Anywhere Real Estate Inc.

will be made available in the investor information section of the company's website tomorrow. A webcast replay will also be made available on the company's website. At this time, I would like to turn the conference over to Anywhere Senior Vice President, Alicia Swift. Please go ahead, Alicia.

Thank you, Eric. Good morning and welcome to the second quarter 2024 earnings conference call for Anywhere Real Estate. On the call with me today are Anywhere CEO and President, Ryan Schneider, and Chief Financial Officer, Charlotte Simonelli. As shown on slide three of the presentation, the company will be making statements about its future results and other forward-looking statements during this call. These statements are based on the current expectation and the current economic environment. Forward-looking statements, estimates, and projections are inherently subject to significant economic, competitive, antitrust, and other litigation regulatory and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic development. Actual results may differ materially from those expressed or implied in the forward-looking statement. As we've shared before, we have two large expected one-time free cash flow headwinds. The first headwind is our approved $83.5 million litigation settlement, and a reminder that $10 million of that was paid in 2023. In the second quarter of 2024, we paid $20 million of this, which means there is $53.5 million remaining, which will be due when appeals are resolved. The appeals timing is uncertain, depending on developments in the proceedings, and could be delayed until 2025. Second, the 1999 ascendant legacy tax matter, approximately $40 million is due shortly after notice is received, which has not yet happened, but still anticipated in 2024. We previously estimated over 100 million of these free cash flow headwinds in 2024, and our current best guess is approximately 60 million for 2024. For further discussion of these matters, see our SEC periodic reports, including the Form 10-Q we filed this morning. Our free cash flow estimates referenced do not include any potential impacts relating to the implementation of industry settlement practice changes, which remain uncertain. The reference to core franchise in these remarks is the franchise segment excluding relocation and leave. Important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in our earnings relief issue today as well as in our annual and quarterly SEC filings. For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein or as of today, August 1st, and have not been updated subsequent to the initial earnings call. Now, I will turn the call over to our CEO and President, Ryan Schneider.

Thank you, Alicia. Good morning. Anywhere Real Estate delivered powerful financial results in the second quarter. We are demonstrating success delivering on what we can control, leveraging our strategic strengths across advantage areas like franchise, luxury, and scaled ancillary services, and building financial octane for the future. Real estate remains in a tough part of the cycle. Macroeconomic uncertainty continues to impact housing, including elevated mortgage rates and very limited supply, putting 2024 on track to be another historically low year for home sale transactions. And the practice changes coming out of the industry-wide litigation settlement are creating uncertainty. While the entire industry faces these two uncertainties, we are using this time of change to position us for growth and further differentiate versus the competition. During the second quarter of 2024, We delivered $1.7 billion of revenue and $139 million of operating EBITDA. We realized approximately $30 million of cost savings and increased our full-year savings target to $120 million. We grew transaction volume 3% year-over-year, consistent with the market results. The dynamics we are seeing include continued unit transaction weakness driven by the combination of high interest rates and the lock-in effect hurting supply. Units declined in about 40 states, including many of the largest like California, Texas, and Florida. There was about 8% price growth in our portfolio versus the prior year, with more than 90% of the country seeing price gains and over 10 states having double-digit price growth, including some of the largest like Florida, New Jersey, and California. We generated $83 million of free cash flow in the quarter, excluding the $20 million litigation settlement payment. and we received final court approval for our nationwide settlement in the sell-side antitrust class action cases. We are incredibly focused ensuring our agents and franchisees are prepared for the upcoming industry practice changes and our best position to win in the market. Turning to our strategic progress in the quarter, we continue to leverage our competitive advantages to transform Anywhere Real Estate with strategic investments to drive growth and streamline operations. Some examples include We are disproportionately invested in luxury, and we love our luxury leadership results. Our Corcoran and Sotheby's International Realty Brands volume meaningfully outperformed both the market and our book, including having positive year-over-year unit growth. And our Coldwell Banker Global Luxury agents also substantially outperformed the market and our book in both units and price. We had over $310 million plus transactions in the quarter. with our volume from $10 million plus deals up 41% versus the prior year. This includes multiple record sales in different geographies, a number of iconic properties, and 15 sales above $50 million. And we currently have over 1,000 $10 million plus listings and over 25 listings above $50 million active in our portfolio. We continue to strategically grow our great franchise business. We expanded with over 15 new franchisees joining us in the quarter, including in high growth geographies like Florida, North Carolina, Tennessee, and Colorado. Each of our six brands added new franchisees, and we are excited to continue growing this business we love. We expanded our upward title JV offering two franchisees into its sixth state, and we have five more states in the pipeline. We love the upward tide of momentum in the business because it opens new earnings opportunities for our franchisees. It enhances our value proposition, deepens our relationship with participating franchisees, and we like the economics. We remain relentlessly focused on simplifying, automating, and streamlining our operations for speed, quality, and cost benefits. You can see that in the progress of our cost agenda with $60 million realized year-to-date and us increasing our annual target to $120 million. And as we told you last quarter, we are integrating and digitizing our brokerage and title operations. This benefits agents and consumers, makes it easier to capture title and mortgage economics, and contributes to a lower cost base. Since we last spoke to you, we've doubled our implementation to two-thirds of the country, and we will finish our national rollout later this year. And finally, we are actively engaging and executing our AI agenda to drive innovation, speed, quality, and lower costs across many parts of our company, with recent successes deploying new generative AI solutions in marketing and in multiple operational areas. So for example, we recently introduced new AI capabilities to listing concierge. Using photos from the home, our generative AI tool automatically drafts listing descriptions, photo captions, and property tags for the over 50% of our Coldwell Banker Realty agents who utilize this great product. And our brokerage operation team that processes transactions receive around 15,000 documents every single day. Leveraging generative AI, we are automating much of this work, including opening emails, recognizing documents, reviewing them, and applying them to the appropriate transaction. This substantial automation not only lets us accomplish these tasks faster, but lets us operate 24-7, delivers better quality with meaningfully lower error rates, and critically lowers our costs. I'm excited by our strategic progress as we invest in the business for the future. And remember, our other top capital allocation priority is reducing debt. I continue to believe the medium-term outlook for housing should be quite strong, fueled by demographic trends and a continued desire for homeownership. Anywhere has a proven track record of delivery, and we are seizing this moment to further transform our company to capture greater strategic and financial results in the future especially in stronger housing markets. Now, before I turn over to Charlotte, I'd like to discuss the August 17th industry practice changes mandated by the National Association of Realtors litigation settlement. While we expect there to be challenges and uncertainty as these complex changes are implemented, there's an opportunity for anywhere in our agents and franchisees to embrace the future with confidence and differentially succeed. something we've been focused on delivering for our agents and franchisees since we announced our settlement in Q3 of 2023. One of the key changes is mandatory buyer agreements. We support these agreements for the transparency they offer consumers. Anywhere is committed to a thoughtful rollout of buyer agreements with two core concepts guiding our approach. The first is simplicity. Buyer agreements must be clear, concise, and free of legal jargon. So, for example, if the agreement cannot be understood and executed electronically in just a few minutes before showing a home, it's too complex. The other principle is flexibility. Consumers and agents will likely want different options for buyer agreements depending on the scenario. For example, we envision consumers and agents wanting a buyer agreement that just covers showing a home or a buyer agreement that helps a customer purchase a specific home or a buyer agreement that covers a multi-month journey to find the right home for a family. And to this end, we're providing multiple buyer agreement templates so consumers and agents can select the version that best suits their needs. Another significant change is the display of buyer-broker compensation. We believe voluntary offers of buyer-broker compensation help sellers secure the best offer for their home and the highest certainty in their transaction. We encourage agents to educate sellers on their options and, as always, to act in the seller's best interest. And to date, we see sellers in the market continuing to see value in offers of buyer-broker compensation. And we will be displaying offers of buyer-broker compensation on our owned brokerage websites. Now, remember, these changes affect everyone in the industry. And that means opportunity for those of us who can best embrace the new reality and help agents and franchisees navigate it successfully. And we believe we're in a unique position to do that the best. We have an advantage because of our first mover decision to settle commission related litigation last year, as we've been implementing the changes for longer than others. And we have a nationwide network of agents and franchisees that provide us insights on how these industry practice changes are playing out differently across both geographies and price points. Having more data and insights enables us to adjust faster and adopt best practices better than our competitors who don't have our scale. We're leveraging these advantages to cut through the noise and to clarify confusion. Frankly, the industry needs more leadership helping real estate professionals navigate these changes, and that's why Sue Yannacone, the CEO of Anywhere Brands and Advisors, and I recently launched Anywhere Voices. a new publicly available series to provide guidance to the industry and its professionals as we all navigate the future. And we delivered our first session in mid-July focused on buyer agreements. I remain incredibly proud of the excellence our affiliated agents, franchisees, and employees have demonstrated during this ongoing industry uncertainty. While the road ahead may present challenges, we believe our agents and franchisees will be best positioned to succeed as we lead real estate to what's next. With that, let me turn it over to Charlotte.