 | $ | 97 | $ | 364 | |||||||||
Company Owned Real Estate Brokerage Services | (17 | ) | 78 | 67 | 37 | 165 | |||||||||||||
Relocation Services | 4 | 30 | 45 | 24 | 103 | ||||||||||||||
Title and Settlement Services | 2 | 14 | 12 | 10 | 38 | ||||||||||||||
Corporate and Other | (20 | ) | (18 | ) | (18 | ) | (417 | ) | (473 | ) | |||||||||
Total Company | $ | 30 | $ | 203 | $ | 213 | $ | (249 | ) | $ | 197 | ||||||||
Less: | |||||||||||||||||||
Depreciation and amortization | 45 | 44 | 42 | 42 | 173 | ||||||||||||||
Interest expense, net | 170 | 176 | 187 | (5 | ) | 528 | |||||||||||||
Income tax expense | 7 | 8 | 18 | 6 | 39 | ||||||||||||||
Net loss attributable to Realogy | $ | (192 | ) | $ | (25 | ) | $ | (34 | ) | $ | (292 | ) | $ | (543 | ) |
(a) | Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of $47 million, $70 million, $66 million and $62 million for the three months ended March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012, respectively. Such amounts are eliminated through the Corporate and Other line. |
(b) | Includes $3 million of restructuring costs and $6 million related to loss on the early extinguishment of debt, partially offset by $3 million of former parent legacy benefits for the three months ended March 31, 2012. Includes $2 million of restructuring costs for the three months ended June 30, 2012. Includes $2 million of restructuring costs, partially offset by $1 million of former parent legacy benefits for the three months ended September 30, 2012. Includes $361 million of IPO related costs (of which $256 million was non-cash and related to the issuance of additional shares and $105 million was a cash fee payment), $39 million expense for the Apollo management fee termination agreement, $18 million loss on the early extinguishment of debt and $5 million of restructuring costs, partially offset by a net benefit of $4 million of former parent legacy items for the three months ended December 31, 2012. The amounts broken down by business units as follows: |
For the Three Months Ended | For the Year Ended | |||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||
2012 | 2012 | 2012 | 2012 | 2012 | ||||||||||
Company Owned Real Estate Brokerage Services | 1 | 2 | 2 | 2 | 7 | |||||||||
Relocation Services | 1 | — | — | 2 | 3 | |||||||||
Title and Settlement Services | 1 | — | — | 1 | 2 | |||||||||
Corporate and Other | 3 | — | (1 | ) | 414 | 416 | ||||||||
Total Company | 6 | 2 | 1 | 419 | 428 |
(c) | The three months ended March 31, 2012 reflects the incremental employee-related costs that were primarily due to $10 million of expense for the 2012 bonus plan, which is in addition to $11 million of expense being recognized for the retention plan that was implemented in November 2010, whereas in the first quarter of 2011 only $11 million of expense was recognized for the retention plan. The retention plan was put in place to retain key employees during a period when there was not an annual bonus plan. |
Less | Equals | Plus | Equals | ||||||||||||||||
Year Ended | Six Months Ended | Six Months Ended | Six Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2012 | June 30, 2012 | December 31, 2012 | June 30, 2013 | June 30, 2013 | |||||||||||||||
Net income (loss) attributable to Realogy (a) | $ | (543 | ) | $ | (217 | ) | $ | (326 | ) | $ | 9 | $ | (317 | ) | |||||
Income tax expense | 39 | 15 | 24 | 16 | 40 | ||||||||||||||
Income (loss) before income taxes | (504 | ) | (202 | ) | (302 | ) | 25 | (277 | ) | ||||||||||
Interest expense, net | 528 | 346 | 182 | 156 | 338 | ||||||||||||||
Depreciation and amortization | 173 | 89 | 84 | 86 | 170 | ||||||||||||||
EBITDA (b) | 197 | 233 | (36 | ) | 267 | 231 | |||||||||||||
Covenant calculation adjustments: | |||||||||||||||||||
Restructuring costs and former parent legacy costs (benefit), net (c) | 5 | ||||||||||||||||||
IPO related costs for the Convertible Notes | 361 | ||||||||||||||||||
Loss on the early extinguishment of debt | 64 | ||||||||||||||||||
Pro forma cost savings for 2013 restructuring initiatives (d) | 2 | ||||||||||||||||||
Pro forma cost savings for 2012 restructuring initiatives (e) | 2 | ||||||||||||||||||
Pro forma effect of business optimization initiatives (f) | 21 | ||||||||||||||||||
Non-cash charges (g) | 19 | ||||||||||||||||||
Non-recurring fair value adjustments for purchase accounting (h) | 2 | ||||||||||||||||||
Pro forma effect of acquisitions and new franchisees (i) | 5 | ||||||||||||||||||
Apollo management fees (j) | 31 | ||||||||||||||||||
Fees for secondary offering | 1 | ||||||||||||||||||
Incremental securitization interest costs (k) | 6 | ||||||||||||||||||
Adjusted EBITDA | $ | 750 | |||||||||||||||||
Total senior secured net debt (l) | $ | 2,528 | |||||||||||||||||
Senior secured leverage ratio | 3.37 | x |
(a) | Net income (loss) attributable to Realogy consists of: (i) a loss of $34 million for the third quarter of 2012, (ii) a loss of $292 million for the fourth quarter of 2012, (iii) a loss of $75 million for the first quarter of 2013 and (iv) income of $84 million for the second quarter of 2013. |
(b) | EBITDA consists of: (i) $213 million for the third quarter of 2012, (ii) negative $249 million for the fourth quarter of 2012, (iii) $63 million for the first quarter 2013 and (iv) $204 million for the second quarter of 2013. |
(c) | Consists of $11 million of restructuring costs partially offset by a net benefit of $6 million for former parent legacy items. |
(d) | Represents incremental costs incurred in the second quarter for the Corporate headquarters that are not expected to recur in subsequent periods. |
(e) | Represents actual costs incurred that are not expected to recur in subsequent periods due to restructuring activities initiated during the year ended December 31, 2012. From this restructuring, we expect to reduce our operating costs by approximately $13 million on a twelve-month run-rate basis and estimate that $11 million of such savings were realized from the time they were put in place. The adjustment shown represents the impact the savings would have had on the period from July 1, 2012 through the time they were put in place had those actions been effected on July 1, 2012. |
(f) | Represents the twelve-month pro forma effect of business optimization initiatives including $3 million related to our Relocation Services integration costs, $4 million related to vendor renegotiations, $8 million related to business cost cutting initiatives and $6 million for employee retention accruals. The employee retention accruals reflect the two year employee retention plan that was implemented in November 2010 in lieu of our customary bonus plan, due to the ongoing and prolonged downturn in the housing market in order to ensure the retention of executive officers and other key personnel, principally within our corporate services unit and the corporate offices of our four business units. |
(g) | Represents the elimination of non-cash expenses, including $36 million of stock-based compensation expense less $15 million for the change in the allowance for doubtful accounts and notes reserves and $2 million of other items from July 1, 2012 through June 30, 2013. |
(h) | Reflects the adjustment for the negative impact of fair value adjustments for purchase accounting at the operating business segments primarily related to deferred rent. |
(i) | Represents the estimated impact of acquisitions and new franchisees as if they had been acquired or signed on July 1, 2012. Franchisee sales activity is comprised of new franchise agreements as well as growth acquired by existing franchisees with our assistance. We have made a number of assumptions in calculating such estimate and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired entities or entered into the franchise contracts as of July 1, 2012. |
(j) | Represents the elimination of the expense recognized for the termination of the Apollo management fee agreement for the twelve months ended June 30, 2013. |
(k) | Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended June 30, 2013. |
(l) | Represents total borrowings under the senior secured credit facility which are secured by a first priority lien on our assets of $2,648 million plus $15 million of capital lease obligations less $135 million of readily available cash as of June 30, 2013. Pursuant to the terms of our senior secured credit facility, total senior secured net debt does not include the First and a Half Lien Notes, other indebtedness secured by a lien on our assets that is pari passu or junior in priority to the First and a Half Lien Notes, including our securitization obligations and the Unsecured Notes. |
Three Months Ended | ||||||
June 30, 2013 | June 30, 2012 | |||||
Net income (loss) attributable to Realogy | $ | 84 | (25 | ) | ||
Income tax expense | 9 | 8 | ||||
Income (loss) before income taxes | 93 | (17 | ) | |||
Interest expense, net | 67 | 176 | ||||
Depreciation and amortization | 44 | 44 | ||||
EBITDA | 204 | 203 | ||||
Restructuring costs, merger costs and former parent legacy costs (benefit), net | 2 | 2 | ||||
Loss on the early extinguishment of debt | 43 | — | ||||
Pro forma cost savings for restructuring initiatives | 2 | — | ||||
Pro forma effect of business optimization initiatives | 3 | 11 | ||||
Non-cash charges | 20 | (4 | ) | |||
Non-recurring fair value adjustments for purchase accounting | 1 | 1 | ||||
Pro forma effect of acquisitions and new franchisees | 1 | 1 | ||||
Fees for secondary offering | 1 | — | ||||
Apollo management fees | — | 4 | ||||
Incremental securitization interest costs | 1 | 1 | ||||
Adjusted EBITDA | 278 | 219 |
For the three months ended | |||||||
June 30, 2013 | |||||||
($ in millions) | ($ per share) | ||||||
Net income attributable to Realogy / Basic earnings per share | $ | 84 | $ | 0.58 | |||
Income tax expense, net of payments | 5 | 0.03 | |||||
Interest expense, net | 67 | 0.46 | |||||
Cash interest payments | (86 | ) | (0.59 | ) | |||
Depreciation and amortization | 44 | 0.30 | |||||
Capital expenditures | (10 | ) | (0.07 | ) | |||
Restructuring costs and legacy, net of payments | (2 | ) | (0.01 | ) | |||
Loss on the early extinguishment of debt | 43 | 0.29 | |||||
Working capital adjustments | 71 | 0.49 | |||||
Relocation assets, net of securitization | (63 | ) | (0.43 | ) | |||
Free Cash Flow / Cash Earnings Per Share | $ | 153 | $ | 1.05 | |||
Basic weighted average number of common shares outstanding (in millions) | 145.4 |
• | these measures do not reflect changes in, or cash requirement for, our working capital needs; |
• | these measures do 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; |
• | these measures do not reflect our income tax expense or the cash requirements to pay our taxes; |
• | these measures do 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 these measures do not reflect any cash requirements for such replacements; and |
• | other companies may calculate these measures differently so they may not be comparable. |
7!E
M`````$YO;F4````)=&]P3W5T O\`H,;'=N;_`#?T_P#"*7UM
MZUD5#'Z+T?*JIZUU"T5U.>YOZ)C0;[+7M<'_`,YL]"K G)E4WI.5&-Z:V,Y9"<_/@H\/V%D;V)E+7AA<"UF:6QT97)S(&5S8STB0U(B
M/SX*/'@Z>&%P;65T82!X;6QN 49(*
M4,0T&BQ;4M$3*0/Z?__:``@!`0`!!0#^C"6FX>!;3NXBT(\S_G,?R/61##D@)'20C
M)\C^K7U8R_K'GBZRNRS`8_?EY;I._;[W8]-MA_39%_T/I_H?YRS\Q>SU/<^M
MKW-+'.`)8>1/8PGKV;&^G&R!LV\1^;MC\U22*[%&,01$\1_2+RS/J?>_ZNV]
M-ON;7G,R[L[`RJB3Z-SK;,C%L][6_1]39>S;_I%>ZUTKJO6/JK=TRYU%?4LF
MIC+7-+C1O#F.L`",6==K$3OG,F=
M=CB[V-8=JOJK]_-7:QNPM9T=,`(<[*G6PF_/MH]'DIA8``8[A[*ZN.M9U]
M36YNM-``$,>:G83J]]G7
Z;(U7%^X,4;>
FSEL\;Z';1L^;94L`UA7`@@JY7QACII84-KSY;1[OPCBW#&3,
MSS5N[6]N&TZ%SGZ@^3\B(J**+*<(N)E)V1Q!Z:N7[V+C?89MNQNE=NY_;'AE
MI=OJG8LCCSGJJY*<&>>ION.=4V]2G
%F;A?XL]/O<+D53!&QO#&$E?9P0`P
M7'@C"MWJ.]E>UQX>,VG;;(E2$MNWK:;?T_\`_]H`"`$"`@8_`/X,(N(`4&@N
M\AXV*QH&\\EFW*V!V>Z^;=WCU4`ZW0;/PW$KIPM_)1<8FO#N&@^BBT[,_P"&
M"38`NEMC>-^2ZFF!"@;'#Q$?A?H;VCS-0-8(DHM,Q8OJ8@^1D-'OP75@V'1F
MV:.%RZ7B!J!S;"$'#;?^%8#N=8/6I`&`$RNE@VYRG8K[27$M&BWCPI@\1XJ.
M%\AHS^_BQ0(@:;9.L//)V%6UH*:FIJ:CD+5"O!34,C`F)T!?%N\KM'FOFV%R
M^!CQR$7&`4&@GR\;E8T;U:SS4#%MZB#$5"US""$`00%$5`#:3F7:5U=,!6(S
M-LYU"_\`J/D+.=$2M2L5JL4'MCQWJ.$[8>?LOFTC7FWRH!,Y'9D+5-640KS4
MU-$#(QKB@UXF2+<.QOF?:CXM)V+L*@X0.M1!@5T8G=F.GWK0%KCFYKJ>8E05
MC#N7R:1LHBPPJ1'/4H%?2?+,?2F)F9!%SK25U.[1YZE"J7:`HG/3U'XMT\
MD&-D%K434L5JG1\F".JS@B&$P)SY`41H!KG*PK"@U_I-D)\J.K%M.C1>H"B#
MA$+K9:WA[46]PGSJ%QV7HN=:2M#1,\E!@AQI^3;=(L*BSY#SJG%9/./6CZ;^
MX2U^Z+W2"+G?DND2SE!K;`*SSJHZ6")75B_(Z,PY\*+*+5::)*5%BL*M"LR`
MJ0KG)W(%1K"@UBXYA%%QF4<0R;*_VJP,BBW-FN0&8V>-M0,&810:)E!@S9/Z
MC.TSU>RB)A#JS>(H,;,KI;^==P`B?==6+\1HS^RZ6"`IM5F1M5F4B:\E)25E
M2RBU&B"A6%!K.\9Z`=)/&'I6:=(\<4TZ"*CMG`)NWA4[V[PN]N\+O;O"B+15
M@9%0$C)`!?\`D9\L@%:H-5MM6RFW+6A1R,(*2DH58405JBVB-44&L\:N%M`&
M@GGZUFMT#BFC214=KAP3=V\5#?2RX5F;?1"\9*)5E:W(0R`J1%8DZ:G4[XLTYS51$&C.3/>H8(ZCI,N9\E\W&&
MB0W5R\_S'R%G&-
T^EYL_'@?Z_QWP>
M3/YO1_A9/2RF6GYPXRI-:D'9J(4+Z?+IIQ;R%N0S6[\TEBU*?KI)&+,?E)XN
M;KOQ"2M@F$6-1AJIMN-2_/7]J4@CVL#W>C/4M0K/6LQM%8@<:JZ..EE8=X(/
M&6P:=1J1.)<=(QU+5Y1U1ZGO*@])/K!XQ,9DZ:F;UQUM->1,O[5R]8E"_K^A
MA=MQR?ZO0K&]90'D9IV*(&]JHFH^ZXH8NFGB6\C8CK5D];RL%77V:GC'8+'(
M%KT8@K2::-+(>;RM[7;4G_!]3DW7@*VF"NR?[QIQ+[M.9S\X`=D;GL[E/+L(
M'$%VG.]:W5D66O8C/2Z.IU5@1W@CC'MEY$CAQT"QQ5805C:70"29AK\YS\@'
M(=^M/"8B'Q;5IO><\DBC'SY'/
?M4D<>)?O5Z,8&OB6)4B70=
M^KD#B7;V(S$>4R,EN&4_109(E6,DDF4#H/LT)^#9GY"QW\FC]+:/[Q<_RHN,
M-_YZO^%7ZEN?R^W1`9L+NBD]2RZ:>)"^H>&Q%KR#PRJLB:\NI1KJ.-Q>7V[:
MI@RV`LF-;"@B&W7;G!:@+=L