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Basis Of Presentation | 6 Months Ended
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Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Basis Of Presentation | 1. BASIS OF PRESENTATION Anywhere Real Estate Inc. ("Anywhere" or the "Company") is a holding company for its consolidated subsidiaries including Anywhere Intermediate Holdings LLC ("Anywhere Intermediate") and Anywhere Real Estate Group LLC ("Anywhere Group") and its consolidated subsidiaries. Anywhere, through its subsidiaries, is a global provider of residential real estate services. Neither Anywhere, the indirect parent of Anywhere Group, nor Anywhere Intermediate, the direct parent company of Anywhere Group, conducts any operations other than with respect to its respective direct or indirect ownership of Anywhere Group. As a result, the consolidated financial positions, results of operations, comprehensive income (loss) and cash flows of Anywhere, Anywhere Intermediate and Anywhere Group are the same. The accompanying Condensed Consolidated Financial Statements include the financial statements of Anywhere and Anywhere Group. Anywhere's only asset is its investment in the common stock of Anywhere Intermediate, and Anywhere Intermediate's only asset is its investment in Anywhere Group. Anywhere's only obligations are its guarantees of certain borrowings and certain franchise obligations of Anywhere Group. All expenses incurred by Anywhere and Anywhere Intermediate are for the benefit of Anywhere Group and have been reflected in Anywhere Group's Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with Article 10 of Regulation S-X. Interim results may not be indicative of full year performance because of seasonal and short-term variations. The Company has eliminated all material intercompany transactions and balances between entities consolidated in these financial statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and the related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates. In management's opinion, the accompanying unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of Anywhere and Anywhere Group's financial position as of June 30, 2024 and the results of operations and comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023. The Consolidated Balance Sheet at December 31, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023. The Company reports its operations in the following three business segments: •Anywhere Brands ("Franchise Group")—franchises a portfolio of well-known, industry-leading franchise brokerage brands, including Better Homes and Gardens® Real Estate, Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA® and Sotheby's International Realty®. This segment also includes the Company's global relocation services operation through Cartus® Relocation Services ("Cartus") and lead generation activities through Anywhere Leads Inc. ("Leads Group"). •Anywhere Advisors ("Owned Brokerage Group")—operates a full-service real estate brokerage business under the Coldwell Banker®, Corcoran® and Sotheby’s International Realty® brand names in many of the largest metropolitan areas in the U.S. This segment also includes the Company's share of equity earnings or losses from the Company's minority-owned real estate auction joint venture. •Anywhere Integrated Services ("Title Group")—provides full-service title, escrow and settlement services to consumers, real estate companies, corporations and financial institutions primarily in support of residential real estate transactions. This segment also includes the Company's share of equity earnings or losses from Guaranteed Rate Affinity, the Company's minority-owned mortgage origination joint venture, and from the Company's minority-owned title insurance underwriter joint venture. Fair Value Measurements The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
Level Input: |  | Input Definitions:
Level I |  | Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II |  | Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III |  | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach. The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. The following table summarizes fair value measurements by level at June 30, 2024 for assets and liabilities measured at fair value on a recurring basis:
| Level I |  | Level II |  | Level III |  | Total
Deferred compensation plan assets (included in other non-current assets) | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | — |  |  | — |  |  | 3 |  |  | 3 |
The following table summarizes fair value measurements by level at December 31, 2023 for assets and liabilities measured at fair value on a recurring basis:
| Level I |  | Level II |  | Level III |  | Total
Deferred compensation plan assets (included in other non-current assets) | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | — |  |  | — |  |  | 4 |  |  | 4 |
The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions. These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis:
|  | Level III
Fair value of contingent consideration at December 31, 2023 |  | $ | 4 |
Additions: contingent consideration related to acquisitions completed during the period |  | — |
Reductions: payments of contingent consideration |  | (1) |
Changes in fair value (reflected in general and administrative expenses) |  | — |
Fair value of contingent consideration at June 30, 2024 |  | $ | 3 |
The following table summarizes the principal amount of the Company’s indebtedness compared to the estimated fair value, primarily determined by quoted market values, at:
| June 30, 2024 |  | December 31, 2023
Debt | Principal Amount |  | Estimated Fair Value (a) |  | Principal Amount |  | Estimated Fair Value (a)
Revolving Credit Facility | $ | 410 |  |  | $ | 410 |  |  | $ | 285 |  |  | $ | 285 |
Term Loan A Facility | 196 |  |  | 195 |  |  | 206 |  |  | 205 |
7.00% Senior Secured Second Lien Notes | 640 |  |  | 523 |  |  | 640 |  |  | 590 |
5.75% Senior Notes | 576 |  |  | 349 |  |  | 576 |  |  | 448 |
5.25% Senior Notes | 457 |  |  | 271 |  |  | 457 |  |  | 336 |
0.25% Exchangeable Senior Notes | 403 |  |  | 324 |  |  | 403 |  |  | 314 |
_______________ (a)The fair value of the Company's indebtedness is categorized as Level II. Equity Method Investments At June 30, 2024, the Company had various equity method investments totaling $179 million recorded on the other non-current assets line on the accompanying Condensed Consolidated Balance Sheets. Although the Company holds certain governance rights, it lacks controlling financial or operational interests in these investments. The Company recorded equity in (earnings) losses from its equity method investments as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Guaranteed Rate Affinity (1) | $ | — |  |  | $ | (2) |  |  | $ | 2 |  |  | $ | — |
Title Insurance Underwriter Joint Venture (2) | (1) |  |  | (1) |  |  | (1) |  |  | (2) |
Other equity method investments (3) | (2) |  |  | (2) |  |  | (3) |  |  | (1) |
Equity in earnings of unconsolidated entities | $ | (3) |  |  | $ | (5) |  |  | $ | (2) |  |  | $ | (3) |
_______________ (1)The Company's 49.9% minority-owned mortgage origination joint venture with Guaranteed Rate, Inc. ("Guaranteed Rate Affinity") at Title Group had an investment balance of $65 million and $67 million at June 30, 2024 and December 31, 2023, respectively. (2)The Company's 25% equity interest in the Title Insurance Underwriter Joint Venture at Title Group had an investment balance of $75 million and $74 million at June 30, 2024 and December 31, 2023, respectively. (3)The Company's various other equity method investments at Title Group and Brokerage Group had a total investment balance of $39 million and $37 million at June 30, 2024 and December 31, 2023, respectively. Income Taxes The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income before income taxes for the period. In addition, non-recurring or discrete items are recorded in the period in which they occur. The provision for income taxes was an expense of $11 million and $8 million for the three months ended June 30, 2024 and 2023, respectively, and a benefit of $17 million and $38 million for the six months ended June 30, 2024 and 2023, respectively. Revenue Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue accounting standard. The Company's revenue is disaggregated by major revenue categories on our Condensed Consolidated Statements of Operations and further disaggregated by business segment as follows:
| Three Months Ended June 30,
| Franchise Group |  | Owned Brokerage Group |  | Title Group |  | Corporate and Other |  | Total Company
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Gross commission income (a) | $ | — |  |  | $ | — |  |  | $ | 1,376 |  |  | $ | 1,363 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,376 |  |  | $ | 1,363 |
Service revenue (b) | 55 |  |  | 62 |  |  | 7 |  |  | 6 |  |  | 97 |  |  | 95 |  |  | — |  |  | — |  |  | 159 |  |  | 163 |
Franchise fees (c) | 190 |  |  | 191 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (89) |  |  | (89) |  |  | 101 |  |  | 102 |
Other (d) | 20 |  |  | 31 |  |  | 10 |  |  | 11 |  |  | 6 |  |  | 5 |  |  | (3) |  |  | (4) |  |  | 33 |  |  | 43 |
Net revenues | $ | 265 |  |  | $ | 284 |  |  | $ | 1,393 |  |  | $ | 1,380 |  |  | $ | 103 |  |  | $ | 100 |  |  | $ | (92) |  |  | $ | (93) |  |  | $ | 1,669 |  |  | $ | 1,671 |
| Six Months Ended June 30,
| Franchise Group |  | Owned Brokerage Group |  | Title Group |  | Corporate and Other |  | Total Company
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Gross commission income (a) | $ | — |  |  | $ | — |  |  | $ | 2,283 |  |  | $ | 2,266 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,283 |  |  | $ | 2,266 |
Service revenue (b) | 101 |  |  | 117 |  |  | 11 |  |  | 10 |  |  | 166 |  |  | 163 |  |  | — |  |  | — |  |  | 278 |  |  | 290 |
Franchise fees (c) | 321 |  |  | 320 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (150) |  |  | (149) |  |  | 171 |  |  | 171 |
Other (d) | 43 |  |  | 54 |  |  | 18 |  |  | 19 |  |  | 8 |  |  | 9 |  |  | (6) |  |  | (7) |  |  | 63 |  |  | 75 |
Net revenues | $ | 465 |  |  | $ | 491 |  |  | $ | 2,312 |  |  | $ | 2,295 |  |  | $ | 174 |  |  | $ | 172 |  |  | $ | (156) |  |  | $ | (156) |  |  | $ | 2,795 |  |  | $ | 2,802 |
______________ (a)Gross commission income at Owned Brokerage Group is recognized at a point in time at the closing of a homesale transaction. (b)Service revenue primarily consists of title and escrow fees at Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. (c)Franchise fees at Franchise Group primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). (d)Other revenue is comprised of brand marketing funds received from franchisees at Franchise Group and other miscellaneous revenues across all of the business segments. The following table shows the change in the Company's contract liabilities (deferred revenue) related to revenue contracts by reportable segment for the period:
| Beginning Balance at January 1, 2024 |  | Additions during the period |  | Recognized as Revenue during the period |  | Ending Balance at June 30, 2024
Franchise Group: |  |  |  |  |  |  |
Deferred area development fees (a) | $ | 39 |  |  | $ | 1 |  |  | $ | (3) |  |  | $ | 37 |
Deferred brand marketing fund fees (b) | 19 |  |  | 35 |  |  | (34) |  |  | 20 |
Deferred outsourcing management fees (c) | 3 |  |  | 22 |  |  | (20) |  |  | 5 |
Other deferred income related to revenue contracts | 8 |  |  | 17 |  |  | (11) |  |  | 14 |
Total Franchise Group | 69 |  |  | 75 |  |  | (68) |  |  | 76 |
Owned Brokerage Group: |  |  |  |  |  |  |
Advanced commissions related to development business (d) | 12 |  |  | 4 |  |  | (3) |  |  | 13 |
Other deferred income related to revenue contracts | 3 |  |  | 3 |  |  | (1) |  |  | 5 |
Total Owned Brokerage Group | 15 |  |  | 7 |  |  | (4) |  |  | 18 |
Total | $ | 84 |  |  | $ | 82 |  |  | $ | (72) |  |  | $ | 94 |
_______________ (a)The Company collects initial area development fees ("ADF") for international territory transactions, which are recorded as deferred revenue when received and recognized into franchise revenue over the average 25 year life of the related franchise agreement as consideration for the right to access and benefit from Anywhere’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination. (b)Revenues recognized include intercompany marketing fees paid by Owned Brokerage Group. (c)The Company earns revenues from outsourcing management fees charged to clients that may cover several of the various relocation services according to the clients' specific needs. Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type. (d)New development closings generally have a development period of between 18 and 24 months from contracted date to closing. Allowance for Doubtful Accounts The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current conditions and forecasts of future losses, and includes specific accounts for which payment has become unlikely. The process by which the Company calculates the allowance is performed in the individual business units where specific problem accounts are identified and reserved primarily based upon the age profile of the receivables and specific payment issues, combined with reasonable and supportable forecasts of future losses. Supplemental Cash Flow Information Significant non-cash transactions included finance lease additions of $3 million and $4 million during the six months ended June 30, 2024 and 2023, respectively, which resulted in non-cash additions to property and equipment, net and other non-current liabilities. Leases The Company's lease obligations as of June 30, 2024 have not changed materially from the amounts reported in the 2023 Form 10-K. Recently Issued Accounting Pronouncements The Company systematically reviews and evaluates the relevance and implications of all Accounting Standards Updates ("ASUs"). While recently issued standards not expressly listed below were scrutinized, they were deemed either inapplicable or anticipated to not have a material impact on the Company's consolidated financial position or results of operations. The FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This standard does not alter the methodology employed by the Company in identifying its operating segments, aggregating those operating segments or applying the quantitative thresholds to determine its reportable segments. Instead, the new standard adds required disclosures concerning significant segment expenses that are regularly provided to or easily computed from information regularly provided to by the chief operating decision maker ("CODM") and included within the Company's reported measure of segment profit of loss, as well as certain other disclosures. The new standard also allows disclosure of multiple measures of segment profitability if those measures are used to allocate resources and assess performance by the CODM. Furthermore, certain annual disclosures will be required on an interim basis. The new standard is effective for annual financial statements of public business entities for fiscal years beginning after December 15, 2023 and in interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The new guidance should be adopted retrospectively unless impracticable. The Company is currently evaluating the impact of the new guidance on its financial statement disclosures. The FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This standard includes enhanced income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid for annual periods. The new standard is effective for annual financial statements of public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted. The new guidance should be adopted on a prospective basis with retrospective application permitted. The Company is currently evaluating the impact of the new guidance on its financial statement disclosures. SEC Rule on Climate-Related Disclosures In March 2024, the SEC adopted final regulations aimed at improving and streamlining climate-related disclosures for publicly traded companies and in public offerings. These regulations represent the SEC's response to investors' calls for more uniform, comparable, and trustworthy data regarding the financial implications of climate-related risks on a company's operations, as well as its strategies for managing such risks. The registrants will be required to provide disclosure, subject to existing audit requirements, regarding the effects of severe weather events and other natural conditions on the financial statements; financial information related to certain carbon offsets and renewable energy certificates; and material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans. Additional disclosure requirements will include: material direct and indirect (Scope 1 and Scope 2) greenhouse gas emissions; governance and oversight of material climate-related risks; the material impact of climate risks on the company’s strategy, results of operations and financial condition; risk management processes for material climate-related risks; and material climate targets and goals. The final rule was scheduled to become effective May 28, 2024, however, the SEC has voluntarily stayed the rule's effective date pending judicial review of consolidated challenges to those rules by the U.S. Court of Appeals for the Eighth Circuit. Pending the resolution of the legal challenges, the final rule provides phase-in periods for compliance with the earliest compliance period applying to large accelerated filers for their annual reports for fiscal year 2025 (filed in 2026). The compliance period begins for annual reports for fiscal year 2026 (filed in 2027) for accelerated filers, with additional delays for smaller companies and greenhouse gas emissions related and certain other disclosures. The SEC final rules follow on the heels of the California climate legislation that will require public and private companies that do business in California to disclose their greenhouse gas emissions and their climate-related financial risks. The Company is currently evaluating the impact of the new laws and regulations.

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