Dear Coldwell Banker® Broker/Owners and Sales Associates:
Earlier today we saw a business writer's blog post get picked up as a "news" report pertaining to the financial condition of a number of companies, including our parent company, Realogy. This coverage generally focused on the long-term debt and viability of these companies.
Although Realogy is currently in a quiet period and we cannot release certain financial information in advance of our fourth quarter 2008 earnings call in March, we certainly could have addressed the fundamentals had this reporter taken the time to attempt to carry out his due diligence by contacting Realogy for the facts.
I want to point out a number of "silver linings" for Realogy that clearly have not been taken into consideration by either the media or the financial ratings agencies:
- During the past several years Realogy has moved aggressively to mitigate the impact of the economy on our company. We have successfully reduced our overhead by more than $350 million and continue to focus on maximizing the effectiveness of our cost structure.
- As we have focused on costs we have been equally focused on growth. In spite of the woes of the housing market we have made great progress in advancing our company. From franchise sales to the retention of the top-tier sales associates to signing new clients at Cartus and Title Resource Group, we continue to be forward thinking, highly focused on the future of our company and the industry.
- In 2009, we expect to benefit from considerably lower interest rates since a significant portion of our bank debt is tied to LIBOR;
- None of our corporate debt is due until at least 2013; and
- Unlike many companies in today's economy, we have the support and commitment of one of the best financed private equity firms in the country, Apollo Management.
Please also remember that private equity funds managed by Apollo Management and co-investors originally invested $2 billion in our company. Apollo has a substantial ongoing interest in the success of Realogy. Our senior management team is highly confident of Apollo's commitment to Realogy. If there is any question as to Apollo's overall financial strength, one need only look to Apollo's success in raising approximately $15 billion in capital last month for its newest investment fund.
As to the future of the industry, we are encouraged that Congress and the White House appreciate the importance of stimulating housing. We have actively engaged in lobbying the House of Representatives, the Senate and the Treasury Department on this critical aspect of our economy. In due course, we believe the government will act to provide the proper stimulus for our industry.
We look forward to the recovery in housing that we all know is inevitable. Thank you in advance for your hard work, patience and commitment to Coldwell Banker.
President & CEO
Realogy Franchise Group