RE/MAX Holdings Reports Preliminary Third Quarter, Fourth Quarter And Full-Year 2017 Results

DENVER, Feb. 22, 2018 /PRNewswire/ —

Preliminary Full-Year 2017 Highlights
(Compared to full-year 2016 unless otherwise noted)

• Total agent count grew by 6.4% to 119,041 agents; U.S. and Canada combined agent count increased 2.3% to 84,274 agents
• Revenue increased 11.1% to $195.9 million
• Net income attributable to RE/MAX Holdings, Inc. of $12.8 million and earnings per diluted share (GAAP EPS) of $0.72 includes an $8.2 million net charge ($0.46 per diluted share decrease in earnings) from the enactment of the Tax Cuts and Jobs Act
• Adjusted EBITDA¹ of $103.9 million, Adjusted EBITDA margin¹ of 53.0% and Adjusted earnings per diluted share (Adjusted EPS¹) of $1.87
• Acquired the Northern Illinois master franchise

Preliminary Fourth Quarter 2017 Highlights
(Compared to fourth quarter 2016 unless otherwise noted)

• Revenue increased 11.4% to $49.5 million
• Net loss attributable to RE/MAX Holdings, Inc. of $3.5 million and loss per diluted share (GAAP EPS) of $0.20 includes an $8.2 million net charge ($0.46 per diluted share decrease in earnings) from the enactment of the Tax Cuts and Jobs Act
• Adjusted EBITDA¹ of $26.4 million, Adjusted EBITDA margin¹ of 53.4% and Adjusted earnings per diluted share (Adjusted EPS¹) of $0.47
• Motto franchise sales accelerated
• Announced an 11% increase to the quarterly dividend on February 21, 2018

RE/MAX Holdings, Inc. (the “Company” or “RE/MAX Holdings”) (NYSE: RMAX), parent company of RE/MAX, one of the world’s leading franchisors of real estate brokerage services, and Motto Mortgage (“Motto”), an innovative mortgage brokerage franchise, today announced preliminary operating results for the third quarter and nine months ended September 30, 2017, and the fourth quarter and year ended December 31, 2017. 

“We delivered double-digit increases in both revenue and adjusted earnings during the fourth quarter compared to last year, as we continued to execute on our strategic growth initiatives,” stated Adam Contos, Chief Executive Officer.  “We added more than 7,000 agents worldwide during 2017 and we had our best year of franchise sales in over a decade. Motto franchise sales accelerated during the last three months of 2017 and we now have over 70 franchises sold since Motto was launched 16 months ago.”

Contos continued, “The real strength of our business resides in our world-class network of brokers and highly productive agents.  During the past year we made investments in training, innovation and technology, which we expect to help our network become even more productive and connect more effectively with today’s home buyers and sellers. Our foundation has never been stronger, our business continues to perform well, and I believe our best days are in front of us.”

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1} Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined elsewhere in this release.  Please see the schedules appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

Preliminary Full-Year 2017 Operating Results

Agent Count

The following table compares agent count as of December 31, 2017 and 2016:

Revenue

RE/MAX Holdings generated total revenue of $195.9 million for the full-year 2017, an increase of $19.6 million or 11.1% compared to $176.3 million in full-year 2016. Revenue increased 7.6% from the acquired independent regions, 3.3% from organic growth and 0.3% from foreign-currency movements.  Organic growth was driven primarily by agent count increases, rising home prices, Motto expansion and fee increases in the Company-owned regions, partially offset by a decrease in revenue from preferred marketing arrangements. Full-year 2017 revenue would have been an estimated $197.9 million had approximately $2.0 million in fees for hurricane-impacted associates not been waived. 

Recurring revenue streams, which consist of continuing franchise fees and annual dues, increased $13.6 million or 12.0% over the full-year 2016 and accounted for 65.1% of revenue in 2017 compared to 64.6% in 2016.

Operating Expenses

Total operating expenses were $95.7 million for the full-year 2017, a decrease of $8.2 million or 7.9% compared to the full-year 2016. This decrease was primarily due to a $32.7 million gain resulting from the reduction in the Company’s tax receivable agreement liability due to the Tax Cuts and Jobs Act (“TCJA”).  Excluding this gain, operating expenses increased $24.5 million principally due to higher selling, operating and administrative expenses and increased depreciation and amortization.

On December 22, 2017, the U.S. government enacted the TCJA.  The TCJA includes significant changes to the U.S. corporate tax system, including a federal corporate rate reduction from 35% to 21%.  The Company estimates its effective U.S. GAAP tax rate attributable to RE/MAX Holdings to be between 14% and 17% starting in 2018 as a result of the TCJA.

During the fourth quarter of 2017, the period in which the tax legislation was enacted, the Company’s “Deferred tax assets” was reduced to reflect the impact of the lower tax rate, resulting in a charge to “Provision for income taxes” of $40.9 million.  Correspondingly, the Company’s “Payable pursuant to tax receivable agreements” liability was also reduced to reflect the impact of the tax rate change, resulting in a benefit to operating income of $32.7 million.  The net effect on net income was a reduction of approximately $8.2 million.

Selling, operating and administrative expenses were $107.3 million in the full-year 2017, an increase of $19.6 million or 22.4% compared to the full-year 2016 and represented 54.7% of revenue compared to 49.7% in the prior-year period. Expenses increased primarily due to a $3.7 million loss recognized on subleasing a portion of our corporate office; $2.6 million net cost incurred in connection with a litigation settlement related to our acquisition of the net assets of Tails, Inc. (“Tails”); $2.6 million of expenses incurred in connection with the investigation by a special committee (the “Special Committee”) of our board of directors (“special investigation expenses”); investments in Motto and the acquired independent regions; as well as an increase in other litigation costs.

Net Income and GAAP EPS

Net income attributable to RE/MAX Holdings was $12.8 million for the full-year 2017, a decrease of $9.9 million or 43.6% from the full-year 2016. The decrease was primarily due to the net impact from the enactment of the TCJA, the litigation settlement, increased depreciation and amortization expenses, the loss on the sublease, special investigation expenses, investments in Motto and the brand refresh, and increased other litigation costs, partially offset by contributions from the acquired independent regions and multiple organic growth contributors, including agent count growth. Reported basic and diluted GAAP EPS were each $0.72 per share for the full-year 2017.  The net impact from the enactment of the TCJA reduced GAAP EPS by $0.46 per diluted share. Fees waived for hurricane-impacted associates reduced GAAP EPS by approximately $0.04 per diluted share.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $103.9 million for the full-year 2017, an increase of $9.1 million or 9.6% compared to the full-year 2016. Adjusted EBITDA grew primarily due to contributions from the acquired independent regions, agent count growth, rising home prices, and fee increases in the Company-owned regions, partially offset by investments in Motto and the brand refresh and an increase in other litigation costs.  Fees of approximately $2.0 million waived for hurricane-impacted associates reduced Adjusted EBITDA by the same amount.  Adjusted EBITDA margin was 53.0% in 2017 compared to 53.7% in 2016.

Adjusted basic and diluted EPS were each $1.87 for the full-year 2017. Fees waived for hurricane-impacted associates reduced full-year 2017 Adjusted EPS by approximately $0.04 per diluted share. The ownership structure used to calculate Adjusted basic and diluted EPS for the year ended December 31, 2017 assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 58.5% for the year ended December 31, 2017.

Preliminary Fourth Quarter 2017 Operating Results

RE/MAX Holdings generated total revenue of $49.5 million for the fourth quarter of 2017, an increase of $5.1 million or 11.4% compared to $44.4 million in the fourth quarter of 2016, primarily due to contributions from the acquired independent regions, agent count growth, rising home prices and Motto expansion. Fourth quarter 2017 revenue would have been an estimated $49.8 million had approximately $0.3 million in fees for hurricane-impacted associates not been waived. 

Total operating expenses were $0.3 million for the fourth quarter of 2017, a decrease of $29.6 million compared to the fourth quarter of 2016. This decrease was primarily due to a $32.7 million gain resulting from the reduction in the Company’s tax receivable agreement liability due to the enactment of the TCJA.  Excluding the impact of the TCJA, total operating expenses increased by $3.1 million due to an increase in selling, operating and administrative expenses, which were primarily driven by special investigation expenses and investments in Motto, as well as an increase in other litigation costs.  Operating expenses in the fourth quarter of 2016 were higher as a result of the refinancing of the Company’s debt agreement. 

Net loss attributable to RE/MAX Holdings was $3.5 million for the fourth quarter of 2017 compared to net income of $3.9 million for the fourth quarter of 2016, a change of $7.4 million.  Net income changed primarily due to the enactment of the TCJA. Reported basic and diluted GAAP loss per share were each $0.20 per share for the fourth quarter of 2017.  The net impact from the enactment of the TCJA reduced GAAP EPS by $0.46 per share.

Adjusted EBITDA was $26.4 million for the fourth quarter of 2017, an increase of $3.7 million or 16.0% from the fourth quarter of 2016. Adjusted EBITDA grew primarily due to the acquired independent regions and multiple organic growth contributors.  The fee waivers of approximately $0.3 million granted for hurricane-impacted associates reduced Adjusted EBITDA by the same amount during the fourth quarter of 2017.  Adjusted EBITDA margin was 53.4% in the fourth quarter of 2017 compared to 51.2% in the fourth quarter of 2016.

Preliminary Third Quarter 2017 Operating Results

RE/MAX Holdings generated total revenue of $49.4 million for the third quarter of 2017, an increase of $3.8 million or 8.4% compared to $45.6 million in the third quarter of 2016, primarily due to contributions from the independent regions acquired in December 2016 and agent count growth.  Third quarter 2017 revenue would have been an estimated $51.1 million had approximately $1.7 million in fees for hurricane-impacted associates not been waived. 

Total operating expenses were $36.6 million for the third quarter of 2017, an increase of $12.4 million or 51.1% compared to the third quarter of 2016. This increase was primarily due to higher selling, operating and administrative expenses, of which $3.7 million was related to a loss recognized on subleasing a portion of our corporate office building and a $2.6 million net cost incurred in connection with a litigation settlement related to our acquisition of the net assets of Tails.  

Net income attributable to RE/MAX Holdings was $3.8 million for the third quarter of 2017, a decrease of $3.1 million or 44.5% from the third quarter of 2016. Net income decreased primarily due to the loss on the sublease, litigation settlement related to our acquisition of the net assets of Tails, investments in Motto and the brand refresh, as well as an increase in other litigation costs, partially offset by contributions from the acquired independent regions and agent count growth. Reported basic and diluted GAAP EPS were each $0.22 per share for the third quarter of 2017.  Fees waived for hurricane-impacted associates reduced third quarter 2017 GAAP EPS by approximately $0.03 per diluted share.

Adjusted EBITDA was $25.8 million for the third quarter of 2017, an increase of $0.1 million or 0.3% from the third quarter of 2016. Adjusted EBITDA grew primarily due to contributions from the acquired independent regions and agent count growth, partially offset by investments in Motto and the brand refresh.  The fee waivers of approximately $1.7 million granted for hurricane-impacted associates reduced Adjusted EBITDA by the same amount during the third quarter of 2017.  Adjusted EBITDA margin was 52.2% in the third quarter of 2017 compared to 56.4% in the third quarter of 2016.

Adjusted basic and diluted EPS were $0.47 and $0.46, respectively for the third quarter of 2017. Fees waived for hurricane-impacted associates reduced third quarter 2017 Adjusted EPS by approximately $0.03 per diluted share. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended September 30, 2017 assumes RE/MAX Holdings owned 100% of RMCO. The weighted average ownership RE/MAX Holdings had in RMCO was 58.5% for the three months ended September 30, 2017.

Preliminary Balance Sheet

As of December 31, 2017, the Company had a cash balance of $50.8 million, a decrease of $6.8 million from December 31, 2016. As of December 31, 2017, RE/MAX had $229.0 million of term loans outstanding, net of an unamortized debt discount and issuance costs, down slightly from last year-end’s $230.8 million. 

“We continue to deploy our capital strategically having recently acquired the master franchise rights to the Northern Illinois region,” stated Karri Callahan, Chief Financial Officer. “Acquiring independent regions has been a priority for RE/MAX and we have bought back seven regions, including Northern Illinois, in the last two years. The Northern Illinois region acquisition was funded using cash on hand.”  

Preliminary Financial Information  

The preliminary financial results and other information set forth in this press release related to the Company’s third and fourth quarters of 2017 and full-year 2017 are unaudited preliminary numbers which are subject to change. The Company has not completed its quarter- and year-end closing and review process and the audit process for its full-year financial statements with its independent registered public accounting firm. The Company’s final results and financial information for the third and fourth quarters and full-year 2017 may vary materially from the preliminary financial information included in this press release. The Company is working to file its Form 10-Q for the third quarter of 2017 and its Form 10-K for 2017 as promptly as possible.  

Dividend

On February 21, 2018, the Company’s Board of Directors approved a quarterly cash dividend of $0.20 per share.  The quarterly dividend is payable on March 21, 2018, to shareholders of record at the close of business on March 7, 2018.

Outlook

The Company’s first quarter and full-year 2018 Outlook includes the expected impact from the new revenue recognition accounting rules and assumes no further currency movements, acquisitions or divestitures.

For the first quarter of 2018, RE/MAX Holdings expects:

• Agent count to increase 5.5% to 6.5% over first quarter 2017;
• Revenue in a range of $49.5 million to $51.0 million; and
• Adjusted EBITDA margin in a range of 38.0% to 39.0% of first quarter 2018 revenue.

For the full-year 2018, RE/MAX Holdings expects:

• Agent count to increase 5.0% to 6.0% over 2017;
• Revenue in a range of $205.5 million to $209.0 million; and
• Adjusted EBITDA margin in a range of 50.5% to 52.5% of 2018 revenue.

The effective U.S. GAAP tax rate attributable to RE/MAX Holdings is estimated to be between 14% and 17% in 2018.

Webcast and Conference Call

The Company will host a conference call for interested parties on Friday, February 23, 2018, beginning at 8:30 a.m. Eastern Time. Interested parties are able to access the conference call using the following dial-in numbers:

Interested parties are also able to access a live webcast through the Investor Relations section of the Company’s website at investors.remax.com. Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company’s website for a limited time as well. For the RE/MAX Quarterly Update Q4 2017 infographic, visit http://rem.ax/2cYFT50.

Basis of Presentation

Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.

About the RE/MAX Network

RE/MAX was founded in 1973 by David and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 115,000 agents provide RE/MAX a global reach of over 100 countries and territories. Nobody in the world sells more real estate than RE/MAX as measured by total residential transaction sides.

RE/MAX, one of the world’s leading franchisors of real estate brokerage services, and Motto Mortgage, an innovative mortgage brokerage franchise, are subsidiaries of RMCO LLC, which is controlled and managed by RE/MAX Holdings, Inc. (NYSE: RMAX).

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” “anticipate,” “may,” “will,” “would” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to the Company’s outlook for the first quarter and full-year 2018 (including expectations regarding agent count, revenue and Adjusted EBITDA margins), the Company’s estimated effective U.S. GAAP tax rate for 2018, and dividends as well as other statements regarding the Company’s strategic and operational plans and business models. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Such risks and uncertainties include, without limitation, (1) that the Company’s preliminary results for the third and fourth quarters of 2017 and full-year 2017 are subject to change pending the completion of the Company’s quarter- and year-end closing and review process and the audit of its financial statements for fiscal year 2017, (2) the impact of the findings and recommendations of the Special Committee on the Company and its management and operations, including reputational damage to the Company and the time and expenses incurred in implementing the recommendations of the Special Committee, (3) that, while the Special Committee investigation has been completed, the full implications of the investigation on the Company and its operations are still being evaluated and there may be unanticipated adverse or negative effects that are not identified at this time, including reputational damage to the Company as well as the time and expense incurred in implementing the recommendations of the Special Committee, (4) any legal proceedings or governmental or regulatory investigations or actions directly or indirectly related to the underlying matters of the Special Committee’s internal investigation or other matters may result in adverse findings, the imposition of fines or other penalties, increased costs and expenses, and the diversion of management’s time and resources to address such matters, any of which may have a material adverse effect on the Company, (5) the impact of recent changes to our senior management team, (6) the impact of disclosing previously undisclosed transactions between members of our management team, including the loan from David Liniger to Adam Contos, (7) the existence and identification of control deficiencies, including disclosure controls  or internal controls over financial reporting, and any impact of such control deficiencies as well as the associated costs in remediating those control deficiencies,  (8) changes in business and economic activity in general, (9) changes in the real estate market or interest rates and availability of financing, (10) the Company’s ability to attract and retain quality franchisees, (11) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (12) changes in laws and regulations, (13) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (14) fluctuations in foreign currency exchange rates, and (15) the impact of the TCJA, as well as those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov.  Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.

Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of financial measures that are not in accordance with U.S. GAAP, such as Adjusted EBITDA and the ratios related thereto, Adjusted net income, Adjusted basic and diluted earnings per share (Adjusted EPS) and Free cash flow. These measures are derived on the basis of methodologies other than in accordance with U.S. GAAP.

The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, loss on early extinguishment of debt, equity-based compensation expense, professional fees and certain expenses incurred in connection with the issuance of Class A common stock as a result of RIHI’s redemption of common units in RMCO, acquisition-related expenses and other non-recurring items including the impact of the TCJA and the special investigation expenses. During the first quarter of 2017, the Company revised its definition of Adjusted EBITDA to better reflect the performance of the business and comply with SEC guidance. The Company now adjusts for equity-based compensation expense and no longer adjusts for straight-line rent expense and severance related expenses. Adjusted EBITDA was revised in prior periods to reflect this change for consistency in presentation.

Because Adjusted EBITDA and Adjusted EBITDA margin omit certain non-cash items and other non-recurring cash charges or other items, the Company believes that each measure is less susceptible to variances that affect its operating performance resulting from depreciation, amortization and other non-cash and non-recurring cash charges or other items. The Company presents Adjusted EBITDA and the related Adjusted EBITDA margin because the Company believes they are useful as supplemental measures in evaluating the performance of its operating businesses and provides greater transparency into the Company’s results of operations. The Company’s management uses Adjusted EBITDA and Adjusted EBITDA margin as factors in evaluating the performance of the business.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analyzing the Company’s results as reported under U.S. GAAP. Some of these limitations are:

• these measures do not reflect changes in, or cash requirements for, the Company’s working capital needs;
• these measures do not reflect the Company’s interest expense, or the cash requirements necessary to service interest or principal payments on its debt;
• these measures do not reflect the Company’s income tax expense or the cash requirements to pay its taxes;
• these measures do not reflect the cash requirements to pay dividends to stockholders of the Company’s Class A common stock and tax and other cash distributions to its non-controlling unitholders;
• these measures do not reflect the cash requirements to pay RIHI Inc. and Oberndorf pursuant to the tax receivable agreements;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these measures do not reflect any cash requirements for such replacements;
• although equity-based compensation is a non-cash charge, the issuance of equity-based awards may have a dilutive impact on earnings per share; and
• other companies may calculate these measures differently so similarly named measures may not be comparable.

The Company’s Adjusted EBITDA margin guidance does not include certain charges and costs. The adjustments to EBITDA margin in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA margin in prior quarters, such as gain on sale or disposition of assets and sublease and acquisition related expenses, among others.  The exclusion of these charges and costs in future periods will have a significant impact on the Company’s Adjusted EBITDA margin. The Company is not able to provide a reconciliation of the Company’s non-GAAP financial guidance to the corresponding U.S. GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs.

Adjusted net income is calculated as Net income attributable to RE/MAX Holdings, assuming the full exchange of all outstanding non-controlling interests for shares of Class A common stock as of the beginning of the period (and the related increase to the provision for income taxes after such exchange), plus primarily non-cash items and other items that management does not consider to be useful in assessing the Company’s operating performance (e.g., amortization of acquired intangible assets, gain on sale or disposition of assets and sub-lease, loss on early debt extinguishment, public-offering related expenses, acquisition-related expenses, equity-based compensation expense, the impact of the TCJA, and special investigation expense). 

Adjusted basic and diluted earnings per share (Adjusted EPS) are calculated as Adjusted net income (as defined above) divided by pro forma (assuming the full exchange of all outstanding non-controlling interests) basic and diluted weighted average shares, as applicable.

When used in conjunction with GAAP financial measures, Adjusted net income and Adjusted EPS are supplemental measures of operating performance that management believes are useful measures to evaluate the Company’s performance relative to the performance of its competitors as well as performance period over period.  By assuming the full exchange of all outstanding non-controlling interests, management believes these measures:

• facilitate comparisons with other companies that do not have a low effective tax rate driven by a non-controlling interest on a pass-through entity;
• facilitate period over period comparisons because they eliminate the effect of changes in Net income attributable to RE/MAX Holdings, Inc. driven by increases in its ownership of RMCO, LLC, which are unrelated to the Company’s operating performance; and
• eliminate primarily non-cash and other items that management does not consider to be useful in assessing the Company’s operating performance.

Free cash flow is calculated as cash flows from operations less capital expenditures, both as reported under GAAP, and quantifies how much cash a company has to pursue opportunities that enhance shareholder value.  The Company believes free cash flow is useful to investors as a supplemental measure as it calculates the cash flow available for working capital needs, re-investment opportunities, potential independent region and strategic acquisitions, dividend payments or other strategic uses of cash.

Free cash flow after tax and non-dividend distributions to RIHI is calculated as free cash flow less tax and other non-dividend distributions paid to RIHI (the non-controlling interest holder) to enable RIHI to satisfy its income tax obligations. Similar payments would be made by the Company directly to federal and state taxing authorities as a component of the Company’s consolidated provision for income taxes if a full exchange of non-controlling interests occurred in the future.  As a result and given the significance of the Company’s ongoing tax and non-dividend distribution obligations to its non-controlling interest, free cash flow after tax and non-dividend distributions, when used in conjunction with GAAP financial measures, provides a meaningful view of cash flow available to the Company to pursue opportunities that enhance shareholder value.

Unencumbered cash generated is calculated as free cash flow after tax and non-dividend distributions to RIHI less quarterly debt principal payments less annual excess cash flow payment on debt, as applicable. Given the significance of the Company’s excess cash flow payment on debt, when applicable, unencumbered cash generated, when used in conjunction with GAAP financial measures, provides a meaningful view of the cash flow available to the Company to pursue opportunities that enhance shareholder value after considering its debt service obligations.

APPENDIX:

RE/MAX HOLDINGS REPORTS
PRELIMINARY THIRD QUARTER 2017 RESULTS

 

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SOURCE RE/MAX Holdings, Inc.

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