Document

EX-99.1 2 anywhererealestatepressrel.htm PRESS RELEASE DATED OCTOBER 24, 2023 Document

Exhibit 99.1

ANYWHERE REAL ESTATE INC. REPORTS

THIRD QUARTER 2023 FINANCIAL RESULTS

MADISON, N.J. (October 24, 2023) - 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.

Anywhere Reports Financial Results for Third Quarter 2023

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.

Anywhere Reports Financial Results for Third Quarter 2023

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

Anywhere Reports Financial Results for Third Quarter 2023

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

Anywhere Reports Financial Results for Third Quarter 2023

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

Anywhere Reports Financial Results for Third Quarter 2023 6

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

Anywhere Reports Financial Results for Third Quarter 2023 7

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.

Anywhere Reports Financial Results for Third Quarter 2023 8

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

Anywhere Reports Financial Results for Third Quarter 2023 9

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

Anywhere Reports Financial Results for Third Quarter 2023 10

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.

Anywhere Reports Financial Results for Third Quarter 2023 11

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.

Anywhere Reports Financial Results for Third Quarter 2023 12

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.

Anywhere Reports Financial Results for Third Quarter 2023 13

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.

Anywhere Reports Financial Results for Third Quarter 2023 14

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.

Anywhere Reports Financial Results for Third Quarter 2023 15

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.

Anywhere Reports Financial Results for Third Quarter 2023 16

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

Anywhere Reports Financial Results for Third Quarter 2023 17

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)

Anywhere Reports Financial Results for Third Quarter 2023 18

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.

Anywhere Reports Financial Results for Third Quarter 2023 19

(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.

Anywhere Reports Financial Results for Third Quarter 2023 20

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.

Anywhere Reports Financial Results for Third Quarter 2023 21

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.