MADISON,
N.J., Oct. 24, 2023 /PRNewswire/
-- Anywhere Real Estate Inc. (NYSE: HOUS) ("Anywhere" or the
"Company"), a global leader in residential real estate services,
today reported financial results for the third quarter ended
September 30, 2023.
"Anywhere led through a difficult housing market to deliver
considerable profitability and achieve substantial debt reduction,"
said Ryan Schneider, Anywhere
president and CEO. "We accelerated our strategic progress,
including expanding our high-margin franchise business, integrating
the consumer transaction experience, taking advantage of the better
competitive environment, and putting significant litigation behind
us, to set Anywhere up for powerful momentum as the housing market
improves."
"Anywhere stayed focused on what we can control and drove
differentiated results in the third quarter," said Charlotte Simonelli, Anywhere executive vice
president, chief financial officer, and treasurer. "We generated
meaningful Operating EBITDA, overdelivered on our cost savings
agenda, achieved sizable debt reduction, and prudently managed our
cash, enabling Anywhere to navigate current market conditions and
invest to drive future success."
Third Quarter 2023 Highlights
- Generated Revenue of $1.6
billion, a decrease of 12% year-over-year, largely impacted
by homesale transaction volume declines versus prior year of
13%.
- Reported Net income of $129
million.
- Operating EBITDA of $107 million,
a decrease of $59 million
year-over-year (See Table 5a).
- Reduced debt by $281 million
through successful debt exchanges, open market bond repurchases and
repayment of a portion of our revolver balance.
- Realized third quarter cost savings of approximately
$60 million and over $160 million year-to-date and completed actions
to deliver $200 million for the full
year.
- Free Cash Flow of $95 million
(See Table 7).
- Commission splits in the third quarter increased 55 basis
points year-over-year.
- Entered into a nationwide settlement agreement in the Burnett
and Moehrl antitrust class action litigation.
- Anywhere was recognized by Forbes as a World's Best Employer
and by TIME Magazine as one of the World's Best Companies.
Third Quarter 2023 Financial Highlights
The following table sets forth the Company's financial
highlights for the periods presented (in millions, except per share
data) (unaudited):
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
|
Change
|
|
%
Change
|
Revenue
|
$
1,584
|
|
$
1,808
|
|
$
(224)
|
|
(12) %
|
Operating EBITDA
1
|
107
|
|
166
|
|
(59)
|
|
(36)
|
Net income attributable
to Anywhere
|
129
|
|
55
|
|
74
|
|
135
|
Adjusted net income
2
|
17
|
|
66
|
|
(49)
|
|
(74)
|
Earnings per
share
|
1.17
|
|
0.49
|
|
0.68
|
|
139
|
Free Cash Flow
3
|
95
|
|
99
|
|
(4)
|
|
(4)
|
Net cash provided by
operating activities
|
$
145
|
|
$
134
|
|
$
11
|
|
8 %
|
|
|
|
|
|
|
|
|
Select Key
Drivers
|
|
|
|
|
|
|
|
Anywhere Brands -
Franchise Group 4 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
200,619
|
|
243,494
|
|
|
|
(18) %
|
Average homesale
price
|
$ 470,818
|
|
$ 449,313
|
|
|
|
5 %
|
Anywhere Advisors -
Owned Brokerage Group 5
|
|
|
|
|
|
|
|
Closed homesale
sides
|
71,794
|
|
86,022
|
|
|
|
(17) %
|
Average homesale
price
|
$ 712,232
|
|
$ 681,387
|
|
|
|
5 %
|
Anywhere Integrated
Services - Title Group
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
28,453
|
|
35,045
|
|
|
|
(19) %
|
Refinance title and
closing units
|
2,304
|
|
3,339
|
|
|
|
(31) %
|
_______________
|
Footnotes:
|
1 See
Table 5a for a reconciliation of Net income attributable to
Anywhere to Operating EBITDA. 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 businesses, investments or other
assets.
|
2 See
Table 1a for a reconciliation of Net income attributable to
Anywhere to Adjusted net income (loss). 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, (gain) loss on the sale of businesses, investments or
other assets and the tax effect of the foregoing
adjustments.
|
3 See
Table 7 for a reconciliation of Net income attributable to Anywhere
to Free Cash Flow. Free Cash Flow is defined as net income (loss)
attributable to Anywhere before income tax expense (benefit),
income tax 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 sale of businesses, investments or
other assets, (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 Owned Brokerage Group.
|
5 The Company's combined
homesale transaction volume (transaction sides multiplied by
average sale price) decreased 13% compared with the third quarter
of 2022.
|
2023 Financial Estimates
Consistent with industry forecasts, we still expect quarterly
transaction volume comparisons to 2022 to improve throughout 2023,
but expect full year 2023 transaction volumes to decline about
15-20% year-over-year and with the weaker market and higher
mortgage rates in the latter part of Q3, we now think this will end
up towards the worse part of that range.
Driven by these projected volume declines, the Company continues
to expect full year 2023 Operating EBITDA to be below 2022.
However, the Company still expects Free Cash Flow from operations
to be modestly positive. This excludes the impact of cash expenses
from the debt exchange transactions and any other non-recurring
items.
Based on year-to-date agent commission trends, we now expect
full year commissions splits to increase about 50 to 60 basis
points above 2022.
The Company continues to expect to realize cost savings of
approximately $200 million in 2023,
inclusive of the cost savings realized year-to-date in 2023.
These estimates are subject to, among other things,
macroeconomic and housing market uncertainties, including those
related to rising inflation and mortgage rates, declining
affordability and constrained inventory as well as competitive,
litigation and regulatory uncertainties.
Balance Sheet
Total corporate debt, including the short-term portion, net of
cash and cash equivalents (net corporate debt), totaled
$2.5 billion at September 30,
2023. The Company ended the quarter with cash and cash equivalents
of $151 million. The Company's Senior
Secured Leverage Ratio was 1.30x at September 30, 2023 (see
Table 8a). The Company's Net Debt Leverage Ratio was 7.8x at
September 30, 2023 (see Table 8b).
During the third quarter of 2023, the Company completed debt
exchange transactions pursuant to which we issued $640 million of 7.00% Senior Secured Second Lien
Notes due 2030 in exchange for $298
million of our 5.75% Senior Notes due 2029 and $503 million of our 5.25% Senior Notes due 2030.
In addition, following consummation of the debt exchange
transactions, we repurchased $26
million of our 5.75% Senior Notes and $40 million of our 5.25% Senior Notes in open
market purchases at an aggregate purchase price of $48 million, plus accrued interest to the
respective repurchase dates.
As of October 23, 2023 the Company
had $325 million of outstanding
borrowings under its Revolving Credit Facility.
A consolidated balance sheet is included as Table 2 of this
press release.
Investor Conference Call
Today, October 24, at 8:30 a.m.
(ET), Anywhere will hold a conference call via webcast to
review its Q3 2023 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.anywhere.re or by dialing (888) 330-3077 (toll free);
international participants should dial (646) 960-0674. Please dial
in at least 5 to 10 minutes prior to start time. A webcast replay
also will be available on the website.
About Anywhere Real Estate Inc.
Anywhere Real Estate Inc. (NYSE: HOUS) is moving the real estate
industry to what's next. A leader of integrated residential real
estate services, Anywhere includes franchise, brokerage,
relocation, and title and settlement businesses, as well as
mortgage and title insurance underwriter joint ventures, supporting
approximately 1.2 million home transactions in 2022. The
diverse Anywhere 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, Anywhere fuels the productivity of its approximately
190,300 independent sales agents in the U.S. and approximately
140,100 independent sales agents in 117 other countries and
territories, helping them build stronger businesses and best serve
today's consumers. Recognized for twelve consecutive years as one
of the World's Most Ethical Companies, Anywhere has also been
designated a Great Place to Work five years in a row, honored on
the Forbes list of World's Best Employers three years in a row,
named one of America's Most Innovative Companies 2023 by Fortune,
and most recently, featured on the inaugural TIME World's Best
Companies list.
Forward-Looking Statements
This press release contains "forward-looking statements,"
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: "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", and include statements that refer to expectations or other
characterizations of future events, circumstances or results.
Examples of forward-looking statements include the information
appearing under 2023 Financial Estimates.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Anywhere Real Estate
Inc. to be materially different from any future results,
performance or achievements expressed or implied by such
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, factors
that impact homesale transaction volume, such as: continued or
accelerated declines or the absence of significant increases in the
number of home sales, stagnant or declining home prices, continued
or accelerated increases in mortgage rates or a prolonged high
interest rate environment, continued or accelerated declines in
housing affordability, consumer demand or inventory, or excessive
inventory; 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, contraction or
stagnation in the U.S. economy, geopolitical and economic
instability, including as related to the conflicts in Ukraine and the Middle East, continued or accelerated
increases in inflation and fiscal and monetary policies of the
federal government; failure to obtain preliminary or final court
approval of the settlement related to our seller antitrust class
action litigation and other adverse developments or outcomes in
current or future litigation, in particular the incurrence of
liabilities that are in excess of amounts accrued or payments that
may be made in connection with pending antitrust litigation and
litigation related to the Telephone Consumer Protection Act (TCPA);
industry structure changes that disrupt the functioning of the
residential real estate market, including the manner in which any
broker commissions are paid; the impact of evolving competitive and
consumer dynamics, including that the Company's share of the
commission income generated by homesale transactions may continue
to shift to affiliated independent sales agents or otherwise erode
due to market factors, our ability to compete against traditional
and non-traditional competitors and meaningful decreases in the
average broker commission rate; our ability to execute our business
strategy and achieve growth, including with respect to the
recruitment and retention of productive independent sales agents,
attraction and retention of franchisees, development or procurement
of products, services and technology that support our strategic
initiatives and simplification and modernization of our business
and achievement or maintenance of a beneficial cost structure; our
ability to safely adopt and integrate Artificial Intelligence (AI)
and other machine learning technology into our products and
services; risks related to our substantial indebtedness and our
ability, and any actions we may take, to refinance, restructure or
repay our indebtedness; our ability to realize the expected
benefits from our existing or future joint ventures or strategic
partnerships; risks related to our business structure, including
our geographic and high-end market concentration, the operating
results of our affiliated franchisees, and risks related to a loss
of our largest real estate benefit program; disruption in the
residential real estate brokerage industry related to listing
aggregator market power and concentration; our failure or
alleged failure to comply with laws, regulations and
regulatory interpretations and any changes or stricter
interpretations of any of the foregoing, including but not limited
to (1) antitrust laws and regulations, (2) the Real Estate
Settlement Procedures Act or other federal or state consumer
protection or similar laws, (3) state or federal employment laws or
regulations that would require reclassification of independent
contractor sales agents to employee status, (4) the TCPA, and (5)
privacy or data security laws and regulations; cybersecurity
incidents; impairment of our goodwill and other long-lived assets;
the accuracy of market forecasts and estimates; and significant
fluctuation in the price of our common stock.
Consideration should be given to the areas of risk described
above, as well as those risks set forth under the headings
"Forward-Looking Statements," "Summary of Risk Factors," "Risk
Factors" and "Legal Proceedings" in our filings with the Securities
and Exchange Commission, including our Quarterly Reports on Form
10-Q for the quarters ended March 31,
2023 and June 30, 2023 and our
Annual Report on Form 10-K for the year ended December 31, 2022, 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 8a, 8b 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@anywhere.re
|
Trey.Sarten@anywhere.re
|
|
|
Tim Swanson
|
Gabriella
Chiera
|
(973)
407-2612
|
(973)
407-5236
|
Tim.Swanson@anywhere.re
|
Gabriella.Chiera@anywhere.re
|
Table
1
|
ANYWHERE REAL ESTATE
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except
per share data)
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
|
|
|
|
Gross commission
income
|
$
1,293
|
|
$
1,469
|
|
$
3,559
|
|
$
4,473
|
Service
revenue
|
155
|
|
189
|
|
445
|
|
652
|
Franchise
fees
|
99
|
|
114
|
|
270
|
|
338
|
Other
|
37
|
|
36
|
|
112
|
|
122
|
Net revenues
|
1,584
|
|
1,808
|
|
4,386
|
|
5,585
|
Expenses
|
|
|
|
|
|
|
|
Commission and other
agent-related costs
|
1,037
|
|
1,170
|
|
2,852
|
|
3,560
|
Operating
|
284
|
|
320
|
|
869
|
|
1,082
|
Marketing
|
56
|
|
59
|
|
161
|
|
195
|
General and
administrative
|
104
|
|
92
|
|
331
|
|
297
|
Former parent legacy
cost, net
|
—
|
|
1
|
|
17
|
|
1
|
Restructuring costs,
net
|
9
|
|
16
|
|
40
|
|
23
|
Impairments
|
3
|
|
3
|
|
11
|
|
3
|
Depreciation and
amortization
|
50
|
|
53
|
|
149
|
|
159
|
Interest expense,
net
|
37
|
|
30
|
|
114
|
|
76
|
(Gain) loss on the
early extinguishment of debt
|
(169)
|
|
—
|
|
(169)
|
|
92
|
Other expense
(income), net
|
3
|
|
(2)
|
|
1
|
|
(140)
|
Total
expenses
|
1,414
|
|
1,742
|
|
4,376
|
|
5,348
|
Income before income
taxes, equity in (earnings) losses and noncontrolling
interests
|
170
|
|
66
|
|
10
|
|
237
|
Income tax
expense
|
45
|
|
8
|
|
7
|
|
52
|
Equity in (earnings)
losses of unconsolidated entities
|
(4)
|
|
2
|
|
(7)
|
|
16
|
Net
income
|
129
|
|
56
|
|
10
|
|
169
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
(1)
|
|
—
|
|
(3)
|
Net income
attributable to Anywhere
|
$
129
|
|
$
55
|
|
$
10
|
|
$
166
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Anywhere shareholders:
|
Basic earnings per
share
|
$
1.17
|
|
$
0.49
|
|
$
0.09
|
|
$
1.44
|
Diluted earnings per
share
|
$
1.15
|
|
$
0.48
|
|
$
0.09
|
|
$
1.42
|
Weighted average
common and common equivalent shares of Anywhere
outstanding:
|
Basic
|
110.5
|
|
112.2
|
|
110.2
|
|
115.3
|
Diluted
|
112.1
|
|
113.5
|
|
111.6
|
|
117.0
|
Table
1a
|
ANYWHERE REAL ESTATE
INC.
NON-GAAP
RECONCILIATION
ADJUSTED NET INCOME
(LOSS)
(In millions, except
per share data)
|
|
Set
forth in the table below is a reconciliation of Net income
attributable to Anywhere to Adjusted net income (loss) as
defined in Table 9 for the three and nine months ended
September 30, 2023 and 2022:
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
attributable to Anywhere
|
$
129
|
|
$
55
|
|
$
10
|
|
$
166
|
Addback:
|
|
|
|
|
|
|
|
Mark-to-market
interest rate swap gains
|
—
|
|
(5)
|
|
—
|
|
(40)
|
Former parent legacy
cost, net (a)
|
—
|
|
1
|
|
17
|
|
1
|
Restructuring costs,
net
|
9
|
|
16
|
|
40
|
|
23
|
Impairments
|
3
|
|
3
|
|
11
|
|
3
|
(Gain) loss on the
early extinguishment of debt (b)
|
(169)
|
|
—
|
|
(169)
|
|
92
|
Loss (gain) on the
sale of businesses, investments or other assets, net
|
3
|
|
—
|
|
2
|
|
(135)
|
Adjustments for tax
effect (c)
|
42
|
|
(4)
|
|
27
|
|
15
|
Adjusted net income
(loss) attributable to Anywhere
|
$
17
|
|
$
66
|
|
$
(62)
|
|
$
125
|
_______________
|
(a)
|
Former parent legacy
cost for the nine months ended September 30, 2023 relates to recent
developments in a legacy tax matter in the first quarter of
2023.
|
(b)
|
Gain on the early
extinguishment of debt for the three and nine months ended
September 30, 2023 relates to the debt exchange transactions
and open market repurchases.
|
(c)
|
Reflects tax effect of
adjustments at the Company's blended state and federal statutory
rate.
|
Table
2
|
ANYWHERE REAL ESTATE
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In millions, except
share data)
(Unaudited)
|
|
|
September
30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
151
|
|
$
214
|
Restricted
cash
|
7
|
|
4
|
Trade receivables (net
of allowance for doubtful accounts of $15 and $12)
|
135
|
|
201
|
Relocation
receivables
|
204
|
|
210
|
Other current
assets
|
198
|
|
205
|
Total current
assets
|
695
|
|
834
|
Property and equipment,
net
|
284
|
|
317
|
Operating lease assets,
net
|
391
|
|
422
|
Goodwill
|
2,524
|
|
2,523
|
Trademarks
|
611
|
|
611
|
Franchise agreements,
net
|
904
|
|
954
|
Other intangibles,
net
|
134
|
|
150
|
Other non-current
assets
|
516
|
|
572
|
Total
assets
|
$
6,059
|
|
$
6,383
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
104
|
|
$
184
|
Securitization
obligations
|
170
|
|
163
|
Current portion of
long-term debt
|
321
|
|
366
|
Current portion of
operating lease liabilities
|
116
|
|
122
|
Accrued expenses and
other current liabilities
|
579
|
|
470
|
Total current
liabilities
|
1,290
|
|
1,305
|
Long-term
debt
|
2,239
|
|
2,483
|
Long-term operating
lease liabilities
|
345
|
|
371
|
Deferred income
taxes
|
211
|
|
239
|
Other non-current
liabilities
|
189
|
|
218
|
Total
liabilities
|
4,274
|
|
4,616
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Anywhere preferred
stock: $0.01 par value; 50,000,000 shares authorized, none issued
and
outstanding at September 30, 2023 and
December 31, 2022
|
—
|
|
—
|
Anywhere common stock:
$0.01 par value; 400,000,000 shares authorized, 110,484,931
shares issued and outstanding at
September 30, 2023 and 109,480,357 shares issued and
outstanding at December 31, 2022
|
1
|
|
1
|
Additional paid-in
capital
|
4,813
|
|
4,805
|
Accumulated
deficit
|
(2,984)
|
|
(2,994)
|
Accumulated other
comprehensive loss
|
(47)
|
|
(48)
|
Total stockholders'
equity
|
1,783
|
|
1,764
|
Noncontrolling
interests
|
2
|
|
3
|
Total
equity
|
1,785
|
|
1,767
|
Total liabilities
and equity
|
$
6,059
|
|
$
6,383
|
Table
3
|
ANYWHERE REAL ESTATE
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2023
|
|
2022
|
Operating
Activities
|
|
|
|
|
|
|
Net income
|
|
|
|
$
10
|
|
$
169
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
Depreciation and
amortization
|
|
|
|
149
|
|
159
|
Deferred income
taxes
|
|
|
|
(30)
|
|
6
|
Impairments
|
|
|
|
11
|
|
3
|
Amortization of
deferred financing costs and debt premium
|
|
|
|
6
|
|
7
|
(Gain) loss on the
early extinguishment of debt
|
|
|
|
(169)
|
|
92
|
Loss (gain) on the
sale of businesses, investments or other assets, net
|
|
|
|
2
|
|
(135)
|
Equity in (earnings)
losses of unconsolidated entities
|
|
|
|
(7)
|
|
16
|
Stock-based
compensation
|
|
|
|
12
|
|
20
|
Mark-to-market
adjustments on derivatives
|
|
|
|
—
|
|
(40)
|
Other adjustments to
net income
|
|
|
|
(3)
|
|
(3)
|
Net change in assets
and liabilities, excluding the impact of acquisitions and
dispositions:
|
Trade
receivables
|
|
|
|
65
|
|
(44)
|
Relocation
receivables
|
|
|
|
6
|
|
(112)
|
Other
assets
|
|
|
|
71
|
|
(50)
|
Accounts payable,
accrued expenses and other liabilities
|
|
|
|
12
|
|
(139)
|
Dividends received from
unconsolidated entities
|
|
|
|
3
|
|
2
|
Other, net
|
|
|
|
(13)
|
|
(22)
|
Net cash provided by
(used in) operating activities
|
|
|
|
125
|
|
(71)
|
Investing
Activities
|
|
|
|
|
|
|
Property and equipment
additions
|
|
|
|
(52)
|
|
(83)
|
Payments for
acquisitions, net of cash acquired
|
|
|
|
(1)
|
|
(17)
|
Net proceeds from the
sale of businesses
|
|
|
|
8
|
|
63
|
Investment in
unconsolidated entities
|
|
|
|
(1)
|
|
(18)
|
Proceeds from the sale
of investments in unconsolidated entities
|
|
|
|
6
|
|
13
|
Other, net
|
|
|
|
1
|
|
17
|
Net cash used in
investing activities
|
|
|
|
(39)
|
|
(25)
|
Financing
Activities
|
|
|
|
|
|
|
Net change in revolving
credit facilities
|
|
|
|
(50)
|
|
—
|
Proceeds from issuance
of Senior Secured Second Lien Notes
|
|
|
|
640
|
|
—
|
Proceeds from issuance
of Senior Notes
|
|
|
|
—
|
|
1,000
|
Redemption of Senior
Secured Second Lien Notes
|
|
|
|
—
|
|
(550)
|
Redemption and
repurchases of Senior Notes
|
|
|
|
(688)
|
|
(617)
|
Amortization payments
on term loan facilities
|
|
|
|
(11)
|
|
(7)
|
Net change in
securitization obligations
|
|
|
|
7
|
|
51
|
Debt issuance
costs
|
|
|
|
(13)
|
|
(22)
|
Cash paid for fees
associated with early extinguishment of debt
|
|
|
|
(2)
|
|
(80)
|
Repurchase of common
stock
|
|
|
|
—
|
|
(97)
|
Taxes paid related to
net share settlement for stock-based compensation
|
|
|
|
(4)
|
|
(16)
|
Other, net
|
|
|
|
(25)
|
|
(29)
|
Net cash used in
financing activities
|
|
|
|
(146)
|
|
(367)
|
Effect of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
|
|
|
—
|
|
(3)
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
|
|
(60)
|
|
(466)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
|
218
|
|
743
|
Cash, cash
equivalents and restricted cash, end of period
|
|
|
|
$
158
|
|
$
277
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
|
Interest payments
(including securitization interest of $10 and $4
respectively)
|
|
|
|
$
135
|
|
$
123
|
Income tax payments,
net
|
|
|
|
4
|
|
61
|
Table
4a
|
ANYWHERE REAL ESTATE
INC.
2023 vs. 2022 KEY
DRIVERS
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Anywhere Brands -
Franchise Group (a)
|
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
200,619
|
|
243,494
|
|
(18) %
|
|
555,038
|
|
724,858
|
|
(23) %
|
Average homesale
price
|
$
470,818
|
|
$
449,313
|
|
5 %
|
|
$
462,826
|
|
$
458,767
|
|
1 %
|
Average homesale broker
commission rate
|
2.45 %
|
|
2.43 %
|
|
2 bps
|
|
2.45 %
|
|
2.43 %
|
|
2 bps
|
Net royalty per
side
|
$ 442
|
|
$ 422
|
|
5 %
|
|
$ 432
|
|
$ 429
|
|
1 %
|
Anywhere Advisors -
Owned Brokerage Group
|
|
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
71,794
|
|
86,022
|
|
(17) %
|
|
201,097
|
|
253,422
|
|
(21) %
|
Average homesale
price
|
$
712,232
|
|
$
681,387
|
|
5 %
|
|
$
698,195
|
|
$
708,719
|
|
(1) %
|
Average homesale broker
commission rate
|
2.41 %
|
|
2.40 %
|
|
1 bps
|
|
2.42 %
|
|
2.40 %
|
|
2 bps
|
Gross commission income
per side
|
$
18,013
|
|
$
17,070
|
|
6 %
|
|
$
17,699
|
|
$
17,649
|
|
— %
|
Anywhere Integrated
Services - Title Group
|
|
|
|
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
28,453
|
|
35,045
|
|
(19) %
|
|
80,338
|
|
107,395
|
|
(25) %
|
Refinance title and
closing units
|
2,304
|
|
3,339
|
|
(31) %
|
|
6,810
|
|
16,119
|
|
(58) %
|
Average fee per closing
unit
|
$
3,187
|
|
$
3,127
|
|
2 %
|
|
$
3,176
|
|
$
3,149
|
|
1 %
|
_______________
|
(a)
Includes all franchisees except for Owned Brokerage
Group.
|
Table
4b
|
ANYWHERE REAL ESTATE
INC.
2022 KEY
DRIVERS
|
|
|
Quarter
Ended
|
Year
Ended
|
|
March 31,
2022
|
|
June 30,
2022
|
|
September
30,
2022
|
|
December 31,
2022
|
|
December 31,
2022
|
Anywhere Brands -
Franchise Group (a)
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
217,764
|
|
263,600
|
|
243,494
|
|
186,219
|
|
911,077
|
Average homesale
price
|
$ 449,250
|
|
$ 475,361
|
|
$ 449,313
|
|
$ 439,671
|
|
$ 454,864
|
Average homesale broker
commission rate
|
2.43 %
|
|
2.43 %
|
|
2.43 %
|
|
2.44 %
|
|
2.43 %
|
Net royalty per
side
|
$
413
|
|
$
450
|
|
$
422
|
|
$
406
|
|
$
425
|
Anywhere Advisors -
Owned Brokerage Group
|
|
|
|
|
|
|
|
|
|
Closed homesale
sides
|
71,371
|
|
96,029
|
|
86,022
|
|
64,178
|
|
317,600
|
Average homesale
price
|
$ 706,282
|
|
$ 735,013
|
|
$ 681,387
|
|
$ 660,702
|
|
$ 699,016
|
Average homesale broker
commission rate
|
2.39 %
|
|
2.41 %
|
|
2.40 %
|
|
2.40 %
|
|
2.40 %
|
Gross commission income
per side
|
$
17,475
|
|
$
18,297
|
|
$
17,070
|
|
$
16,592
|
|
$
17,435
|
Anywhere Integrated
Services - Title Group
|
|
|
|
|
|
|
|
|
|
Purchase title and
closing units
|
30,867
|
|
41,483
|
|
35,045
|
|
25,660
|
|
133,055
|
Refinance title and
closing units
|
8,068
|
|
4,712
|
|
3,339
|
|
2,351
|
|
18,470
|
Average fee per closing
unit
|
$ 3,033
|
|
$ 3,264
|
|
$ 3,127
|
|
$ 3,137
|
|
$ 3,146
|
_______________
|
(a)
Includes all franchisees except for Owned Brokerage
Group.
|
Table
5a
|
ANYWHERE REAL ESTATE
INC.
NON-GAAP
RECONCILIATION - OPERATING EBITDA
THREE MONTHS ENDED
SEPTEMBER 30, 2023 AND 2022
(In
millions)
|
|
Set
forth in the table below is a reconciliation of Net income
attributable to Anywhere to Operating EBITDA as defined in
Table 9 for the three-month periods ended September 30, 2023
and 2022:
|
|
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
Net income attributable
to Anywhere
|
$
129
|
|
$
55
|
Income tax
expense
|
45
|
|
8
|
Income before income
taxes
|
174
|
|
63
|
Add: Depreciation
and amortization
|
50
|
|
53
|
Interest expense,
net
|
37
|
|
30
|
Restructuring costs,
net (a)
|
9
|
|
16
|
Impairments
(b)
|
3
|
|
3
|
Former parent legacy
cost, net (c)
|
—
|
|
1
|
Gain on the early
extinguishment of debt (c)
|
(169)
|
|
—
|
Loss on the sale of
businesses, investments or other assets, net
|
3
|
|
—
|
Operating
EBITDA
|
$
107
|
|
$
166
|
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
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
Franchise
Group
|
$ 271
|
|
$ 306
|
|
$
(35)
|
|
(11) %
|
|
$ 155
|
|
$ 202
|
|
$
(47)
|
|
(23) %
|
|
57 %
|
|
66 %
|
|
(9)
|
Owned Brokerage
Group
|
1,309
|
|
1,486
|
|
(177)
|
|
(12)
|
|
(8)
|
|
(1)
|
|
(7)
|
|
(700)
|
|
(1)
|
|
—
|
|
(1)
|
Title Group
|
93
|
|
113
|
|
(20)
|
|
(18)
|
|
2
|
|
9
|
|
(7)
|
|
(78)
|
|
2
|
|
8
|
|
(6)
|
Corporate and
Other
|
(89)
|
|
(97)
|
|
8
|
|
(d)
|
|
(42)
|
|
(44)
|
|
2
|
|
5
|
|
|
|
|
|
|
Total
Company
|
$
1,584
|
|
$
1,808
|
|
$ (224)
|
|
(12) %
|
|
$ 107
|
|
$ 166
|
|
$
(59)
|
|
(36) %
|
|
7 %
|
|
9 %
|
|
(2)
|
_______________
|
(a)
|
Restructuring charges
incurred for the three months ended September 30, 2023 include $2
million at Franchise Group, $5 million at Owned Brokerage Group, $1
million at Title Group and $1 million at Corporate and Other.
Restructuring charges incurred for the three months ended September
30, 2022 include $2 million at Franchise Group, $8 million at Owned
Brokerage Group and $6 million at Corporate and Other.
|
(b)
|
Impairments primarily
relate to non-cash lease asset and software impairments.
|
(c)
|
Former parent legacy
items and Gain on the early extinguishment of debt are recorded in
Corporate and Other. Gain on the early extinguishment of debt
relates to the debt exchange transactions and open market
repurchases that occurred during the third quarter of
2023.
|
(d)
|
Revenues include the
elimination of transactions between segments, which consists of
intercompany royalties and marketing fees paid by Owned Brokerage
Group of $89 million and $97 million during the three months ended
September 30, 2023 and 2022, respectively, and are eliminated
through the Corporate and Other line.
|
Table
5b
|
ANYWHERE REAL ESTATE
INC.
NON-GAAP
RECONCILIATION - OPERATING EBITDA
NINE MONTHS ENDED
SEPTEMBER 30, 2023 AND 2022
(In
millions)
|
|
Set
forth in the table below is a reconciliation of Net income
attributable to Anywhere to Operating EBITDA as defined in
Table 9 for the nine-month periods ended September 30, 2023
and 2022:
|
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
Net income attributable
to Anywhere
|
$
10
|
|
$
166
|
Income tax
expense
|
7
|
|
52
|
Income before income
taxes
|
17
|
|
218
|
Add: Depreciation
and amortization
|
149
|
|
159
|
Interest expense,
net
|
114
|
|
76
|
Restructuring costs,
net (a)
|
40
|
|
23
|
Impairments
(b)
|
11
|
|
3
|
Former parent legacy
cost, net (c)
|
17
|
|
1
|
(Gain) loss on the
early extinguishment of debt (c)
|
(169)
|
|
92
|
Loss (gain) on the
sale of businesses, investments or other assets, net (d)
|
2
|
|
(135)
|
Operating
EBITDA
|
$
181
|
|
$
437
|
The
following table reflects Revenue, Operating EBITDA and Operating
EBITDA margin by reportable segments:
|
|
|
Revenues
(e)
|
|
$
Change
|
|
%
Change
|
|
Operating
EBITDA
|
|
$
Change
|
|
%
Change
|
|
Operating EBITDA
Margin
|
|
Change
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
Franchise
Group
|
$ 762
|
|
$ 912
|
|
$
(150)
|
|
(16) %
|
|
$ 416
|
|
$ 544
|
|
$ (128)
|
|
(24) %
|
|
55 %
|
|
60 %
|
|
(5)
|
Owned Brokerage
Group
|
3,604
|
|
4,525
|
|
(921)
|
|
(20)
|
|
(93)
|
|
(30)
|
|
(63)
|
|
(210)
|
|
(3)
|
|
(1)
|
|
(2)
|
Title Group
(f)
|
265
|
|
447
|
|
(182)
|
|
(41)
|
|
(5)
|
|
27
|
|
(32)
|
|
(119)
|
|
(2)
|
|
6
|
|
(8)
|
Corporate and
Other
|
(245)
|
|
(299)
|
|
54
|
|
(e)
|
|
(137)
|
|
(104)
|
|
(33)
|
|
(32)
|
|
|
|
|
|
|
Total
Company
|
$
4,386
|
|
$
5,585
|
|
$
(1,199)
|
|
(21) %
|
|
$ 181
|
|
$ 437
|
|
$ (256)
|
|
(59) %
|
|
4 %
|
|
8 %
|
|
(4)
|
_______________
|
(a)
|
Restructuring charges
incurred for the nine months ended September 30, 2023 include $8
million at Franchise Group, $23 million at Owned Brokerage Group,
$2 million at Title Group and $7 million at Corporate and Other.
Restructuring charges incurred for the nine months ended September
30, 2022 include $4 million at Franchise Group, $11 million at
Owned Brokerage Group and $8 million at Corporate and
Other.
|
(b)
|
Impairments primarily
relate to non-cash lease asset and software impairments.
|
(c)
|
Former parent legacy
items and (Gain) loss on the early extinguishment of debt are
recorded in Corporate and Other. Former parent legacy cost in 2023
relates to recent developments in a legacy tax matter in the first
quarter of 2023. Gain on the early extinguishment of debt in 2023
relates to the debt exchange transactions and open market
repurchases that occurred during the third quarter of 2023. Loss on
the early extinguishment of debt in 2022 relates to the refinancing
transactions that occurred during the first quarter of
2022.
|
(d)
|
Loss (gain) on the sale
of businesses, investments or other assets, net in 2022 is recorded
in Title Group and is related to the sale of the Title Underwriter
and subsequent sales of a portion of the Company's ownership in the
Title Insurance Underwriter Joint Venture.
|
(e)
|
Revenues include the
elimination of transactions between segments, which consists of
intercompany royalties and marketing fees paid by Owned Brokerage
Group of $245 million and $299 million during the nine months ended
September 30, 2023 and 2022, respectively, and are eliminated
through the Corporate and Other line.
|
(f)
|
Title
Group includes our title, escrow and settlement services
(title agency) businesses, our minority-owned mortgage origination
joint venture and our minority-owned Title Insurance Underwriter
Joint Venture. The sale of the Title Underwriter late in the
first quarter of 2022 resulted in declines of $80 million in
underwriter revenue and $6 million in Operating EBITDA during the
nine months ended September 30, 2023 compared to the same
period in 2022, with $4 million of equity in earnings attributable
to the Title Insurance Underwriter Joint Venture partially
offsetting the decline in earnings. The Operating EBITDA
contribution from the mortgage origination joint venture improved
$13 million from losses of $12 million for the nine months ended
September 30, 2022 to earnings of $1 million for the nine
months ended September 30, 2023.
|
Table
6a
|
ANYWHERE REAL ESTATE
INC.
SELECTED 2023
FINANCIAL DATA
(In
millions)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
2023
|
|
2023
|
|
2023
|
Net revenues
(a)
|
|
|
|
|
|
Franchise
Group
|
$
207
|
|
$
284
|
|
$
271
|
Owned Brokerage
Group
|
915
|
|
1,380
|
|
1,309
|
Title Group
|
72
|
|
100
|
|
93
|
Corporate and
Other
|
(63)
|
|
(93)
|
|
(89)
|
Total
Company
|
$
1,131
|
|
$
1,671
|
|
$
1,584
|
|
|
|
|
|
|
Operating
EBITDA
|
|
|
|
|
|
Franchise
Group
|
$
97
|
|
$
164
|
|
$
155
|
Owned Brokerage
Group
|
(75)
|
|
(10)
|
|
(8)
|
Title Group
|
(17)
|
|
10
|
|
2
|
Corporate and
Other
|
(57)
|
|
(38)
|
|
(42)
|
Total
Company
|
$
(52)
|
|
$
126
|
|
$
107
|
|
|
|
|
|
|
Non-GAAP
Reconciliation - Operating EBITDA
|
|
|
|
|
|
Total Company Operating
EBITDA
|
$
(52)
|
|
$
126
|
|
$
107
|
|
|
|
|
|
|
Less:
Depreciation and amortization
|
50
|
|
49
|
|
50
|
Interest expense,
net
|
38
|
|
39
|
|
37
|
Income tax (benefit)
expense
|
(46)
|
|
8
|
|
45
|
Restructuring costs,
net (b)
|
25
|
|
6
|
|
9
|
Impairments
(c)
|
4
|
|
4
|
|
3
|
Former parent legacy
cost, net (d)
|
16
|
|
1
|
|
—
|
Gain on the early
extinguishment of debt (d)
|
—
|
|
—
|
|
(169)
|
(Gain) loss on the
sale of businesses, investments or other assets, net
|
(1)
|
|
—
|
|
3
|
Net (loss) income
attributable to Anywhere
|
$
(138)
|
|
$
19
|
|
$
129
|
_______________
|
(a)
|
Transactions between
segments are eliminated in consolidation. Revenues for Franchise
Group include intercompany royalties and marketing fees paid by
Owned Brokerage Group of $63 million, $93 million and $89 million
for the three months ended March 31, 2023, June 30, 2023 and
September 30, 2023. Such amounts are eliminated through the
Corporate and Other line.
|
(b)
|
Includes restructuring
charges broken down by business unit as follows:
|
|
Three Months
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
2023
|
|
2023
|
|
2023
|
Franchise
Group
|
$
6
|
|
$
—
|
|
$
2
|
Owned Brokerage
Group
|
14
|
|
4
|
|
5
|
Title Group
|
—
|
|
1
|
|
1
|
Corporate and
Other
|
5
|
|
1
|
|
1
|
Total
Company
|
$
25
|
|
$
6
|
|
$
9
|
|
(c)
|
Impairments primarily
relate to non-cash lease asset impairments.
|
(d)
|
Former parent legacy
cost and Gain on the early extinguishment of debt are recorded in
Corporate and Other. Former parent legacy cost relates to recent
developments in a legacy tax matter in the first quarter of 2023.
Gain on the early extinguishment of debt relates to the debt
exchange transactions and open market repurchases that occurred
during the third quarter of 2023.
|
Table
6b
|
ANYWHERE REAL ESTATE
INC.
SELECTED 2022
FINANCIAL DATA
(In
millions)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
Net revenues
(a)
|
|
|
|
|
|
|
|
|
|
Franchise
Group
|
$
267
|
|
$
339
|
|
$
306
|
|
$
233
|
|
$
1,145
|
Owned Brokerage
Group
|
1,264
|
|
1,775
|
|
1,486
|
|
1,081
|
|
5,606
|
Title Group
|
190
|
|
144
|
|
113
|
|
83
|
|
530
|
Corporate and
Other
|
(86)
|
|
(116)
|
|
(97)
|
|
(74)
|
|
(373)
|
Total
Company
|
$
1,635
|
|
$
2,142
|
|
$
1,808
|
|
$
1,323
|
|
$
6,908
|
|
|
|
|
|
|
|
|
|
|
Operating
EBITDA
|
|
|
|
|
|
|
|
|
|
Franchise
Group
|
$
138
|
|
$
204
|
|
$
202
|
|
$
126
|
|
$
670
|
Owned Brokerage
Group
|
(40)
|
|
11
|
|
(1)
|
|
(56)
|
|
(86)
|
Title Group
|
(3)
|
|
21
|
|
9
|
|
(18)
|
|
9
|
Corporate and
Other
|
(26)
|
|
(34)
|
|
(44)
|
|
(40)
|
|
(144)
|
Total
Company
|
$
69
|
|
$
202
|
|
$
166
|
|
$
12
|
|
$
449
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation - Operating EBITDA
|
|
|
|
|
|
|
|
|
|
Total Company Operating
EBITDA
|
$
69
|
|
$
202
|
|
$
166
|
|
$
12
|
|
$
449
|
|
|
|
|
|
|
|
|
|
|
Less:
Depreciation and amortization
|
51
|
|
55
|
|
53
|
|
55
|
|
214
|
Interest expense,
net
|
18
|
|
28
|
|
30
|
|
37
|
|
113
|
Income tax expense
(benefit)
|
12
|
|
32
|
|
8
|
|
(120)
|
|
(68)
|
Restructuring costs,
net (b)
|
4
|
|
3
|
|
16
|
|
9
|
|
32
|
Impairments
(c)
|
—
|
|
—
|
|
3
|
|
480
|
|
483
|
Former parent legacy
cost, net (d)
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
Loss on the early
extinguishment of debt (d)
|
92
|
|
—
|
|
—
|
|
4
|
|
96
|
Gain on the sale of
businesses, investments or other assets, net (e)
|
(131)
|
|
(4)
|
|
—
|
|
—
|
|
(135)
|
Net income (loss)
attributable to Anywhere
|
$
23
|
|
$
88
|
|
$
55
|
|
$
(453)
|
|
$
(287)
|
_______________
|
(a)
|
Transactions between
segments are eliminated in consolidation. Revenues for Franchise
Group include intercompany royalties and marketing fees paid by
Owned Brokerage Group of $86 million, $116 million, $97 million and
$74 million for the three months ended March 31, 2022, June 30,
2022, September 30, 2022 and December 31, 2022, respectively. Such
amounts are eliminated through the Corporate and Other
line.
|
(b)
|
Includes restructuring
charges (reversals) broken down by business unit as
follows:
|
|
Three Months
Ended
|
|
Year
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
Franchise
Group
|
$
1
|
|
$
1
|
|
$
2
|
|
$
(3)
|
|
$
1
|
Owned Brokerage
Group
|
2
|
|
1
|
|
8
|
|
8
|
|
19
|
Corporate and
Other
|
1
|
|
1
|
|
6
|
|
4
|
|
12
|
Total
Company
|
$
4
|
|
$
3
|
|
$
16
|
|
$
9
|
|
$
32
|
|
(c)
|
Non-cash impairments
for the three months ended September 30, 2022 primarily relate to
lease asset and software impairments. Non-cash impairments for the
three months ended December 31, 2022 include an impairment of
goodwill at the Owned Brokerage Group reporting unit of $280
million, an impairment of goodwill at the Franchise Group segment
of $114 million related to the Cartus/Leads Group reporting unit,
an impairment of franchise trademarks of $76 million and $10
million of other impairment charges related to lease asset,
investment and software impairments.
|
(d)
|
Former parent legacy
items and Loss on the early extinguishment of debt are recorded in
Corporate and Other.
|
(e)
|
Gain on the sale of
businesses, investments or other assets, net is recorded in Title
Group related to the sale of the Title Underwriter during the first
quarter of 2022 and the sale of a portion of the Company's
ownership in the Title Insurance Underwriter Joint Venture during
the second quarter of 2022.
|
Table
6c
|
ANYWHERE REAL ESTATE
INC.
2022 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,
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
Revenues
|
|
|
|
|
|
|
|
|
|
Gross commission
income
|
$
1,247
|
|
$ 1,757
|
|
$
1,469
|
|
$
1,065
|
|
$
5,538
|
Service
revenue
|
246
|
|
217
|
|
189
|
|
141
|
|
793
|
Franchise
fees
|
99
|
|
125
|
|
114
|
|
79
|
|
417
|
Other
|
43
|
|
43
|
|
36
|
|
38
|
|
160
|
Net revenues
|
1,635
|
|
2,142
|
|
1,808
|
|
1,323
|
|
6,908
|
Expenses
|
|
|
|
|
|
|
|
|
|
Commission and other
agent-related costs
|
988
|
|
1,402
|
|
1,170
|
|
855
|
|
4,415
|
Operating
|
406
|
|
356
|
|
320
|
|
295
|
|
1,377
|
Marketing
|
64
|
|
72
|
|
59
|
|
57
|
|
252
|
General and
administrative
|
98
|
|
107
|
|
92
|
|
91
|
|
388
|
Former parent legacy
cost, net
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
Restructuring costs,
net
|
4
|
|
3
|
|
16
|
|
9
|
|
32
|
Impairments
|
—
|
|
—
|
|
3
|
|
480
|
|
483
|
Depreciation and
amortization
|
51
|
|
55
|
|
53
|
|
55
|
|
214
|
Interest expense,
net
|
18
|
|
28
|
|
30
|
|
37
|
|
113
|
Loss on the early
extinguishment of debt
|
92
|
|
—
|
|
—
|
|
4
|
|
96
|
Other income,
net
|
(131)
|
|
(7)
|
|
(2)
|
|
—
|
|
(140)
|
Total
expenses
|
1,590
|
|
2,016
|
|
1,742
|
|
1,883
|
|
7,231
|
Income (loss) before
income taxes, equity in losses and noncontrolling
interests
|
45
|
|
126
|
|
66
|
|
(560)
|
|
(323)
|
Income tax expense
(benefit)
|
12
|
|
32
|
|
8
|
|
(120)
|
|
(68)
|
Equity in losses of
unconsolidated entities
|
10
|
|
4
|
|
2
|
|
12
|
|
28
|
Net income
(loss)
|
23
|
|
90
|
|
56
|
|
(452)
|
|
(283)
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
(2)
|
|
(1)
|
|
(1)
|
|
(4)
|
Net income (loss)
attributable to Anywhere
|
$
23
|
|
$ 88
|
|
$
55
|
|
$
(453)
|
|
$
(287)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Anywhere shareholders:
|
|
|
Basic earnings (loss)
per share
|
$ 0.20
|
|
$
0.76
|
|
$
0.49
|
|
$
(4.14)
|
|
$
(2.52)
|
Diluted earnings
(loss) per share
|
$ 0.19
|
|
$
0.75
|
|
$
0.48
|
|
$
(4.14)
|
|
$
(2.52)
|
Weighted average
common and common equivalent shares of Anywhere
outstanding:
|
|
|
Basic
|
117.1
|
|
116.5
|
|
112.2
|
|
109.5
|
|
113.8
|
Diluted
|
120.4
|
|
117.8
|
|
113.5
|
|
109.5
|
|
113.8
|
Table
7
|
ANYWHERE REAL ESTATE
INC.
NON-GAAP
RECONCILIATION - FREE CASH FLOW
THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(In
millions)
|
|
A
reconciliation of net income attributable to Anywhere to Free Cash
Flow as defined in Table 9 is set forth in the
following table:
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
attributable to Anywhere
|
$
129
|
|
$
55
|
|
$
10
|
|
$
166
|
Income tax
expense
|
45
|
|
8
|
|
7
|
|
52
|
Income tax
payments
|
(1)
|
|
(17)
|
|
(4)
|
|
(61)
|
Interest expense,
net
|
37
|
|
30
|
|
114
|
|
76
|
Cash interest
payments
|
(53)
|
|
(33)
|
|
(135)
|
|
(123)
|
Depreciation and
amortization
|
50
|
|
53
|
|
149
|
|
159
|
Capital
expenditures
|
(18)
|
|
(27)
|
|
(52)
|
|
(83)
|
Restructuring costs and
former parent legacy items, net of payments
|
1
|
|
12
|
|
25
|
|
11
|
Impairments
|
3
|
|
3
|
|
11
|
|
3
|
(Gain) loss on the
early extinguishment of debt
|
(169)
|
|
—
|
|
(169)
|
|
92
|
Loss (gain) on the sale
of businesses, investments or other assets, net
|
3
|
|
—
|
|
2
|
|
(135)
|
Working capital
adjustments
|
47
|
|
(2)
|
|
109
|
|
(202)
|
Relocation receivables
(assets), net of securitization obligations
|
21
|
|
17
|
|
13
|
|
(61)
|
Free Cash
Flow
|
$
95
|
|
$
99
|
|
$
80
|
|
$
(106)
|
A
reconciliation of net cash provided by (used in) operating
activities to Free Cash Flow is set forth in the following
table:
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
(used in) operating activities
|
$
145
|
|
$
134
|
|
$
125
|
|
$
(71)
|
Property and equipment
additions
|
(18)
|
|
(27)
|
|
(52)
|
|
(83)
|
Net change in
securitization obligations
|
(31)
|
|
(6)
|
|
7
|
|
51
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
(1)
|
|
(2)
|
|
—
|
|
(3)
|
Free Cash
Flow
|
$
95
|
|
$
99
|
|
$
80
|
|
$
(106)
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
(19)
|
|
$
(32)
|
|
$
(39)
|
|
$
(25)
|
Net cash used in
financing activities
|
$
(155)
|
|
$
(85)
|
|
$
(146)
|
|
$
(367)
|
Table
8a
|
NON-GAAP
RECONCILIATION - SENIOR SECURED LEVERAGE RATIO
FOR THE FOUR-QUARTER
PERIOD ENDED SEPTEMBER 30, 2023
(In
millions)
|
|
The
senior secured leverage ratio is tested quarterly pursuant to the
terms of the senior secured credit facilities*. For the
trailing four-quarter period ended September 30, 2023,
Anywhere Real Estate Group LLC ("Anywhere Group") was required
to
maintain a senior secured leverage ratio not to exceed 4.75 to
1.00. The senior secured leverage ratio is measured by dividing
Anywhere Group's total senior secured net debt by the trailing
four-quarter 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 7.00% Senior
Secured Second Lien Notes*, our unsecured indebtedness, including
the Unsecured Notes* and Exchangeable Senior Notes*,
or the securitization obligations. EBITDA calculated on a Pro Forma
Basis, as defined in the Senior Secured Credit Agreement,
includes the bank adjustments set forth below. The Company was
in compliance with the senior secured leverage ratio covenant
at September 30, 2023 with a ratio of 1.30x to
1.00.
A
reconciliation of net loss attributable to Anywhere Group to EBITDA
calculated on a Pro Forma Basis, as those terms are
defined in the Senior Secured Credit Agreement, for the
four-quarter period ended September 30, 2023 is set forth in
the
following table:
|
|
|
Four-Quarter Period
Ended
|
|
September 30,
2023
|
Net loss attributable
to Anywhere Group (a)
|
$
(443)
|
Bank covenant
adjustments:
|
|
Income tax
benefit
|
(113)
|
Depreciation and
amortization
|
204
|
Interest expense,
net
|
151
|
Restructuring costs,
net
|
49
|
Impairments
|
491
|
Former parent legacy
cost, net
|
17
|
Gain on the early
extinguishment of debt
|
(165)
|
Pro forma effect of
business optimization initiatives (b)
|
38
|
Non-cash stock
compensation expense, other non-cash charges and extraordinary,
nonrecurring or unusual charges (c)
|
70
|
Pro forma effect of
acquisitions and new franchisees (d)
|
4
|
Incremental
securitization interest costs (e)
|
12
|
EBITDA as defined
by the Senior Secured Credit Agreement*
|
$
315
|
Total senior secured
net debt (f)
|
$
408
|
Senior secured
leverage ratio*
|
1.30 x
|
_______________
|
(a)
|
Net loss attributable
to Anywhere Group consists of: (i) loss of $453 million for the
fourth quarter of 2022, (ii) loss of $138 million for the first
quarter of 2023, (iii) income of $19 million for the second quarter
of 2023 and (iv) income of $129 million for the third quarter of
2023.
|
(b)
|
Represents the
four-quarter pro forma effect of business optimization initiatives
as if these initiatives had occurred at the beginning of the
trailing twelve-month period.
|
(c)
|
Represents non-cash
long term incentive compensation charges, other non-cash charges
and extraordinary, nonrecurring or unusual litigation
charges.
|
(d)
|
Represents the
estimated impact of acquisitions and franchise sales activity, net
of brokerages that exited our franchise system, as if these changes
had occurred at the beginning of the trailing twelve-month period.
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 the
beginning of the trailing twelve-month period.
|
(e)
|
Incremental borrowing
costs incurred as a result of the securitization facilities
refinancing for the four-quarter period ended September 30,
2023.
|
(f)
|
Represents total
borrowings secured by a first priority lien on our assets of $511
million under the Revolving Credit Facility and Term Loan A
Facility plus $21 million of finance lease obligations less $124
million of readily available cash as of September 30, 2023.
Pursuant to the terms of our senior secured credit facilities,
total senior secured net debt does not include our securitization
obligations, 7.00% Senior Secured Second Lien Notes or unsecured
indebtedness, including the Unsecured Notes and Exchangeable Senior
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 7.00% Senior Secured Second Lien
Notes due in 2030. Our Unsecured Notes include our 5.75% Senior
Notes due 2029 and 5.25% Senior Notes due 2030. Exchangeable Senior
Notes refers to our 0.25% Exchangeable Senior Notes due
2026.
|
Table
8b
|
NET DEBT LEVERAGE
RATIO
FOR THE FOUR-QUARTER
PERIOD ENDED SEPTEMBER 30, 2023
(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 Agreement, for the
four-quarter period ended September 30, 2023 (referred to as
net debt
leverage ratio) is set forth in the following table:
|
|
|
|
As of September 30,
2023
|
Revolving Credit
Facility
|
|
$
300
|
Extended Term Loan
A
|
|
211
|
7.00% Senior Secured
Second Lien Notes
|
|
640
|
5.75% Senior
Notes
|
|
576
|
5.25% Senior
Notes
|
|
457
|
0.25% Exchangeable
Senior Notes
|
|
403
|
Finance lease
obligations
|
|
21
|
Corporate Debt
(excluding securitizations)
|
|
2,608
|
Less: Cash and cash
equivalents
|
|
151
|
Net Corporate Debt
(excluding securitizations)
|
|
$
2,457
|
|
|
|
EBITDA as defined by
the Senior Secured Credit Agreement (a)
|
|
$
315
|
|
|
|
Net Debt Leverage
Ratio
|
|
7.8 x
|
_______________
|
(a)
See Table 8a for a reconciliation of Net loss attributable to
Anywhere Group to EBITDA as defined by the Senior Secured Credit
Agreement.
|
Table
9
Non-GAAP Definitions
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 were subject to significant fluctuations
(remaining interest rate swaps expired in November 2022); (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; (f) the (gain) loss on the sale of businesses,
investments or other assets and (g) the tax effect of the foregoing
adjustments. We present Adjusted net income (loss) because we
believe this measure is useful as a supplemental measure in
evaluating the performance of our operating businesses and provides
greater transparency into our operating results.
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
businesses, 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
businesses, 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
Anywhere before income tax expense (benefit), income tax 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 sale of businesses, investments or other assets,
(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 Anywhere 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 Anywhere Real Estate Inc.