Frontdoor, Inc. · NASDAQ:FTDR

Frontdoor — Q3 2018 Earnings Presentation

17 slides from Frontdoor's earnings presentation, Nov 5, 2018

1. Slide 1: Third-Quarter 2018 Earnings Webcast

   Third-Quarter 2018 Earnings Webcast November 5, 2018 1

2. Slide 2: Forward Looking Statements

   Forward Looking Statements Forw ard-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future per

3. Slide 3: Agenda

   Rex Tibbens Brian Turcotte Matt Davis Chief Executive Officer SVP & Chief Financial Officer VP IR and Treasury Agenda Q3 2018 Highlights Q3 2018 Financial Summary Business Update Full-Year 2018 Outlook 3

4. Slide 4: Third-Quarter 2018 Highlights

   Spinoff Completed Successfully completed spinoff on October 1, 2018 Adding Leadership Talent Jeff Fiarman – SVP & General Counsel Brett Worthington – SVP of Business Development Scott Brown – SVP of Customer Experience Brian McAndrews joined Board of Directors Third-Quarter Increased Revenue 2018 Hi

5. Slide 5: Significantly Strengthening Core Business to Enable Continued Growth & Claims Costs Containment

   Significantly Strengthening Core Business to Enable Continued Growth & Claims Costs Containment Initiatives Actions • Strategically raising prices across all channels Pricing • Implementing dynamic pricing • Improving models used to estimate claims costs • Managing to the inputs will provide more vi

6. Slide 6: Continue to Execute Core Business Strategy

   Continue to Execute Core Business Strategy • Investing in Direct-to-Consumer o Driving organic revenue growth o Implementing dynamic pricing • Growing Share in Real Estate o Increasing penetration o Strengthening partnerships with top real estate firms to drive incremental sales • Improving Customer

7. Slide 7: Large Total Addressable Market for Core Home Service Plan Business and On-Demand Opportunity

   Large Total Addressable Market for Core Home Service Plan Business and On-Demand Opportunity View by homes View by services Grow th Strategy Home 5 Improvement Home Million Increasing Maintenance Home Service Penetration 22% Plan Customers ~$400B 75 U.S. Home Million On-Demand Service 51% Ow ner Occ

8. Slide 8: Q3 2018 Financial Summary

   Q3 2018 Financial Summary Financial Results Three Months Ended September 30, $ millions, except per share amounts 2018 2017 Change Revenue $ 377 $ 346 9 % Gross Profit 176 179 (2) % Net Income 49 53 (7) % Pro Forma Earnings per Share 0.58 0.63 (8) % Adjusted EBITDA 86 96 (10) % Home Service Plans (n

9. Slide 9: Q3 2018 vs. Q3 2017 Adjusted EBITDA Bridge

   Q3 2018 vs. Q3 2017 Adjusted EBITDA Bridge $ millions 19 $96 $86 (21) (2) (2) (2) (3) Q3 '17 Revenue Claims Cost Sales & Customer Spinoff Other Q3 '18 Conversion Marketing Service Dis-synergies Note: Revenue and expense items are year-over-year increases/(decreases); amounts presented in table may n

10. Slide 10: September YTD Cash Flow and Cash Position

    September YTD Cash Flow and Cash Position Nine Months Ended September 30, $ millions 2018 2017 Net cash provided from (used for): Operating Activities $ 126 $ 136 Investing Activities (4) 5 Financing Activities (98) (53) Cash increase during the period $ 23 $ 88 Note: Amounts presented in table may

11. Slide 11: Full-Year 2018 Outlook

    Full-Year 2018 Outlook Low High Revenue ($ billions) $ 1.25 $ 1.26 Gross Profit Margin 43% 44% Adjusted EBITDA ($ millions) 215 225 Capital Expenditures ($ millions) 25 30 Effective Tax Rate ~25% Note: A reconciliation of the forward-looking full-year 2018 Adjusted EBITDA outlook to net income canno

12. Slide 12: Q&A

    Q&A For more information please visit our website: www.frontdoorhome.com 12

13. Slide 13: Appendix

    BG Sa ase ty eae ete”, ©. sa ag: Dee,

14. Slide 14: Q3 Consolidated Results

    Q3 Consolidated Results $ millions, except per share amounts Three Months Ended September, 30 2018 2017 Better / (Worse) Revenue $ 377 $ 346 $ 31 YoY Growth 9% Gross Profit 176 179 (3) % of revenue 46.5% 51.6% (5.1) pts Selling and administrative expenses 90 82 (8) % of revenue 23.8% 23.8% 0 pts Dep

15. Slide 15: September YTD Consolidated Results

    September YTD Consolidated Results $ millions, except per share amounts Nine Months Ended September 30, 2018 2017 Better / (Worse) Revenue $ 979 $ 899 $ 80 YoY Growth 9% Gross Profit 448 447 1 % of revenue 45.7% 49.7% (3.9) pts Selling and administrative expenses 259 241 (18) % of revenue 26.4% 26.8

16. Slide 16: Net Income to Adjusted EBITDA and Adjusted Net Income Reconciliations

    Net Income to Adjusted EBITDA and Adjusted Net Income Reconciliations $ millions, except per share amounts Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net Income $ 49 $ 53 $ 108 $ 116 Depreciation and amortization expense 5 4 14 13 Restructuring charges — 4 3

17. Slide 17: Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations

    Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations Three Months Ended Nine Months Ended September 30, September 30, ($ millions) 2018 2017 2018 2017 Net Cash Provided from Operating Activities $ 4 $ 24 $ 126 $ 136 Property additions (4) (3) (21) (9) Free Cash Flow $ — $ 22

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