Anywhere Real Estate Inc. (04M.DU) Earnings Call Transcript & Summary

Hello, everyone. I'm Charlotte Simonelli, Realogy's CFO and Treasurer. I hope 2021 finds you and your families safe and healthy. Realogy recently released tremendous full year 2020 results. We delivered top line growth, cost efficiencies, impressive profitability, greater simplification, and we seized opportunities to improve our capital structure. Let me talk about some highlights from 2020. We delivered $726 million in operating EBITDA, up 23% from 2019. We generated $555 million in free cash flow and reduced net debt by approximately $500 million. We also reported a 3.4x net leverage ratio, the lowest level since Realogy went public in 2012. Our title and mortgage JV delivered $226 million in operating EBITDA, which really demonstrates Realogy's ability to capture more of the overall transaction economics. We had 2 consecutive quarters of market share gains in Q3 and Q4 with market share of 15.3% unchanged, 2020 versus last year. We also had a strong start to 2021 with preliminary open volume for the month of January up 45% year-over-year, which is an early indicator of continued momentum. We enter 2021 from a position of strength with considerable operating momentum and hit the ground running aggressively, pursuing continued execution of our strategic and financial priorities. Now I am excited to recap some of our successes already in 2021. During the first 2 months of the year, Realogy successfully completed an oversubscribed $900 million senior unsecured notes offering with a 5.75% coupon, maturing in 2029. We were proactive in advancing our capital structure priorities while taking advantage of favorable market conditions. With the proceeds, we reduced Realogy's senior secured debt, our term loan A outstanding borrowing by $250 million and our term loan B by $655 million. All in, on a pro forma basis, we effectively lowered our senior secured leverage ratio to below 1x at year-end. We also finalized an amendment and extension of slightly more than 50% of our term loan A and close to 2/3 of our revolver. These transactions provide us greater flexibility, and we have better optimized Realogy's capital structure by lengthening the maturity stack. Looking at Realogy's maturities. Now only approximately $600 million remain in 2023 between the term loan A and our 2023 unsecured notes. We remain confident in our ability to satisfy these maturities. We remain committed to investing in our business and paying down debt until we get to a more sustained leverage level with lower debt. I have been CFO of Realogy for nearly 2 years now. During this time, we have made consistent strategic and operational progress even amid COVID-19. And in fact, in many ways, we have emerged with even greater efficiency and stronger momentum because of our proactive moves to reimagine how we work. We believe the power of Realogy's full-service model, a core strength and true competitive advantage for Realogy in the market today, will help drive longer-term success and continued execution on our financial priorities. The size and scale of Realogy is difficult to replicate, and it's more impactful to the bottom line when you add the incremental transaction economics from our fully scaled and growing title business and GRA mortgage joint venture. Our business is well positioned. Our financial profile is much stronger today, and I remain optimistic for the future of our business.