REALOGY Q3 2017 EARNINGS CALL November 3, 2017
Management Presenters Richard A. Smith Chairman and Chief Executive Officer Ryan Schneider President and Chief Operating Officer Executive Vice President, Chief Financial Officer Tony Hull & Treasurer Senior Vice President, Investor Relations and Alicia Swift Financial Planning & Analysis 2
Important Disclosures Forward-Looking Statements This presentation contains forward-looking statements. The Company desires to take advantage of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all forward-looking statements. Therefore, the Company wishes to caution each participant to consider carefully the specific factors discussed with each forward-looking statement in this presentation and other factors contained in the Company’s filings with the Securities and Exchange Commission under the captions “Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as such factors in some cases have affected, and in the future (together with other factors) could affect, the ability of the Company to implement its business strategy and may cause actual results to differ materially from those contemplated by the statements expressed herein. The information contained in this presentation is as of November 3, 2017. The Company assumes no obligation to update the information or the forward-looking statements contained herein, whether as a result of new information or otherwise. RECIPIENTS ARE STRONGLY ADVISED TO READ THE COMPANY’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Non-GAAP Financial Measures Certain financial measures, as used in this presentation, are supplemental measures of the Company’s performance that are not Generally Accepted Accounting Principles (“GAAP”) measures. Refer to slides 19-22 of this presentation and Tables 1a, 4a, 4b, 5, 6 ,7 and 8 of the November 3 press release announcing third quarter 2017 financial results for the definitions of these non-GAAP financial measures, a reconciliation of these measures to their most comparable GAAP measures, and the Company’s explanation of why it believes these non-GAAP measures are useful to investors. Because of the forward-looking nature of the Company’s forecasted non-GAAP financial measures, specific quantifications of the amounts that would be required to reconcile forecasted Operating EBITDA to forecasted net income and forecasted Free Cash Flow to forecasted net income are not readily determinable. The Company believes that there is a degree of volatility with respect to certain of the Company’s GAAP measures which preclude the Company from providing accurate forecasted GAAP to non-GAAP reconciliations. Based on the above, the Company believes that providing estimates of the amounts that would be required to reconcile the range of the non-GAAP measures to forecasted GAAP measures would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above. 3
Operational and Financial Highlights Financial Results • Revenue of $1.7 billion driven by combined Q3 homesales transaction volume growth of 4% • Operating EBITDA of $258 million NRT • Transaction volume increased 4% • Year over year, approximately doubled recruited GCI* • Top agent retention rate 94% RFG • Zap platform will be deployed to substantially all eligible franchisees by year-end • 5% gain in transaction volume Capital Deployment • Since inception of capital return program, Company has repurchased 13.5 million shares for a total of $394 million and paid $63 million in dividends to shareholders * Represents production generated LTM from agents' previous brokers per respective Multiple Listing Service. 4
Q4 2017 Guidance Q4 2017 Guidance Homesale Metrics Ranges Transaction Volume (both RFG and NRT) 4% to 6% Sides flat to 1% Price 4% to 5% RFG transaction volume 3% to 5% NRT transaction volume 7% to 9% Guidance is as of November 3, 2017 5
Full Year 2017 Guidance Full Year Guidance Homesale Metrics Ranges Transaction Volume (both RFG and NRT) 6% to 7% RFG transaction volume 5% to 6% NRT transaction volume 7% to 8% Revenue $6.1 billion to $6.150 billion Operating EBITDA $725 million to $735 million Free Cash Flow $505 million to $520 million Guidance is as of November 3, 2017 6
Q3 2017 Results Financial Metrics Net Revenue: Revenue was $1.7 billion, an increase of 2% compared with Q3 2016 Operating EBITDA was $258 million, compared with Operating EBITDA 1 : $279 million in Q3 2016 Net Income and Net Income Per Net Income was $95 million, or $0.70 per share, Share: compared with $106 million, or $0.74 per share in Q3 2016 Adjusted Net Income was $97 million or $0.71 per Adjusted Net Income and share, compared with $108 million, or $0.75 per share Adjusted Earnings Per Share 2 : in Q3 2016 3.9x, reflective of $3.2 billion of Net Corporate Debt Net Debt Leverage Ratio 3 : (excluding securitizations) at September 30, 2017 1 See Slide 19 for a reconciliation from Net Income attributable to the Company to Operating EBITDA. 2 See Table 1a of our November 3, 2017 press release for a reconciliation from Net Income to Adjusted Net Income. 3 Defined as net corporate debt divided by EBITDA as defined by the Senior Secured Credit Facility. See Table 7 of our November 3, 2017 press release for Net Debt Leverage Ratio detail. 7
Q3 2017 Key Revenue Drivers Amount % Change Realogy Franchise Group Closed Homesale Sides 318,961 (1%) Average Homesale Price $292,000 6% Average Broker Commission Rate 2.49% (1) bps NRT Closed Homesale Sides 95,236 —% Average Homesale Price $506,418 4% Average Broker Commission Rate 2.45% (1) bps Cartus Initiations 39,608 (2%) Referrals 23,905 (6%) Title Resource Group Purchase Title and Closing Units 43,764 2% Refinance Title and Closing Units 6,513 (57%) Average Fee per Closing Unit 16% $2,115 8
Business Unit Revenue and Operating EBITDA Net Revenue Q3 2017 Q3 2016 $ Change % Change ($ in millions) RFG $ 224 $ 215 $ 9 4 % NRT 1,267 1,231 36 3 % Cartus 111 116 (5) (4)% TRG 154 164 (10) (6)% Intercompany Eliminations (82) (82) — * Total Revenue $ 1,674 $ 1,644 $ 30 2 % Operating EBITDA Q3 2017 Q3 2016 $ Change % Change ($ in millions) RFG $ 159 154 $ 5 3 % NRT (before PHHHL JV earnings) 52 76 (24) (32)% PHHHL JV earnings* 12 4 8 200 % Cartus 37 41 (4) (10)% TRG 21 24 (3) (13)% Corporate (23) (20) (3) ** Total Operating EBITDA $ 258 $ 279 $ (21) (8)% Note: Operating EBITDA excludes restructuring, legacy and early extinguishment of debt charges. See Slides 19-21 for a reconciliation of Operating EBITDA to Net Income. * NRT results exclude equity earnings related to our investment in PHH Home Loans LLC (“PHHHL JV Earnings”), our home mortgage joint venture with PHH Corporation (“PHH”). We own 49.9% of the joint venture and PHH owns the remaining 50.1% and as managing member of the venture is responsible for its operations. The new mortgage joint venture with Guaranteed Rate will be reported in the TRG segment. ** not meaningful 9
2017 Cash Flow Items 2017* ($ in millions) Low High Operating EBITDA 1 $725 $735 Cash Interest Expense (165) (165) Cash Taxes (10) (15) Working Capital 55 60 Cap Ex (100) (95) Free Cash Flow 1 $505 $520 * Guidance is as of November 3, 2017 10 1 See Appendix for the definitions of Operating EBITDA and Free Cash Flow, a reconciliation of thees measures to their most comparable GAAP measures, and the Company's explanation of why it believes these non-GAAP measures are useful to investors
Appendix
Existing Home Sale Transaction Volume National Association of Realtors vs. Realogy 2013-2017 35% 25% 15% 5% -5% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 NAR (sides x price) RFG (sides x price) NRT (sides x price) Source: National Association of Realtors, Realogy data 12
Total Realogy U.S. Footprint 13
NRT - U.S. Footprint 14
Historical Average Broker Commission Rate Average Broker Commission Rate and NAR Median Homesale Price Trends 8.0 7.8 7.6 275,000 7.4 7.2 7.0 Median Homesale Price in $ 6.8 225,000 6.6 6.4 ABCR % 6.2 6.0 5.8 175,000 5.6 5.4 5.2 5.0 125,000 4.8 4.6 4.4 4.2 4.0 75,000 1991 1996 2001 2006 2011 2016 Period Ending ABCR Median Price Source: RealTrends, National Association of Realtors 15
Capitalization Table Maturity As of September Rate ($ in millions) Date 30, 2017 Cash and Cash Equivalents $348 L+200 (1) Revolver October 2020 190 L+200 (1) Term Loan A October 2020 397 L+200 (1) Term Loan A-1 July 2021 344 L+225 (1)(2) Term Loan B July 2022 1,086 Senior Notes 4.50% April 2019 450 December Senior Notes 5.25% 550 2021 Senior Notes 4.875% June 2023 500 Net Corporate Debt (excluding securitizations) $3,169 Net Debt Leverage Ratio (3) 3.9x 1) Adjusts up or down based on senior secured leverage ratio as defined by the Senior Secured Credit Facility. 2) Includes 75 basis point LIBOR floor. 3) Defined as net corporate debt divided by EBITDA as defined by the Senior Secured Credit Facility. See Table 7 of our November 3, 2017 press release for a Net Debt Leverage Ratio calculation. 16
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