|
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 5.03.
|
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
Item 5.07.
|
Submission of Matters to a Vote of Security Holders.
|
Director Nominee
|
Votes For
|
Votes Withheld
|
Broker Non-Votes
|
Jessica M. Bibliowicz
|
123,930,409
|
1,178,868
|
4,072,800
|
Fiona P. Dias
|
123,345,319
|
1,763,958
|
4,072,800
|
Votes For
|
Votes Against
|
Abstain
|
Broker Non-Votes
|
123,982,207
|
4,143
|
1,122,927
|
4,072,800
|
Votes For
|
Votes Against
|
Abstain
|
Broker Non-Votes
|
128,018,307
|
25,445
|
1,138,325
|
—
|
Votes For
|
Votes Against
|
Abstain
|
Broker Non-Votes
|
120,868,564
|
3,112,868
|
1,127,845
|
4,072,800
|
Votes For
|
Votes Against
|
Abstain
|
127,947,353
|
66,381
|
1,168,343
|
Item 9.01.
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
Exhibit
No.
|
|
Description
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of Realogy Holdings Corp.
|
3.2
|
|
Third Amended and Restated Bylaws of Realogy Holdings Corp.
|
99.1
|
|
Press Release dated May 5, 2014.
|
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
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of Realogy Holdings Corp.
|
3.2
|
|
Third Amended and Restated Bylaws of Realogy Holdings Corp.
|
99.1
|
|
Press Release dated May 5, 2014.
|
•
|
Residential Real Estate Leader Reports Quarterly Revenue of
$1.0 Billion
|
•
|
Core Business Transaction Volume Increases
10%
Year-over-Year
|
•
|
Broad Industry Decline in Mortgage Refinancing Activity Impacted Q1
|
•
|
Realogy Strategically Reducing Run-Rate Interest Expense and Refinancing High-Cost Debt
|
•
|
Realogy's net revenue for
first quarter
2014
was
$1.0 billion
, a
5%
increase
compared to first quarter of 2013.
|
•
|
Realogy's Adjusted EBITDA
1
for
first quarter
2014
was
$53 million
, down from
$71 million
in the first quarter of 2013, primarily due to an approximately
$20 million
reduction in earnings related to the decrease in refinancing activity at our mortgage origination joint venture and within the Company's title and settlement services segment.
|
•
|
Net loss for
first quarter
2014
was
$46 million
, which includes
$70 million
of interest expense,
$46 million
of depreciation and amortization expense and
$10 million
in pre-tax charges related to the repricing of its term loan and repurchases of
$44 million
of senior secured notes during the quarter.
|
•
|
Realogy reduced its annualized run-rate corporate cash interest expense to approximately $215 million with the completion of its term loan repricing and other refinancing actions completed to date in 2014.
|
•
|
Realogy has reduced its outstanding senior secured notes by
$398 million
this year, and intends to use remaining net proceeds of its April debt offering as well as free cash flow to continue to retire high-cost debt.
|
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
March 31, |
||||||
|
2014
|
|
2013
|
||||
Revenues
|
|
|
|
||||
Gross commission income
|
$
|
738
|
|
|
$
|
676
|
|
Service revenue
|
165
|
|
|
183
|
|
||
Franchise fees
|
63
|
|
|
57
|
|
||
Other
|
41
|
|
|
41
|
|
||
Net revenues
|
1,007
|
|
|
957
|
|
||
Expenses
|
|
|
|
||||
Commission and other agent-related costs
|
500
|
|
|
454
|
|
||
Operating
|
336
|
|
|
327
|
|
||
Marketing
|
51
|
|
|
50
|
|
||
General and administrative
|
70
|
|
|
67
|
|
||
Former parent legacy costs, net
|
1
|
|
|
1
|
|
||
Depreciation and amortization
|
46
|
|
|
42
|
|
||
Interest expense, net
|
70
|
|
|
89
|
|
||
Loss on the early extinguishment of debt
|
10
|
|
|
3
|
|
||
Total expenses
|
1,084
|
|
|
1,033
|
|
||
Loss before income taxes, equity in earnings and noncontrolling interests
|
(77
|
)
|
|
(76
|
)
|
||
Income tax (benefit) expense
|
(34
|
)
|
|
7
|
|
||
Equity in (earnings) losses of unconsolidated entities
|
3
|
|
|
(9
|
)
|
||
Net loss
|
(46
|
)
|
|
(74
|
)
|
||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
(1
|
)
|
||
Net loss attributable to Realogy Holdings
|
$
|
(46
|
)
|
|
$
|
(75
|
)
|
|
|
|
|
||||
Loss per share attributable to Realogy Holdings:
|
|
|
|
||||
Basic loss per share:
|
$
|
(0.32
|
)
|
|
$
|
(0.52
|
)
|
Diluted loss per share:
|
$
|
(0.32
|
)
|
|
$
|
(0.52
|
)
|
Weighted average common and common equivalent shares outstanding:
|
|||||||
Basic:
|
145.8
|
|
|
145.1
|
|
||
Diluted:
|
145.8
|
|
|
145.1
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
|
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
119
|
|
|
$
|
236
|
|
Trade receivables (net of allowance for doubtful accounts of $32 and $37)
|
131
|
|
|
121
|
|
||
Relocation receivables
|
277
|
|
|
270
|
|
||
Deferred income taxes
|
186
|
|
|
186
|
|
||
Other current assets
|
105
|
|
|
104
|
|
||
Total current assets
|
818
|
|
|
917
|
|
||
Property and equipment, net
|
199
|
|
|
205
|
|
||
Goodwill
|
3,359
|
|
|
3,335
|
|
||
Trademarks
|
736
|
|
|
732
|
|
||
Franchise agreements, net
|
1,545
|
|
|
1,562
|
|
||
Other intangibles, net
|
362
|
|
|
365
|
|
||
Other non-current assets
|
208
|
|
|
210
|
|
||
Total assets
|
$
|
7,227
|
|
|
$
|
7,326
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
138
|
|
|
$
|
123
|
|
Securitization obligations
|
194
|
|
|
252
|
|
||
Due to former parent
|
63
|
|
|
63
|
|
||
Revolving credit facilities and current portion of long-term debt
|
164
|
|
|
19
|
|
||
Accrued expenses and other current liabilities
|
363
|
|
|
454
|
|
||
Total current liabilities
|
922
|
|
|
911
|
|
||
Long-term debt
|
3,839
|
|
|
3,886
|
|
||
Deferred income taxes
|
299
|
|
|
337
|
|
||
Other non-current liabilities
|
192
|
|
|
179
|
|
||
Total liabilities
|
5,252
|
|
|
5,313
|
|
||
Commitments and contingencies
|
|
|
|
|
|||
Equity:
|
|
|
|
||||
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at March 31, 2014 and December 31, 2013.
|
—
|
|
|
—
|
|
||
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 146,161,257 shares outstanding at March 31, 2014 and 146,125,337 shares outstanding at December 31, 2013.
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
5,644
|
|
|
5,635
|
|
||
Accumulated deficit
|
(3,653
|
)
|
|
(3,607
|
)
|
||
Accumulated other comprehensive loss
|
(19
|
)
|
|
(19
|
)
|
||
Total stockholders' equity
|
1,973
|
|
|
2,010
|
|
||
Noncontrolling interests
|
2
|
|
|
3
|
|
||
Total equity
|
1,975
|
|
|
2,013
|
|
||
Total liabilities and equity
|
$
|
7,227
|
|
|
$
|
7,326
|
|
|
For Three Months Ended March 31,
|
|||||||||
|
2014
|
|
2013
|
|
% Change
|
|||||
Real Estate Franchise Services (a)
|
|
|
|
|
|
|||||
Closed homesale sides
|
203,972
|
|
|
209,779
|
|
|
(3
|
%)
|
||
Average homesale price
|
$
|
236,711
|
|
|
$
|
210,919
|
|
|
12
|
%
|
Average homesale broker commission rate
|
2.53
|
%
|
|
2.56
|
%
|
|
(3) bps
|
|
||
Net effective royalty rate
|
4.49
|
%
|
|
4.57
|
%
|
|
(8) bps
|
|
||
Royalty per side
|
$
|
282
|
|
|
$
|
258
|
|
|
9
|
%
|
Company Owned Real Estate Brokerage Services
|
|
|
|
|
||||||
Closed homesale sides
|
56,685
|
|
|
58,060
|
|
|
(2
|
%)
|
||
Average homesale price
|
$
|
489,053
|
|
|
$
|
427,812
|
|
|
14
|
%
|
Average homesale broker commission rate
|
2.50
|
%
|
|
2.52
|
%
|
|
(2) bps
|
|
||
Gross commission income per side
|
$
|
13,041
|
|
|
$
|
11,630
|
|
|
12
|
%
|
Relocation Services
|
|
|
|
|
|
|||||
Initiations
|
37,898
|
|
|
35,951
|
|
|
5
|
%
|
||
Referrals
|
16,496
|
|
|
15,677
|
|
|
5
|
%
|
||
Title and Settlement Services
|
|
|
|
|
|
|||||
Purchase title and closing units
|
20,775
|
|
|
21,506
|
|
|
(3
|
%)
|
||
Refinance title and closing units
|
7,199
|
|
|
24,500
|
|
|
(71
|
%)
|
||
Average fee per closing unit
|
$
|
1,715
|
|
|
$
|
1,322
|
|
|
30
|
%
|
(a)
|
Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment.
|
|
|
Quarter Ended
|
|
Year Ended
|
||||||||||||||||
|
|
March 31,
2013 |
|
June 30,
2013 |
|
September 30,
2013 |
|
December 31,
2013 |
|
December 31,
2013 |
||||||||||
Real Estate Franchise Services (a)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Closed homesale sides
|
|
209,779
|
|
|
302,420
|
|
|
315,432
|
|
|
255,793
|
|
|
1,083,424
|
|
|||||
Average homesale price
|
|
$
|
210,919
|
|
|
$
|
236,590
|
|
|
$
|
240,408
|
|
|
$
|
237,776
|
|
|
$
|
233,011
|
|
Average homesale broker commission rate
|
|
2.56
|
%
|
|
2.55
|
%
|
|
2.53
|
%
|
|
2.53
|
%
|
|
2.54
|
%
|
|||||
Net effective royalty rate
|
|
4.57
|
%
|
|
4.51
|
%
|
|
4.46
|
%
|
|
4.44
|
%
|
|
4.49
|
%
|
|||||
Royalty per side
|
|
$
|
258
|
|
|
$
|
281
|
|
|
$
|
281
|
|
|
$
|
278
|
|
|
$
|
276
|
|
Company Owned Real Estate Brokerage Services
|
||||||||||||||||||||
Closed homesale sides
|
|
58,060
|
|
|
92,878
|
|
|
93,083
|
|
|
72,619
|
|
|
316,640
|
|
|||||
Average homesale price
|
|
$
|
427,812
|
|
|
$
|
478,280
|
|
|
$
|
475,823
|
|
|
$
|
490,666
|
|
|
$
|
471,144
|
|
Average homesale broker commission rate
|
|
2.52
|
%
|
|
2.49
|
%
|
|
2.49
|
%
|
|
2.49
|
%
|
|
2.50
|
%
|
|||||
Gross commission income per side
|
|
$
|
11,630
|
|
|
$
|
12,598
|
|
|
$
|
12,527
|
|
|
$
|
12,856
|
|
|
$
|
12,459
|
|
Relocation Services
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Initiations
|
|
35,951
|
|
|
51,311
|
|
|
42,788
|
|
|
35,655
|
|
|
165,705
|
|
|||||
Referrals
|
|
15,677
|
|
|
26,258
|
|
|
28,406
|
|
|
21,032
|
|
|
91,373
|
|
|||||
Title and Settlement Services
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase title and closing units
|
|
21,506
|
|
|
34,157
|
|
|
33,540
|
|
|
26,369
|
|
|
115,572
|
|
|||||
Refinance title and closing units
|
|
24,500
|
|
|
23,123
|
|
|
17,625
|
|
|
10,948
|
|
|
76,196
|
|
|||||
Average price per closing unit
|
|
$
|
1,322
|
|
|
$
|
1,490
|
|
|
$
|
1,579
|
|
|
$
|
1,649
|
|
|
$
|
1,504
|
|
(a)
|
Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment.
|
|
For the Three Months Ended
|
||
|
March 31,
2014 |
||
Net revenues (a)
|
|
||
Real Estate Franchise Services
|
$
|
144
|
|
Company Owned Real Estate Brokerage Services
|
750
|
|
|
Relocation Services
|
86
|
|
|
Title and Settlement Services
|
81
|
|
|
Corporate and Other
|
(54
|
)
|
|
Total Company
|
$
|
1,007
|
|
|
|
||
EBITDA (b)
|
|
||
Real Estate Franchise Services
|
$
|
79
|
|
Company Owned Real Estate Brokerage Services
|
(20
|
)
|
|
Relocation Services
|
7
|
|
|
Title and Settlement Services
|
(5
|
)
|
|
Corporate and Other
|
(25
|
)
|
|
Total Company
|
$
|
36
|
|
Less:
|
|
||
Depreciation and amortization
|
46
|
|
|
Interest expense, net
|
70
|
|
|
Income tax benefit
|
(34
|
)
|
|
Net loss attributable to Realogy Holdings
|
$
|
(46
|
)
|
(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
$54 million
for the
three months ended
March 31, 2014
. Such amounts are eliminated through the Corporate and Other line.
|
(b)
|
The three months ended March 31, 2014 includes
$10 million
related to the loss on early extinguishment of debt,
$1 million
related to the Phantom Value Plan
and
$1 million
of former parent legacy costs.
|
|
For the Three Months Ended
|
|
For the Year Ended
|
||||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
||||||||||
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||
Net revenues (a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Real Estate Franchise Services
|
$
|
135
|
|
|
$
|
193
|
|
|
$
|
193
|
|
|
$
|
169
|
|
|
$
|
690
|
|
Company Owned Real Estate Brokerage Services
|
686
|
|
|
1,182
|
|
|
1,178
|
|
|
944
|
|
|
3,990
|
|
|||||
Relocation Services
|
87
|
|
|
108
|
|
|
127
|
|
|
97
|
|
|
419
|
|
|||||
Title and Settlement Services
|
100
|
|
|
130
|
|
|
134
|
|
|
103
|
|
|
467
|
|
|||||
Corporate and Other
|
(51
|
)
|
|
(80
|
)
|
|
(79
|
)
|
|
(67
|
)
|
|
(277
|
)
|
|||||
Total Company
|
$
|
957
|
|
|
$
|
1,533
|
|
|
$
|
1,553
|
|
|
$
|
1,246
|
|
|
$
|
5,289
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA (b) (c)
|
|
|
|
|
|
|
|
|
|
||||||||||
Real Estate Franchise Services
|
$
|
72
|
|
|
$
|
133
|
|
|
$
|
133
|
|
|
$
|
110
|
|
|
$
|
448
|
|
Company Owned Real Estate Brokerage Services
|
(8
|
)
|
|
102
|
|
|
91
|
|
|
21
|
|
|
206
|
|
|||||
Relocation Services
|
10
|
|
|
27
|
|
|
45
|
|
|
22
|
|
|
104
|
|
|||||
Title and Settlement Services
|
4
|
|
|
20
|
|
|
17
|
|
|
9
|
|
|
50
|
|
|||||
Corporate and Other
|
(15
|
)
|
|
(78
|
)
|
|
(50
|
)
|
|
(12
|
)
|
|
(155
|
)
|
|||||
Total Company
|
$
|
63
|
|
|
$
|
204
|
|
|
$
|
236
|
|
|
$
|
150
|
|
|
$
|
653
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
42
|
|
|
44
|
|
|
44
|
|
|
46
|
|
|
176
|
|
|||||
Interest expense, net
|
89
|
|
|
67
|
|
|
74
|
|
|
51
|
|
|
281
|
|
|||||
Income tax expense (benefit)
|
7
|
|
|
9
|
|
|
9
|
|
|
(267
|
)
|
|
(242
|
)
|
|||||
Net income (loss) attributable to Realogy
|
$
|
(75
|
)
|
|
$
|
84
|
|
|
$
|
109
|
|
|
$
|
320
|
|
|
$
|
438
|
|
(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, $80 million, $79 million and $67 million for the three months ended March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 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.
|
|
|
|
Less
|
|
Equals
|
|
Plus
|
|
Equals
|
||||||||||
|
Year Ended
|
|
Three Months Ended
|
|
Nine Months
Ended |
|
Three Months Ended
|
|
Twelve Months
Ended |
||||||||||
|
December 31,
2013 |
March 31,
2013 |
December 31,
2013 |
March 31,
2014 |
March 31,
2014 |
||||||||||||||
Net income (loss) attributable to Realogy Group (a)
|
$
|
438
|
|
|
$
|
(75
|
)
|
|
$
|
513
|
|
|
$
|
(46
|
)
|
|
$
|
467
|
|
Income tax (benefit) expense
|
(242
|
)
|
|
7
|
|
|
(249
|
)
|
|
(34
|
)
|
|
(283
|
)
|
|||||
Income (loss) before income taxes
|
196
|
|
|
(68
|
)
|
|
264
|
|
|
(80
|
)
|
|
184
|
|
|||||
Interest expense, net
|
281
|
|
|
89
|
|
|
192
|
|
|
70
|
|
|
262
|
|
|||||
Depreciation and amortization
|
176
|
|
|
42
|
|
|
134
|
|
|
46
|
|
|
180
|
|
|||||
EBITDA (b)
|
653
|
|
|
63
|
|
|
590
|
|
|
36
|
|
|
626
|
|
|||||
Covenant calculation adjustments:
|
|
|
|||||||||||||||||
Restructuring costs and former parent legacy benefit, net (c)
|
|
—
|
|
||||||||||||||||
Loss on the early extinguishment of debt
|
|
76
|
|
||||||||||||||||
Pro forma effect of business optimization initiatives (d)
|
|
12
|
|
||||||||||||||||
Non-cash charges (e)
|
|
44
|
|
||||||||||||||||
Pro forma effect of acquisitions and new franchisees (f)
|
|
17
|
|
||||||||||||||||
Fees for secondary equity offerings
|
|
2
|
|
||||||||||||||||
Incremental securitization interest costs (g)
|
|
4
|
|
||||||||||||||||
Adjusted EBITDA
|
|
$
|
781
|
|
|||||||||||||||
Total senior secured net debt (h)
|
|
$
|
2,590
|
|
|||||||||||||||
Senior secured leverage ratio
|
|
3.32
|
x
|
(a)
|
Net income (loss) attributable to Realogy consists of: (i) income of
$84 million
for the second quarter of 2013, (ii) income of
$109 million
for the third quarter of 2013, (iii) income of
$320 million
for the fourth quarter of 2013 and (iv) a loss of
$46 million
for the first quarter of 2014.
|
(b)
|
EBITDA consists of: (i)
$204 million
for the second quarter of 2013, (ii)
$236 million
for the third quarter of 2013, (iii)
$150 million
for the fourth quarter of 2013 and (iv)
$36 million
for the first quarter of 2014.
|
(c)
|
Consists of
$4 million
of restructuring costs offset by a net benefit of
$4 million
of former parent legacy items.
|
(d)
|
Represents the twelve-month pro forma effect of business optimization initiatives including
$7 million
related to business cost cutting initiatives,
$2 million
related to our Relocation Services integration costs,
$2 million
related to vendor renegotiations and
$1 million
of other items.
|
(e)
|
Represents the elimination of non-cash expenses, including
$67 million
of stock-based compensation expense and
$3 million
of other items less
$26 million
for the change in the allowance for doubtful accounts and notes reserves from
April 1, 2013
through
March 31, 2014
.
|
(f)
|
Represents the estimated impact of acquisitions and new franchisees as if they had been acquired or signed on
April 1, 2013
. 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
April 1, 2013
.
|
(g)
|
Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended
March 31, 2014
.
|
(h)
|
Represents total borrowings under the senior secured credit facility and borrowings secured by a first priority lien on our assets of
$2,639 million
plus
$18 million
of capital lease obligations less
$67 million
of readily available cash as of
March 31, 2014
. 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, our securitization obligations or unsecured indebtedness, including the 3.375% Senior Notes and the 4.50% Senior Notes.
|
|
For the Year Ended December 31, 2013
|
||
Net income attributable to Realogy Holdings
|
$
|
438
|
|
Income tax benefit
|
(242
|
)
|
|
Income before income taxes
|
196
|
|
|
Interest expense, net
|
281
|
|
|
Depreciation and amortization
|
176
|
|
|
EBITDA
|
653
|
|
|
Covenant calculation adjustments:
|
|
||
Restructuring costs and former parent legacy costs (benefit), net (a)
|
—
|
|
|
Loss on the early extinguishment of debt
|
68
|
|
|
Pro forma cost savings for 2013 restructuring initiatives (b)
|
1
|
|
|
Pro forma effect of business optimization initiatives (c)
|
16
|
|
|
Non-cash charges (d)
|
39
|
|
|
Non-recurring fair value adjustments for purchase accounting (e)
|
1
|
|
|
Pro forma effect of acquisitions and new franchisees (f)
|
11
|
|
|
Fees for secondary equity offerings
|
2
|
|
|
Incremental securitization interest costs (g)
|
5
|
|
|
Adjusted EBITDA
|
$
|
796
|
|
Total senior secured net debt (h)
|
$
|
2,346
|
|
Senior secured leverage ratio
|
2.95x
|
|
(a)
|
Consists of $4 million of restructuring costs offset by a benefit of $4 million of former parent legacy items.
|
(b)
|
Represents incremental costs incurred for the corporate headquarters that are not expected to recur in subsequent periods.
|
(c)
|
Represents the twelve-month pro forma effect of business optimization initiatives including $9 million related to business cost cutting initiatives, $2 million related to our Relocation Services integration costs, $3 million related to vendor renegotiations, and $2 million of other items.
|
(d)
|
Represents the elimination of non-cash expenses, including $61 million of stock-based compensation expense and $1 million of other items less $23 million for the change in the allowance for doubtful accounts and notes reserves from January 1, 2013 through December 31, 2013.
|
(e)
|
Reflects the adjustment for the negative impact of fair value adjustments for purchase accounting at the operating business segments primarily related to deferred rent.
|
(f)
|
Represents the estimated impact of acquisitions and new franchisees as if they had been acquired or signed on January 1, 2013. 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 January 1, 2013.
|
(g)
|
Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended December 31, 2013.
|
(h)
|
Represents total borrowings under the senior secured credit facility and borrowings secured by a first priority lien on our assets of $2,498 million plus $19 million of capital lease obligations less $171 million of readily available cash as of December 31, 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, our securitization obligations or unsecured indebtedness, including the 3.375% Senior Notes.
|
|
Three Months Ended
|
||||||
|
March 31,
2014 |
|
March 31,
2013 |
||||
Net loss attributable to Realogy
|
$
|
(46
|
)
|
|
$
|
(75
|
)
|
Income tax (benefit) expense
|
(34
|
)
|
|
7
|
|
||
Loss before income taxes
|
(80
|
)
|
|
(68
|
)
|
||
Interest expense, net
|
70
|
|
|
89
|
|
||
Depreciation and amortization
|
46
|
|
|
42
|
|
||
EBITDA
|
36
|
|
|
63
|
|
||
Former parent legacy costs, net
|
1
|
|
|
1
|
|
||
Loss on the early extinguishment of debt
|
10
|
|
|
3
|
|
||
Non-cash charges
|
2
|
|
|
(2
|
)
|
||
Pro forma effect of business optimization initiatives
|
2
|
|
|
4
|
|
||
Pro forma effect of acquisitions and new franchisees
|
1
|
|
|
1
|
|
||
Incremental securitization interest costs
|
1
|
|
|
1
|
|
||
Adjusted EBITDA
|
53
|
|
|
71
|
|
|
For the three months ended
|
||||||
|
March 31, 2014
|
||||||
|
($ in millions)
|
|
($ per share)
|
||||
Net loss attributable to Realogy Holdings / Basic loss per share
|
$
|
(46
|
)
|
|
$
|
(0.32
|
)
|
Income tax benefit, net of payments
|
(36
|
)
|
|
(0.25
|
)
|
||
Interest expense, net
|
70
|
|
|
0.48
|
|
||
Cash interest payments
|
(88
|
)
|
|
(0.60
|
)
|
||
Depreciation and amortization
|
46
|
|
|
0.32
|
|
||
Capital expenditures
|
(13
|
)
|
|
(0.09
|
)
|
||
Restructuring costs and legacy, net of payments
|
(1
|
)
|
|
(0.01
|
)
|
||
Loss on the early extinguishment of debt
|
10
|
|
|
0.07
|
|
||
Working capital adjustments
|
(58
|
)
|
|
(0.40
|
)
|
||
Relocation assets, net of securitization
|
(65
|
)
|
|
(0.44
|
)
|
||
Free Cash Flow / Cash Loss Per Share
|
$
|
(181
|
)
|
|
$
|
(1.24
|
)
|
|
|
|
|
||||
Basic weighted average number of common shares outstanding (in millions)
|
|
|
145.8
|
|
•
|
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.
|