Douglas Elliman Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
DOUG$1.56-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001878897-24-000018
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001878897-24-000031
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 118 current paragraphs.
59 unchanged; 33 reworded; 16 added; 3 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Convertible Debt. On July 2, 2024, we issued $50,000 in aggregate principal amount of senior secured convertible notes due on July 2, 2029 (the “Convertible Notes”) to funds advised by KLIM. The Convertibles Notes bear interest at a rate of 7.0% per annum payable in cash, or, at the our election, 8.0% per annum paid in kind, due semi-annually. The convertible notes are convertible into common stock at an initial conversion rate equal to $1.50 per share, subject to certain customary anti-dilution adjustments. We intend to use the net proceeds from the sale of the Convertible Notes for general corporate purposes.
Current report
Revenues. Our revenues were $285,751 for the three months ended June 30, 2024 compared to $275,912 for the three months ended June 30, 2023. The $9,839 increase in revenues was primarily due to increases in commission and other brokerage revenues which primarily related to increases in revenues from existing home sales.
Current report
Operating expenses. Our operating expenses were $289,424 for the three months ended June 30, 2024 compared to $284,209 for the three months ended June 30, 2023. The increase of $5,215 was due primarily to an increase in real estate agent commissions of $11,655 arising primarily from increases in commissions and other brokerage revenue partially offset by declines in general and administrative expenses.
Current report
Operating loss. Operating loss was $3,673 for the three months ended June 30, 2024 compared to $8,297 for the same period in 2023. The $4,624 decline in operating loss was due to the net impact of increases in commission and other brokerage revenues partially offset by the increases in operating expenses.
Current report
Income tax expense (benefit). Income tax expense was $173 compared to income tax benefit of $1,293 for the three months ended June 30, 2024 and 2023, respectively.
Current report
Revenues. Our revenues were $285,751 for the three months ended June 30, 2024 compared to $275,912 for the three months ended June 30, 2023. The increase of $9,839 was primarily related to an increase in our commission and other brokerage income, as a result of an increase in revenues from existing home sales.
Current report
Operating Expenses. Our operating expenses were $282,804 for the three months ended June 30, 2024 compared to $276,926 for the three months ended June 30, 2023, an increase of $5,878, due primarily to increases in real estate brokerage commissions, partially offset by reductions in general and administrative and technology expenses. The primary components of operating expenses are described below.
Current report
Operations and support. Operations and support expenses were $17,999 for the three months ended June 30, 2024 compared to $17,324 for the three months ended June 30, 2023. The increase is primarily related to an increase in legal expense in the 2024 period.
Current report
Technology. Technology expenses were $5,433 for the three months ended June 30, 2024 compared to $6,163 for the three months ended June 30, 2023. The decline resulted from continued expense reduction efforts in 2024, which included the negotiation of existing licensing agreements in an effort to improve our technology efficiency
Current report
Operating income (loss). Operating income was $2,947 for the three months ended June 30, 2024 compared to operating loss of $1,014 for the three months ended June 30, 2023. The increase in operating income is primarily associated with the net impact of increased commission and other brokerage revenues and partially offset by increases in operating expenses.
Current report
Six months ended June 30, 2024 Compared to Six months ended June 30, 2023
Current report
Real Estate Brokerage.
Current report
Sales and Marketing. Sales and marketing expenses were $43,451 for the six months ended June 30, 2024 compared to $43,400 for the six months ended June 30, 2023.
Current report
Corporate and Other.
Current report
On July 2, 2024, we issued $50,000 in aggregate principal amount of Convertible Notes. The Convertible Notes bear interest at a rate of 7.0% per annum, payable in cash, or, at our election, 8.0% per annum paid in kind, due semi-annually. See “-- Recent Developments” and “Item 1A. Risk Factors --Our debt obligations under our Convertible Notes could impair our financial condition, limit our operational flexibility and result in significant dilution” for more information concerning our Convertible Notes.
Current report
•litigation risks, the costs associated with, and the outcome of, litigation and other proceedings to the exten uninsured, including litigation or other claims against companies we invest in or acquire,
Removed paragraphs (3)
Previous report
Litigation. Following the federal jury decision in the Sitzer/Burnett case on October 31, 2023, several additional putative class action lawsuits were filed against the National Association of Realtors and real estate brokerage firms, including Douglas Elliman, alleging anticompetitive conduct similar to that in the Sitzer/Burnett case in violation of federal and state antitrust laws and consumer protection claims as well as allegations of unjust enrichment. Presently, we are a defendant in eight of these cases. We may become involved in additional legal proceedings concerning the same or similar claims. We are unable to reasonably estimate the financial impact of these matters. See Note 7 - “Contingencies” to our condensed consolidated financial statements.
Previous report
Three months ended March 31, 2024 Compared to Three months ended March 31, 2023
Previous report
•litigation risks,
Reworded paragraphs (33)
Previous wording
The following discussion should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Audited Consolidated Financial Statements as of and for the year ended December 31, 2023 and Notes thereto, included in our 2023 Annual Report on Form 10-K, and our Condensed Consolidated Financial Statements and related Notes as of and for the quarterly period ended March 31, 2024.
Current wording
The following discussion should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Audited Consolidated Financial Statements as of and for the year ended December 31, 2023 and Notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”), and our Condensed Consolidated Financial Statements and related Notes as of and for the quarterly period and six months ended June 30, 2024.
Previous wording
(a)Represents amortization of stock-based compensation. $4,745, $1,225,$1,019, and$4,539 are attributable to the Real estate brokerage segment for the last twelve months ended March 31, 2024, the three months ended March 31, 2024, and 2023, and the year ended December 31, 2023, respectively. $8,862, $2,130,$1,804, and$8,536 are attributable to the Corporate and other segment for the last twelve months ended March 31, 2024, the three months ended March 31, 2024, and 2023, and the year ended December 31, 2023, respectively.
Current wording
(a)Represents amortization of stock-based compensation. $4,712, $2,353,$2,180, and$4,539 are attributable to the Real estate brokerage segment for the last twelve months ended June 30, 2024, the six months ended June 30, 2024, and 2023, and the year ended December 31, 2023, respectively. $8,969, $4,477,$4,044, and$8,536 are attributable to the Corporate and other segment for the last twelve months ended June 30, 2024, the six months ended June 30, 2024, and 2023, and the year ended December 31, 2023, respectively.
Previous wording
Under the Settlement Agreement, we agreed to pay, into an escrow fund, $7,750 within 30 business days of preliminary approval of the settlement by the court, (which preliminary approval was granted on April 30, 2024) as well as two $5,000 contingent payments subject to certain financial contingencies through December 31, 2027 (collectively, the “Settlement Amount”). The contingent payments may be accelerated under certain circumstances. We recognized an expense of$17,750 in the three months ended March 31, 2024.
Current wording
Under the Settlement Agreement, we paid$7,750, into an escrow fund, on June 12, 2024 and agreed to pay two $5,000 contingent payments subject to certain financial contingencies on or before December 31, 2027 (collectively, the “Settlement Amount”). The contingent payments may be accelerated under certain circumstances. We recognized an expense of$17,750 in the six months ended June 30, 2024.
Previous wording
During the three months ended March 31, 2024, our real estate brokerage segment reduced its operating expenses, excluding commissions and restructuring expenses, by approximately $5,400 as compared to the corresponding period in 2023 and the reductions totaled approximately $18,900 from April 1, 2023 to March 31, 2024. These reductions during the quarter ended March 31, 2024 included approximately $5,000 of general and administrative expenses. Compared to the first quarter of 2023, these actions resulted in a 7.6% reduction of operating expenses, excluding commissions, depreciation, litigation settlement, non-cash stock-based compensation and restructuring expenses.
Current wording
During the six months ended June 30, 2024, our real estate brokerage segment reduced its operating expenses, excluding commissions, litigation settlement, restructuring expenses and non-cash stock compensation expenses by approximately $11,300 (7.9%) as compared to the corresponding period in 2023. These reductions during the six months ended June 30, 2024 included approximately $10,700 of general and administrative expenses.
Previous wording
The following table sets forth our revenue and operating loss by segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
Current wording
The following table sets forth our revenue and operating (loss) income by segment for the three months ended June 30, 2024 compared to the three months ended June 30, 2023:
Previous wording
Other income. Other income was $974 for the three months ended March 31, 2024 compared to $578 for the three months ended March 31, 2023. For the three months ended March 31, 2024, other income primarily consisted of interest income, net of $1,376 . This was offset by equity losses from equity method investments of $11 and investment and other losses, primarily associated with our PropTech investments of $391.
Current wording
Other income. Other income was $2,066 for the three months ended June 30, 2024 compared to $1,826 for the three months ended June 30, 2023. For the three months ended June 30, 2024, other income primarily consisted of interest income, net of $1,048, investment and other income, primarily associated with our PropTech investments of $1,020. This was partially offset by equity in losses from equity method investments of $2.
Previous wording
Sales and Marketing. Sales and marketing expenses were $21,298 for the three months ended March 31, 2024 compared to $21,239 for the three months ended March 31, 2023.
Current wording
Sales and Marketing. Sales and marketing expenses were $22,153 for the three months ended June 30, 2024 compared to $22,161 for the three months ended June 30, 2023.
Previous wording
Revenues. Our revenues were $200,239 for the three months ended March 31, 2024 compared to $213,982 for the three months ended March 31, 2023. The $13,743 decline in revenues was primarily due to a decline in commissions and other brokerage income because of lower revenues from existing home sales caused, in part, by lower listing inventory associated with continued high mortgage rates.
Current wording
Revenues. Our revenues were $485,990 for the six months ended June 30, 2024 compared to $489,894 for the six months ended June 30, 2023. The $3,904 decline in revenues was primarily due to a decline in commissions and other brokerage income because of lower revenues from existing home sales caused, in part, by lower listing inventory associated with continued high mortgage rates.
Previous wording
Operating expenses. Our operating expenses were $241,703 for the three months ended March 31, 2024 compared to $237,790 for the three months ended March 31, 2023. The increase of $3,913 was due primarily to the litigation settlement of $17,750 partially offset by declines in real estate brokerage commissions of $7,086 and other operating expenses of $6,751.
Current wording
Operating expenses. Our operating expenses were $531,127 for the six months ended June 30, 2024 compared to $521,999 for the six months ended June 30, 2023. The increase of $9,128 was due primarily to the litigation settlement of $17,750 and increases in real estate brokerage commissions of $4,569 partially offset by a decline in other operating expenses of $13,191.
Previous wording
Operating loss. Operating loss was $41,464 for the three months ended March 31, 2024 compared to $23,808 for the three months ended March 31, 2023. The $17,656 increase in operating loss was primarily due to the litigation settlement and the net impact of declines in commissions and other brokerage revenues partially offset by a decline in operating expenses.
Current wording
Operating loss. Operating loss was $45,137 for the six months ended June 30, 2024 compared to $32,105 for the six months ended June 30, 2023. The $13,032 increase in operating loss was primarily due to the litigation settlement and the net impact of declines in commissions and other brokerage revenues partially offset by a decline in operating expenses.
Previous wording
Loss before provision for income taxes. Loss before income taxes was $40,490 for the three months ended March 31, 2024 and $23,230 for the three months ended March 31, 2023.
Current wording
Loss before provision for income taxes. Loss before income taxes was $42,097 for the six months ended June 30, 2024 and $29,701 for the six months ended June 30, 2023.
Previous wording
Income tax expense (benefit). Income tax expense was $1,195 for the three months ended March 31, 2024 and income tax benefit was $5,390 for the three months ended March 31, 2023.
Current wording
Income tax expense (benefit). Income tax expense was $1,368 for the six months ended June 30, 2024 compared to income tax benefit of $6,683 for the six months ended June 30, 2023.
Previous wording
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. During the three months ending March 31, 2024, we analyzed the likelihood of utilizing our deferred tax assets and determined it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result we established a valuation allowance for the full amount of the deferred tax assets. We refine annual estimates as current information becomes available.
Current wording
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. During the six months ended June 30, 2024, we analyzed the likelihood of utilizing our deferred tax assets and determined it will be more likely than not that the benefits of these deductible differences will not be realized, and as a result we established a valuation allowance for the full amount of the deferred tax assets. We refine annual estimates as current information becomes available.
Previous wording
Revenues. Our revenues were $200,239 for the three months ended March 31, 2024 compared to $213,982 for the three months ended March 31, 2023. The decline of $13,743 was primarily related to a decline in our commission and other brokerage income because of lower revenues from existing home sales caused, in part, by lower listing inventory associated with continued high mortgage rates.
Current wording
Revenues. Our revenues were $485,990 for the six months ended June 30, 2024 compared to $489,894 for the six months ended June 30, 2023. The decline of $3,904 was primarily related to a decline in our commission and other brokerage income because of lower revenues from development marketing sales.
Previous wording
Our revenues from commission and other brokerage income were $188,265 for the three months ended March 31, 2024 compared to $202,036 for the three months ended March 31, 2023, a decline of $13,771. In 2024, our commission and other brokerage income generated from the sales of existing homes declined by $8,558 in New York City. This was partially offset by increases of $3,176 in our Florida market, $2,354 in the West region and $1,481 in the Northeast region, which excludes New York City. In addition, our revenues from Development Marketing declined by $12,224 in the 2024 period compared to the 2023 period.
Current wording
Our revenues from commission and other brokerage income were $460,578 for the six months ended June 30, 2024 compared to $464,525 for the six months ended June 30, 2023, a decline of $3,947. In 2024, our commission and other brokerage income generated from the sales of existing homes declined by $12,220 in New York City. This was partially offset by increases of $14,369 in our Florida market, $5,944 in the West region and $3,153 in the Northeast region, which excludes New York City. In addition, our revenues from Development Marketing declined by $15,193 in the 2024 period compared to the 2023 period.
Previous wording
Operating Expenses. Our operating expenses were $235,525 for the three months ended March 31, 2024 compared to $231,325 for the three months ended March 31, 2023, an increase of $4,200, due primarily to the litigation settlement partially offset by declines in real estate brokerage commissions and other operating expenses.
Current wording
Operating Expenses. Our operating expenses were $518,329 for the six months ended June 30, 2024 compared to $508,251 for the six months ended June 30, 2023, an increase of $10,078, due primarily to the litigation settlement partially offset by declines in other operating expenses.
Previous wording
Real Estate Agent Commissions. As a result of declines in commissions and other brokerage income, our real estate agent commissions expense was $149,016 for the three months ended March 31, 2024 compared to $156,102 for the three months ended March 31, 2023, a decline of $7,086. Real estate agent commissions expense, as a percentage of revenues, increased to 74.4% for the three months ended March 31, 2024 compared to 73.0% for the three months ended March 31, 2023. The increase in real estate agent commissions expense as a percentage of revenue in the 2024 period was primarily driven by a lower percentage of commission revenues derived from Development Marketing, which generally pays lower commission rates, during three months ended March 31, 2024 compared to the prior year period. In addition, during three months ended March 31, 2024, a higher percentage of our revenues was generated from locations (primarily Florida, California, Texas, Colorado and Nevada) which generally pay higher commission rates.
Current wording
Real Estate Agent Commissions. Our real estate agent commissions expense was $365,473 for the six months ended June 30, 2024 compared to $360,904 for the six months ended June 30, 2023, an increase of $4,569. Real estate agent commissions expense, as a percentage of revenues, increased to 75.2% for the six months ended June 30, 2024 compared to 73.7% for the six months ended June 30, 2023. The increase in real estate agent commissions expense as a percentage of revenue in the 2024 period was primarily driven by a lower percentage of commission revenues derived from Development Marketing, which generally pays lower commission rates, during six months ended June 30, 2024 compared to the prior year period. In addition, during the six months ended June 30, 2024, a higher percentage of our revenues was generated from locations (primarily Florida, California, Texas, Colorado and Nevada) which generally pay higher commission rates.
Previous wording
Operations and support. Operations and support expenses were $18,799 for the three months ended March 31, 2024 compared to $18,893 for the three months ended March 31, 2023.
Current wording
Operations and support. Operations and support expenses were $36,798 for the six months ended June 30, 2024 compared to $36,217 for the six months ended June 30, 2023.
Previous wording
General and administrative. General and administrative expenses were $20,838 for the three months ended March 31, 2024 compared to $25,830 for the three months ended March 31, 2023.The decline is primarily related to reductions in personnel as well as lower incentive compensation expenses.
Current wording
General and administrative. General and administrative expenses were $39,073 for the six months ended June 30, 2024 compared to $49,806 for the six months ended June 30, 2023.The decline is primarily related to reductions in personnel as well as lower incentive compensation expenses.
Previous wording
Technology. Technology expenses were $5,843 for the three months ended March 31, 2024 compared to $6,012 for the three months ended March 31, 2023.
Current wording
Technology. Technology expenses were $11,276 for the six months ended June 30, 2024 compared to $12,175 for the six months ended June 30, 2023.
Previous wording
Operating loss. Operating loss was $35,286 for the three months ended March 31, 2024 compared to $17,343 for the three months ended March 31, 2023. The increase in operating loss is primarily associated with the litigation settlement of $17,750 and decline in revenues partially offset by a decline in operating expenses.
Current wording
Operating loss. Operating loss was $32,339 for the six months ended June 30, 2024 compared to $18,357 for the six months ended June 30, 2023. The increase in operating loss is primarily associated with the litigation settlement of $17,750 and decline in revenues partially offset by a decline in operating expenses.
Previous wording
Corporate and Other loss. The operating loss at the Corporate and Other segment was $6,178 for the three months ended March 31, 2024 compared to $6,465 for the three months ended March 31, 2023.
Current wording
Corporate and Other loss. The operating loss at the Corporate and Other segment was $12,798 for the six months ended June 30, 2024 compared to $13,748 for the six months ended June 30, 2023.
Previous wording
As of March 31, 2024, New Valley Ventures had investments (at a carrying value) of approximately$13,112 in PropTech companies. This amounts to approximately 3% of the value of Douglas Elliman’s total assets, which totaled approximately $461 million, as of March 31, 2024.
Current wording
As of June 30, 2024, New Valley Ventures had investments (at a carrying value) of approximately$12,919 in PropTech companies. This amounts to approximately 3% of the value of Douglas Elliman’s total assets, which totaled approximately $464 million, as of June 30, 2024.
Previous wording
Cash, cash equivalents and restricted cash declined by $29,449 to $100,068, which included $8,617 of restricted cash, during the three months ended March 31, 2024 and by $39,778, which included restricted cash of $7,942 during the three months ended March 31, 2023.
Current wording
Cash, cash equivalents and restricted cash declined by $26,613 to $102,904, which included $10,040 of restricted cash, during the six months ended June 30, 2024 and by $32,084, which included restricted cash of $8,880, during the six months ended June 30, 2023.
Previous wording
Cash used in operations was $27,291 and $31,575 for the three months ended March 31, 2024 and 2023, respectively. The decline in the cash used in the 2024 period was related to the receipt of income tax refunds and lower uses of working capital. This was partially offset by lower operating income in the three months ended March 31, 2024.
Current wording
Cash used in operations was $25,973 and $23,140 for the six months ended June 30, 2024 and 2023, respectively. The decline in the cash used in the 2024 period was related to the receipt of income tax refunds and lower uses of working capital. This was partially offset by lower operating income in the six months ended June 30, 2024.
Previous wording
Cash used in investing activities was $2,158 and $3,982 for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, cash used in investing activities was comprised of capital expenditures of $2,081 and the purchase of investments of $85 in our PropTech business. This was offset by $8 of distributions from our investments in equity securities. For the three months ended March 31, 2023, cash used in investing activities was comprised of capital expenditures of $3,627, and purchase of investments of $355 in our PropTech business.
Current wording
Cash used in investing activities was $629 and $4,711 for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, cash used in investing activities was comprised of capital expenditures of $2,967 and the purchase of investments of $185 in our PropTech business. This was offset by $2,523 of distributions from our investments in equity securities. For the six months ended June 30, 2023, cash used in investing activities was comprised of capital expenditures of $4,614, and purchase of investments of $505 in our PropTech business. This was offset by $408 of distributions from our investments in equity securities.
Previous wording
Cash used in financing activities was $0 and $4,221 for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2023, cash used in financing activities was comprised of dividends and distributions on common stock of $4,221 .
Current wording
Cash used in financing activities was $11 and $4,233 for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, cash used in financing activities was comprised of tax benefit of options exercised of $11. For the six months ended June 30, 2023, cash used in financing activities was comprised of dividends and distributions on common stock of $4,222 and $11 for payroll tax liabilities associated with restricted stock withheld upon the vesting of restricted stock.
Previous wording
We paid a quarterly cash dividend of $0.05 per share from March 2022 to March 2023. On June 12, 2023, we announced that our Board had suspended the quarterly cash dividend, effective immediately. On June 12, 2023, our Board also declared a stock dividend on our common stock of 5%, which was paid on June 30, 2023 to stockholders of record as of the close of business on June 22, 2023. As part of the evaluation of our dividend policy, our Board determined that instating a stock dividend and suspending the quarterly cash dividend was in the best interest of us and our stockholders. This updated dividend policy is intended to strengthen our balance sheet and position us to deliver long-term stockholder returns. The amount and payment of a stock dividend and any quarterly cash dividend are subject to the Board’s regular evaluation of our dividend policy and capital allocation strategy.
Current wording
We paid a quarterly cash dividend of $0.05 per share from March 2022 to March 2023. On June 12, 2023, we announced that our Board had suspended the quarterly cash dividend, effective immediately. On June 12, 2023, our Board also declared a stock dividend on our common stock of 5%, which was paid on June 30, 2023 to stockholders of record as of the close of business on June 22, 2023. As part of the evaluation of our dividend policy, our Board determined that making a stock dividend and suspending the quarterly cash dividend was in the best interest of us and our stockholders. The amount and payment of any stock or cash dividend is subject to the Board’s regular evaluation of our dividend policy and capital allocation strategy.
Previous wording
Real Estate Brokerage Litigation. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending class action litigations, Gibson v. NAR, No. 4:23-cv-00788-SRB (W.D. Mo.)and Umpa v. NAR, 4:23-cv-00945-SRB (W.D. Mo.) alleging claims on behalf of sellers against Douglas Elliman Inc. and our subsidiaries. Under the settlement agreement, we agreed to pay $7,750 within 30 business days of preliminary approval of the settlement by the court, as well as two $5,000 contingent payments subject to certain financial contingencies through December 31, 2027. Litigation is subject to uncertainty and it is possible that there could be adverse developments in other pending cases or that more cases, including antitrust lawsuits, could be concerned.
Current wording
Real Estate Brokerage Litigation. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending class action litigations, Gibson v. NAR, No. 4:23-cv-00788-SRB (W.D. Mo.)and Umpa v. NAR, 4:23-cv-00945-SRB (W.D. Mo.) alleging claims on behalf of sellers against Douglas Elliman Inc. and our subsidiaries. Under the settlement agreement,the Company paid $7,750 into an escrow fund on June 12, 2024, and agreed to pay two $5,000 contingent payments subject to certain financial contingencies on or before December 31, 2027 (collectively, the “Settlement Amount”). The contingent payments may be accelerated under certain circumstances. The Company recognized an expense of$17,750 for the six months ended June 30, 2024. Litigation is subject to uncertainty and it is possible that there could be adverse developments in other pending cases or that more cases, including antitrust lawsuits, could be concerned.
Previous wording
We had cash and cash equivalents of approximately $91,451 as of March 31, 2024 and, in addition to any cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business. Management currently anticipates that these amounts, as well as expected cash flows from our operations and proceeds from any financings to the extent available, should be sufficient to meet our liquidity needs over the next twelve months. We may acquire or seek to acquire additional operating businesses through a merger, purchase of assets, stock acquisition or other means, or to make or seek to make other investments, which may limit our liquidity otherwise available.
Current wording
We had cash and cash equivalents of approximately $92,864 as of June 30, 2024 and, in addition to any cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business. Management currently anticipates that these amounts, as well as expected cash flows from our operations and proceeds from any financings to the extent available, should be sufficient to meet our liquidity needs over the next twelve months. We may acquire or seek to acquire additional operating businesses through a merger, purchase of assets, stock acquisition or other means, or to make or seek to make other investments, which may limit our liquidity otherwise available.
Previous wording
As a service to its customers, Portfolio Escrow Inc., a subsidiary of the Company, administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250. The escrow funds on deposit at the subsidiary were $35,863 and $41,338 as of March 31, 2024 and December 31, 2023, respectively, and corresponding escrow funds in holding of the same amount. While these deposits are not assets of the Company (and, therefore, are excluded from the accompanying condensed consolidated balance sheets), the subsidiary of the Company remains contingently liable for the disposition of these deposits.
Current wording
As a service to its customers, Portfolio Escrow Inc., a subsidiary of the Company, administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250. The escrow funds on deposit at the subsidiary were $34,314 and $41,338 as of June 30, 2024 and December 31, 2023, respectively, and corresponding escrow funds in holding of the same amount. While these deposits are not assets of the Company (and, therefore, are excluded from the accompanying condensed consolidated balance sheets), the subsidiary of the Company remains contingently liable for the disposition of these deposits.
Previous wording
Further information on the risks and uncertainties to our business includes the risk factors discussed above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission.
Current wording
Further information on the risks and uncertainties to our business includes the risk factors discussed above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC and in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.
Previous wording
Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. The forward-looking statements speak only as of the date they are made.
Current wording
Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. The forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this report. New factors may emerge, and it is not possible to predict all factors that may affect our business and operations.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
Three months ended June 30, 2024 Compared to the Three months ended June 30, 2023
Current report — wording carried from elsewhere
Loss before provision for income taxes. Loss before income taxes was $1,607 and $6,471 for the three months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Wecalculate our provision for income taxes based upon our estimate of the annual effective income tax rate based on full year projections and apply the annual effective income tax rate against year-to-date pretax income to record income tax expense, adjusted for discrete items, if any. We refine annual estimates as current information becomes available.
Current report — wording carried from elsewhere
Our revenues from commission and other brokerage income were $272,313 for the three months ended June 30, 2024 compared to $262,489 for the three months ended June 30, 2023, an increase of $9,824. In the three months ended June 30, 2024, our commission and other brokerage income generated from the sales of existing homes increased by $11,193 in the Florida market, $3,590 in the West region, and $1,672 in the Northeast region, which excludes New York City. This was partially offset by declines of $3,662 in New York City. In addition, our revenues from Development Marketing declined by $2,969 in the 2024 period compared to the 2023 period.
Current report — wording carried from elsewhere
Real Estate Agent Commissions. As a result of increases in our commissions and other brokerage income, our real estate agent commissions expense was $216,457 for the three months ended June 30, 2024 compared to $204,802 for the three months ended June 30, 2023. Real estate agent commissions expense, as a percentage of revenues, increased to 75.8% for the three months ended June 30, 2024 compared to 74.2% for the three months ended June 30, 2023. The increase in real estate agent commissions expense as a percentage of revenue in the 2024 period was primarily driven by a higher percentage of revenues being generated in the Southeast (Florida), which traditionally pay higher commission rates than other regions, as well as a lower percentage of commission revenues derived from Development Marketing, which generally pays lower commission rates.
Current report — wording carried from elsewhere
General and administrative. General and administrative expenses were $18,235 for the three months ended June 30, 2024 compared to $23,976 for the three months ended June 30, 2023. The decline is primarily related to reductions in personnel as well as lower incentive compensation expense in the 2024 period.
Current report — wording carried from elsewhere
Corporate and Other loss. The operating loss at the Corporate and Other segment was $6,620 for the three months ended June 30, 2024 compared to $7,283 for the three months ended June 30, 2023. The decline was primarily attributable to a decline in operating expenses.
Current report — wording carried from elsewhere
The following table sets forth our revenue and operating loss by segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:
Current report — wording carried from elsewhere
Other income. Other income was $3,040 for the six months ended June 30, 2024 compared to $2,404 for the six months ended June 30, 2023. For the six months ended June 30, 2024, other income primarily consisted of interest income, net of $2,424 and $629 of investment and other losses primarily associated with our PropTech investments. This was partially offset by equity losses from equity method investments of $13.
Current report — wording carried from elsewhere
The following table sets forth our condensed consolidated statements of operations data for the Real Estate Brokerage segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023: