CHARLOTTE, N.C., Feb. 5, 2009 (GLOBE NEWSWIRE) -- Tree.com, Inc. (Nasdaq:TREE) today announced financial results for its fourth quarter ended December 31, 2008. Q408 Adjusted EBITDA was ($0.8) million, which was a $7.4 million increase quarter-over-quarter and a $13.8 million increase year-over-year.
Doug Lebda, Chairman and CEO of Tree.com, said, "While we are certainly pleased with the results for the quarter, we were benefitted by a confluence of several positive events that are not continuing in 2009. In Q4, our refinance volume was extremely high and we cut our marketing expense to balance lead flow to lenders. In 2009, volumes are still strong, but lenders are now significantly reducing their marketing spend with us. Thus, we do not anticipate sustained profitability until our strategy of revenue diversification and organic traffic begins to pay off."
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Summary Financial Results
$s in millions (Except per share amounts)
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Q/Q Y/Y
Q4 2008 Q3 2008 % Change Q4 2007 % Change
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Revenue $ 48.1 $ 50.3 (4%) $ 50.8 (5%)
EBITDA $ (2.0) $ (10.7) 82% $ (26.5) 93%
Adjusted EBITDA $ (0.8) $ (8.3) 90% $ (14.7) 94%
Net Loss $ (7.0) $ (22.6) 69% $(531.5) 99%
Net Loss Per Share $ (0.75) $ (2.41) 69% $(56.98) 99%
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Information Regarding Q4 Results
* Q408 revenue decreased 4% from Q308 and 5% from Q407. The decrease in revenue is primarily driven by the Real Estate Business, which continues to be negatively impacted by the current credit and housing market conditions. The Lending Business was positively impacted by the decrease in mortgage rates towards the end of Q408, which was offset by the continued narrow supply of loan products available and tightened lending standards within the marketplace. * Q408 results reflect $1.1 million of restructuring charges. Q308 and Q407 results were also negatively impacted by $2.4 million and $11.9 million of restructuring charges, respectively. * Exclusive of these restructuring items, Q408 Adjusted EBITDA increased $7.4 million quarter-over-quarter and $13.8 million year-over-year. This was primarily driven by an increase in revenue from the origination and sale of loans, as well as reduced marketing spend, both driven by the decreases in mortgage rates, which significantly increased consumer demand. Exclusive of non-cash compensation expense, selling and marketing expense, as a percentage of total revenue, decreased to 39% in Q408 compared to 50% in Q308 and 60% in Q407.
Tree.com CFO Matt Packey added, "Both the mortgage and real estate markets continue to be extremely volatile, which have impacted our businesses both positively and negatively. This low rate, high volume environment has allowed us to significantly cut costs but we have also experienced capacity issues with our lending exchange as lenders work to balance their staffing levels against these short term volume spikes, which was also complicated by the holiday season."
Business Unit Discussion
LENDING SEGMENT
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Lending Segment Results
$s in millions
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Q/Q Y/Y
Q4 2008 Q3 2008 % Change Q4 2007 % Change
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Revenue - Lending
Origination and
Sale of Loans $ 20.2 $ 17.9 13% $ 13.8 47%
Match Fees 11.8 12.1 (2%) 15.5 (24%)
Closed Loan Fees 6.5 8.2 (21%) 11.0 (41%)
Other 2.1 2.3 (9%) 1.1 82%
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Total Revenue -
Lending $ 40.6 $ 40.5 0% $ 41.4 (2%)
Cost of Revenue* $ 8.9 $ 9.5 6% $ 8.4 (7%)
Operating Expenses -
Lending*
Selling and
Marketing
Expense* 17.6 23.8 26% 28.0 37%
General and
Administrative
Expense* 11.5 12.4 8% 14.3 20%
Product
Development* 0.9 1.3 33% 2.0 58%
Restructuring
Expense 1.2 2.4 50% 11.2 89%
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Total Operating
Expenses - Lending* $ 31.2 $ 39.9 22% $ 55.5 44%
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EBITDA - Lending $ 0.5 $ (8.9) 106% $ (22.5) 102%
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Adjusted EBITDA -
Lending $ 1.7 $ (6.5) 126% $ (11.3) 115%
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Metrics - Lending
Transmitted loan
requests (000s) 410.3 476.3 (14%) 535.3 (23%)
Closing -
units (000s) 18.1 23.5 (23%) 32.3 (44%)
Closing -
units (dollars) $2,830.0 $3,358.5 (16%) $4,134.3 (32%)
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* Does not include non-cash compensation expense
Lending
Lending revenue in Q408 was relatively flat compared to Q308 and decreased 2% compared to the same period in 2007. Revenue from origination and sale of loans increased 13% quarter-over-quarter and 47% year-over-year. The quarter-over-quarter increase in revenue from the origination and sale of loans is related to mortgage rates decreasing in the latter part of Q408. The year-over-year increase in revenue from origination and sale of loans is principally related to Q407 revenue from origination and sale of loans including $9.5 million of net loan origination costs as a reduction of revenue under a previously applied accounting standard. In 2008, the new Fair Value accounting standards no longer require the netting of these costs against revenue. Additionally, Q407 revenue was reduced by $8.2 million more in loan loss reserves than in Q408. Despite the positive trends in mortgage rates in latter part of Q408, match fees and closed loan fees decreased quarter-over-quarter, which was mainly related to capacity constraints with the existing exchange lenders. Match fees and closed loan fees also decreased year-over-year, reflecting the impact of a narrowed supply of loan products available and tightened lending standards within the marketplace.
Adjusting for the restructuring expense and exclusive of non-cash compensation, operating expenses declined $7.5 million quarter-over-quarter and $14.4 million year-over-year. These decreases were primarily driven by reductions in marketing spend as a result of the consumer demand driven by the favorable mortgage rate trends that were experienced in late Q408. Overall selling and marketing expense, as a percentage of revenue, decreased to 43% compared to 59% in Q308 and 68% in Q407. Our restructuring efforts helped reduce our general and administrative expenses sufficiently to keep these costs in line with the revenue declines.
REAL ESTATE SEGMENT
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Real Estate Segment Results
$s in millions
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Q/Q Y/Y
Q4 2008 Q3 2008 % Change Q4 2007 % Change
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Revenue -
Real Estate $ 7.5 $ 9.8 (23%) $ 9.4 (19%)
Cost of Revenue* $ 4.5 $ 5.7 21% $ 5.1 11%
Operating Expenses -
Real Estate*
Selling and
Marketing
Expense* $ 1.1 $ 1.5 27% $ 2.5 56%
General and
Administrative
Expense* 4.0 3.8 (5%) 4.2 5%
Product
Development* 0.5 0.5 5% 1.0 51%
Restructuring
Expense (0.1) (0.0) 106% 0.6 110%
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Total Operating
Expenses - Real
Estate* $ 5.5 $ 5.8 5% $ 8.3 34%
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EBITDA - Real Estate $ (2.5) $ (1.7) (45%) $ (4.0) 38%
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Adjusted EBITDA -
Real Estate $ (2.5) $ (1.7) (46%) $ (3.4) 24%
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Metrics - Real Estate
Closing -
units (000s) 1.6 2.1 (21%) 1.9 (16%)
Closing -
units (dollars) $ 395.1 $ 516.1 (23%) $ 483.4 (18%)
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* Does not include non-cash compensation expense
Real Estate
Q408 Real Estate revenue decreased $2.3 million or 23% from Q308 and $1.9 million or 19% from Q407. Revenue in our company-owned real estate brokerage, RealEstate.com, REALTORS(r), decreased $1.3 million quarter-over-quarter and increased $1.1 million year-over-year. The decrease quarter-over-quarter was primarily driven by the macro credit and housing market conditions and seasonality. These circumstances contributed to closings being down 16% quarter-over-quarter, as well as lower average home prices. The year-over-year increase in RealEstate.com, REALTORS(r) was driven by growth into new markets and the addition of new agents, which increased closings by 55% year-over-year. RealEstate.com, REALTORS(r) now operates in 20 markets with approximately 1,200 agents compared to 15 markets and over 800 agents at the end of Q407. The year-over-year improvement was more than offset by declines in our builder and broker referral networks, which experienced significant decreases in closings year-over-year due to persistent negative market conditions, as well as a decrease due to the agent referral business, which ceased operations in December 2007.
Exclusive of restructuring expense, operating expenses improved $0.3 million quarter-over-quarter and $2.1 million year-over-year, reflecting continued progress in marketing efficiency driven by innovation on the RealEstate.com Web site, as well as prior cost cutting initiatives. Real Estate Adjusted EBITDA decreased $0.7 million from Q308 and increased $0.9 million from Q407. The decrease quarter-over-quarter is primarily attributable to Q4 seasonality and continued negative macro trends in the real estate market.
Liquidity and Capital Resources
As of December 31, 2008, Tree.com had $88.8 million in cash and restricted cash compared to $98.2 million as of September 30, 2008. There were several key drivers of the decrease. The first is related to the Q408 payment of $3.4 million in settlement of previously disclosed employment litigation. The second is related operational timing differences. In Q408, as a result of the decline in interest rates and an increase in consumer volume, we originated more new loans than we sold, increasing loans held for sale and our warehouse payable by a combined net $2.5 million for the period. To a lesser extent a third factor was related to capital expenditures for the quarter and other changes in working capital.
The loans held for sale and warehouse lines of credit balances as of December 31, 2008 were $87.8 million and $76.2 million, respectively. During Q408, LendingTree Loans extended one of its $50 million warehouse lines through December 29, 2009. In early Q109, LendingTree Loans extended the other $50 million warehouse line through February 23, 2009. The parties continue to work on a one year extension of this facility.
Conference Call
Tree.com will audiocast its conference call with investors and analysts discussing the Company's fourth quarter financial results on Thursday, February 5, 2009 at 11:00 a.m. Eastern Time (ET). This call will include the disclosure of certain information, including forward-looking information, which may be material to an investor's understanding of Tree.com's business. The live audiocast is open to the public at http://investor-relations.tree.com/.
QUARTERLY FINANCIALS
TREE.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
-------------------- -------------------
2008 2007 2008 2007
--------- ---------- --------- ---------
(unaudited) (audited)
(In thousands, except per share amounts)
Revenue
Lending:
Origination and sale of
loans $20,229 $13,766 $88,968 $130,151
Other lending 20,360 27,643 103,677 164,475
--------- ---------- --------- ---------
Total Lending 40,589 41,409 192,645 294,626
Real Estate 7,549 9,378 35,927 51,752
--------- ---------- --------- ---------
Total revenue 48,138 50,787 228,572 346,378
Cost of revenue
Lending 8,955 8,349 43,051 47,264
Real Estate 4,519 5,048 21,342 25,850
--------- ---------- --------- ---------
Total cost of revenue
(exclusive of depreciation
shown separately below) 13,474 13,397 64,393 73,114
--------- ---------- --------- ---------
Gross margin 34,664 37,390 164,179 273,264
Operating expenses
Selling and marketing
expense 18,781 30,527 109,253 187,612
General and administrative
expense 16,557 18,518 75,205 99,244
Product development 1,356 2,981 6,687 14,991
Proceeds from a litigation
settlement -- -- -- (15,000)
Restructuring expense 1,147 11,868 5,704 22,867
Amortization and impairment
of intangibles 1,451 20,189 44,361 34,469
Depreciation 1,705 2,208 7,042 10,058
Goodwill impairment -- 459,463 130,957 459,463
--------- ---------- --------- ---------
Total operating expenses 40,997 545,754 379,209 813,704
--------- ---------- --------- ---------
Operating loss (6,333) (508,364) (215,030) (540,440)
Other income (expense)
Interest income 121 526 134 1,171
Interest expense (153) (229) (650) (986)
Other income (expense) -- -- (4) 14
--------- ---------- --------- ---------
Total other income (expense),
net (32) 297 (520) 199
--------- ---------- --------- ---------
Loss before income taxes (6,365) (508,067) (215,550) (540,241)
Income tax (provision)
benefit (641) (23,427) 13,274 (10,161)
--------- ---------- --------- ---------
Net loss $(7,006) $(531,494 $(202,276 $(550,402)
========= ========== ========= =========
Net loss per share available
to common shareholders
Basic $(0.75) $(56.98) $(21.59) $(59.00)
========= ========== ========= =========
Diluted $(0.75) $(56.98) $(21.59) $(59.00)
========= ========== ========= =========
Weighted Average Common
Shares (a) 9,369 9,328 9,368 9,328
(a) The weighted average common shares for the three months ended
and the year ended December 31, 2007 are equal to the number of
shares outstanding immediately following the spin off from IAC.
TREE.COM, INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2008 2007
----------- -----------
(In thousands)
ASSETS:
Cash and cash equivalents $73,643 $45,940
Restricted cash and cash equivalents 15,204 14,953
Accounts receivable, net of allowance of
$367 and $322, respectively 7,234 12,433
Loans held for sale ($85,638 measured at
fair value in 2008) 87,835 86,754
Deferred income taxes -- 6,420
Prepaid and other current assets 8,960 6,011
----------- -----------
Total current assets 192,876 172,511
Property and equipment, net 17,057 21,466
Goodwill 9,285 140,892
Intangible assets, net 64,663 108,440
Other non-current assets 202 278
----------- -----------
Total assets $284,083 $443,587
=========== ===========
LIABILITIES:
Warehouse lines of credit $76,186 $79,426
Notes payable -- 20,196
Accounts payable, trade 3,541 3,335
Deferred revenue 1,231 1,435
Income taxes payable -- 993
Accrued expenses and other current
liabilities 37,146 83,613
----------- -----------
Total current liabilities 118,104 188,998
Income taxes payable 862 730
Other long-term liabilities 9,016 2,529
Deferred income taxes 17,973 36,706
----------- -----------
Total liabilities 145,955 228,963
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Preferred stock $.01 par value; authorized
5,000,000 shares; none issued or
outstanding -- --
Common stock $.01 par value; authorized
50,000,000 shares; issued and outstanding
9,369,381 and -0- shares, respectively 94 --
Invested capital -- 751,923
Additional paid-in capital 894,577 --
Payables to IAC and subsidiaries -- 20,067
Accumulated deficit (756,543) (557,366)
----------- -----------
Total shareholders' equity 138,128 214,624
----------- -----------
Total liabilities and shareholders'
equity $284,083 $443,587
=========== ===========
TREE.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------
2008 2007
----------- ----------
(In thousands)
Cash flows from operating activities:
Net loss $(202,276) $(550,402)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Amortization and impairment of intangibles 44,361 34,469
Depreciation 7,042 10,058
Goodwill impairment 130,957 459,463
Non-cash compensation expense 11,237 2,925
Non-cash restructuring expense 1,260 8,403
Deferred income taxes (13,274) 2,764
Gain on origination and sale of loans held
for sale (88,968) (130,151)
Loss on impaired loans not sold 361 322
Loss on sale of real estate acquired in
satisfaction of loans 218 210
Bad debt expense 597 1,925
Non-cash interest expense 76 903
Changes in current assets and liabilities:
Accounts receivable 4,605 9,364
Origination of loans held for sale (2,206,065) (5,812,047)
Proceeds from sales of loans held for sale 2,291,022 6,218,684
Principal payments received on loans held
for sale 911 3,723
Payments to investors for loan repurchases
and early payoff obligations (4,568) (11,384)
Prepaid and other current assets 3,775 7,461
Accounts payable and other current
liabilities (23,329) (20,780)
Income taxes payable 329 (702)
Deferred revenue (519) (1,784)
Other, net 328 (439)
Net cash (used in) provided by operating ----------- ----------
activities (41,920) 232,985
----------- ----------
Cash flows from investing activities:
Contingent consideration paid to former
shareholders of Home Loan Center and iNest (14,487) (1,559)
Capital expenditures (4,131) (9,421)
Other, net (143) 33
----------- ----------
Net cash used in investing activities (18,761) (10,947)
Cash flows from financing activities: ----------- ----------
Borrowing under warehouse lines of credit 1,993,938 5,651,803
Repayments of warehouse lines of credit (1,997,179) (5,910,849)
Principal payments on long-term obligations (20,045) (11,654)
Transfers to IAC -- (7,083)
Capital contributions from IAC 111,517 --
Issuance of common stock, net of withholding
taxes 11 --
Excess tax benefits from stock-based awards 393 1,673
(Increase) decrease in restricted cash (251) 514
Net cash provided by (used in) financing ----------- ----------
activities 88,384 (275,596)
Net increase (decrease) in cash and cash ----------- ----------
equivalents 27,703 (53,558)
Cash and cash equivalents at beginning of
period 45,940 99,498
----------- ----------
Cash and cash equivalents at end of period $73,643 $45,940
=========== ==========
TREE'S RECONCILIATION OF SEGMENT RESULTS TO GAAP ($S in thousands):
For the Three Months Ended December 31, 2008:
---------------------------------------------
Non-Cash
Adjusted Restructuring Compensation
EBITDA Expense EBITDA Expense
---------- -------------- ------------ ---------
Lending $1,715 $(1,206) $509 $(775)
Real Estate (2,531) 59 (2,472) (439)
---------- -------------- ------------ ---------
Total $(816) $(1,147) $(1,963) $(1,214)
========== ============== ============ =========
Goodwill Amortization Depreciation Operating
Impairment of Intangibles Expense Loss
---------- -------------- ------------ ---------
Lending $-- $(388) $ (1,246) $(1,900)
Real Estate -- (1,062) (460) (4,433)
---------- -------------- ------------ ---------
Total $-- $(1,450) $(1,706) (6,333)
========== ============== ============
Other expense, net (32)
---------
Loss before income taxes (6,365)
Income tax provision (641)
---------
Net loss $(7,006)
=========
For the Three Months Ended September 30, 2008:
----------------------------------------------
Non-Cash
Adjusted Restructuring Compensation
EBITDA Expense EBITDA Expense
---------- -------------- ------------ ---------
Lending $(6,516) $(2,422) $(8,938) $(5,090)
Real Estate (1,745) 28 (1,717) (2,715)
---------- -------------- ------------ ---------
Total $(8,261) $(2,394) $(10,655) $(7,805)
========== ============== ============ =========
Goodwill Amortization Depreciation Operating
Impairment of Intangibles Expense Loss
---------- -------------- ------------ ---------
Lending $-- $(1,116) $ (1,336) $(16,480)
Real Estate -- (1,088) (455) (5,975)
---------- -------------- ------------ ---------
Total $-- $(2,204) $(1,791) (22,455)
========== ============== ============
Other expense, net (169)
---------
Loss before income taxes (22,624)
Income tax benefit 73
---------
Net loss $(22,551)
=========
For the Three Months Ended December 31, 2007:
---------------------------------------------
Non-Cash
Adjusted Restructuring Compensation
EBITDA Expense EBITDA Expense
---------- -------------- ------------ ---------
Lending $(11,297) $(11,248) $(22,545) $6
Real Estate (3,365) (620) (3,985) 21
---------- -------------- ------------ ---------
Total $(14,662) $(11,868) $(26,530) $27
========== ============== ============ =========
Amortization
Goodwill and Impairment Depreciation Operating
Impairment of Intangibles Expense Loss
---------- -------------- ------------ ---------
Lending $(459,463) $(19,054) $(1,947) $(503,003)
Real Estate -- (1,136) (261) (5,361)
---------- -------------- ------------ ---------
Total $(459,463) $(20,190) $(2,208) (508,364)
========== ============== ============
Other income, net 297
---------
Loss before income taxes (508,067)
Income tax provision (23,427)
---------
Net loss $(531,494)
=========
Definition of Tree.com's Non-GAAP Measures
EBITDA is defined as operating income excluding, if applicable: (1) depreciation expense, (2) non-cash compensation expense, (3) amortization and impairment of intangibles, (4) goodwill impairment, (5) pro forma adjustments for significant acquisitions, and (6) one-time items. Tree.com believes this measure is useful to investors because it represents the operating results from Tree.com, but excludes the effects of these non-cash expenses. EBITDA has certain limitations in that it does not take into account the impact to Tree.com's statement of operations of certain expenses, including depreciation, non-cash compensation, and acquisition-related accounting. Tree.com endeavors to compensate for the limitations of the non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure.
Adjusted EBITDA is defined as EBITDA, which is defined above, excluding (1) restructuring expenses and (2) proceeds from litigation settlements. Tree.com believes this measure is useful to investors because it represents the operating results from Tree.com, but excludes the effects of the expenses. Adjusted EBITDA has certain limitations in that it does not take into account the impact to Tree.com's statement of operations of certain expenses, including depreciation, non-cash compensation, and acquisition-related accounting. Tree.com endeavors to compensate for the limitations of the non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure.
Pro Forma Results
Tree.com will only present EBITDA on a pro forma basis if it views a particular transaction as significant in size or transformational in nature. For the periods presented, there are no transactions that Tree.com has included on a pro forma basis.
One-Time Items
EBITDA is presented before one-time items, if applicable. These items are truly one-time in nature and non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. For the periods presented, there are no one-time items.
Non-Cash Expenses That Are Excluded From Tree.com's Non-GAAP Measures
Non-cash compensation expense consists principally of expense associated with the grants, including unvested grants assumed in acquisitions, of restricted stock units and stock options. These expenses are not paid in cash, and Tree.com will include the related shares in its future calculations of fully diluted shares outstanding. Upon vesting of restricted stock units and the exercise of certain stock options, the awards will be settled, at Tree.com's discretion, on a net basis, with Tree.com remitting the required tax withholding amount from its current funds.
Amortization of intangibles is a non-cash expense relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives. Tree.com believes that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, they were part of transaction costs.
Reconciliation of EBITDA
For a reconciliation of EBITDA to operating loss for Tree.com's operating segments and to net loss in total for the three months ended December 31, 2008, September 30, 2008 and December 31, 2007 see table above.
Interest Rate Risk
Tree.com's exposure to market rate risk for changes in interest rates relates primarily to its interest rate lock commitments, loans held for sale, and LendingTree Loans' lines of credit.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Certain matters included in the discussion above may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. Such forward-looking statements include, without limitation, statements made with respect to future revenue, revenue growth, new products, market acceptance of our products and services, expense reduction, and profitability. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: our ability to operate effectively as a separate public entity following our spin-off from IAC in August 2008; additional costs associated with operating as an independent company; volatility in our stock price and trading volume; our ability to obtain financing on acceptable terms; limitations on our ability to enter into transactions due to spin-related restrictions; adverse conditions in the primary and secondary mortgage markets and in the economy; adverse conditions in the financial markets; fluctuating home prices and interest rates; adverse conditions in the credit markets; seasonality in our businesses; potential liabilities to secondary market purchasers; changes in our relationships with network lenders, real estate professionals, credit providers and secondary market purchasers; breaches of our network security or the misappropriation or misuse of personal consumer information; our failure to provide competitive service; our failure to maintain brand recognition; our ability to attract and retain customers in a cost-effective manner; our ability to develop new products and services and enhance existing ones; competition from our network lenders and affiliated real estate professionals; our failure to comply with existing or changing laws, rules or regulations, or to obtain and maintain required licenses; failure of our network lenders or other affiliated parties to comply with regulatory requirements; failure to maintain the integrity of our systems and infrastructure; liabilities as a result of privacy regulations; failure to adequately protect our intellectual property rights or allegations of infringement of intellectual property rights; changes in our management; and deficiencies in our disclosure controls and procedures and internal control over financial reporting. These and additional factors to be considered are set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in our Quarterly Report on Form 10-Q for the period ended September 30, 2008, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.
About Tree.com, Inc.
Tree.com, Inc. (Nasdaq:TREE) is the parent of several brands and businesses in the financial services and real estate industries including LendingTree(r), LendingTree Loans(sm), GetSmart(r), Home Loan Center, RealEstate.com, iNest(r), and RealEstate.com, REALTORS(r). Together, they serve as an ally for consumers who are looking to comparison shop loans, real estate and other financial products from multiple businesses and professionals who compete for their business.
Tree.com, Inc. is headquartered in Charlotte, N.C. and maintains operations solely in the United States. For more information, please visit www.tree.com.
The Tree.com, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5367
Lending Segment
Lending consists of online networks (principally LendingTree.com and GetSmart.com) and call centers that connect consumers and financial providers in the lending industry. Tree.com also originates, processes, approves and funds various residential real estate loans through Home Loan Center ("HLC"), which does business as LendingTree Loans in certain jurisdictions. The HLC and LendingTree Loans brand names are collectively referred to in these consolidated financial statements as "LendingTree Loans."
Real Estate Segment
Real Estate consists of a proprietary full service real estate brokerage (RealEstate.com, REALTORS(r)) that operates in 20 U.S. markets, as well as an online network accessed at www.RealEstate.com, that connects consumers with real estate brokerages around the country and iNest.com, an online network that matches buyers and builders of new homes.
REALTOR(r) -- A registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS(r) and subscribes to its strict Code of Ethics.