Delaware | 001-35674 | 20-8050955 | ||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Delaware | 333-148153 | 20-4381990 | ||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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 5.07. | Submission of Matters to a Vote of Security Holders. |
Director Nominee | Votes For | Votes Against | Abstain | Broker Non-Votes | ||||
Raul Alvarez | 99,884,070 | 18,764,469 | 705,915 | 9,901,745 | ||||
Fiona P. Dias | 114,417,902 | 4,230,540 | 706,012 | 9,901,745 | ||||
Matthew J. Espe | 116,688,894 | 1,959,645 | 705,915 | 9,901,745 | ||||
V. Ann Hailey | 111,786,060 | 6,862,401 | 705,993 | 9,901,745 | ||||
Duncan L. Niederauer | 114,625,166 | 4,023,401 | 705,887 | 9,901,745 | ||||
Richard A. Smith | 115,123,835 | 2,415,629 | 1,814,990 | 9,901,745 | ||||
Sherry M. Smith | 117,740,727 | 907,850 | 705,877 | 9,901,745 | ||||
Christopher S. Terrill | 118,062,978 | 585,561 | 705,915 | 9,901,745 | ||||
Michael J. Williams | 113,430,964 | 5,217,575 | 705,915 | 9,901,745 |
Votes For | Votes Against | Abstain | Broker Non-Votes | ||||
111,503,181 | 7,119,006 | 732,267 | 9,901,745 |
Votes For | Votes Against | Abstain | |||
128,470,452 | 85,489 | 700,258 |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Press Release dated May 4, 2017. |
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 |
Exhibit No. | Exhibit | |
99.1 | Press Release dated May 4, 2017. |
• | Revenue was $1.20 billion, an increase of 6% as compared with the first quarter in 2016, driven by transaction volume increases at the Company-owned brokerage segment (NRT) and Realogy Franchise Group (RFG). |
• | The Company's combined homesale transaction volume increased 9% compared with the first quarter of 2016, consisting of a 10% volume gain at RFG and a 7% volume gain at NRT. |
• | Net loss was $28 million compared with net loss of $42 million in the first quarter of 2016. Basic loss per share was $0.20 compared with basic loss per share of $0.29 in the first quarter of 2016. |
• | Adjusted net loss was $23 million compared with adjusted net loss of $17 million in the first quarter of 2016. Adjusted net loss per share was $0.16 compared with adjusted net loss per share of $0.12 in first quarter of 2016. (See Table 1a).1 |
• | Operating EBITDA was $61 million, compared with $65 million in the first quarter of 2016. (See Table 6).2 |
• | The Company returned $73 million of capital to shareholders through repurchases and dividends. |
Investor Contacts: | Media Contact: | |
Alicia Swift | Mark Panus | |
(973) 407-4669 | (973) 407-7215 | |
alicia.swift@realogy.com | mark.panus@realogy.com | |
Jennifer Halchak | ||
(973) 407-7487 | ||
jennifer.halchak@realogy.com |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues | |||||||
Gross commission income | $ | 881 | $ | 826 | |||
Service revenue | 194 | 190 | |||||
Franchise fees | 75 | 69 | |||||
Other | 53 | 49 | |||||
Net revenues | 1,203 | 1,134 | |||||
Expenses | |||||||
Commission and other agent-related costs | 605 | 558 | |||||
Operating | 376 | 367 | |||||
Marketing | 62 | 58 | |||||
General and administrative | 96 | 86 | |||||
Former parent legacy costs, net | — | 1 | |||||
Restructuring costs | 5 | 9 | |||||
Depreciation and amortization | 50 | 48 | |||||
Interest expense, net | 39 | 73 | |||||
Loss on the early extinguishment of debt | 4 | — | |||||
Total expenses | 1,237 | 1,200 | |||||
Loss before income taxes, equity in losses and noncontrolling interests | (34 | ) | (66 | ) | |||
Income tax benefit | (9 | ) | (24 | ) | |||
Equity in losses of unconsolidated entities | 3 | — | |||||
Net loss | (28 | ) | (42 | ) | |||
Less: Net income attributable to noncontrolling interests | — | — | |||||
Net loss attributable to Realogy Holdings | $ | (28 | ) | $ | (42 | ) | |
Loss per share attributable to Realogy Holdings: | |||||||
Basic loss per share | $ | (0.20 | ) | $ | (0.29 | ) | |
Diluted loss per share | $ | (0.20 | ) | $ | (0.29 | ) | |
Weighted average common and common equivalent shares of Realogy Holdings outstanding: | |||||||
Basic | 139.7 | 146.5 | |||||
Diluted | 139.7 | 146.5 | |||||
Cash dividends declared per share (beginning in August 2016) | $ | 0.09 | $ | — |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net loss attributable to Realogy Holdings | $ | (28 | ) | $ | (42 | ) | |
Addback: | |||||||
Mark-to-market interest rate swap adjustments | (1 | ) | 31 | ||||
Former parent legacy costs, net | — | 1 | |||||
Restructuring costs, net | 5 | 9 | |||||
Loss on the early extinguishment of debt | 4 | — | |||||
Adjustments for tax effect (a) | (3 | ) | (16 | ) | |||
Adjusted net loss | $ | (23 | ) | $ | (17 | ) | |
Loss per share | |||||||
Basic loss per share: | $ | (0.20 | ) | $ | (0.29 | ) | |
Diluted loss per share: | $ | (0.20 | ) | $ | (0.29 | ) | |
Adjusted loss per share | |||||||
Adjusted basic loss per share: | $ | (0.16 | ) | $ | (0.12 | ) | |
Adjusted diluted loss per share: | $ | (0.16 | ) | $ | (0.12 | ) | |
Weighted average common and common equivalent shares outstanding: | |||||||
Basic: | 139.7 | 146.5 | |||||
Diluted: | 139.7 | 146.5 |
(a) | Reflects tax effect of adjustments at an assumed tax rate of 40% for the quarters ended March 31, 2017 and 2016. |
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 205 | $ | 274 | |||
Trade receivables (net of allowance for doubtful accounts of $12 and $13) | 147 | 152 | |||||
Relocation receivables | 223 | 244 | |||||
Other current assets | 158 | 148 | |||||
Total current assets | 733 | 818 | |||||
Property and equipment, net | 270 | 267 | |||||
Goodwill | 3,691 | 3,690 | |||||
Trademarks | 748 | 748 | |||||
Franchise agreements, net | 1,344 | 1,361 | |||||
Other intangibles, net | 304 | 313 | |||||
Other non-current assets | 240 | 224 | |||||
Total assets | $ | 7,330 | $ | 7,421 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 125 | $ | 140 | |||
Securitization obligations | 172 | 205 | |||||
Due to former parent | 29 | 28 | |||||
Current portion of long-term debt | 355 | 242 | |||||
Accrued expenses and other current liabilities | 400 | 435 | |||||
Total current liabilities | 1,081 | 1,050 | |||||
Long-term debt | 3,256 | 3,265 | |||||
Deferred income taxes | 379 | 389 | |||||
Other non-current liabilities | 239 | 248 | |||||
Total liabilities | 4,955 | 4,952 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at March 31, 2017 and December 31, 2016 | — | — | |||||
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 138,733,646 shares outstanding at March 31, 2017 and 140,227,692 shares outstanding at December 31, 2016 | 1 | 1 | |||||
Additional paid-in capital | 5,499 | 5,565 | |||||
Accumulated deficit | (3,090 | ) | (3,062 | ) | |||
Accumulated other comprehensive loss | (39 | ) | (40 | ) | |||
Total stockholders' equity | 2,371 | 2,464 | |||||
Noncontrolling interests | 4 | 5 | |||||
Total equity | 2,375 | 2,469 | |||||
Total liabilities and equity | $ | 7,330 | $ | 7,421 |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | % Change | |||||||||
RFG (a) | |||||||||||
Closed homesale sides | 225,250 | 218,330 | 3 | % | |||||||
Average homesale price | $ | 275,828 | $ | 259,044 | 6 | % | |||||
Average homesale broker commission rate | 2.50 | % | 2.51 | % | (1) bps | ||||||
Net effective royalty rate | 4.44 | % | 4.51 | % | (7) bps | ||||||
Royalty per side | $ | 322 | $ | 309 | 4 | % | |||||
NRT | |||||||||||
Closed homesale sides | 66,570 | 64,244 | 4 | % | |||||||
Average homesale price | $ | 509,197 | $ | 493,125 | 3 | % | |||||
Average homesale broker commission rate | 2.45 | % | 2.46 | % | (1) bps | ||||||
Gross commission income per side | $ | 13,261 | $ | 12,878 | 3 | % | |||||
Cartus | |||||||||||
Initiations | 36,515 | 37,174 | (2 | %) | |||||||
Referrals | 15,203 | 16,893 | (10 | %) | |||||||
TRG | |||||||||||
Purchase title and closing units (b) | 31,297 | 29,236 | 7 | % | |||||||
Refinance title and closing units (c) | 8,533 | 9,703 | (12 | %) | |||||||
Average fee per closing unit | $ | 2,001 | $ | 1,848 | 8 | % |
(a) | Includes all franchisees except for NRT. |
(b) | The amounts presented for the three months ended March 31, 2017 include 1,972 purchase units as a result of acquisitions completed prior to the first quarter of 2017. |
(c) | The amounts presented for the three months ended March 31, 2017 include 523 refinance units as a result of the acquisitions completed prior to the first quarter of 2017. |
Quarter Ended | Year Ended | |||||||||||||||||||
March 31, 2016 | June 30, 2016 | September 30, 2016 | December 31, 2016 | December 31, 2016 | ||||||||||||||||
RFG (a) | ||||||||||||||||||||
Closed homesale sides | 218,330 | 319,748 | 323,176 | 274,090 | 1,135,344 | |||||||||||||||
Average homesale price | $ | 259,044 | $ | 273,900 | $ | 275,325 | $ | 277,037 | $ | 272,206 | ||||||||||
Average homesale broker commission rate | 2.51 | % | 2.51 | % | 2.50 | % | 2.49 | % | 2.50 | % | ||||||||||
Net effective royalty rate | 4.51 | % | 4.49 | % | 4.50 | % | 4.34 | % | 4.46 | % | ||||||||||
Royalty per side | $ | 309 | $ | 319 | $ | 322 | $ | 313 | $ | 317 | ||||||||||
NRT | ||||||||||||||||||||
Closed homesale sides | 64,244 | 98,314 | 95,605 | 77,536 | 335,699 | |||||||||||||||
Average homesale price | $ | 493,125 | $ | 485,688 | $ | 486,343 | $ | 495,242 | $ | 489,504 | ||||||||||
Average homesale broker commission rate | 2.46 | % | 2.49 | % | 2.46 | % | 2.44 | % | 2.46 | % | ||||||||||
Gross commission income per side | $ | 12,878 | $ | 12,732 | $ | 12,681 | $ | 12,760 | $ | 12,752 | ||||||||||
Cartus | ||||||||||||||||||||
Initiations | 37,174 | 51,560 | 40,556 | 33,773 | 163,063 | |||||||||||||||
Referrals | 16,893 | 26,138 | 25,495 | 18,751 | 87,277 | |||||||||||||||
TRG | ||||||||||||||||||||
Purchase title and closing units (b) | 29,236 | 43,914 | 42,932 | 36,915 | 152,997 | |||||||||||||||
Refinance title and closing units (c) | 9,703 | 11,227 | 15,170 | 14,819 | 50,919 | |||||||||||||||
Average fee per closing unit | $ | 1,848 | $ | 1,919 | $ | 1,824 | $ | 1,907 | $ | 1,875 |
(a) | Includes all franchisees except for NRT. |
(b) | The amounts presented for the year ended December 31, 2016 include 18,930 purchase units as a result of the acquisitions. |
(c) | The amounts presented for the year ended December 31, 2016 include 4,469 refinance units as a result of the acquisitions. |
Three Months Ended | |||
March 31, 2017 | |||
Net revenues (a) | |||
Real Estate Franchise Services | $ | 170 | |
Company Owned Real Estate Brokerage Services | 897 | ||
Relocation Services | 77 | ||
Title and Settlement Services | 120 | ||
Corporate and Other | (61 | ) | |
Total Company | $ | 1,203 | |
EBITDA (b) | |||
Real Estate Franchise Services | $ | 102 | |
Company Owned Real Estate Brokerage Services | (26 | ) | |
Relocation Services | 1 | ||
Title and Settlement Services | 2 | ||
Corporate and Other | (27 | ) | |
Total Company | $ | 52 | |
Less: | |||
Depreciation and amortization | 50 | ||
Interest expense, net | 39 | ||
Income tax benefit | (9 | ) | |
Net loss attributable to Realogy Holdings | $ | (28 | ) |
(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 $61 million for the three months ended March 31, 2017. Such amounts are eliminated through the Corporate and Other line. |
(b) | Includes restructuring charges of $5 million in the Company Owned Real Estate Brokerage Services segment and $4 million related to the loss on the early extinguishment of debt for the three months ended March 31, 2017. |
Three Months Ended | Year Ended | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | |||||||||||||||
Net revenues (a) | |||||||||||||||||||
Real Estate Franchise Services | $ | 157 | $ | 221 | $ | 215 | $ | 188 | $ | 781 | |||||||||
Company Owned Real Estate Brokerage Services | 841 | 1,268 | 1,231 | 1,004 | 4,344 | ||||||||||||||
Relocation Services | 83 | 109 | 116 | 97 | 405 | ||||||||||||||
Title and Settlement Services | 111 | 149 | 164 | 149 | 573 | ||||||||||||||
Corporate and Other | (58 | ) | (85 | ) | (82 | ) | (68 | ) | (293 | ) | |||||||||
Total Company | $ | 1,134 | $ | 1,662 | $ | 1,644 | $ | 1,370 | $ | 5,810 | |||||||||
EBITDA (b) | |||||||||||||||||||
Real Estate Franchise Services | $ | 92 | $ | 149 | $ | 153 | $ | 122 | $ | 516 | |||||||||
Company Owned Real Estate Brokerage Services | (21 | ) | 78 | 74 | 6 | 137 | |||||||||||||
Relocation Services | 5 | 29 | 40 | 22 | 96 | ||||||||||||||
Title and Settlement Services | — | 26 | 23 | 13 | 62 | ||||||||||||||
Corporate and Other | (21 | ) | (19 | ) | (20 | ) | (18 | ) | (78 | ) | |||||||||
Total Company | $ | 55 | $ | 263 | $ | 270 | $ | 145 | $ | 733 | |||||||||
Less: | |||||||||||||||||||
Depreciation and amortization | 48 | 48 | 53 | 53 | 202 | ||||||||||||||
Interest expense, net | 73 | 59 | 37 | 5 | 174 | ||||||||||||||
Income tax expense (benefit) | (24 | ) | 64 | 74 | 30 | 144 | |||||||||||||
Net income (loss) attributable to Realogy Holdings | $ | (42 | ) | $ | 92 | $ | 106 | $ | 57 | $ | 213 |
(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 $58 million, $85 million, $82 million and $68 million for the three months ended March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively. Such amounts are eliminated through the Corporate and Other line. |
(b) | Includes a net cost of $1 million and a net benefit of $3 million of former parent legacy items for the three months ended March 31, 2016 and December 31, 2016, respectively. |
Three Months Ended | Year Ended | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | |||||||||||||||
Real Estate Franchise Services | $ | — | $ | 3 | $ | 1 | $ | — | $ | 4 | |||||||||
Company Owned Real Estate Brokerage Services | 2 | 7 | 6 | 7 | 22 | ||||||||||||||
Relocation Services | 2 | 1 | 1 | — | 4 | ||||||||||||||
Title and Settlement Services | — | — | 1 | — | 1 | ||||||||||||||
Corporate and Other | 6 | 1 | — | (1 | ) | 6 | |||||||||||||
Total Company | $ | 10 | $ | 12 | $ | 9 | $ | 6 | $ | 37 |
Year Ended | |||
December 31, 2016 | |||
Net income attributable to Realogy Holdings | $ | 213 | |
Income tax expense | 144 | ||
Income before income taxes | 357 | ||
Interest expense, net | 174 | ||
Depreciation and amortization | 202 | ||
EBITDA | 733 | ||
EBITDA adjustments: | |||
Restructuring costs | 39 | ||
Former parent legacy costs (benefit), net | (2 | ) | |
Operating EBITDA | $ | 770 |
Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Net loss attributable to Realogy | $ | (28 | ) | $ | (42 | ) | |
Income tax benefit | (9 | ) | (24 | ) | |||
Loss before income taxes | (37 | ) | (66 | ) | |||
Interest expense, net | 39 | 73 | |||||
Depreciation and amortization | 50 | 48 | |||||
EBITDA | 52 | 55 | |||||
EBITDA adjustments: | |||||||
Restructuring costs | 5 | 9 | |||||
Former parent legacy cost, net | — | 1 | |||||
Loss on the early extinguishment of debt | 4 | — | |||||
Operating EBITDA | $ | 61 | $ | 65 |
Revenues | Operating EBITDA | Operating EBITDA Margin | ||||||||||||||||||||||||||||||||||||
2017 | 2016 | Change | % Change | 2017 | 2016 | Change | % Change | 2017 | 2016 | Change | ||||||||||||||||||||||||||||
RFG | $ | 170 | $ | 157 | $ | 13 | 8 | % | $ | 102 | $ | 92 | $ | 10 | 11 | % | 60 | % | 59 | % | 1 | |||||||||||||||||
NRT | 897 | 841 | 56 | 7 | (21 | ) | (19 | ) | (2 | ) | (11 | ) | (2 | ) | (2 | ) | — | |||||||||||||||||||||
Cartus | 77 | 83 | (6 | ) | (7 | ) | 1 | 7 | (6 | ) | (86 | ) | 1 | 8 | (7 | ) | ||||||||||||||||||||||
TRG | 120 | 111 | 9 | 8 | 2 | — | 2 | * | 2 | — | 2 | |||||||||||||||||||||||||||
Corporate and Other | (61 | ) | (58 | ) | (3 | ) | * | (23 | ) | (15 | ) | (8 | ) | * | ||||||||||||||||||||||||
Total Company | $ | 1,203 | $ | 1,134 | $ | 69 | 6 | % | $ | 61 | $ | 65 | $ | (4 | ) | (6 | )% | 5 | % | 6 | % | (1 | ) | |||||||||||||||
Less: Restructuring costs | 5 | 9 | ||||||||||||||||||||||||||||||||||||
Former parent legacy cost, net | — | 1 | ||||||||||||||||||||||||||||||||||||
Loss on the early extinguishment of debt | 4 | — | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 50 | 48 | ||||||||||||||||||||||||||||||||||||
Interest expense, net | 39 | 73 | ||||||||||||||||||||||||||||||||||||
Income tax benefit | (9 | ) | (24 | ) | ||||||||||||||||||||||||||||||||||
Net loss attributable to Realogy Holdings | $ | (28 | ) | $ | (42 | ) |
* | not meaningful |
Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Net loss attributable to Realogy Holdings | $ | (28 | ) | $ | (42 | ) | |
Income tax benefit, net of payments | (11 | ) | (26 | ) | |||
Interest expense, net | 39 | 73 | |||||
Cash interest payments | (24 | ) | (28 | ) | |||
Depreciation and amortization | 50 | 48 | |||||
Capital expenditures | (28 | ) | (22 | ) | |||
Restructuring costs and former parent legacy items, net of payments | (3 | ) | 2 | ||||
Working capital adjustments | (60 | ) | (82 | ) | |||
Relocation receivables (assets), net of securitization obligations | (11 | ) | (36 | ) | |||
Free Cash Flow | $ | (72 | ) | $ | (113 | ) |
Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Net cash used in operating activities | $ | (12 | ) | $ | (64 | ) | |
Property and equipment additions | (28 | ) | (22 | ) | |||
Net change in securitization | (33 | ) | (27 | ) | |||
Effect of exchange rates on cash and cash equivalents | 1 | — | |||||
Free Cash Flow | $ | (72 | ) | $ | (113 | ) | |
Net cash used in investing activities | $ | (31 | ) | $ | (34 | ) | |
Net cash used in financing activities | $ | (27 | ) | $ | (34 | ) |
• | these measures do not reflect changes in, or cash required 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. |
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