Slide 1: Second-Quarter 2020 Earnings Webcast
Second-Quarter 2020 Earnings Webcast August 5, 2020
Slide 2: Today's Speakers
Today’s Speakers Rex Tibbens Brian Turcotte Matt Davis President & Senior Vice President & Vice President Chief Executive Officer Chief Financial Officer Investor Relations & Treasurer 2
Slide 3: Forward Looking Statements
Forward Looking Statements This news release 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 performance and any statements
Slide 4: Current Business Focus
Current Business Focus • Opportunistically investing in resilient business model • Direct-to-Consumer channel • Improving customer retention • Building emerging businesses • Improving customer experience • Responding to evolving business conditions 4
Slide 5: Second-Quarter 2020 Summary
Second-Quarter 2020 Summary • Delivered solid financial results • Managed challenging environment • Invested in direct-to-consumer marketing • Maintained customer retention at 75% • Expanded Candu on-demand platform 5
Slide 6: Q2 2020 Financial Summary
Q2 2020 Financial Summary $ millions Net Adjusted Revenue Income EBITDA(1) $417 $49 $100 (1) See the Appendix accompanying this presentation for a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the nearest GAAP measure. See “Reconciliations of Non-GAAP Financial Measures” included in this
Slide 7: Q2 2020 Adjusted EBITDA Bridge
Q2 2020 Adjusted EBITDA(1) Bridge $ millions Three Months Ended June 30, 2019 $105 Impact of change in revenue(2) 25 Contract claims costs (13) Sales and marketing costs (14) Customer service costs (2) General and administrative costs (1) Other (1) Three Months Ended June 30, 2020 $100 Note: Revenue
Slide 8: Q2 2020 Cash Flow
Q2 2020 Cash Flow $ millions Six Months Ended June 30, Net cash provided from 2020 2019 $ millions (used for): Operating Activities $140 $140 Free Cash Available Flow(1) Liquidity(2) Investing Activities (19) (12) Financing Activities (4) (4) $122 $622 Cash increase during $118 $124 the period (1} S
Slide 9: Q&A
Q&A For more information please visit our website: frontdoorhome.com 9
Slide 10: Appendix
=p Frontdoor. APPENDIX
Slide 11: Q2 2020 Consolidated Results
Q2 2020 $ millions, except per share amounts Three Months Ended June 30, Consolidated 2020 2019 Better / (Worse) Revenue $ 417 $ 388 $ 30 YoY Growth 8% Results Note: See elsewhere in this Appendix for a reconciliation of Adjusted Gross Profit % of revenue Selling and administrative expenses 218 52.1
Slide 12: YTD 2020 Consolidated Results
YTD 2020 $ millions, except per share amounts Six Months Ended June 30, Consolidated 2020 2019 Better / (Worse) Revenue $ 711 $ 658 $ 53 YoY Growth 8% Results Note: See elsewhere in this Appendix for a reconciliation of Adjusted Gross Profit % of revenue Selling and administrative expenses 364 51.2%
Slide 13: Net Income to Adjusted EBITDA Reconciliations
Net Income to Adjusted EBITDA Reconciliations $ millions Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net Income $ 49 $ 60 $ 62 $ 73 Depreciation and amortization expense 10 6 18 12 Restructuring charges 1 — 4 — Spin-off charges — — — 1 Provision for income taxes 17 20 2
Slide 14: Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations
Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations $ millions Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net Cash Provided from Operating Activities $ 80 $ 88 $ 140 $ 140 Property Additions (11) (6) (18) (10) Free Cash Flow $ 70 $ 82 $ 122 $