Realogy improves first-quarter cash from operations by $110 million

By Jennifer Lanning Drey

Portland, Ore., May 12 - Realogy Corp. generated $4 million of cash flow from operations in the first quarter, representing a $110 million year-over-year improvement from the same period in 2008, Richard Smith, chief executive officer of Realogy, said Tuesday during the company's quarterly earnings conference call.

At the same time, EBITDA for the period was negatively affected by $38 million of restructuring and legacy charges.

Realogy's senior secured leverage ratio was 5.1 to 1, or 0.25 times below the maximum 5.35 to 1 ratio allowed under its credit agreement, at the end of the period.

"Our results illustrate the practical market pressures that we and the industry are experiencing," Smith said.

Realogy ended the first quarter with $421 million of cash and $600 million outstanding on its revolving credit facility for a net revolver balance of $214 million.

At April 30, the net revolver balance had increased to $420 million due to Realogy's payment of semi-annual interest expense and the funding cycle of its securitization facilities, Anthony Hull, chief financial officer of Realogy, said during the call.

The company continues to look to hold a cash surplus rather than pay down the revolver and expects it will continue to do so through the remainder of the year, Hull said.

The CFO noted that the second and third quarters are typically Realogy's best periods for cash generation.

Also during the call, Smith said he believes views that the housing market is at or near a bottom may be overly optimistic due to the continuation of factors including new foreclosures, the weak job market, tight credit markets and low consumer confidence.

In the first quarter, the company continued to strategically manage its costs while focusing on investing in long-term growth opportunities.

Realogy is a Parsippany, N.J.-based provider of real estate and relocation services.

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