Anywhere(US:HOUS)2020-08-06 11:31Financial Performance - Realogy Holdings Corp. reported Q2 2020 net revenues of $1,207 million, a decrease of 27.4% compared to $1,664 million in Q2 2019[38]. - Gross commission income for Q2 2020 was $919 million, down 29.8% from $1,310 million in Q2 2019[38]. - The company incurred a net loss of $13 million in Q2 2020, compared to a net income of $70 million in Q2 2019[40]. - Total expenses for Q2 2020 were $1,204 million, a decrease of 23.2% from $1,569 million in Q2 2019[38]. - Realogy Holdings reported a basic loss per share of $0.12 for Q2 2020, compared to earnings per share of $0.60 in Q2 2019[38]. - Net loss for the six months ended June 30, 2020, was $475 million, compared to a net loss of $29 million for the same period in 2019[46]. - The company reported a net loss of $14 million in Q2 2020 compared to a net income of $69 million in Q2 2019[179]. - The company reported a net loss of $476 million for the six months ended June 30, 2020, compared to a net loss of $30 million for the same period in 2019[154]. Cash Flow and Liquidity - Cash and cash equivalents increased to $686 million as of June 30, 2020, up from $235 million at the end of 2019[43]. - Net cash provided by operating activities from continuing operations was $35 million, a decrease from $113 million in the prior year[46]. - Net cash used in investing activities was $63 million, slightly up from $62 million in the same period of 2019[47]. - Net cash provided by financing activities from continuing operations was $571 million, compared to $70 million in the previous year[47]. - The company reported a significant increase in the net change in the Revolving Credit Facility, rising to $625 million from $60 million[47]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $704 million, up from $278 million at the end of June 2019[47]. Debt and Liabilities - Long-term debt remained relatively stable at $3,175 million as of June 30, 2020, compared to $3,211 million at the end of 2019[43]. - The principal amount of the company's debt as of June 30, 2020, included $1,053 million in Term Loan B and $550 million in Senior Secured Second Lien Notes[62]. - As of June 30, 2020, total short-term and long-term debt amounted to $4,043 million, an increase from $3,445 million as of December 31, 2019, representing a 17.4% rise[109]. - The Company issued $550 million in 7.625% Senior Secured Second Lien Notes in June 2020, maturing on June 15, 2025[125]. - The Revolving Credit Facility has outstanding borrowings of $815 million as of June 30, 2020, with an expiration date in February 2023[110]. Impairment and Restructuring - The company experienced a significant impairment charge of $454 million in Q2 2020, compared to $3 million in Q2 2019[38]. - The company recorded impairment charges of $454 million due to the impact of COVID-19 on future earnings[46]. - Goodwill impairment of $413 million was recognized for the Realogy Brokerage Group due to the impact of COVID-19, reducing the carrying value to $256 million[101]. - Restructuring charges totaled $14 million and $25 million for the three and six months ended June 30, 2020, respectively, compared to $9 million and $18 million for the same periods in 2019[136]. - The company has implemented a plan to accelerate office consolidation and operational efficiencies, which includes reducing headcount and optimizing workforce roles[138]. Revenue Trends - Total net revenues for Q2 2020 were $1,207 million, down from $1,664 million in Q2 2019, reflecting a decrease of approximately 27.5%[68]. - For the first half of 2020, total net revenues were $2,323 million, compared to $2,718 million in the same period of 2019, representing a decline of about 14.5%[68]. - Realogy Franchise Group revenues decreased to $179 million in Q2 2020 from $260 million in Q2 2019, a decline of 31%[178]. - Realogy Brokerage Group revenues fell to $933 million in Q2 2020 from $1.331 billion in Q2 2019, a decrease of 30%[178]. - Closed homesale transaction volume decreased by 24% in Q2 2020 compared to the same period in 2019, but improved to a decline of only 8% year-over-year in June 2020[195]. Market Conditions and Outlook - The COVID-19 crisis led to a 30% decrease in homesale transaction volume for Realogy Brokerage Group in Q2 2020 compared to Q2 2019, primarily due to a 25% decrease in existing homesale transactions[205]. - The inventory of existing homes for sale in the U.S. decreased approximately 18% from 1.92 million in June 2019 to 1.57 million in June 2020, resulting in a decline in months of supply from 4.3 to 4.0[207]. - The unemployment rate in the U.S. declined to 11.1% in June 2020, down from a high of 14.7% in April 2020, but still represents a 7.6% increase since February 2020[208]. - The average mortgage rate for a 30-year fixed mortgage was 3.23% in Q2 2020, down from 4.00% in Q2 2019, positively impacting refinancing activity and homesale transactions[209]. - NAR forecasts existing homesale transactions to increase by 7% in 2021, while Fannie Mae forecasts a 4% increase for the same period[221]. Legal and Regulatory Matters - The company is involved in multiple litigation cases, including a putative class action complaint alleging violations of the Exchange Act, with claims for compensatory damages for stock purchasers between February 24, 2017, and May 22, 2019[164]. - The company is facing class action lawsuits that could incur judgments or settlements materially in excess of amounts accrued, potentially affecting its financial condition[167]. - The Department of Justice has filed statements of interest in ongoing litigation matters, indicating potential regulatory scrutiny[160][161]. - The company believes it has adequately accrued for legal matters, but litigation outcomes are inherently unpredictable and could materially affect its operations[167].