UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

^{___________________________}

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2016~~March 31, 2017

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 001-35674

REALOGY HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

20-8050955

(I.R.S. Employer Identification Number)

Commission File No. 333-148153

REALOGY GROUP LLC

(Exact name of registrant as specified in its charter)

20-4381990

(I.R.S. Employer Identification Number)

Delaware

(State or other jurisdiction of incorporation or organization)

175 Park Avenue

Madison, NJ 07940

(Address of principal executive offices) (Zip Code)

(973) 407-2000

(Registrants' telephone number, including area code)

^{___________________________}

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Realogy Holdings Corp. Yes þ No ¨ Realogy Group LLC Yes ¨ No þ

Indicate by check mark whether the Registrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).

Realogy Holdings Corp. Yes þ No ¨ Realogy Group LLC Yes þ No ¨

Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, or smaller reporting companies, or emerging growth companies. See the definitions of "large accelerated filer," "accelerated ~~filer"~~filer," "smaller reporting company," and ~~"smaller reporting~~"emerging growth company" in Rule 12b-2 of the Exchange Act.



	Large accelerated filer	Accelerated filer		Non-accelerated filer ~~filer~~	~~Smaller reporting~~ ~~company~~
			(Do not check if a smaller reporting company)			Smaller reporting company		Emerging growth company
Realogy Holdings Corp.	þ	¨		¨	¨		¨
Realogy Group LLC	¨	¨		þ	¨		¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act).

Realogy Holdings Corp. Yes ¨ No þ Realogy Group LLC Yes ¨ No þ

There were ~~145,086,425~~137,993,866 shares of Common Stock, $0.01 par value, of Realogy Holdings Corp. outstanding as of ~~August~~May 2, ~~2016~~.2017.

TABLE OF CONTENTS



	Page
Introductory Note		1
Forward-Looking Statements		1

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Report of Independent Registered Public Accounting Firm for Realogy Holdings Corp.	4
	Report of Independent Registered Public Accounting Firm for Realogy Group LLC	5
	Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	6
	Condensed Consolidated Statements of Comprehensive ~~Income~~Loss for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	7
	Condensed Consolidated Balance Sheets as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016	8
	Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3029
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	5048
Item 4.	Controls and Procedures	5048
PART II	OTHER INFORMATION	5250
Item 1.	Legal Proceedings	5250
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5350
Item 5.	Other Information	5351
Item 6.	Exhibits	5451
Signatures		5552
Exhibit Index		5653

INTRODUCTORY NOTE

Except as otherwise indicated or unless the context otherwise requires, the terms "we," "us," "our," "our company," "Realogy," "Realogy Holdings" and the "Company" refer to Realogy Holdings Corp., a Delaware corporation, and its consolidated subsidiaries, including Realogy Intermediate Holdings LLC, a Delaware limited liability company ("Realogy Intermediate"), and Realogy Group LLC, a Delaware limited liability company ("Realogy Group"). Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.

Realogy Holdings is not a party to the Senior Secured Credit Facility and Term Loan A Facility and certain references in this report to our consolidated indebtedness exclude Realogy Holdings with respect to indebtedness under the Senior Secured Credit Facility and Term Loan A Facility. In addition, while Realogy Holdings is a guarantor of Realogy Group's obligations under its unsecured notes, Realogy Holdings is not subject to the restrictive covenants in the indentures governing such indebtedness.

FORWARD-LOOKING STATEMENTS

Forward-looking statements included in this report and our other public filings or other public statements that we make from time to time are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include the information concerning our future financial performance, business strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts. You should understand that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

risks related to general business, economic, employment and political conditions and the U.S. residential real estate markets, either regionally or nationally, including but not limited to:


◦	a lack of improvement or a decline in the number of homesales, stagnant or declining home prices and/or a deterioration in other economic factors that particularly impact the residential real estate market and the business segments in which we operate;


◦	increasing mortgage rates and/or constraints on the availability of mortgage financing;


◦	insufficient or excessive home inventory levels by market and price point;


◦	a decrease in consumer confidence;


◦	the impact of recessions, slow economic growth, disruptions in the U.S. government or banking system, disruptions in a major geoeconomic region, or equity or commodity markets and high levels of unemployment in the U.S. and abroad, which may impact all or a portion of the housing markets in which we and our franchisees operate;


◦	~~increasing mortgage rates and/or constraints on the availability of mortgage financing;~~


◦	legislative, tax or regulatory changes (including changes in regulatory interpretations or enforcement practices)that would adversely impact the residential real estate market, including changes relating to the Real Estate Settlement Procedures Act ("RESPA") ~~and~~, potential reforms of Fannie Mae and Freddie Mac, immigration reform, and potential tax code reform;


◦	continued or lengthier delays in homesale transaction closings that impact us or other industry participants resulting from the Consumer Financial Protection Bureau's rule relating to integrated mortgage disclosure forms, which became effective for new loan applications beginning October 3, 2015;


◦	a decrease in housing affordability;


◦	high levels of foreclosure activity;


◦	~~insufficient or excessive home inventory levels by market;~~


◦	changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, or decide not to, purchase a home, as well as the potential impact of decisions to rent versus purchase a home; and

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◦	the inability or unwillingness of current homeowners to purchase their next home due to various factors, including limited or negative equity in their current home, difficult mortgage underwriting standards, attractive rates on existing mortgages and the lack of available inventory in their market;

increased competition whether through traditional competitors or competitors with alternative business models, including companies employing technologies intended to disrupt the traditional brokerage model, as well as eliminating brokers or agents from, or minimizing the role they play in, the homesale transaction;

competition for more productive sales associates, sales associate teams, and manager talent may continue to impact the ability of our company owned brokerage business and our affiliated franchisees to attract and retain independent sales associates, either individually or as members of a team, without significantly impacting the commission split rates currently paid by our company owned brokerages and our affiliated franchisees;

our geographic and high-end market concentration, particularly with respect to our company owned brokerage operations;

our inability to enter into franchise agreements with new franchisees at current net effective royalty rates, or to realize royalty revenue growth from them;


•	our inability to renew existing franchise agreements at current net effective royalty rates or without increasing the amount and prevalence of non-standard incentives, or to maintain or enhance our value proposition to ~~franchisees, including but not limited to our ability to successfully develop, license and scale our ZAP~~^SM ~~technology to our~~ franchisees;

the lack of revenue growth or declining profitability of our franchisees and company owned brokerage operations, including the impact of lower average broker commission rates;

disputes or issues with entities that license us their tradenames for use in our business that could impede our franchising of those brands;

actions by our franchisees that could harm our business or reputation, non-performance of our franchisees, controversies with our franchisees or actions against us by their independent sales associates or employees or third parties with which our franchisees have business relationships;

~~increased competition whether through traditional competitors~~loss, attrition or ~~competitors with alternative business models;~~

competition for productive agents and manager talent—both at our franchisees and our company owned brokerage business—impacting the ability to attract and retain independent sales associates, either individually or as members of a team;

~~loss or attrition~~changes among our senior executives, or other key ~~employees;~~employees or our inability to recruit top talent;

~~we may be unable~~our inability to achieve or maintain cost savings and other benefits from our restructuring activities;

~~our restructuring activities could have an adverse impact on our operations;~~

our inability to realize the benefits from acquisitions due to the loss of key personnel or productive agents of the acquired companies, as well as the possibility that expected benefits and synergies of the transactions may not be achieved in a timely manner or at all;

our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes in laws and regulations or stricter interpretations of regulatory requirements, including but not limited to (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales associates to employee ~~status; and~~status, (2) RESPA or state consumer protection or similar ~~laws;~~laws and (3) privacy or data security laws and regulations;

any adverse resolution of litigation, governmental or regulatory proceedings or arbitration awards as well as any adverse impact of decisions to voluntarily modify business arrangements or enter into settlement agreements to avoid the risk of protracted and costly litigation or other proceedings;

~~the general impact of emerging technologies on our business;~~

our inability to obtain new technologies and systems, to replace or introduce new technologies and systems as quickly as our competitors and in a cost-effective manner or to achieve the benefits anticipated from new technologies or systems;

the failure or significant disruption of our operations from various causes related to our critical information technologies and systems including cybersecurity threats to our data and customer, franchisee and independent sales associate data as well as reputational or financial risks associated with a loss of any such data;

risks related to our international operations, including compliance with the Foreign Corrupt Practices Act and similar anti-corruption laws as well as risks relating to the master franchisor model that we deploy internationally;

risks associated with our substantial indebtedness and interest obligations and restrictions contained in our debt agreements, including risks relating to having to dedicate a significant portion of our cash flows from operations to service our debt;

risks relating to our ability to refinance or repay our indebtedness, incur additional indebtedness or return capital to stockholders;

changes in corporate relocation practices resulting in fewer employee relocations, reduced relocation benefits or the loss of one or more significant ~~Affinity~~affinity clients;

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an increase in the claims rate of our title underwriter and an increase in mortgage rates could adversely impact the revenue of our title and settlement services segment;

our inability to securitize certain assets of our relocation business, which would require us to find an alternative source of liquidity that may not be available, or if available, may not be on favorable terms;

risks that could materially adversely impact our equity investment in ~~PHH Home Loans LLC,~~ our mortgage origination joint venture, ~~with PHH Corporation ("PHH");~~including increases in mortgage rates, the impact of joint venture operational or liquidity risks, the impact of a transition from our current joint venture to our new joint venture, regulatory changes, litigation, investigations and inquiries or any termination of the venture;

any remaining resolutions or outcomes with respect to contingent liabilities of our former parent, Cendant Corporation ("Cendant"), under the Separation and Distribution Agreement and the Tax Sharing Agreement (each as described in our Annual Report on Form 10-K for the year ended December 31, ~~2015)~~2016, the "2016 Form 10-K"), including any adverse impact on our future cash flows; and

new types of taxes or increases in state, local or federal taxes that could diminish profitability or liquidity.

Other factors not identified above, including those described under the headings "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in ~~our Annual Report on~~the 2016 Form ~~10-K for the year ended December 31, 2015 (the "2015 Form 10-K")~~10-K), filed with the Securities and Exchange Commission ("SEC"), may also cause actual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with any forward-looking statements that may be made by us and our businesses generally.

Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law. For any forward-looking statement contained in this Report, our public filings or other public statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Realogy Holdings Corp.:

We have reviewed the accompanying condensed consolidated balance sheet of Realogy Holdings Corp. and its subsidiaries as of ~~June 30, 2016,~~March 31, 2017, and the related condensed consolidated statements of operations, ~~and~~ comprehensive ~~income for the three~~loss, and ~~six-month periods ended June 30, 2016 and June 30, 2015 and the condensed consolidated statements of~~ cash flows for the ~~six-month~~three-month periods ended ~~June 30, 2016~~March 31, 2017 and ~~June 30, 2015.~~March 31, 2016. These interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial ~~statements~~information for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, ~~2015,~~2016, and the related consolidated statements of operations, comprehensive income, ~~(loss),~~ equity, ~~(deficit),~~ and cash flows for the year then ended (not presented herein), and in our report dated February 24, ~~2016,~~2017, we expressed an unqualified opinion on those consolidated financial statements which included a paragraph that described the change in the manner of accounting for the presentation of debt issuance costs and the balance sheet classification of deferred taxes in 2015 and retrospectively for prior years.statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet information as of December 31, ~~2015,~~2016, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

Florham Park, ~~New Jersey~~NJ

~~August~~May 4, ~~2016~~2017

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Realogy Group LLC:

We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries as of ~~June 30, 2016,~~March 31, 2017, and the related condensed consolidated statements of operations, ~~and~~ comprehensive ~~income for the three~~loss, and ~~six-month periods ended June 30, 2016 and June 30, 2015 and the condensed consolidated statements of~~ cash flows for the ~~six-month~~three-month periods ended ~~June 30, 2016~~March 31, 2017 and ~~June 30, 2015.~~March 31, 2016. These interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). and in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), or in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ PricewaterhouseCoopers LLP

Florham Park, ~~New Jersey~~NJ

~~August~~May 4, ~~2016~~2017

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2016			2015			2016			2015			2017			2016
Revenues
Gross commission income	$	1,251		$	1,278		$	2,077		$	2,059		$	881		$	826
Service revenue	252			228			442			399			194			190
Franchise fees	104			99			173			166			75			69
Other	55			46			104			89			53			49
Net revenues	1,662			1,651			2,796			2,713			1,203			1,134
Expenses
Commission and other agent-related costs	864			877			1,422			1,407			605			558
Operating	391			366			758			708			376			367
Marketing	65			59			123			115			62			58
General and administrative	70			92			156			170			96			86
Former parent legacy costs (benefit), net	—			(1		)	1			(1		)
Former parent legacy costs, net													—			1
Restructuring costs	12			—			21			—			5			9
Depreciation and amortization	48			52			96			98			50			48
Interest expense, net	59			50			132			118			39			73
Other income, net	—			(1		)	—			(1		)
Loss on the early extinguishment of debt													4			—
Total expenses	1,509			1,494			2,709			2,614			1,237			1,200
Income before income taxes, equity in earnings and noncontrolling interests	153			157			87			99
Income tax expense	64			66			40			42
Equity in earnings of unconsolidated entities	(5		)	(7		)	(5		)	(9		)
Net income	94			98			52			66
Loss before income taxes, equity in losses and noncontrolling interests													(34		)	(66		)
Income tax benefit													(9		)	(24		)
Equity in losses of unconsolidated entities													3			—
Net loss													(28		)	(42		)
Less: Net income attributable to noncontrolling interests	(2		)	(1		)	(2		)	(1		)	—			—
Net income attributable to Realogy Holdings and Realogy Group	$	92		$	97		$	50		$	65
Net loss attributable to Realogy Holdings and Realogy Group													$	(28	)	$	(42	)

Earnings per share attributable to Realogy Holdings:
Basic earnings per share	$	0.63		$	0.66		$	0.34		$	0.44
Diluted earnings per share	$	0.63		$	0.66		$	0.34		$	0.44
Loss per share attributable to Realogy Holdings:
Basic loss per share													$	(0.20	)	$	(0.29	)
Diluted loss per share													$	(0.20	)	$	(0.29	)
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic	145.5			146.5			146.0			146.4			139.7			146.5
Diluted	146.7			148.0			147.2			147.9			139.7			146.5

Cash dividends declared per share (beginning in August 2016)													$	0.09		$	—

See Notes to Condensed Consolidated Financial Statements.

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~LOSS

(In millions)

(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Net income $ 94
$ 98
$ 52
$ 66
Currency translation adjustment (3 ) 2
(3 ) —
Defined benefit pension plan - amortization of actuarial loss to periodic pension cost 1
—
1
—
Other comprehensive income (loss), before tax (2 ) 2
(2 ) —
Income tax expense related to items of other comprehensive income —
—
—
—
Other comprehensive income (loss), net of tax (2 ) 2
(2 ) —
Comprehensive income 92
100
50
66
Less: comprehensive income attributable to noncontrolling interests (2 ) (1 ) (2 ) (1 )
Comprehensive income attributable to Realogy Holdings and Realogy Group $ 90
$ 99
$ 48
$ 65



	Three Months Ended
	March 31,
	2017			2016
Net loss	$	(28	)	$	(42	)
Currency translation adjustment	1			—
Other comprehensive income, before tax	1			—
Income tax expense related to items of other comprehensive income	—			—
Other comprehensive income, net of tax	1			—
Comprehensive loss	(27		)	(42		)
Less: comprehensive income attributable to noncontrolling interests	—			—
Comprehensive loss attributable to Realogy Holdings and Realogy Group	$	(27	)	$	(42	)

See Notes to Condensed Consolidated Financial Statements.

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


	June 30, 2016			December 31, 2015			March 31, 2017			December 31, 2016

ASSETS
Current assets:
Cash and cash equivalents	$	423		$	415		$	205		$	274
Trade receivables (net of allowance for doubtful accounts of $16 and $20)	175			141
Trade receivables (net of allowance for doubtful accounts of $12 and $13)							147			152
Relocation receivables	356			279			223			244
Other current assets	129			126			158			148
Total current assets	1,083			961			733			818
Property and equipment, net	250			254			270			267
Goodwill	3,631			3,618			3,691			3,690
Trademarks	745			745			748			748
Franchise agreements, net	1,394			1,428			1,344			1,361
Other intangibles, net	298			316			304			313
Other non-current assets	229			209			240			224
Total assets	$	7,630		$	7,531		$	7,330		$	7,421
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	152		$	139		$	125		$	140
Securitization obligations	280			247			172			205
Due to former parent	31			31			29			28
Current portion of long-term debt	41			740			355			242
Accrued expenses and other current liabilities	403			448			400			435
Total current liabilities	907			1,605			1,081			1,050
Long-term debt	3,691			2,962			3,256			3,265
Deferred income taxes	299			267			379			389
Other non-current liabilities	309			275			239			248
Total liabilities	5,206			5,109			4,955			4,952
Commitments and contingencies (Notes 8 and 10)
Equity:
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at June 30, 2016 and December 31, 2015	—			—
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 144,990,520 shares outstanding at June 30, 2016 and 146,746,537 shares outstanding at December 31, 2015	1			1
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at March 31, 2017 and December 31, 2016							—			—
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 138,733,646 shares outstanding at March 31, 2017 and 140,227,692 shares outstanding at December 31, 2016							1			1
Additional paid-in capital	5,687			5,733			5,499			5,565
Accumulated deficit	(3,230		)	(3,280		)	(3,090		)	(3,062		)
Accumulated other comprehensive loss	(38		)	(36		)	(39		)	(40		)
Total stockholders' equity	2,420			2,418			2,371			2,464
Noncontrolling interests	4			4			4			5
Total equity	2,424			2,422			2,375			2,469
Total liabilities and equity	$	7,630		$	7,531		$	7,330		$	7,421

See Notes to Condensed Consolidated Financial Statements.

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



	Six Months Ended June 30,						Three Months Ended March 31,
	2016			2015			2017			2016
Operating Activities
Net income	$	52		$	66
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss							$	(28	)	$	(42	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	96			98			50			48
Deferred income taxes	33			32			(10		)	(27		)
Amortization of deferred financing costs and discount	8			9			4			4
Equity in earnings of unconsolidated entities	(5		)	(9		)
Loss on the early extinguishment of debt							4			—
Equity in losses of unconsolidated entities							3			—
Stock-based compensation	25			26			12			12
Mark-to-market adjustments on derivatives	45			10			(1		)	31
Other adjustments to net income	(3		)	(1		)
Other adjustments to net loss							(1		)	(1		)
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables	(33		)	(47		)	4			3
Relocation receivables	(79		)	(137		)	22			(9		)
Other assets	(14		)	(9		)	(24		)	(10		)
Accounts payable, accrued expenses and other liabilities	(18		)	36			(44		)	(71		)
Due to former parent	1			(5		)	—			1
Dividends received from unconsolidated entities	1			6			1			—
Taxes paid related to net share settlement for stock-based compensation	(5		)	(3		)
Other, net	(6		)	1			(4		)	(3		)
Net cash provided by operating activities	98			73
Net cash used in operating activities							(12		)	(64		)
Investing Activities
Property and equipment additions	(40		)	(41		)	(28		)	(22		)
Payments for acquisitions, net of cash acquired	(15		)	(75		)	(1		)	(13		)
Investment in unconsolidated entities							(3		)	—
Change in restricted cash	1			(8		)	2			2
Other, net	(4		)	3			(1		)	(1		)
Net cash used in investing activities	(58		)	(121		)	(31		)	(34		)
Financing Activities
Net change in revolving credit facilities	(200		)	—
Repayments of term loan facilities	(20		)	(10		)
Net change in revolving credit facility							110			(200		)
Amortization payments on term loan facilities							(10		)	(10		)
Proceeds from issuance of Senior Notes	750			—			—			250
Redemption of Senior Notes	(500		)	—
Net change in securitization obligations	34			120			(33		)	(27		)
Debt issuance costs	(7		)	(1		)	(6		)	(2		)
Repurchase of common stock	(67		)	—			(57		)	(33		)
Dividends paid on common stock							(13		)	—
Proceeds from exercise of stock options	1			2			1			—
Payments of contingent consideration	(10		)	(5		)
Taxes paid related to net share settlement for stock-based compensation							(10		)	(4		)
Payments of contingent consideration related to acquisitions							(4		)	(4		)
Other, net	(12		)	(11		)	(5		)	(4		)
Net cash (used in) provided by financing activities	(31		)	95
Net cash used in financing activities							(27		)	(34		)
Effect of changes in exchange rates on cash and cash equivalents	(1		)	(1		)	1			—
Net increase in cash and cash equivalents	8			46
Net decrease in cash and cash equivalents							(69		)	(132		)
Cash and cash equivalents, beginning of period	415			313			274			415
Cash and cash equivalents, end of period	$	423		$	359		$	205		$	283
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $3 for both periods presented)	$	86		$	108
Interest payments (including securitization interest of $1 for both periods presented)							$	24		$	28
Income tax payments, net	7			5			2			2

See Notes to Condensed Consolidated Financial Statements.

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are in millions)

(Unaudited)


1.	BASIS OF PRESENTATION

Realogy Holdings Corp. ("Realogy Holdings", "Realogy" or the "Company") is a holding company for its consolidated subsidiaries including Realogy Intermediate Holdings LLC ("Realogy Intermediate") and Realogy Group LLC ("Realogy Group") and its consolidated subsidiaries. Realogy, through its subsidiaries, is a global provider of residential real estate services. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations, comprehensive ~~income~~loss and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.

The accompanying Condensed Consolidated Financial Statements include the financial statements of Realogy Holdings and Realogy Group. Realogy Holdings' only asset is its investment in the common stock of Realogy Intermediate, and Realogy Intermediate's only asset is its investment in Realogy Group. Realogy Holdings' only obligations are its guarantees of certain borrowings and certain franchise obligations of Realogy Group. All expenses incurred by Realogy Holdings and Realogy Intermediate are for the benefit of Realogy Group and have been reflected in Realogy Group's Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with Article 10 of Regulation S-X. Interim results may not be indicative of full year performance because of seasonal and short-term variations. The Company has eliminated all material intercompany transactions and balances between entities consolidated in these financial statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and the related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates.

In management's opinion, the accompanying Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary to present fairly Realogy Holdings and Realogy Group's financial position as of ~~June 30, 2016~~March 31, 2017 and the results of operations and comprehensive ~~income~~loss for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~ and cash flows for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 and ~~2015.~~2016. As the interim Condensed Consolidated Financial Statements are prepared using the same accounting principles and policies used to prepare the annual consolidated financial statements, they should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, ~~2015~~2016 included in the Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016.

Fair Value Measurements

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.



Level Input:		Input Definitions:

Level I		Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level II		Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III		Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure

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purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach.

The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. There have been no transfers between Level I, II or III assets or liabilities during the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017.

The following table summarizes fair value measurements by level at ~~June 30, 2016~~March 31, 2017 for assets and liabilities measured at fair value on a recurring basis:

Level I Level II Level III Total
Interest rate swaps (included in other non-current liabilities) $ —
$ 82
$ —
$ 82
Deferred compensation plan assets
(included in other non-current assets)
3
—
—
3
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and non-current liabilities) —
—
49
49



	Level I		Level II		Level III		Total
Interest rate swaps (included in other current and non-current liabilities)	$	—	$	27	$	—	$	27
Deferred compensation plan assets (included in other non-current assets)	3		—		—		3
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and non-current liabilities)	—		—		45		45

The following table summarizes fair value measurements by level at December 31, ~~2015~~2016 for assets and liabilities measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Interest rate swaps (included in other non-current liabilities)	$	—	$	47	$	—	$	47	$	—	$	33	$	—	$	33
Deferred compensation plan assets (included in other non-current assets)	3		—		—		3		3		—		—		3
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and non-current liabilities)	—		—		59		59		—		—		50		50

The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions. These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis.

The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis:

Level III
Fair value of contingent consideration at December 31, 2015 $ 59
Additions: contingent consideration related to acquisitions during the period 1
Reductions: payments of contingent consideration (reflected in the financing section of the Statement of Cash Flows) (10 )
Changes in fair value (reflected in the Statement of Operations) (1 )
Fair value of contingent consideration at June 30, 2016 $ 49



	Level III
Fair value of contingent consideration at December 31, 2016	$	50
Additions: contingent consideration related to acquisitions completed during the period	—
Reductions: payments of contingent consideration (reflected in the financing section of the Consolidated Statement of Cash Flows)	(4		)
Changes in fair value (reflected in the Consolidated Statement of Operations)	(1		)
Fair value of contingent consideration at March 31, 2017	$	45

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The following table summarizes the principal amount of the Company’s indebtedness compared to the estimated fair value, primarily determined by quoted market values, at:


	June 30, 2016				December 31, 2015				March 31, 2017				December 31, 2016
Debt	Principal Amount		Estimated Fair Value (a)		Principal Amount		Estimated Fair Value (a)		Principal Amount		Estimated Fair Value (a)		Principal Amount		Estimated Fair Value (a)
Senior Secured Credit Facility:
Revolving Credit Facility	$	—	$	—	$	200	$	200	$	310	$	310	$	200	$	200
Term Loan B	1,858		1,853		1,867		1,849		1,092		1,097		1,094		1,100
Term Loan A Facility:
Term Loan A	424		415		435		426		408		408		413		414
3.375% Senior Notes	—		—		500		500
Term Loan A-1									348		349		351		351
4.50% Senior Notes	450		462		450		464		450		463		450		461
5.25% Senior Notes	550		564		300		308		550		571		550		562
4.875% Senior Notes	500		494		—		—		500		490		500		483
Securitization obligations	280		280		247		247		172		172		205		205

_______________


(a)	The fair value of the Company's indebtedness is categorized as Level I.

Investment in PHH Home Loans

The Company owns 49.9% of PHH Home Loans, a mortgage origination venture formed in 2005 created for the purpose of originating and selling mortgage loans primarily sourced through the Company’s real estate brokerage and relocation businesses. PHH Corporation ("PHH") owns the remaining percentage.

In connection with the joint venture, the Company recorded ~~equity earnings~~$4 million in losses related to its equity investment in PHH Home Loans ~~of $3 million and $6 million~~ for the three months ended ~~June 30, 2016~~March 31, 2017 and ~~June 30, 2015, respectively, and $3 million and $8 million~~no equity in earnings for the ~~six~~three months ended ~~June 30, 2016 and June 30, 2015, respectively.~~March 31, 2016. The Company received no cash dividends from PHH Home Loans during both the ~~six~~three months ended ~~June 30, 2016 compared to $5 million in cash dividends during the same period in 2015.~~March 31, 2017 and March 31, 2016. The Company's investment in PHH Home Loans is ~~$61~~$55 million at ~~June 30, 2016~~March 31, 2017 and ~~$58~~$59 million at December 31, ~~2015.~~2016.

On February 15, 2017, Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreed to form a new joint venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"), which is expected to begin doing business in mid-2017. Commencement of operations is subject to the closing of the transactions contemplated by an asset purchase agreement under which Guaranteed Rate Affinity will acquire certain assets of the mortgage operations of PHH Home Loans, the existing joint venture between Realogy and PHH Mortgage Corporation. The asset purchase agreement is subject to approval by PHH Corporation’s shareholders and other closing conditions and the movement of employees from the existing joint venture to the new joint venture is expected to be completed in a series of phases. The initial phase is expected to occur in mid-2017 and the final phase is expected to occur during the fourth quarter of 2017.

Income Taxes

The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income before income taxes for the period. In addition, non-recurring or discrete items are recorded ~~during~~in the period in which they occur. The provision for income taxes was ~~an expense~~a benefit of ~~$64 million and $66~~$9 million for the three months ended ~~June 30, 2016~~March 31, 2017 and ~~June 30, 2015, respectively, and $40 million and $42~~a benefit of $24 million for the ~~six~~three months ended ~~June 30, 2016 and June 30, 2015, respectively.~~March 31, 2016.

Derivative Instruments

The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The Company uses foreign currency forward contracts largely to manage its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables and payables. The Company primarily manages its foreign currency exposure to the British Pound, Euro, Swiss Franc and Canadian ~~Dollar and British Pound.~~Dollar. The Company has not elected to utilize hedge accounting for these forward contracts; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations. However, the fluctuations in the value of these forward contracts generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. As of ~~June 30, 2016,~~March 31, 2017, the Company had outstanding foreign currency forward contracts with a fair value of less than $1 million and a

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notional value of ~~$22~~$27 million. As of December 31, ~~2015,~~2016, the Company had outstanding foreign currency forward contracts with a fair value of ~~less than $1~~$2 million and a notional value of ~~$33~~$29 million.

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The Company also enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. The Company has interest rate swaps with an aggregate notional value of $1,475 million to offset the variability in cash flows resulting from the term loan facilities as follows:



Notional Value (in millions)	Commencement Date	Expiration Date
$225	July 2012	February 2018
$200	January 2013	February 2018
$600	August 2015	August 2020
$450	November 2017	November 2022

The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations.

The fair value of derivative instruments was as follows:

Liability Derivatives

Fair Value

Liability Derivatives

Fair Value

Not Designated as Hedging Instruments

Balance Sheet Location

June 30, 2016

December 31, 2015

Balance Sheet Location

March 31, 2017

December 31, 2016

Interest rate swap contracts

Other non-current liabilities

Other current and non-current liabilities

The effect of derivative instruments on earnings was as follows:


Derivative Instruments Not Designated as Hedging Instruments	Location of (Gain) or Loss Recognized for Derivative Instruments	(Gain) or Loss Recognized on Derivatives										Location of (Gain) or Loss Recognized for Derivative Instruments	(Gain) or Loss Recognized on Derivatives
		Three Months Ended June 30,					Six Months Ended June 30,						Three Months Ended March 31,
		2016		2015			2016		2015				2017			2016
Interest rate swap contracts	Interest expense	$	14	$	(3	)	$	45	$	11		Interest expense	$	(1	)	$	31
Foreign exchange contracts	Operating expense	—		—			—		(1		)	Operating expense	—			—

Restricted Cash

Restricted cash primarily relates to amounts specifically designated as collateral for the repayment of outstanding borrowings under the Company’s securitization facilities. Such amounts approximated $75 million and $8$7 million at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016, respectively, and are primarily included within other current assets on the Company’s Condensed Consolidated Balance Sheets.

Supplemental Cash Flow Information

Significant non-cash transactions during the ~~six~~three months ended ~~June 30,~~March 31, 2017 and March 31, 2016 ~~and June 30, 2015~~ included capital lease additions of $7$5 million and $9$4 million, respectively, which resulted in non-cash additions to property and equipment, net and other non-current liabilities.

Stock Repurchases

The Company may repurchase shares of its common stock under authorizations made from its Board of Directors. Shares repurchased are retired and not displayed separately as treasury stock on the consolidated financial statements. The par value of the shares repurchased and retired is deducted from common stock and the excess of the purchase price over par value is first charged against any available additional paid-in capital with the balance charged to retained earnings. Direct costs incurred to repurchase the shares are included in the total cost of the shares.

In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 million of the ~~Company’s~~Company's common stock. ~~From~~On February 23, 2017, the ~~date~~Company's Board of ~~authorization through June 30, 2016,~~Directors authorized a new share repurchase program of up to an additional $300 million of the Company's common stock.

As of March 31, 2017, the Company had repurchased and retired 29.3 million shares of common stock under the February 2016 share repurchase program for ~~$67~~an aggregate of $259 million at a weighted average market price of ~~$32.45~~$27.93 per share, including 2.2 million shares of common stock repurchased during the first quarter of 2017 for $60 million at a weighted average market price of $27.82 per share. As of March 31, 2017, approximately $16 million remained available

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for repurchase under the February 2016 share repurchase program and $300 million remained available for repurchase under the February 2017 share repurchase plan.

Dividend Policy

In August 2016, the Company’s Board of Directors approved the initiation of a quarterly cash dividend policy of $0.09 per share on its common stock. During the three months ended March 31, 2017, the Board declared and paid a cash dividend of $0.09 per share of the Company’s common stock.

The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreements, and the indentures governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant.

Pursuant to the Company’s policy, the dividends payable in cash are treated as a reduction of additional paid-in capital since the Company is currently in a retained deficit position.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards ~~Updates ("ASU").~~Updates. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

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In ~~March~~August 2016, the FASB issued ~~an ASU~~a new standard on "Improvements to Employee Share-Based Payment Accounting" which amended guidance related to employee share-based payment accounting. The guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and will be applied on a prospective basis. The guidance increases the amount companies can withhold to cover income taxes on awards without triggering liability classification ~~for shares used to satisfy statutory income tax withholding obligations and requires application of a modified retrospective transition method. In addition, the guidance requires presentation~~ of cash ~~paid by an employer when directly withholding shares for tax withholding purposes as a financing activity~~receipts and payments on the statement of cash flows intending to reduce diversity in practice on how certain transactions are classified. In addition, in November 2016, the FASB issued a new standard requiring that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and ~~requires retrospective application.~~amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU also allows entities to elect as an accounting policy either to continue to estimate forfeitures on share-based payment awards or to account for forfeitures when they occur using a modified retrospective approach. The amended guidance will benew standards are effective for ~~interim and~~ annual periods beginning after December 15, ~~2016; early adoption is permitted if all provisions are adopted~~2017 and will require a retrospective application at the beginning of the earliest comparative period presented in the ~~same period.~~year of adoption. The Company is currently evaluating the impact of the ~~standard~~standards on its consolidated financial ~~statements but does not expect the new standard to have a material impact on the financial results of the Company.~~statements.

In February 2016, the FASB issued its new standard on leases which requires virtually all leases to be recognized on the balance sheet. Lessees will recognize a right-of-use asset and a lease liability for all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance leases. Operating leases will result in straight-line expense, similar to current operating leases, while finance leases will result in a front-loaded expense pattern, similar to current capital leases. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The new standard is effective for annual periods beginning after December 15, ~~2018 (i.e., calendar periods beginning on January 1, 2019).~~2018. Early adoption is permitted. The new leasing standard requires modified retrospective transition, which requires application of the new guidance at the beginning of the earliest comparative period presented in the year of adoption. The Company is currently evaluating the impact of the standard on its consolidated financial statements.

In May 2014, the FASB issued a standard on revenue recognition that will impact most companies to some extent. The objective of the revenue standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and the timing of revenue recognition. The new standard permits for two alternative implementation methods, the use of either (1) full retrospective application to each prior reporting period presented or (2) modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating implementation method and plans to adopt the new standard in the first quarter of ~~2018 but has not yet determined~~2018. After a review of the ~~method by which~~Company's revenue streams, the ~~standard will be adopted. The~~ Company does not expect the new standard to have a material impact on ~~the~~ financial results ~~of the Company~~ as the majority of ~~our~~the Company's revenue is recognized at the completion of a homesale transaction ~~and~~which will not ~~be impacted by this~~result in a change in the timing of recognition of revenue transactions under the new revenue recognition guidance. ~~The Company is currently evaluating the impact~~

Table of ~~the standard on other revenue streams.~~Contents


2.	ACQUISITIONS

~~2016~~2017 Acquisitions

During the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, the Company acquired ~~four~~five real estate brokerage ~~related~~ operations through its wholly owned subsidiary, NRT, for aggregate cash consideration of ~~$15 million and established~~ $1 million, ~~of contingent consideration. These acquisitions resulted~~resulting in goodwill ~~of $13 million, pendings and listings of $2 million and other assets~~ of $1 million.

None of the ~~2016~~2017 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.

~~2015~~2016 Acquisitions

During the year ended December 31, ~~2015,~~2016, the Company acquired ~~thirteen~~eleven real estate brokerage ~~related~~and property management operations through its wholly owned subsidiary, NRT, ~~including a large franchisee of the Real Estate Franchise segment,~~ for aggregate cash consideration of ~~$96~~$74 million and established ~~$13~~$9 million of ~~liabilities related to~~ contingent ~~consideration and other acquisition related liabilities.~~consideration. These acquisitions resulted in goodwill of ~~$94~~$52 million, customer relationships of $20 million, pendings and listings of ~~$10~~$6 million, other ~~intangibles~~intangible assets of $1$3 million, other assets of $7$5 million and other liabilities of $3 million.

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During the year ended December 31, ~~2015,~~2016, the Company acquired ~~three~~one title and settlement ~~operations~~operation through its wholly owned subsidiary, TRG, for cash consideration of ~~$34~~$24 million and established ~~$37~~$10 million of ~~liabilities related to~~ contingent consideration. ~~These acquisitions~~This acquisition resulted in goodwill of ~~$47~~$20 million, title plant of $7 million, pendings of $5 million, trademarks of ~~$9 million, pendings and listings of $8~~$3 million, other ~~intangibles~~intangible assets of $5$2 million, ~~title plant shares~~other assets of $1$6 million and other ~~assets~~liabilities of $1$9 million.

None of the ~~2015~~2016 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.


3.	INTANGIBLE ASSETS

Goodwill by segment and changes in the carrying amount are as follows:

Real Estate
Franchise
Services

Company
Owned
Brokerage
Services

Relocation
Services

Title and
Settlement
Services

Total
Company
Gross goodwill as of December 31, 2015 $ 3,315
$ 999
$ 641
$ 449
$ 5,404
Accumulated impairment losses (1,023 ) (158 ) (281 ) (324 ) (1,786 )
Balance at December 31, 2015 2,292
841
360
125
3,618
Goodwill acquired —
13
—
—
13
Balance at June 30, 2016 $ 2,292
$ 854
$ 360
$ 125
$ 3,631



	Real Estate Franchise Services			Company Owned Brokerage Services			Relocation Services			Title and Settlement Services			Total Company
Gross goodwill as of December 31, 2016	$	3,315		$	1,051		$	641		$	469		$	5,476
Accumulated impairment losses	(1,023		)	(158		)	(281		)	(324		)	(1,786		)
Balance at December 31, 2016	2,292			893			360			145			3,690
Goodwill acquired	—			1			—			—			1
Balance at March 31, 2017	$	2,292		$	894		$	360		$	145		$	3,691

Intangible assets are as follows:


	As of June 30, 2016						As of December 31, 2015						As of March 31, 2017						As of December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable—Franchise agreements (a)	$	2,019	$	625	$	1,394	$	2,019	$	591	$	1,428	$	2,019	$	675	$	1,344	$	2,019	$	658	$	1,361
Indefinite life—Trademarks (b)	$	745			$	745	$	745			$	745	$	748			$	748	$	748			$	748
Other Intangibles
Amortizable—License agreements (c)	$	45	$	9	$	36	$	45	$	8	$	37	$	45	$	9	$	36	$	45	$	9	$	36
Amortizable—Customer relationships (d)	530		297		233		530		284		246		550		318		232		550		312		238
Indefinite life—Title plant shares (e)	11				11		11				11		18				18		18				18
Amortizable—Pendings and listings (f)	2		1		1		3		1		2		6		6		—		6		5		1
Amortizable—Other (g)	31		14		17		31		11		20		33		15		18		33		13		20
Total Other Intangibles	$	619	$	321	$	298	$	620	$	304	$	316	$	652	$	348	$	304	$	652	$	339	$	313

_______________

(a) Generally amortized over a period of 30 years.


(b)	Primarily relates to the Century 21^®, Coldwell Banker^®, ERA^®, Corcoran^®, Coldwell Banker Commercial^® and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time.

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(c)	Relates to the Sotheby’s International Realty^® and Better Homes and Gardens^® Real Estate agreements which are being amortized over 50 years (the contractual term of the license agreements).


(d)	Relates to the customer relationships at the Relocation Services segment, the Title and Settlement Services segment, ~~and~~ the Real Estate Franchise Services segment and our Company Owned Real Estate Brokerage Services segment. These relationships are being amortized over a period of 2 to 20 years.


(e)	~~Primarily relates to the Texas American Title Company title plant shares.~~ Ownership in a title plant is required to transact title insurance in certain states. The Company expects to generate future cash flows for an indefinite period of time.


(f)	Generally amortized over a period of 5 months.


(g)	Consists of covenants not to compete which are amortized over their contract lives and other intangibles which are generally amortized over periods ranging from 5 to 10 years.

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Intangible asset amortization expense is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Franchise agreements	$	17	$	16	$	34	$	33	$	17	$	17
License agreements	1		—		1		1		—		—
Customer relationships	6		7		13		14		6		7
Pendings and listings	2		6		2		6		1		—
Other	1		2		3		3		2		2
Total	$	27	$	31	$	53	$	57	$	26	$	26

Based on the Company’s amortizable intangible assets as of ~~June 30, 2016,~~March 31, 2017, the Company expects related amortization expense for the remainder of ~~2016,~~2017, the four succeeding years and thereafter to be approximately $5073 million, $97 million, $96 million, $94 million, $~~93 million~~, ~~$91~~92 million and $~~1,257~~1,178 million, respectively.


4.	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:


	June 30, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Accrued payroll and related employee costs	$	100	$	140	$	85	$	138
Accrued volume incentives	24		34		29		40
Accrued commissions	44		29		37		31
Restructuring accruals	11		9		12		14
Deferred income	70		73		67		69
Accrued interest	18		13		31		13
Contingent consideration for acquisitions	20		27		20		24
Other	116		123		119		106
Total accrued expenses and other current liabilities	$	403	$	448	$	400	$	435

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5. SHORT AND LONG-TERM DEBT

Total indebtedness is as follows:

June 30, 2016 December 31, 2015
Senior Secured Credit Facility:
Revolving Credit Facility $ —
$ 200
Term Loan B 1,833
1,839
Term Loan A 422
433
3.375% Senior Notes —
499
4.50% Senior Notes 437
434
5.25% Senior Notes 544
297
4.875% Senior Notes 496
—
Total Short-Term & Long-Term Debt $ 3,732
$ 3,702
Securitization obligations:
Apple Ridge Funding LLC $ 269
$ 238
Cartus Financing Limited 11
9
Total securitization obligations $ 280
$ 247

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	March 31, 2017		December 31, 2016
Senior Secured Credit Facility:
Revolving Credit Facility	$	310	$	200
Term Loan B	1,069		1,069
Term Loan A Facility:
Term Loan A	406		411
Term Loan A-1	345		347
4.50% Senior Notes	440		439
5.25% Senior Notes	545		545
4.875% Senior Notes	496		496
Total Short-Term & Long-Term Debt	$	3,611	$	3,507
Securitization obligations:
Apple Ridge Funding LLC	$	160	$	192
Cartus Financing Limited	12		13
Total securitization obligations	$	172	$	205

Indebtedness Table

As of ~~June 30, 2016,~~March 31, 2017, the Company’s borrowing arrangements were as follows:


	Interest Rate	Expiration Date	Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Amount		Interest Rate	Expiration Date	Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Amount
Senior Secured Credit Facility:
Revolving Credit Facility (1)	(2)	October 2020	$	—	$ *		$	—	(2)	October 2020	$	310	$ *		$	310
Term Loan B	(3)	March 2020	1,858		25		1,833		(3)	July 2022	1,092		23		1,069
Term Loan A Facility:
Term Loan A	(4)	October 2020	424		2		422		(4)	October 2020	408		2		406
Term Loan A-1									(5)	July 2021	348		3		345
Senior Notes	4.50%	April 2019	450		13		437		4.50%	April 2019	450		10		440
Senior Notes	5.25%	December 2021	550		6		544		5.25%	December 2021	550		5		545
Senior Notes	4.875%	June 2023	500		4		496		4.875%	June 2023	500		4		496
Securitization obligations: (5)
Apple Ridge Funding LLC (6)		June 2017	269		*		269
Cartus Financing Limited (7)		August 2016	11		*		11
Total (8)			$	4,062	$	50	$	4,012
Securitization obligations: (6)
Apple Ridge Funding LLC (7)										June 2017	160		*		160
Cartus Financing Limited (8)										August 2017	12		*		12
Total (9)									Total (9)		$	3,830	$	47	$	3,783

_______________


*	The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets.

(1)

As of ~~June 30, 2016,~~March 31, 2017, the Company had ~~$815~~$1,050 million of borrowing capacity under its Revolving Credit ~~Facility. On August 2, 2016, the Company had $225 million outstanding borrowings on the Revolving Credit~~ Facility, leaving ~~$590~~$740 million of available capacity. The ~~increase~~revolving credit facility expires in October 2020, but is classified on the balance sheet as current due to the revolving nature of the facility. The outstanding borrowings ~~compared to June 30, 2016 was a result~~and capacity are the same as of ~~amending and reducing the borrowings under the Term Loan B in July 2016. See Note 12, "Subsequent Events" for a description of the transaction.~~May 3, 2017.

(2)

Interest rates with respect to revolving loans under the Senior Secured Credit Facility at ~~June 30, 2016~~March 31, 2017 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended ~~June 30, 2016.~~March 31, 2017.


(3)	The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus ~~3.00%~~2.25% (with a LIBOR floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus ~~2.00%~~1.25% (with an ABR floor of 1.75%).


(4)	The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling per annum 5%, 5%, 7.5%, 10.0% and 12.5% of the original principal amount of the Term Loan A in 2016, 2017, 2018, 2019 and 2020, respectively. The interest rates with respect to term loans under the Term Loan A ~~Facility~~are based on, at the Company's option, (a) adjusted LIBOR plus an

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additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended March 31, 2017.

(5)

The Term Loan A-1 provides for quarterly amortization payments, which commenced on September 30, 2016, totaling per annum 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, with the last amortization payment made on June 30, 2021. The interest rates with respect to term loans under the Term Loan A-1 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended ~~June 30, 2016.~~March 31, 2017.


~~(5)~~(6)	Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.


~~(6)~~(7)	~~In June 2016, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2017.~~ As of ~~June 30, 2016,~~March 31, 2017, the Company had $325 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving ~~$56~~$165 million of available capacity.


~~(7)~~(8)	Consists of a £2010 million revolving loan facility and a £5 million working capital facility. As of ~~June 30, 2016,~~March 31, 2017, the Company had ~~$33~~$19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving ~~$22~~$7 million of available capacity.

~~(8)~~(9)

Not included in this table, the Company had ~~$130~~$126 million of outstanding letters of credit at ~~June 30, 2016~~March 31, 2017 under the Unsecured Letter of Credit Facility with a weighted average rate of ~~3.10%~~2.93%. In the second quarter of 2016, the Company moved outstanding letters of credit to the Unsecured Letter of Credit Facility and terminated the synthetic letter of credit facility. As a result, the Company increasedAt March 31, 2017, the capacity ~~under~~of the ~~Unsecured Letter of Credit Facility by $47 million to $135~~facility was $131 million.

~~See Note 12, "Subsequent Events" for a description of the~~ ~~July 2016 Refinancing of the Senior Secured Term Loan B and Entry into a New Term Loan A~~.

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Maturities Table

As of ~~June 30, 2016,~~March 31, 2017, the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for the remainder of ~~2016~~2017 and each of the next four years is as follows:


Year	Amount		Amount
Remaining 2016	$	21
2017	41
Remaining 2017 (a)			$	341
2018	52		57
2019	513		527
2020	2,105		357
2021			836

The remaining 2016 portion of long-term debt consists of remaining 2016 quarterly amortization payments totaling $11 million and $10 million for the Term Loan A and Term Loan B facilities, respectively. The current portion of long-term debt of $41 million shown on the balance sheet consists of four quarters of amortization payments totaling $22 million and $19 million for the Term Loan A and Term Loan B facilities, respectively._______________

(a)

The current portion of long-term debt consists of remaining 2017 amortization payments totaling $16 million, $7 million and $8 million for the Term Loan A, Term Loan A-1 and Term Loan B facilities, respectively, as well as $310 million of revolver borrowings under the revolving credit facility which expires in October 2020, but are classified on the balance sheet as current due to the revolving nature of the facility.

Senior Secured Credit Facility

In ~~October 2015, Realogy Group~~July 2016, the Company entered into a ~~second~~third amendment ~~to the senior secured credit agreement~~ (the ~~“Amended and Restated Credit Agreement”~~“Third Amendment”). The second amendment provided for a five-year, $815 million revolving credit facility and included a $125 million letter of credit sub-facility. The Term Loan B and the synthetic letter of credit facility under to the Amended and Restated Credit Agreement, ~~were not affected by~~dated as of March 5, 2013, as amended. The Third Amendment replaced the ~~second amendment.~~$1,858 million Term Loan B due March 2020 with a new $1,100 million Term Loan B due July 20, 2022. In ~~the second quarter of 2016,~~January 2017, the Company ~~moved outstanding letters of credit~~entered into a fourth amendment (the “Fourth Amendment” to the ~~Unsecured Letter~~Amended and Restated Credit Agreement, as so amended, the "Senior Secured Credit Agreement") that repriced the Term Loan B through a refinancing of the existing term loan with a new Term Loan B. The Fourth Amendment reduced the interest rate by 75 basis points but did not change the maturity date for the Term Loan B. The Company also entered into an Incremental Assumption Agreement to the Senior Secured Credit Agreement pursuant to which the Company increased the borrowing capacity under its Revolving Credit Facility ~~and terminated~~to $1,050 million from the ~~synthetic letter of credit facility. See the "Other Debt Facilities" section below for more information.~~existing $815 million.

The ~~Amended and Restated~~Senior Secured Credit Agreement provides for:

(a)

a Term Loan B ~~initially~~ issued in the original aggregate principal amount of ~~$1,905~~$1,100 million with a maturity date of ~~March 5, 2020.~~July 2022. The Term Loan B has quarterly amortization payments totaling 1% per annum of the initial aggregate principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at Realogy Group's option, adjusted LIBOR plus ~~3.00%~~2.25% (with a LIBOR floor of 0.75%) or ABR plus ~~2.00%~~1.25% (with an ABR floor of 1.75%); and

(b)

~~an $815~~a $1,050 million Revolving Credit Facility with a maturity date of October 23, 2020, which includes (i) a $125 million letter of credit subfacility and (ii) a swingline loan subfacility. The interest rate with respect to revolving loans under the Revolving Credit Facility is based on, at Realogy Group's option, adjusted LIBOR or ABR plus an ~~additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:~~

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additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:



Senior Secured Leverage Ratio	Applicable LIBOR Margin	Applicable ABR Margin
Greater than 3.50 to 1.00	2.50%	1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00	2.25%	1.25%
Less than 2.50 to 1.00	2.00%	1.00%

The ~~Amended and Restated~~Senior Secured Credit Agreement permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and us, without the consent of the existing lenders under the new senior secured credit facility, plus an unlimited amount if Realogy Group's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the ~~Amended and Restated~~Senior Secured Credit Agreement also permits us to issue senior secured or unsecured notes in lieu of any incremental facility.

The obligations under the ~~Amended and Restated~~Senior Secured Credit Agreement are secured to the extent legally permissible by substantially all of the assets of Realogy Group, Realogy Intermediate and all of their domestic subsidiaries, other than certain excluded subsidiaries.

Realogy Group’s ~~Amended and Restated~~Senior Secured Credit Agreement contains financial, affirmative and negative covenants and requires Realogy Group to maintain a senior secured leverage ratio, not to exceed 4.75 to 1.00, and pursuant to the second amendment discussed above, the leverage ratio is tested quarterly ~~commencing with the period ended September 30, 2015,~~

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regardless of the amount of borrowings outstanding and letters of credit issued under the revolver at the testing date. In this report, the Company refers to the term "Adjusted (Covenant) EBITDA" to mean EBITDA as so defined for purposes of determining compliance with the senior secured leverage covenant. The senior secured leverage ratio measured at any applicable quarter end is Realogy Group's total senior secured net debt divided by the trailing twelve month Adjusted (Covenant) EBITDA. Total senior secured net debt does not include unsecured indebtedness, including the Unsecured Notes as well as the securitization obligations. At ~~June 30, 2016,~~March 31, 2017, Realogy Group’s senior secured leverage ratio was ~~2.22~~2.35 to 1.00.

~~See Note 12, "Subsequent Events" for a description of the~~ ~~July 2016 Refinancing of the Senior Secured Term Loan B and Entry into a New Term Loan A~~ in which the Company refinanced its existing $1,858 million Term Loan B due July 2020 by issuing a new Term Loan B in the amount of $1,100 million with a maturity date in July 2022 and entering into a new Term Loan A in the amount of $355 million with a maturity date in July 2021.

Term Loan A Facility

In October 2015, Realogy Group entered into the Term Loan A senior secured credit ~~agreement. The Term Loan A Agreement~~agreement which provides for a five-year, $435 million loan issued at par with a maturity date of October 23, 2020 (the “Term Loan A”) and has terms substantially similar to the ~~Amended and Restated~~Senior Secured Credit Agreement. The Term Loan A provides for quarterly amortization payments, ~~commencing~~which commenced March 31, 2016, totaling the amount per annum equal to the following percentages of the original principal amount of the Term Loan A: 5%, 5%, 7.5%, 10.0% and 12.5% for amortizations payable in 2016, 2017, 2018, 2019 and 2020, with the balance payable upon the final maturity date. The interest rates with respect to term loans under the Term Loan A are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:



Senior Secured Leverage Ratio	Applicable LIBOR Margin	Applicable ABR Margin
Greater than 3.50 to 1.00	2.50%	1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00	2.25%	1.25%
Less than 2.50 to 1.00	2.00%	1.00%

In July 2016, Realogy Group entered into a first amendment to the Term Loan A senior secured credit agreement. Under the amendment, the Company issued the Term Loan A-1 in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A. The Term Loan A-1 provides for quarterly amortization payments totaling 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, which commenced September 30, 2016 continuing through June 30, 2021.

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The interest rates with respect to term loans under the Term Loan A-1 are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:



Senior Secured Leverage Ratio	Applicable LIBOR Margin	Applicable ABR Margin
Greater than 3.50 to 1.00	2.50%	1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00	2.25%	1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00	2.00%	1.00%
Less than 2.00 to 1.00	1.75%	0.75%

Consistent with the ~~Amended and Restated~~Senior Secured Credit Agreement, the Term Loan A Facility permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and the company, without the consent of the existing lenders under the Term Loan A, plus an unlimited amount if the Company's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Term Loan A Facility also permits us to issue senior secured or unsecured notes in lieu of any incremental facility.

Unsecured Notes

The 4.50% Senior Notes, 5.25% Senior Notes and 4.875% Senior Notes (each as defined below, ~~and~~ collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on April 15, 2019, December 1, 2021 and June 1, 2023, respectively. Interest on the Unsecured Notes is payable each year semiannually on April 15 and October 15 for the 4.50% Senior Notes and June 1 and December 1 for both the 5.25% Senior Notes and 4.875% Senior Notes.

In March 2016, the Company issued 5.25% Senior Notes due 2021 of $250 million (the "Additional 5.25% Senior Notes") under the same indenture as the $300 million of Realogy Group’s 5.25% Senior Notes due 2021 issued on November 21, 2014 (the "Existing 5.25% Senior Notes") (collectively the "5.25% Senior Notes"). The Additional 5.25% Senior Notes mature on December 1, 2021 and interest on the notes is due on June 1 and December 1 of each year with the first interest payment date of June 1, 2016. The Additional 5.25% Senior Notes have identical terms, other than the issue date, the issue price and the first interest payment date, and constitute part of the same series as the Existing 5.25% Senior Notes.

In the second quarter of 2016, the Company used $400 million of revolver borrowings and a portion of cash on hand to retire the $500 million of 3.375% Senior Notes at maturity. The Company also issued $500 million of 4.875% Senior Notes (the "4.875% Senior Notes") due 2023 and used the proceeds to temporarily reduce revolver borrowings. The 4.875% Senior Notes mature on June 1, 2023 and interest on the 4.875% Notes is due on June 1 and December 1 of each year with the first interest payment date of December 1, 2016.

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The Unsecured Notes are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities and are guaranteed by Realogy Holdings on an unsecured senior subordinated basis.

Other Debt Facilities

The Company has an Unsecured Letter of Credit Facility to provide for the issuance of letters of credit required for general corporate purposes by the Company. ~~In the second quarter of 2016, the Company increased~~At March 31, 2017, the capacity ~~under~~of the facility ~~by $47 million from $88 million to $135~~was $131 million. The facility's expiration dates are as follows:



Capacity (in millions)	Expiration Date
$53	~~June 2017~~
~~$16~~65	September 2018
$66	December 2019

The fixed pricing to the Company is based on a spread above the credit default swap rate for senior unsecured debt obligations of the Company over the applicable letter of credit period. Realogy Group's obligations under the Unsecured Letter of Credit Facility are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities. As of ~~June 30, 2016, $130~~March 31, 2017, $126 million of the Unsecured Letter of Credit Facility is being utilized.

Securitization Obligations

Realogy Group has secured obligations through Apple Ridge Funding LLC under a securitization program. InThe program expires in June ~~2016, Realogy Group extended the program until June 2017. The program~~2017 and has a capacity of $325 million. At ~~June 30, 2016,~~March 31, 2017, Realogy Group has ~~$269~~$160 million of outstanding borrowings under the facility.

Realogy Group, through a special purpose entity known as Cartus Financing Limited, has agreements providing for a £2010 million revolving loan facility and a £5 million working capital facility, both of which expire in August ~~2016.~~31, 2017. There are ~~$11~~$12 million of outstanding borrowings on the facilities at ~~June 30, 2016.~~March 31, 2017. These Cartus Financing Limited facilities are secured by the relocation assets of a U.K. government contract in this special purpose entity and are therefore classified as permitted securitization financings as defined in Realogy Group’s Senior Secured Credit Facility and the indentures governing the Unsecured Notes.

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The Apple Ridge entities and the Cartus Financing Limited entity are consolidated special purpose entities that are utilized to securitize relocation receivables and related assets. These assets are generated from advancing funds on behalf of clients of Realogy Group’s relocation business in order to facilitate the relocation of their employees. Assets of these special purpose entities are not available to pay Realogy Group’s general obligations. Under the Apple Ridge program, provided no termination or amortization event has occurred, any new receivables generated under the designated relocation management agreements are sold into the securitization program and as new eligible relocation management agreements are entered into, the new agreements are designated to the program. The Apple Ridge program has restrictive covenants and trigger events, including performance triggers linked to the age and quality of the underlying assets, foreign obligor limits, multicurrency limits, financial reporting requirements, restrictions on mergers and change of control, any uncured breach of Realogy Group’s senior secured leverage ratio under Realogy Group’s Senior Secured Credit Facility, and cross-defaults to Realogy Group’s material indebtedness. The occurrence of a trigger event under the Apple Ridge securitization facility could restrict our ability to access new or existing funding under this facility or result in termination of the facility, either of which would adversely affect the operation of our relocation business.

Certain of the funds that Realogy Group receives from relocation receivables and related assets must be utilized to repay securitization obligations. These obligations were collateralized by ~~$350~~$216 million and $~~281~~238 million of underlying relocation receivables and other related relocation assets at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016, respectively. Substantially all relocation related assets are realized in less than twelve months from the transaction date. Accordingly, all of Realogy Group’s securitization obligations are classified as current in the accompanying Condensed Consolidated Balance Sheets.

Interest incurred in connection with borrowings under these facilities amounted to $21 million ~~and $3 million~~ for both the three ~~and six~~ months ended ~~June 30, 2016~~March 31, 2017 and ~~2015.~~2016. This interest is recorded within net revenues in the accompanying Condensed Consolidated Statements of Operations as related borrowings are utilized to fund Realogy Group's relocation

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business where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was ~~2.5%~~3.3% and ~~2.1%~~2.6% for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 and ~~2015~~2016, respectively.

Loss on the Early Extinguishment of Debt

As a result of the refinancing transaction, the Company recorded a loss on the early extinguishment of debt of $4 million during the three months ended March 31, 2017.


6.	RESTRUCTURING COSTS

The restructuring ~~charge~~charges for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~was $12~~were $5 million and ~~$21~~$9 million, respectively. The components of the restructuring charges for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~ were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Personnel-related costs (1)	$	9	$	—	$	11	$	—	$	5	$	2
Facility-related costs (2)	3		—		5		—		—		2
Accelerated depreciation on asset disposals									—		—
Other restructuring costs (3)	—		—		5		—		—		5
Total restructuring charges	$	12	$	—	$	21	$	—	$	5	$	9

_______________


(1)	Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition.


(2)	Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments that will continue to be incurred under the contract for its remaining term without economic benefit to the Company and other facility and employee relocation related costs.


(3)	Other restructuring costs consist of costs related to professional fees, consulting fees and other costs associated with restructuring activities which are primarily included in the Corporate and Other business segment.

Business Optimization Initiative

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client service levels across each of the business units while enhancing the Company's profitability and incremental margins. The plan focuses on several key areas of opportunity which include process improvement efficiencies, office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. During the second quarter of 2016, the Company expanded the scope of restructuring activities in order to realign the Company Owned Real Estate Brokerage Services back office administration and support functions across the country. As a result of this realignment, theThe expected costs of activities undertaken in connection with the restructuring plan ~~have increased and~~ are ~~now~~ expected to be largely completed by ~~mid 2017.~~mid-2017.

The following is a reconciliation of the beginning and ending restructuring reserve balances for the Business Optimization Initiative:


	Personnel-related costs			Facility-related costs			Other restructuring costs			Total			Personnel-related costs			Facility-related costs			Accelerated depreciation on asset disposal		Other restructuring costs		Total
Balance at December 31, 2015	$	3		$	3		$	3		$	9
Balance at December 31, 2016													$	9		$	7		$	—	$	—	$	16
Restructuring charges	11			5			5			21			5			—			—		—		5
Costs paid or otherwise settled	(9		)	(2		)	(7		)	(18		)	(6		)	(2		)	—		—		(8		)
Balance at June 30, 2016	$	5		$	6		$	1		$	12
Balance at March 31, 2017													$	8		$	5		$	—	$	—	$	13

The following table shows the total restructuring costs expected to be incurred by type of cost for the Business Optimization Initiative:

Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred
Personnel-related costs $ 41
$ 14
$ 27
Facility-related costs 13
8
5
Accelerated depreciation related to asset disposals 1
—
1
Other restructuring costs 11
9
2
Total $ 66
$ 31
$ 35

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	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
Personnel-related costs	$	34	$	30	$	4
Facility-related costs	17		13		4
Accelerated depreciation related to asset disposals	3		1		2
Other restructuring costs	11		10		1
Total	$	65	$	54	$	11

The following table shows the total restructuring costs expected to be incurred by reportable segment for the Business Optimization Initiative:


	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred		Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
Real Estate Franchise Services	$	4	$	3	$	1	$	5	$	4	$	1
Company Owned Real Estate Brokerage Services	43		14		29		39		32		7
Relocation Services	6		4		2		5		5		—
Title and Settlement Services	1		—		1		1		1		—
Corporate and Other	12		10		2		15		12		3
Total	$	66	$	31	$	35	$	65	$	54	$	11


7.	STOCK-BASED COMPENSATION

The Company has stock-based compensation plans (the 2007 Stock Incentive Plan and the 2012 Long-Term Incentive Plan) under which incentive equity awards such as non-qualified stock options, rights to purchase shares of common stock, restricted stock, restricted stock units ("RSUs"), performance restricted stock units and performance share units ("PSUs") may be issued to employees, consultants and directors of Realogy. The Company's stockholders approved the Amended and Restated 2012 Long-Term Incentive Plan at the 2016 Annual Meeting of Stockholders held on May 4, 2016 (the "Amended and Restated 2012 LTIP"). The Amended and Restated 2012 LTIP increases the number of shares authorized for issuance under that plan by 9.8 million shares. The total number of shares authorized for issuance under the plans is 19.4 million shares.

Awards granted under the Amended and Restated 2012 LTIP utilizing the additional 9.8 million share reserve, except options and stock appreciation rights, must be counted against the foregoing share limit on a 2.22 share to one basis for each share actually granted in connection with such award. As of ~~June 30, 2016,~~March 31, 2017, the total number of shares available for future grants under the Amended and Restated 2012 LTIP was ~~8.0~~approximately 3 million shares. The Company does not expect to issue any additional awards under the 2007 Stock Incentive Plan.

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Consistent with the ~~2015~~2016 long-term incentive equity awards, the ~~2016~~2017 awards include a mix of PSUs, RSUs (performance restricted stock units for the CEO and direct reports) and options. The ~~2016~~2017 PSUs are incentives that reward grantees based upon the Company's financial performance over a three-year performance period ending December 31, ~~2018.~~2019. There are two PSU awards: one is based upon the total stockholder return of Realogy's common stock relative to the total stockholder return of the SPDR S&P Homebuilders Index ("XHB") (the "RTSR award"), and the other is based upon the achievement of cumulative free cash flow goals. The number of shares that may be issued under the PSU is variable and based upon the extent to which the performance goals are achieved over the performance period (with a range of payout from 0% to 175% of target for the RTSR award and 0% to 200% of target for the achievement of cumulative free cash flow award). The shares earned will be distributed in early ~~2019.~~2020. The RSUs vest over three years, with 33.33% vesting on each anniversary of the grant date. Time-vesting of the ~~2016~~2017 performance RSUs for the CEO and direct reports is subject to achievement of a minimum EBITDA performance goal for ~~2016.~~2017. The stock options have a maximum term of ten years and vest over four years, with 25% vesting on each anniversary date of the grant date. The options have an exercise price equal to the closing sale price of the Company's common stock on the date of grant.

In August 2016, the Company’s Board of Directors approved the initiation of a quarterly cash dividend policy on its common stock. The ~~options,~~Board declared a cash dividend of $0.09 per share of the Company’s common stock per quarter. When payment of cash dividends occurs, the Company issues dividend equivalent units ("DEUs") to eligible holders of outstanding RSUs and PSUs. The number of DEUs granted for each RSU or PSU is calculated by dividing the ~~PSUs based upon RTSR included in~~amount of the ~~2016 long-term incentive plan were granted in February 2016.~~cash dividend on the number of shares covered by the RSU or PSU at the time of the related dividend record date by the closing price of the Company's stock on the related dividend payment date. The ~~performance RSUs and the PSUs based upon achievement of cumulative free cash flow aggregating 0.4 million shares~~DEUs are subject to ~~those awards at target were also awarded in February 2016, but~~ the ~~grant was subject to approval of the Amended~~same vesting requirements, settlement provisions, and ~~Restated 2012 LTIP. The stockholders approved the Amended~~other terms and ~~Restated 2012 LTIP at the May 4, 2016 Annual Meeting and we have accordingly treated May 4, 2016~~conditions as the ~~grant date for these awards and are expensing those awards from that date over~~original award to which they relate. The issuance of DEUs have an immaterial impact on the ~~balance of the vesting or performance period.~~

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Company's stock-based compensation activity.

The fair value of RSUs and PSUs without a market condition is equal to the closing sale price of the Company's common stock on the date of grant. The fair value of the RTSR PSU award was estimated on the date of grant using the Monte Carlo Simulation method utilizing the following assumptions. Expected volatility was based on historical volatilities of the Company and select comparable companies.

2016 RTSR PSU
Grant date fair value $ 28.15
Expected volatility 28.1 %
Volatility of XHB 19.4 %
Correlation coefficient 0.58
Risk-free interest rate 0.9 %
Dividend yield —



	2017 RTSR PSU
Weighted average grant date fair value	$	27.98
Weighted average expected volatility	29.0		%
Weighted average volatility of XHB	18.4		%
Weighted average correlation coefficient	0.53
Weighted average risk-free interest rate	1.5		%
Weighted average dividend yield	—

A summary of RSU activity for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 is presented below (number of shares in millions):


	Restricted Stock Units		Weighted Average Grant Date Fair Value		Restricted Stock Units		Weighted Average Grant Date Fair Value
Unvested at January 1, 2016	1.02		$	46.36
Unvested at January 1, 2017					1.4		$	37.53
Granted	0.92		32.40		0.9		27.69
Vested (a)	(0.36	)	46.79		(0.5	)	40.63
Forfeited	(0.02	)	39.70		—		—
Unvested at June 30, 2016	1.56		$	38.16
Unvested at March 31, 2017					1.8		$	31.41

______________


(a)	The total fair value of RSUs which vested during the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 was ~~$17~~$23 million.

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A summary of PSU activity for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 is presented below (number of shares in millions):


	Performance Share Units (a)		Weighted Average Grant Date Fair Value		Performance Share Units (a)	Weighted Average Grant Date Fair Value
Unvested at January 1, 2016	0.86		$	44.97
Unvested at January 1, 2017					1.0	$	36.71
Granted	0.64		32.05		0.7	27.70
Vested ~~(b)~~	(0.03	)	46.45		—	—
Forfeited	—		—		—	—
Unvested at June 30, 2016	1.47		$	39.33
Unvested at March 31, 2017					1.7	$	32.74

______________


(a)	The PSU amounts in the table are shown at the target amount of the award.


~~(b)~~	~~The total fair value of PSUs which vested during the six months ended June 30, 2016 was $1 million.~~

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility was based on historical volatilities of the Company and select comparable companies. The expected term of the options granted represents the period of time that options are expected to be outstanding and is based on the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options.

2016 Options
Grant date fair value $ 10.97
Expected volatility 31.7 %
Expected term (years) 6.25
Risk-free interest rate 1.3 %
Dividend yield —

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	2017 Options
Weighted average grant date fair value	$	8.00
Weighted average expected volatility	30.7		%
Weighted average expected term (years)	6.25
Weighted average risk-free interest rate	2.1		%
Weighted average dividend yield	1.3		%

A summary of stock option unit activity for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 is presented below (number of shares in millions):

Options
Weighted Average
Exercise Price
Outstanding at January 1, 2016 3.15
$ 31.42
Granted 0.30
32.63
Exercised (a) (b) (0.05 ) 20.82
Forfeited/Expired (0.02 ) 33.42
Outstanding at June 30, 2016 (c) 3.38
$ 31.68



	Options	Weighted Average Exercise Price
Outstanding at January 1, 2017	3.3	$	31.73
Granted	0.4	27.56
Exercised	—	—
Forfeited/Expired	—	—
Outstanding at March 31, 2017 (a)	3.7	$	31.31

______________


(a)	~~The intrinsic value of options exercised during the six months ended June 30, 2016 was $1 million.~~


~~(b)~~	~~Cash received from options exercised during the six months ended June 30, 2016 was $1 million.~~


~~(c)~~	Options outstanding at ~~June 30, 2016~~March 31, 2017 have an intrinsic value of ~~$13~~$7 million and have a weighted average remaining contractual life of ~~6.4~~6.2 years.

Stock-Based Compensation Expense

As of ~~June 30, 2016,~~March 31, 2017, based on current performance achievement expectations, there was $6269 million of unrecognized compensation cost related to incentive equity awards under the plans which will be recorded in future periods as compensation expense over a remaining weighted average period of approximately ~~1.2~~1.4 years. The Company recorded stock-based compensation expense related to the incentive equity awards of $1312 million ~~and $25 million~~ for both the three ~~and six~~ months ended ~~June 30, 2016, respectively,~~March 31, 2017 and ~~$15 million~~ ~~and $26 million for the three and six months ended June 30, 2015, respectively.~~2016.


8.	TRANSACTIONS WITH FORMER PARENT AND SUBSIDIARIES

Transfer of Cendant Corporate Liabilities and Issuance of Guarantees to Cendant and Affiliates

Realogy Group (then Realogy Corporation) separated from Cendant on July 31, 2006 (the "Separation"), pursuant to a plan by Cendant (now known as Avis Budget Group, Inc.) to separate into four independent companies—one for each of Cendant's business units—real estate services (Realogy), travel distribution services ("Travelport"), hospitality services, including timeshare resorts ("Wyndham Worldwide"), and vehicle rental ("Avis Budget Group"). Realogy Group has certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify

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Cendant, Wyndham Worldwide and Travelport for such liabilities). These guarantee arrangements primarily relate to certain contingent litigation liabilities, contingent tax liabilities, and other corporate liabilities, of which Realogy Group assumed and is generally responsible for 62.5%. Upon separation from Cendant, the liabilities assumed by Realogy Group were comprised of certain Cendant corporate liabilities which were recorded on the historical books of Cendant as well as additional liabilities which were established for guarantees issued at the date of Separation related to certain unresolved contingent matters that could arise during the guarantee period. Regarding the guarantees, if any of the companies responsible for all or a portion of such liabilities were to default in its payment of costs or expenses related to any such liability, Realogy Group would be responsible for a portion of the defaulting party or parties’ obligation. To the extent such recorded liabilities are in excess or are not adequate to cover the ultimate payment amounts, such excess or deficiency will be reflected in the results of operations in future periods.

The due to former parent balance was $3129 million and $28 million at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016., respectively. The due to former parent balance was comprised of the Company’s portion of the following: (i) Cendant’s remaining state and foreign contingent tax liabilities, (ii) accrued interest on contingent tax liabilities, (iii) potential liabilities related to Cendant’s terminated or divested businesses, and (iv) potential liabilities related to the residual portion of accruals for Cendant operations.

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9. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share attributable to Realogy Holdings

Basic earnings per share is computed based on net income attributable to Realogy Holdings stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Realogy Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The ~~following table sets forth~~Company was in a net loss position for the three months ended March 31, 2017 and 2016, and therefore the impact of incentive equity awards were excluded from the computation of ~~basic~~dilutive loss per share as the inclusion of such amounts would be anti-dilutive. At March 31, 2017 and ~~diluted earnings per share:~~

Three Months Ended June 30, Six Months Ended June 30,
(in millions, except per share data) 2016 2015 2016 2015
Net income attributable to Realogy Holdings shareholders $ 92
$ 97
$ 50
$ 65
Basic weighted average shares 145.5
146.5
146.0
146.4
Stock options, restricted stock, restricted stock units and performance share units (a) 1.2
1.5
1.2
1.5
Weighted average diluted shares 146.7
148.0
147.2
147.9
Earnings Per Share:
Basic $ 0.63
$ 0.66
$ 0.34
$ 0.44
Diluted $ 0.63
$ 0.66
$ 0.34
$ 0.44

~~_______________~~

~~(a)~~

The three and six months ended June 30, 2016, both exclude 5.3 million shares of common stock issuable for incentive equity awards, which includes performance share units based on the achievement of target amounts, that are anti-dilutive to the diluted earnings per share computation. The three and six months ended June 30, 2015, both exclude 3.9 million shares of common stock issuable for incentive equity awards, which includes performance share units based on the achievement of target amounts, that are anti-dilutive to the diluted earnings per share computation.

~~In February~~ 2016, the ~~Company's Board~~number of ~~Directors authorized a share repurchase program~~shares of ~~up to $275~~common stock issuable for incentive equity awards, with performance awards based on the achievement of 100% of target amounts, was 7.3 million and 6.0 million, respectively.

In the first quarter of ~~the Company’s common stock. From the date of authorization through June 30, 2016,~~2017, the Company repurchased and retired 22.2 million shares of common stock for ~~$67~~$60 million at a weighted average market price of ~~$32.45~~$27.82 per share. The shares repurchased during the first quarter of 2017 include 226,352 shares for which the trade date occurred in late March 2017 while settlement occurred in April 2017. The purchase of shares under this plan reduces the weighted-average number of shares outstanding in the basic earnings per share calculation.


10.	COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved in claims, legal proceedings, alternative dispute resolution and governmental inquiries related to alleged contract disputes, business practices, intellectual property and other commercial, employment, regulatory and tax matters. Examples of such matters include but are not limited to allegations:

that the Company is vicariously liable for the acts of franchisees under theories of actual or apparent agency;

by former franchisees that franchise agreements were breached including improper terminations;

concerning claims for alleged RESPA or state real estate law violations including but not limited to claims challenging the validity of sales associates indemnification, and administrative fees;

that residential real estate sales associates engaged by NRT—under certain state or federal laws—are potentially employees instead of independent contractors, and they or regulators therefore may bring claims against NRT for breach of contract, wage and hour classification claims, wrongful discharge, ~~and~~ unemployment and workers' compensation and could obtain benefits, back wages, overtime, indemnification, penalties related to classification practices and expense reimbursement available to employees;

~~concerning claims for alleged RESPA or state real estate law violations including but not limited to claims challenging the validity~~

Table of ~~sales associates indemnification, and administrative fees;~~Contents

concerning claims generally against the company owned brokerage operations for negligence, misrepresentation or breach of fiduciary duty in connection with the performance of real estate brokerage or other professional services as well as other brokerage claims associated with listing information and property history; ~~and~~

concerning claims generally against the title company contending that, as the escrow company, the company knew or should have known that a transaction was fraudulent or concerning other title defects or settlement ~~errors.~~errors; and

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concerning information security and cyber crime.

Real Estate Business Litigation

Strader, et al. and Hall v. PHH Corporation, et al. (U.S. District Court for the Central District of California). This is a purported class action brought by four California residents against 15 defendants, including Realogy and certain of its subsidiaries, PHH Corporation and PHH Home Loans, LLC (a joint venture between Realogy and PHH), alleging violations of Section 8(a) of RESPA. Plaintiffs seek to represent two subclasses comprised of all persons in the United States who, since January 31, 2005, (1) obtained a RESPA-covered mortgage loan from either (a) PHH Home Loans, LLC or one of its subsidiaries, or (b) one of the mortgage services managed by PHH Corporation for other lenders, and (2) paid a fee for title insurance or settlement services to TRG or one of its subsidiaries. Plaintiffs allege, among other things, that PHH Home Loans, LLC operates in violation of RESPA and that the other defendants violate RESPA by referring business to one another under agreements or ~~arrangements that are prohibited by RESPA.~~arrangements. Plaintiffs seek treble damages and an award of attorneys’ fees, costs and disbursements. On February 5, 2016, the defendants filed a motion to dismiss the case claiming that not only do the claims lack merit, but they are time-barred under RESPA's one-year statute of limitations. On April 5, 2016, the court granted defendants' motion to dismiss with leave for the plaintiffs to amend their complaint. Plaintiffs filed a second amended complaint on April 21, 2016, and a third amended complaint on May 12, 2016. ~~On May 26, 2016 we~~Defendants filed a motion to dismiss the third amended complaint. The Court ~~has not yet decided that motion.~~denied the motion on October 6, 2016, without prejudice to defendants’ ability to move for summary judgment after discovery. The parties are proceeding with discovery.

The case raises significant claims and rests in part on certain interpretations of RESPA by the Consumer Financial Protection Bureau ("CFPB"), which are the subject of pending industry litigation in various ~~previously unlitigated claims.~~jurisdictions. As with all class action litigation, the case is inherently complex and subject to many uncertainties. We believe that we and the joint venture have complied with RESPA, the regulations promulgated thereunder and existing regulatory guidance. There can be no assurance, however, that if the action continues and a large class is subsequently certified, the plaintiffs will not seek a substantial damage award, penalties and other remedies. ~~Given the early stage of this case and the novel claims and issues presented, we cannot estimate a range of reasonably potential losses for this litigation.~~ The Company will vigorously defend this action.

The Company is involved in certain other claims and legal actions arising in the ordinary course of our business. Such litigation, regulatory actions and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, franchising arrangements, actions against our title company alleging it knew or should have known that others were committing mortgage fraud, standard brokerage disputes like the failure to disclose accurate square footage or hidden defects in the property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including franchisees and independent sales associates, antitrust and anti-competition claims, general fraud claims, employment law claims, including claims challenging the classification of our sales associates as independent contractors, wage and hour classification claims, and claims alleging violations of RESPA or state consumer fraud statutes. While the results of such claims and legal actions cannot be predicted with certainty, we do not believe based on information currently available to us that the final outcome of current proceedings against the Company will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Cendant Corporate Litigation

Pursuant to the Separation and Distribution Agreement dated as of July 27, 2006 among Cendant, Realogy Group, Wyndham Worldwide and Travelport, each of Realogy Group, Wyndham Worldwide and Travelport have assumed certain contingent and other corporate liabilities (and related costs and expenses), which are primarily related to each of their respective businesses. In addition, Realogy Group has assumed 62.5% and Wyndham Worldwide has assumed 37.5% of certain contingent and other corporate liabilities (and related costs and expenses) of Cendant or its subsidiaries, which are not primarily related to any of the respective businesses of Realogy Group, Wyndham Worldwide, Travelport and/or Cendant’s vehicle rental operations, in each case incurred or allegedly incurred on or prior to the date of the separation of Travelport from Cendant.

* * *

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The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable.

Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.

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Tax Matters

The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities whereby the outcome of the audits is uncertain. The Company believes there is appropriate support for positions taken on its tax returns. The liabilities that have been recorded represent the best estimates of the probable loss on certain positions and are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. However, the outcomes of tax audits are inherently uncertain.

Under the Tax Sharing Agreement with Cendant, Wyndham Worldwide and Travelport, the Company is generally responsible for 62.5% of payments made to settle claims with respect to tax periods ending on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries, the operations (or former operations) of which were determined by Cendant not to relate specifically to the respective businesses of Realogy, Wyndham Worldwide, Avis Budget or Travelport.

With respect to any remaining legacy Cendant tax liabilities, the Company and its former parent believe there is appropriate support for the positions taken on Cendant’s tax returns. However, tax audits and any related litigation, including disputes or litigation on the allocation of tax liabilities between parties under the Tax Sharing Agreement, could result in outcomes for the Company that are different from those reflected in the Company’s historical financial statements.

Contingent Liability Letter of Credit

In April 2007, the Company established a standby irrevocable letter of credit for the benefit of Avis Budget Group in accordance with the Separation and Distribution Agreement. The synthetic letter of credit was utilized to support the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities. The stated amount of the standby irrevocable letter of credit is subject to periodic adjustment to reflect the then current estimate of Cendant contingent and other liabilities. The letter of credit was $53 million at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015.~~2016. The standby irrevocable letter of credit will be terminated if (i) the Company’s senior unsecured credit rating is raised to BB by Standard and Poor’s or Ba2 by Moody’s or (ii) the aggregate value of the former parent contingent liabilities falls below $30 million.

Escrow and Trust Deposits

As a service to its customers, 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 thousand. These escrow and trust deposits totaled ~~$611~~$571 million at ~~June 30, 2016~~March 31, 2017 and ~~$308~~$415 million at December 31, ~~2015~~2016. These escrow and trust deposits are not assets of the Company and, therefore, are excluded from the accompanying Condensed Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits.

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11.	SEGMENT INFORMATION

The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. Management evaluates the operating results of each of its reportable segments based upon revenue and EBITDA, which is defined as net income (loss) before depreciation and amortization, interest (income) expense, net (other than Relocation Services interest for relocation receivables and securitization obligations) and income

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taxes, each of which is presented in the Company’s Condensed Consolidated Statements of Operations. The Company’s presentation of EBITDA may not be comparable to similar measures used by other companies.


	Revenues (a) (b)												Revenues (a) (b)
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Real Estate Franchise Services	$	221		$	213		$	378		$	364		$	170		$	157
Company Owned Real Estate Brokerage Services	1,268			1,289			2,109			2,085			897			841
Relocation Services	109			108			192			193			77			83
Title and Settlement Services	149			128			260			215			120			111
Corporate and Other (c)	(85		)	(87		)	(143		)	(144		)	(61		)	(58		)
Total Company	$	1,662		$	1,651		$	2,796		$	2,713		$	1,203		$	1,134

_______________

(a)

Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of ~~$85~~$61 million and ~~$143~~$58 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016, ~~respectively, and $87 million and $144 million for the three and six months ended June 30, 2015,~~ respectively. Such amounts are eliminated through the Corporate and Other line.

(b)

Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of ~~$13 million and $21~~$8 million for both the three ~~and six~~ months ended ~~June 30, 2016, respectively,~~March 31, 2017 and ~~$15 million and $23 million for the three and six months ended June 30, 2015, respectively.~~2016. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions.


(c)	Includes the elimination of transactions between segments.


	EBITDA												EBITDA
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2016 (a)			2015 (b)			2016 (c)			2015 (d)			2017 (a)			2016 (b)
Real Estate Franchise Services	$	149		$	146		$	241		$	232		$	102		$	92
Company Owned Real Estate Brokerage Services	78			97			57			81			(26		)	(21		)
Relocation Services	29			29			34			36			1			5
Title and Settlement Services	26			20			26			17			2			—
Corporate and Other ~~(e)~~(c)	(19		)	(27		)	(40		)	(43		)	(27		)	(21		)
Total Company	$	263		$	265		$	318		$	323		$	52		$	55
Less:
Depreciation and amortization	$	48		$	52		$	96		$	98		$	50		$	48
Interest expense, net	59			50			132			118			39			73
Income tax expense	64			66			40			42
Net income attributable to Realogy Holdings and Realogy Group	$	92		$	97		$	50		$	65
Income tax benefit													(9		)	(24		)
Net loss attributable to Realogy Holdings and Realogy Group													$	(28	)	$	(42	)

_______________

(a)

Includes ~~$12 million of~~ restructuring charges ~~as follows: $3 millionin the Real Estate Franchise Services segment,~~$7of $5 million in the Company Owned Real Estate Brokerage Services segment $1and $4 million inrelated to the ~~Relocation Services segment and $1 million in Corporate and Other~~loss on the early extinguishment of debt for the three months ended ~~June 30, 2016.~~

March 31, 2017.


(b)	Includes ~~a net benefit of $1 million of former parent legacy items for the three months ended June 30, 2015.~~

~~(c)~~

~~Includes $21~~$9 million of restructuring charges as follows: ~~$3 millionin the Real Estate Franchise Services segment, $9~~$2 million in the Company Owned Real Estate Brokerage Services segment, $3$2 million in the Relocation Services segment and $6$5 million in Corporate and Other, and a net cost of $1 million of former parent legacy items ~~included in Corporate and Other~~ for the ~~six~~three months ended ~~June 30,~~March 31, 2016.


~~(d)~~	~~Includes a net benefit of $1 million of former parent legacy items for the six months ended June 30, 2015.~~


~~(e)~~(c)	Includes the elimination of transactions between segments.

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~~12.~~	~~SUBSEQUENT EVENTS~~

~~July 2016 Refinancing of the Senior Secured Term Loan B and Entry into a New Term Loan A~~

In July 2016, the Company refinanced its existing $1,858 million Term Loan B ("Existing Term Loan B") due July 2020. The new Term Loan B ("New Term Loan B") was issued at par in the amount of $1,100 million with a maturity date in July 2022. The New Term Loan B bears the same interest rate as the Existing Term Loan B. The New Term Loan B provides for quarterly amortization payments totaling 1% per annum and commencing September 30, 2016.

Concurrently, the Company entered into a new Term Loan A ("New Term Loan A") in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A ("Existing Term Loan A"). The interest rates with respect to term loans under the New Term Loan A are based on, at the Company's option, adjusted LIBOR plus an additional margin or ABR plus additional margin, in each case subject to the following adjustments based on the Company's current senior secured leverage ratio:

Senior Secured Leverage Ratio Applicable LIBOR Margin Applicable ABR Margin
Greater than 3.50 to 1.00 2.50% 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00

2.25% 1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 2.00% 1.00%
Less than 2.00 to 1.00 1.75% 0.75%

The New Term Loan A provides for quarterly amortization payments on the last day of each quarter, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the New Term Loan A, commencing September 30, 2016 through maturity with the last amortization payment made on June 30, 2021.

The Company used the net proceeds from the New Term Loan B and New Term Loan A, along with revolver borrowings of $225 million and cash on-hand, to repay the Existing Term Loan B, reducing Term Loan B borrowings from $1,858 million to $1,100 million.

~~Dividend Policy~~

On August 3, 2016, the Company’s Board of Directors approved the initiation of a quarterly cash dividend policy on its common stock. The Board has declared a cash dividend of $0.09 per share of the Company’s common stock, payable on August 31, 2016 to stockholders of record as of the close of business on August 17, 2016. The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreement, and the indenture governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying notes thereto included elsewhere herein and with our Consolidated Financial Statements and accompanying notes included in the ~~2015~~2016 Form 10-K. Unless otherwise noted, all dollar amounts in tables are in millions. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the condensed consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same. This Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. See "Forward-Looking Statements" in this report and "Forward-Looking Statements" and "Risk Factors" in our ~~2015~~2016 Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those contained in any forward-looking statements.

OVERVIEW

We are a global provider of real estate and relocation services and report our operations in the following four segments:

•

Real Estate Franchise Services (known as Realogy Franchise Group or RFG)—franchises the Century 21^®, Coldwell Banker^®, Coldwell Banker Commercial^®, ERA^®, Sotheby's International Realty^® and Better Homes and Gardens^® Real Estate brand names. As of ~~June 30, 2016,~~March��31, 2017, our franchise systems had approximately ~~13,600~~14,200 franchised and company owned offices and approximately ~~261,000~~274,500 independent sales associates operating under our franchise and proprietary brands in the U.S. and ~~108~~112 other countries and territories around the world, which included ~~approximately~~more than 780 of our company owned and operated brokerage offices with ~~approximately 46,800~~more than 48,100 independent sales associates. Our wholly-owned subsidiary, Zaplabs is a developer of proprietary technology platform for real estate brokerages, independent sales associates and customers. Through the first half of 2016, we have rolled out Zaplabs' comprehensive, integrated ZAP^SM technology platform to approximately 1,000 of our approximately 2,600 franchisees and, consistent with our previously disclosed plan, anticipate rolling this product out to a broader franchisee base over the next two years. We believe the ZAP technology platform will increase the value proposition to our franchisees, their independent sales associates and their customers.

Our wholly-owned subsidiary, ZapLabs LLC (which changed its name from ZipRealty LLC in 2016), is the developer of our proprietary technology platform for the real estate brokerages and independent sales associates in our franchise system as well as their customers. As of March 31, 2017, we rolled out ZapLabs' comprehensive, integrated Zap^® technology platform to approximately 70% of our eligible franchisees. Consistent with our previously disclosed plan, we anticipate rolling this product out to a majority of our remaining franchisees in 2017. We believe the Zap technology platform will increase the value proposition to franchisees, independent sales associates and customers as well as improve the productivity of independent sales associates.

•

Company Owned Real Estate Brokerage Services (known as NRT)—operates a full-service real estate brokerage business principally under the Coldwell Banker^®, Corcoran^®, Sotheby’s International Realty^®, ZipRealty^®and Citi Habitats^SM ~~and ZipRealty~~^® brand names in more than 50 of the 100 largest metropolitan areas in the U.S. This segment also includes the Company's share of earnings for our PHH Home Loans venture.

•

Relocation Services (known as Cartus^®)—primarily offers clients employee relocation services such as homesale assistance, providing home equity advances to transferees (generally guaranteed by the client), home finding and other destination services, expense processing, relocation policy counseling and consulting services, arranging household goods moving services, coordinating visa and immigration support, intercultural and language training and group move management services. In addition, we provide home buying and selling assistance to members of affinity clients.

Title and Settlement Services (known as Title Resource Group or TRG)—provides full-service title and settlement services to real estate companies, affinity groups, corporations and financial institutions with many of these services provided in connection with the Company's real estate brokerage and relocation services business.

RECENT DEVELOPMENTS

Debt Transactions

Fourth Amendment to the Senior Secured Credit Agreement. On January 23, 2017, Realogy Group, an indirect, wholly-owned subsidiary of Realogy Holdings Corp., entered into a fourth amendment (the “Fourth Amendment”) to its Amended and Restated Credit Agreement, dated as of March 5, 2013, as amended (the Amended and Restated Credit Agreement, as so amended, “Senior Secured Credit Agreement”). The Fourth Amendment reprices the existing Term Loan B issued under the Senior Secured Credit Agreement through a refinancing of the existing term loan with a new Term Loan B. The interest rate with respect to the new Term Loan B is based on, at the Company’s option, adjusted LIBOR plus 2.25% (with a floor of 0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%). The maturity date for the new Term Loan B remains July 20,

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2022, and all other material provisions under the Senior Secured Credit Agreement remain unchanged. Realogy expects to reduce its annual cash interest expense by approximately $8 million as a result of the repricing.

Incremental Assumption Agreement under Senior Secured Credit Agreement. On January 23, 2017, the Company entered into an Incremental Assumption Agreement to the Senior Secured Credit Agreement pursuant to which the Company increased the borrowing capacity under its Revolving Credit Facility to $1,050 million from the existing $815 million.

New Mortgage Origination Joint Venture

On February 15, 2017, Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreed to form a new joint venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"), which is expected to begin doing business in mid-2017. Commencement of operations is subject to the closing of the transactions contemplated by an asset purchase agreement under which Guaranteed Rate Affinity will acquire certain assets of the mortgage operations of PHH Home Loans, the existing joint venture between Realogy and PHH Mortgage Corporation, including its four regional centers and employees across the United States, but not its mortgage assets.

Following completion of the transactions under the asset purchase agreement, Guaranteed Rate Affinity will originate and market its mortgage lending services to Realogy’s real estate brokerage and relocation subsidiaries as well as other real estate brokerage and relocation companies across the country. Guaranteed Rate will own a controlling 50.1% stake of Guaranteed Rate Affinity and Realogy will own 49.9%. Guaranteed Rate will have responsibility for the oversight of the officers and senior employees of Guaranteed Rate Affinity who are designated to manage Guaranteed Rate Affinity.

The asset purchase agreement is subject to approval by PHH Corporation’s shareholders and other closing conditions and the movement of employees from the existing joint venture to the new joint venture is expected to be completed in a series of phases. The initial phase is expected to occur in mid-2017 and the final phase is expected to occur during the fourth quarter of 2017. Once these transactions are complete together with the monetization of Realogy's stake in the old joint venture, the Company expects to realize approximately $25 million of net cash. There can be no assurance that the transactions contemplated by the asset purchase agreement will be consummated, that Guaranteed Rate Affinity will commence operations in a timely manner or at all or that the Company will receive the cash it expects from the wind down of the existing joint venture and the establishment of the new joint venture. The Company also expects that earnings from the operations of the joint venture may be lower in 2017 given the level of organizational change associated with the transition and the transaction phases.

NRT Initiatives

While NRT has historically compensated its independent sales associates using a traditional model, utilizing elements of other models depending upon the geographic market, we are placing an even greater focus on the quality of our services and the use of financial incentives to strengthen our recruiting and retention of independent sales associates and teams. These actions include a more aggressive strategy to recruit and retain top performing sales associates with the overall goal of sustaining or growing market share in various markets and ultimately improving NRT's overall profitability. In addition, there is an enhanced focus on the value proposition offered to independent sales associate teams. We expect near-term moderate pressure on costs and margin from these initiatives as the benefits from recruiting new independent sales associates relate mainly to new listings and not pending listings.

Return of Capital to Stockholders

In February 2016, the Board authorized a share repurchase program of up to $275 million. On February 23, 2017, our Board authorized a new share repurchase program of up to an additional $300 million of the Company's common stock. At the time of the February 23, 2017 authorization, there was $61 million remaining under the original February 2016 authorization.

Repurchases under these programs may be made at management's discretion from time to time on the open market, pursuant to Rule 10b5-1 trading plans or privately negotiated transactions. The size and timing of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The repurchase programs have no time limit and may be suspended or discontinued at any time.

Refer to "Part II—Other Information, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds" for additional information on the Company's share repurchase programs.

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During the three months ended March 31, 2017, the Board declared and paid a cash dividend of $0.09 per share of the Company’s common stock, returning an additional $13 million to stockholders.

Business Optimization Initiative

During the fourth quarter of 2015, the Company began a business optimization initiative that focuses on maximizing the efficiency and effectiveness of the cost structure of each of the Company's business units. The action is designed to improve client service levels across each of the business units while enhancing the Company's profitability and incremental margins. The plan focuses on several key areas of opportunity which include process improvement efficiencies, office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. ~~Total~~The expected costs of activities undertaken in connection with the restructuring plan are expected to be largely completed by mid-2017. The Company expects to incur an additional $11 million of restructuring costs which would result in total restructuring costs of approximately ~~$66~~$65 million are currently anticipated to be incurred through mid 2017. As of March 31, 2016, cost savings related to the restructuring initiatives were estimated to be approximately $40 million on an annual run rate basis with approximately $25 million of those cost savings expected to be realized in 2016. In the second quarter, the Company increased its cost savings estimate to approximately $60 million on an annual run rate basis with approximately $30 million of those cost savings expected to be realized in 2016. The increase in

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estimated savings and extension of the expected completion date are the result of NRT expanding the scope of its restructuring activities in order to realign its back office administration and support functions across the country. The $60 million of estimated cost savings is expected to be realized on an annual run rate basis by each reportable segment as follows: $5 million at RFG, $44 million at NRT, $8 million at Cartus, $1 million at TRG and $2 million at Corporate.for this initiative.

The following table reflects the total amount of restructuring costs expected to be incurred for the business optimization initiative by reportable segment:


	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred		Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
RFG	$	4	$	3	$	1	$	5	$	4	$	1
NRT	43		14		29		39		32		7
Cartus	6		4		2		5		5		—
TRG	1		—		1		1		1		—
Corporate and Other	12		10		2		15		12		3
Total	$	66	$	31	$	35	$	65	$	54	$	11

~~Share Repurchase Plan~~

~~In February 2016,~~Cost savings related to the ~~Company's Board of Directors authorized a share repurchase program of up~~restructuring initiatives are estimated to ~~$275~~be approximately $70 million on an annual run rate basis with approximately $29 million of ~~the Company’s common stock. From the date of authorization through June 30, 2016, the Company repurchased and retired 2 million shares of common stock for $67~~those cost savings expected to be realized in 2017. The estimated cost savings is expected to be realized on an annual run rate basis by each reportable segment as follows: $7 million at ~~a weighted average market price of $32.45 per share.~~

~~Dividend Policy~~

~~Debt Transactions~~

~~In the second quarter of 2016, the Company used $400~~RFG, $45 million ~~of revolver borrowings~~at NRT, $9 million at Cartus, $5 million at TRG and ~~a portion of cash on hand to retire the $500~~$4 million ~~of 3.375% Senior Notes~~ at ~~maturity. The Company also issued $500 million of 4.875% Senior Notes due 2023 and used the proceeds to temporarily reduce revolver borrowings.~~

In July 2016, the Company refinanced its existing $1,858 million Term Loan B ("Existing Term Loan B") due July 2020. The new Term Loan B ("New Term Loan B") was issued at par in the amount of $1,100 million with a maturity date in July 2022. Concurrently, the Company entered into a new Term Loan A ("New Term Loan A") in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A ("Existing Term Loan A"). The Company used the net proceeds from the New Term Loan B and New Term Loan A, along with revolver borrowings of $225 million and cash on-hand, to repay the Existing Term Loan B, reducing Term Loan B borrowings from of $1,858 million to $1,100 million.

~~See Note 12, "Subsequent Events" for a detailed description of the~~ ~~July 2016 Refinancing of the Senior Secured Term Loan B and Entry into a New Term Loan A~~.Corporate.

CURRENT INDUSTRY TRENDS

During the first ~~half~~quarter of ~~2016,~~2017, according to ~~NAR,~~the National Association of Realtors ("NAR"), homesale transaction volume increased 9%11% due to an increase in the number of homesale transactions, as well as average homesale price growth. RFG and NRT homesale transaction volume on a combined basis increased 4%9% in the first ~~half~~quarter of ~~2016.~~2017. NRT experienced a 4% increase in existing homesale transactions and a 3% increase in average homesale price while RFG experienced a 3% increase in existing homesale transactions and a 6% increase in average homesale price. At NRT specifically, we have seen the ~~continued slowing~~cumulative impact of ~~activity at~~market share attrition and inventory issues in the mid and lower priced homes in the major markets in which NRT operates, partially offset by volume increases in the high end of the market, ~~the cumulative impact~~defined as homes with a price of aggressive recruiting of certain of our independent sales associates resulting in attrition and inventory constraints in major markets in which we operate. In the first half of 2016, NRT saw a decline in both sides and price at the high end of the market. At NRT, sales volume at the $2.5 million ~~and higher homesale price points decreased from 20% of total volume in the first half of 2015 to 17% in 2016.~~or greater.

Recruitment and retention of independent sales associates and independent sales associate teams are critical to the business and financial results of a brokerage, including our company owned brokerages and those operated by our affiliated franchisees. Most of a brokerage's real estate listings are sourced through the sphere of influence of their independent sales

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associates, notwithstanding the growing influence of internet-generated leads. Competition for independent sales associates in our industry is high, has intensified particularly with respect to ~~top producing~~more productive independent sales associates and has resulted in a decline of our market share at ~~NRT.~~NRT, as well as at RFG to a lesser extent. Competition for independent sales associates is generally subject to numerous factors, including remuneration ~~(most notably the~~(such as sales commission percentage and other financial incentives paid to independent sales associates), ~~fees charged to~~other expenses of independent sales associates, leads or business opportunities generated for the independent sales associate from the brokerage, ~~their~~independent sales associates' perception of the value of the broker's brand affiliation, marketing and advertising efforts by the brokerage, the office manager, ~~and~~ staff and fellow independent sales associates with whom they collaborate daily and ~~the tools,~~technology, continuing professional education, and other services provided by the brokerage. We believe that the influence of independent sales associates and independent sales associate teams has increased during the housing recovery and, together with the increasing competition from other brokerages, has ~~put additional pressure on~~negatively impacted the recruitment and retention of independent sales ~~associates.~~associates and put pressure on commission rate splits. See ~~"Key Drivers"~~"Recent Developments" above for the Company's incremental actions that are being undertaken to address the competition for independent sales associates.

Beginning on October 3, 2015, CFPB's new three-day advance closing disclosure rule, known as TILA-RESPA Integrated Disclosure ("TRID"), became effective for new loan applications and is a significant change for the industry. The new regulations have caused closing delays throughout the industry, including at Realogy for both its company-owned and franchised operations. The National Association

Table of Realtors NAR Economists’ Outlook report published on July 12, 2016 reported that the time from contract-to-close for U.S. homesales was approximately 3 days higher in June 2016 compared to June 2015.Contents

According to NAR, the inventory of existing homes for sale in the U.S. was 2.1 million homes at the end of June 2016. The June 2016 inventory represents a national average supply of 4.6 months at the current homesales pace which is significantly below the 6.3 month 25-year average.

As reported by NAR, the housing affordability index has continued to be at historically favorable levels. An index above 100 signifies that a family earning the median income has sufficient income to purchase a median-priced home, assuming a 20 percent down payment and ability to qualify for a mortgage. The composite housing affordability index was ~~159~~161 for ~~May 2016~~February 2017 and ~~164~~165 for ~~2015.~~2016. The housing affordability index remains significantly higher than the average of ~~126~~127 for the period from 1970 through ~~2015.~~2016.

~~Mortgage rates continue to be at low levels by historical standards, which we believe has helped stimulate demand in the residential real estate market.~~ According to Freddie Mac, mortgage rates on commitments for a 30-year, conventional, fixed-rate first ~~mortgage~~mortgages averaged ~~3.9%~~3.7% for ~~2015~~2016 and the rate at ~~June 30,~~March 31, 2017 was 4.2%. Although mortgage rates increased 50 basis points to 4.2% as of March 31, 2017 from 3.7% as of March 2016, ~~was 3.6%. In addition,~~they continue to be at low levels by historical standards. While this increase adversely impacts housing affordability, we believe that rising wages, improving consumer confidence and a continuation of low inventory levels for the mainstream housing market will result in continued favorable demand conditions and existing homesale volume growth. To the extent that mortgage rates increase, consumers continue to have financing alternatives such as adjustable rate mortgages or shorter term mortgages which can be utilized to obtain a lower mortgage rate than a 30-year fixed-rate mortgage.

Partially offsetting the positive impact of low mortgage rates are low housing inventory ~~levels~~levels. According to NAR, the inventory of existing homes for sale in the U.S. was 1.8 million and 2.0 million at the end of March 2017 and March 2016, respectively. The March 2017 inventory represents a national average supply of 3.8 months at the current homesales pace which is below the 6.1 month 25-year average.

Additional factors offsetting the positive impact of low mortgage rates include the ongoing rise in home prices, conservative mortgage underwriting standards ~~increased down payment requirements~~ and certain homeowners having limited or negative equity in homes. Mortgage credit conditions tightened significantly during the recent housing downturn, with banks limiting credit availability to more creditworthy borrowers and requiring larger down payments, stricter appraisal standards, and more extensive mortgage documentation. Although mortgage credit conditions appear to be easing, mortgages remain less available to some borrowers and it frequently takes longer to close a homesale transaction due to current mortgage and underwriting requirements.

During the first half of 2016, according to Fannie Mae, refinancing originations totaled $365 billion which represented a decrease of 22% from the first half of 2015. In the first half of 2016 compared to the first half of 2015, the Company experienced a $5 million decline in earnings from our PHH Home Loans venture, as well as an 8% decrease in refinance title and closing units at TRG, excluding the impact of acquisitions.

RESPA has become a greater challenge in recent years for most industry participants offering settlement services, including mortgage companies, title companies and brokerages, because of changes in the regulatory environment. With the passage of Dodd-Frank in 2010, primary responsibility for enforcement of RESPA has shifted to the CFPB. The CFPB has taken a much stricter approach toward interpretation of RESPA and related regulations than the prior regulatory authority (the Department of Housing and Urban Development) and has significantly increased the use of enforcement proceedings. In the face of this changing regulatory landscape, various industry participants, while disagreeing with the CFPB’s narrow interpretation of RESPA, have nevertheless decided to modify or terminate long-standing business arrangements to avoid the risk of protracted and costly litigation defending such arrangements. While we have made, and may make, other changes to our RESPA-related business practices, we do not expect these changes to have a material impact on our operations.

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Existing Homesales

According to NAR, existing homesale transactions for ~~2015~~2016 increased to ~~5.3~~5.5 million homes, or up 6%4% compared to ~~2014,~~2015, while homesale transactions increased 5%2% on a combined basis for RFG and NRT.

~~For~~ In the ~~quarters ended March 31, 2016 and June 30, 2016,~~first quarter of 2017, NAR existing home homesale transactions increased to 1.1 million homes, or up 5%, compared to the same ~~periods in 2015, NAR existing homesale transactions increased 6% and 4%, respectively.~~period of 2016. For the ~~quarters~~first three months ended March 31, ~~2016 and June 30, 2016,~~2017, RFG and NRT homesale transactions on a combined basis increased ~~4% and~~ 3%~~, respectively,~~ compared to the same ~~periods in 2015. Our homesale transactions were impacted by a continued slowing~~period of activity in the high-end markets served by NRT, the cumulative impact of aggressive recruiting of certain of our independent sales associates and inventory constraints in many of the markets served by NRT.

2016. The annual and quarterly year-over-year trends in homesale transactions are as follows:


				2016 vs. 2015
	Full Year 2015 vs. 2014			First Quarter			Second Quarter			Third Quarter Forecast			Fourth Quarter Forecast			Full Year Forecast 2016 vs. 2015						2017 vs. 2016
Number of Existing Homesales																			Full Year 2016 vs. 2015			First Quarter			Second Quarter Forecast			Third Quarter Forecast			Fourth Quarter Forecast			Full Year Forecast 2017 vs. 2016
Industry
NAR	6	%	(a)	6	%	(a)	4	%	(a)	3	%	(b)	4	%	(b)	4	%	(b)	4	%	(a)	5	%	(a)	5	%	(b)	3	%	(b)	1	%	(b)	3	%	(b)
Fannie Mae (c)	6	%		5	%		4	%		3	%		3	%		3	%		4	%		6	%		1	%		3	%		—	%		2	%
Realogy
RFG and NRT Combined	5	%		4	%		3	%											2	%		3	%
RFG	3	%	(d)	3	%	(d)	4	%											3	%		3	%
NRT	9	%	(d)	7	%	(d)	(1	%)											—	%		4	%

_______________


(a)	Historical existing homesale data is as of the most recent NAR press release, which is subject to sampling error.


(b)	Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent NAR forecast.


(c)	Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent Fannie Mae press release.


~~(d)~~	In April 2015, NRT acquired Coldwell Banker United, a large franchisee of RFG, and as a result the drivers of Coldwell Banker United shifted from RFG to NRT. In addition, NRT homesale sides include transactions from the acquisition of ZipRealty in August 2014. The year-over-year change in homesale sides, excluding the impact of these acquisitions, would have been as follows:

Full Year
2015 vs. 2014 First Quarter
2016 vs. 2015
RFG 5 % 4 %
NRT 2 % 1 %

Since the acquisition of Coldwell Banker United occurred during the beginning of the second quarter of 2015, it did not impact the comparability of homesale transactions during the second quarter of 2016 compared to the second quarter of 2015.

As of their most recent releases, NAR ~~and~~is forecasting existing homesales to increase 3% in 2018 while Fannie Mae ~~are both~~is forecasting an increase ~~of 2%~~ in existing homesale transactions ~~for 2017 compared to 2016.~~of 1% in 2018.

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Existing Homesale Price

In ~~2015,~~2016, NAR existing homesale average price increased 4% compared to the same period in ~~2014,~~2015, while average homesale price increased 3%2% on a combined basis for RFG and NRT.

For ~~both of~~ the ~~quarters~~quarter ended March 31, ~~2016 and June 30, 2016,~~2017, compared to the same ~~periods~~period in ~~2015,~~2016, NAR existing homesale average price increased 4%5%. For the ~~quarters~~quarter ended March 31, ~~2016 and June 30, 2016,~~2017, RFG and NRT average homesale price on a combined basis increased ~~2% and 1%, respectively,~~5% compared to the same ~~periods~~period in ~~2015.~~2016. The combined average homesale price increase was due to a modest shift in homesale transaction activity from ~~higher-price~~lower and mid-priced homes to ~~lower and mid-priced~~higher price homes across RFG and NRT. Homes at the low to mid-price points are also experiencing continued constrained inventory levels.

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The annual and quarterly year-over-year trends in the price of homes are as follows:


				2016 vs. 2015
	Full Year 2015 vs. 2014			First Quarter			Second Quarter			Third Quarter Forecast			Fourth Quarter Forecast			Full Year Forecast 2016 vs. 2015						2017 vs. 2016
Price of Existing Homes																			Full Year 2016 vs. 2015			First Quarter			Second Quarter Forecast			Third Quarter Forecast			Fourth Quarter Forecast			Full Year Forecast 2017 vs. 2016
Industry
NAR (a)	4	%	(a)	4	%	(a)	4	%	(a)	5	%	(b)	4	%	(b)	4	%	(b)
NAR																			4	%	(a)	5	%	(a)	5	%	(b)	5	%	(b)	4	%	(b)	5	%	(b)
Fannie Mae (c)	6	%		6	%		5	%		5	%		5	%		5	%		5	%		6	%		6	%		5	%		5	%		6	%
Realogy
RFG and NRT Combined	3	%		2	%		1	%											2	%		5	%
RFG	5	%	(d)	3	%	(d)	3	%											3	%		6	%
NRT	(2	)%	(d)	(2	%)	(d)	(2	%)											—	%		3	%

_______________


(a)	Historical homesale price data is for existing homesale average price and is as of the most recent NAR press release.


(b)	Forecasted homesale price data is for median price and is as of the most recent NAR forecast.


(c)	Existing homesale price data is for median price and is as of the most recent Fannie Mae press release.

~~(d)~~

In April 2015, NRT acquired Coldwell Banker United, a large franchisee of RFG, and as a result the drivers of Coldwell Banker United shifted from RFG to NRT. In addition, NRT homesale price includes transactions from the acquisition of ZipRealty in August 2014. The acquisition of Coldwell Banker United did not have a significant impact on the average homesale price for RFG. The year-over-year change in average homesale price for NRT, excluding the impact of these acquisitions, would have been as follows:

Full Year
2015 vs. 2014 First Quarter
2016 vs. 2015
NRT 1 % 1 %

Since the acquisition of Coldwell Banker United occurred at the beginning of the second quarter of 2015, it did not impact the comparability of average homesale price during the second quarter of 2016 compared to the second quarter of 2015.

As of their most recent releases, NAR ~~and Fannie Mae are~~is forecasting ~~a 3% and 4%~~an increase in ~~the 2017~~ median existing homesale price ~~compared to 2016, respectively.~~of 3% in 2018 while Fannie Mae is forecasting a 4% increase in 2018.

* * *

We believe that long-term demand for housing and the growth of our industry are primarily driven by the affordability of housing, the economic health of the U.S. economy, ~~positive~~ demographic trends such as population growth, the increase in household formation, mortgage rate levels and mortgage availability, certain tax benefits, job growth, the inherent attributes of homeownership versus renting and the influence of local housing dynamics of supply versus demand. At this time, most of these factors are generally trending favorably. Factors that may negatively affect ~~a sustained~~continued growth in the housing ~~recovery~~industry include:

higher mortgage rates due to increases in long-term interest rates as well as reduced availability of mortgage financing;

insufficient inventory levels and lack of building of new housing leading to lower unit sales;

changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, or decide not to, purchase homes;

potential homebuyers with a low credit rating or inability to afford down payments;

the impact of limited or negative equity of current homeowners, as well as the lack of available inventory may limit their proclivity to purchase an alternative home;

reduced affordability of homes;

~~high levels of unemployment and associated lack of consumer confidence;~~

unsustainable economic recovery in the U.S. or a weak recovery resulting in only modest economic growth;

a decline in home ownership levels in the U.S.;

geopolitical and economic instability; and

legislative or regulatory reform, including but not limited to reform that adversely impacts the financing of the U.S. housing market or amends the Internal Revenue Code in a manner that negatively impacts home ownership such as reform that reduces the amount that certain taxpayers would be allowed to deduct for home mortgage interest.

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Many of the trends impacting our businesses that derive revenue from homesales also impact Cartus, which is a global provider of outsourced employee relocation services. In addition to general residential housing trends, key drivers of Cartus are global corporate spending on relocation services, which has not returned to levels that existed prior to the most recent recession and changes in employment relocation trends. Cartus is subject to a competitive pricing environment and lower average revenue per relocation as a result of a shift in the mix of services and number of services being delivered per move. These factors have, and may continue to, put pressure on the growth and profitability of this segment.

* * *

While data provided by NAR and Fannie Mae are two indicators of the direction of the residential housing market, we believe that homesale statistics will continue to vary between us and NAR and Fannie Mae because:

they use survey data and estimates in their historical reports and forecasting models, which are subject to sampling error, whereas we use data based on actual reported results;

there are geographical differences and concentrations in the markets in which we operate versus the national market. For example, many of our company owned brokerage offices are geographically located where average homesale prices are generally higher than the national average and therefore NAR survey data will not correlate with NRT's results;

comparability is also impaired due to NAR’s utilization of seasonally adjusted annualized rates whereas we report actual period-over-period changes and their use of median price for their forecasts compared to our average price;

NAR historical data is subject to periodic review and revision and these revisions have been, and could be material in the future; and

NAR and Fannie Mae generally update their forecasts on a monthly basis and a subsequent forecast may change materially from a forecast that was previously issued.

While we believe that the industry data presented herein is derived from the most widely recognized sources for reporting U.S. residential housing market statistical data, we do not endorse or suggest reliance on this data alone. We also note that forecasts are inherently uncertain or speculative in nature and actual results for any period could materially differ.

KEY DRIVERS OF OUR BUSINESSES

Within RFG and NRT, we measure operating performance using the following key operating statistics: (i) closed homesale sides, which represents either the "buy" side or the "sell" side of a homesale transaction, (ii) average homesale price, which represents the average selling price of closed homesale transactions, and (iii) average homesale broker commission rate, which represents the average commission rate earned on either the "buy" side or "sell" side of a homesale ~~transaction and (iv)~~transaction. For RFG, we also use net effective royalty rate which represents the average percentage of our franchisees’ commission revenues payable to RFG, net of volume incentives achieved.

~~From 2007 through December 2013,~~Over the ~~average homesale broker commission rate remained fairly stable; however, in 2014 and 2015~~last several years we experienced a modest decline in the average broker commission ~~rate. We~~rate and we expect that over the long term the average brokerage commission rates ~~could~~will continue modestly ~~decline~~declining as a result of increases in average homesale ~~prices.~~prices and, to a lesser extent, competitors providing fewer services for a reduced fee. This is particularly relevant in periods when there is constrained housing inventory. A continuing housing recovery should result in an increase in our revenues, although such increases could be offset by modestly declining brokerage commission rates and competitive pressures.

In general, most of our third-party franchisees are entitled to volume incentives, which are calculated for each franchisee as a progressive percentage of each franchisee's annual gross ~~revenues.~~income. These incentives decrease during times of declining homesale transaction volumes and increase ~~during market recoveries~~ when there is a corresponding increase in homesale transaction volume. ~~As a result, the net effective royalty rate may be impacted by the cyclical residential housing market.~~ We expect that over the long term the net effective royalty rate will modestly decline as a result of increases in homesale transaction ~~volume.~~volume, consolidation of our franchisees and market pressures. In addition, several of our larger franchisees have a flat royalty rate, which will modestly reduce the Company's net effective royalty rate if their homesale transaction volume increases.

Royalty fees are charged to all franchisees pursuant to the terms of the relevant franchise agreements and are included in each of the real estate brands' franchise disclosure documents. Non-standard incentives may be used as consideration for new or renewing franchisees. Most of our franchisees do not receive these non-standard incentives and in contrast to royalties and volume incentives, they are not homesale transaction based. We have accordingly excluded the non-standard incentives from the calculation of the net effective royalty rate. Had these non-standard incentives been included, the net

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effective royalty rate would be lower by approximately 2123 and 1821 basis points for the years ended December 31, 2016 and 2015, respectively. We expect that the trend of increasing non-standard incentives by approximately 4 basis points a year will continue in the future in order to attract and ~~2014, respectively.~~retain certain large franchisees.

NRT has a significant concentration of real estate brokerage offices and transactions in geographic regions where home prices are at the higher end of the U.S. real estate market, particularly the east and west coasts, while RFG has franchised offices that are more widely dispersed across the United States. Accordingly, operating results and homesale statistics may differ between NRT and RFG based upon geographic presence and the corresponding homesale activity in each geographic region. In addition, the share of commissions earned by sales associates directly impacts the margin earned by NRT. Such share of commissions earned by sales associates varies by region and commission schedules are generally progressive to incentivize sales associates to achieve higher levels of production. ~~The level of commissions earned by sales associates is generally subject to review and reset on the anniversary of the sales associates' engagement with the broker and we~~We expect that they will continue to be subject to upward pressure because of the increased bargaining power of independent sales associates as well as more aggressive recruitment activities taken by our competitors.

As described above under "Current Industry Trends," competition for independent sales associates in our industry has intensified and we expect this competition will continue particularly with respect to ~~top producing~~more productive independent sales associates which has impacted NRT's market share and results of ~~operations.~~operations, as well as RFG to a lesser extent. Currently, there are several different compensation models being utilized by real estate brokerages to compensate their independent sales associates. The most common models are as follows: (1) a graduated commission plan, sometimes referred to as the "traditional model" where the independent sales associate receives a percentage of the brokerage commission that increases as the independent sales associate increases his or her volume of homesale transactions and the brokerage frequently provides independent sales associates with a broad set of support offerings and promotion of properties, (2) a desk rental or 100% plan, where the independent sales associate is entitled to all or nearly all of the broker commission and pays the broker on both a monthly and transaction basis for office space, tools, technology and support while also being responsible for the promotion of properties and other items, (3) a capped model, which generally blends aspects of the first two models described herein, and (4) a fixed transaction fee model where the sales associate is entitled to all of the broker commission and pays a fixed fee per homesale transaction and often receives very limited support from the brokerage. Most brokerages focus primarily on one compensation model though some may offer one or more of these models to their sales associates. Increasingly, independent sales associates have affiliated with brokerages that offer fewer services to the independent sales associates, allowing the independent sales associate to retain a greater percentage of the commission. However, there are long-term trade-offs in the level of support independent sales associates receive in areas such as marketing, technology and professional education.

While NRT has historically compensated its independent sales associates using a traditional model, utilizing elements of other models depending upon the geographic market, we are placing an even greater focus on the quality of our services and ~~our~~ use of financial incentives to strengthen our recruiting and retention of independent sales associates and teams. These actions include a more aggressive strategy to recruit ~~top performing sales associates~~ and retain top performing sales associates with the overall goal of sustaining or growing market share in various markets and ultimately improving NRT's overall profitability. In addition, there ~~will be~~is an enhanced focus on the value proposition offered to independent sales associate teams. ~~Results of~~We expect near-term moderate pressure on costs and margin from these ~~recruiting efforts are not expected to be realized for at least 12 to 18 months~~initiatives as the benefits from recruiting new independent sales associates relate mainly to new listings and not pending listings. ~~While we expect near-term moderate pressure on costs from these initiatives, the expected increase in revenue should more than offset the related costs.~~

Within Cartus, we measure operating performance using the following key operating statistics: (i) initiations, which represent the total number of new transferees and the total number of real estate closings for affinity members and (ii) referrals, which represent the number of referrals from which we earn revenue from real estate brokers.

In TRG, operating performance is evaluated using the following key metrics: (i) purchase title and closing units, which represent the number of title and closing units we process as a result of home purchases, (ii) refinance title and closing units, which represent the number of title and closing units we process as a result of homeowners refinancing their home loans, and (iii) average fee per closing unit, which represents the average fee we earn on purchase title and refinancing title sides. An increase or decrease in homesale transactions will impact the financial results of TRG; however, the financial results are not significantly impacted by a change in homesale price. In addition, ~~although~~ the average mortgage rate ~~continued to decline~~increased in ~~2015 and~~ the ~~first half~~fourth quarter of 2016 and refinancing transactions ~~increased~~have decreased as a ~~result, we~~result. We believe that ana further increase in mortgage rates in the future will most likely have a negative impact on refinancing title and closing units.

A decline in the number of homesale transactions and decline in homesale prices could adversely affect our results of operations by: (i) reducing the royalties we receive from our franchisees, (ii) reducing the commissions our company owned brokerage operations earn, (iii) reducing the demand for our title and settlement services, (iv) reducing the referral

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fees we earn in our relocation services business, and (v) increasing the risk of franchisee default due to lower homesale volume. Our results could also be negatively affected by a decline in commission rates charged by brokers or greater commission payments to sales associates.

The following table presents our drivers for the three ~~and six~~ months ended ~~June 30, 2016~~March 31, 2017 and ~~2015.~~2016. See "Results of Operations" below for a discussion as to how these drivers affected our business for the periods presented.


	Three Months Ended June 30,								Six Months Ended June 30,								Three Months Ended March 31,
	2016			2015			% Change		2016			2015			% Change		2017			2016			% Change
RFG (a)
Closed homesale sides	319,748			307,293			4	%	538,078			519,432			4	%	225,250			218,330			3	%
Average homesale price	$	273,900		$	266,456		3	%	$	267,872		$	260,296		3	%	$	275,828		$	259,044		6	%
Average homesale broker commission rate	2.51		%	2.52		%	(1) bps		2.51		%	2.52		%	(1) bps		2.50		%	2.51		%	(1) bps
Net effective royalty rate	4.49		%	4.48		%	1 bps		4.50		%	4.50		%	—		4.44		%	4.51		%	(7) bps
Royalty per side	$	319		$	312		2	%	$	315		$	308		2	%	$	322		$	309		4	%
NRT	NRT																NRT
Closed homesale sides	98,314			99,435			(1	%)	162,558			159,622			2	%	66,570			64,244			4	%
Average homesale price	$	485,688		$	493,746		(2	%)	$	488,627		$	497,083		(2	%)	$	509,197		$	493,125		3	%
Average homesale broker commission rate	2.49		%	2.46		%	3 bps		2.47		%	2.45		%	2 bps		2.45		%	2.46		%	(1) bps
Gross commission income per side	$	12,732		$	12,830		(1	%)	$	12,790		$	12,901		(1	%)	$	13,261		$	12,878		3	%
Cartus
Initiations	51,560			51,528			—	%	88,734			89,696			(1	%)	36,515			37,174			(2	%)
Referrals	26,138			29,033			(10	%)	43,031			47,055			(9	%)	15,203			16,893			(10	%)
TRG
Purchase title and closing units (b)	43,914			35,596			23	%	73,150			57,239			28	%	31,297			29,236			7	%
Refinance title and closing units (c)	11,227			9,815			14	%	20,930			19,311			8	%	8,533			9,703			(12	%)
Average fee per closing unit	$	1,919		$	1,795		7	%	$	1,890		$	1,777		6	%	$	2,001		$	1,848		8	%

_______________


(a)	Includes all franchisees except for NRT.


(b)	The ~~amounts~~amount presented for the three ~~and six~~ months ended ~~June 30, 2016 include 8,971 and 15,556~~March 31, 2017 includes 1,972 purchase units ~~respectively,~~ as a result of acquisitions completed prior to the ~~acquisition~~first quarter of ~~Independence Title on July 1, 2015.~~2017.


(c)	The ~~amounts~~amount presented for the three ~~and six~~ months ended ~~June 30, 2016 include 1,560 and 3,101~~March 31, 2017 includes 523 refinance units ~~respectively,~~ as a result of the ~~acquisition~~acquisitions completed prior to the first quarter of ~~Independence Title on July 1, 2015.~~2017.

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RESULTS OF OPERATIONS

Discussed below are our condensed consolidated results of operations and the results of operations for each of our reportable segments. The reportable segments presented below represent our operating segments for which separate financial information is available and which is utilized on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon revenue and EBITDA. EBITDA is defined as net income (loss) before depreciation and amortization, interest (income) expense, net (other than Relocation Services interest for securitization assets and securitization obligations) and income taxes, each of which is presented on our Condensed Consolidated Statements of Operations. Our presentation of EBITDA may not be comparable to similarly titled measures used by other companies.

Three Months Ended ~~June 30, 2016~~March 31, 2017 vs. Three Months Ended ~~June 30, 2015~~March 31, 2016

Our consolidated results comprised the following:

Three Months Ended June 30,
2016 2015 Change
Net revenues $ 1,662
$ 1,651
$ 11
Total expenses (1) 1,509
1,494
15
Income before income taxes, equity in earnings and noncontrolling interests 153
157
(4 )
Income tax expense 64
66
(2 )
Equity in earnings of unconsolidated entities (5 ) (7 ) 2
Net income 94
98
(4 )
Less: Net income attributable to noncontrolling interests (2 ) (1 ) (1 )
Net income attributable to Realogy Holdings and Realogy Group $ 92
$ 97
$ (5 )



	Three Months Ended March 31,
	2017			2016			Change
Net revenues	$	1,203		$	1,134		$	69
Total expenses (1)	1,237			1,200			37
Loss before income taxes, equity in losses and noncontrolling interests	(34		)	(66		)	32
Income tax benefit	(9		)	(24		)	15
Equity in losses of unconsolidated entities	3			—			3
Net loss	(28		)	(42		)	14
Less: Net income attributable to noncontrolling interests	—			—			—
Net loss attributable to Realogy Holdings and Realogy Group	$	(28	)	$	(42	)	$	14

_______________

(1)

Total expenses for the three months ended ~~June 30, 2016~~March 31, 2017 includes ~~$12~~$5 million of restructuring ~~charges.~~charges and $4 million related to loss on the early extinguishment of debt. Total expenses for the three months ended ~~June 30, 2015~~March 31, 2016 includes $9 million of restructuring charges and a net ~~benefit~~cost of $1 million of former parent legacy items. ~~There were no restructuring charges in the second quarter of 2015.~~

Net revenues increased ~~$11~~$69 million or 1%6% for the three months ended ~~June 30, 2016~~March 31, 2017 compared with the three months ended ~~June 30, 2015,~~March 31, 2016, principally due to ~~increases in revenue at RFG driven primarily by higher~~ homesale transaction volume increases at NRT and ~~an increase in revenue at TRG mostly due to the impact of acquisitions completed in the second half of 2015.~~RFG.

Total expenses increased ~~$15~~$37 million or 1%3% primarily due to:

~~$12 million in restructuring charges related to the Company's business optimization initiative;~~

a $9 million net increase in interest expense to $59 million in the second quarter of 2016 from $50 million in the second quarter of 2015 due to the impact of mark-to-market adjustments for our interest rate swaps which resulted in losses of $14 million in the second quarter of 2016 compared to gains of $3 million in the same period of 2015, partially offset by the impact of lower interest expense as a result of a reduction in total outstanding indebtedness and weighted average interest rate. Before the mark-to-market adjustments for our interest rate swaps, interest expense was $45 million and $53 million during the second quarter of 2016 and 2015, respectively;

~~a $6~~$47 million increase in ~~marketing expenses primarily driven by higher advertising spending~~commission and other sales associate-related costs due to an increase in homesale transaction volume at ~~NRT and RFG; and~~NRT;

a $3$19 million increase in operating and general and administrative expenses primarily driven by:


◦	$10 million of additional employee-related costs associated with ~~acquisitions completed after the second quarter of 2015; and~~acquisitions;


◦	a $7 million increase in other expenses including professional fees and occupancy costs; and


◦	a $3 million increase in variable operating costs at TRG primarily related to volume ~~increases as a result of acquisitions completed after the second quarter of 2015,~~increases;

a $4 million increase in marketing expense; and

$4 million related to the loss on the early extinguishment of debt as a result of the refinancing transaction completed during the first quarter of 2017.

The increases were partially offset byby:


◦	~~a $7 million decrease in employee-related costs primarily related to lower incentive accruals; and~~


◦	~~the absence of $6 million of expenses related to certain transaction costs associated with the acquisition of Coldwell Banker United and the settlement of a legal matter in 2015.~~

~~These expense increases are partially offset by~~ a ~~$13~~$34 million net decrease in ~~commission~~interest expense to $39 million in the first quarter of 2017 from $73 million in the first quarter of 2016. Before the mark-to-market adjustments for our interest rate swaps, interest expense decreased $2 million to $40 million in the first quarter of 2017 from $42 million in the first quarter of 2016 as a result of a reduction in total outstanding indebtedness and ~~other sales associate-related~~a lower weighted average interest rate. Mark-to-market adjustments for our interest rate swaps resulted in gains of $1 million in the first quarter of 2017 compared to losses of $31 million in the same period of 2016; and

$5 million in restructuring costs related to the Company's business optimization plan in the first quarter of 2017 compared to $9 million in the same period in 2016.

Losses from equity investments was $3 million primarily due to ~~the decrease in homesale transaction volume at NRT.~~first quarter losses from PHH Home Loans.

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~~Equity in earnings of unconsolidated entities declined by $2 million primarily due to a decrease in earnings from PHH Home Loans.~~

During the fourth quarter of 2015, the Company began a business optimization initiative that focuses on maximizing the efficiency and effectiveness of the cost structure of each of the Company's business units. The action is designed to improve client service levels across each of the business units while enhancing the Company's profitability and incremental margins. The plan focuses on several key areas of opportunity which include process improvement efficiencies, office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. The Company has incurred ~~$12~~$5 million of restructuring ~~charges during~~costs in the ~~second~~first quarter of ~~2016 which consisted of personnel-related costs~~2017 and ~~facility-related costs.~~expects to incur an additional approximately $11 million in 2017. See Note 6, "Restructuring Costs", in the ~~consolidated financial statements~~Condensed Consolidated Financial Statements for additional information.

The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income or loss before income taxes for the period. In addition, non-recurring or discrete items are recorded ~~during~~in the period in which they occur. The provision for income taxes was ~~$64~~a $9 million benefit for the three months ended ~~June 30, 2016~~March 31, 2017 compared to ~~$66~~a $24 million benefit for the three months ended ~~June 30, 2015.~~March 31, 2016. Our federal and state blended statutory rate is estimated to be 40% for ~~2016.~~2017. Our effective tax rate was 24% and 36% for the three months ended ~~June 30,~~March 31, 2017 and March 31, 2016, ~~and 2015~~respectively. The effective tax rate in each reporting period was primarily impacted by a discrete item related to equity awards for which the market value at vesting was lower than at the date of grant. Our full year effective tax rate is estimated to be 41% ~~and 40%, respectively.~~.

~~Following is a more detailed discussion of~~The following table reflects the results of each of our reportable segments during the three months ended ~~June 30, 2016~~March 31, 2017 and ~~2015:~~2016:


	Revenues (a)						% Change			EBITDA (b)							% Change			EBITDA Margin						Change		Revenues (a)								% Change		EBITDA (b)						% Change			EBITDA Margin						Change
	2016			2015					2016				2015				% Change		2016			2015			2017				2016					2017				2016				2017		% Change		2016							Change
RFG	$	221		$	213		% Change	4	%		$	149			$	146		2	%		67	%		69	%	Change			(2	)	$	170			$	% Change	157		8	%	$	102		$	92			11	%		60	%		59	%	1
NRT	1,268			1,289			(2	)		78				97			(20	)		6			8			(2	)	897				841				7		(26		)	(21		)	(24	)		(3	)		(2	)		(1	)
Cartus	109			108			1			29				29			—			27			27			—		77				83				(7	)	1			5			(80	)		1			6			(5	)
TRG	149			128			16			26				20			30			17			16			1		120				111				8		2			—			*			2			—			2
Corporate and Other	(85		)	(87		)	*			(19		)		(27		)	*											(61		)		(58		)		*		(27		)	(21		)	*
Total Company	$	1,662		$	1,651		1	%		$	263			$	265		(1	)%		16	%		16	%		—		$	1,203			$	1,134			6	%	$	52		$	55		(5	)%		4	%		5	%		(1	)
Less: Depreciation and amortization	Less: Depreciation and amortization									48				52														Less: Depreciation and amortization										50			48
Interest expense, net	Interest expense, net									59				50														Interest expense, net										39			73
Income tax expense										64				66
Net income attributable to Realogy Holdings and Realogy Group										$	92			$	97
Income tax benefit																												Income tax benefit										(9		)	(24		)
Net loss attributable to Realogy Holdings and Realogy Group																												Net loss attributable to Realogy Holdings and Realogy Group										$	(28	)	$	(42	)

_______________


*	not meaningful


(a)	Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT of ~~$85~~$61 million and ~~$87~~$58 million during the three months ended ~~June 30,~~March 31, 2017 and March 31, 2016, ~~and 2015,~~ respectively.


(b)	EBITDA for the three months ended ~~June 30, 2016~~March 31, 2017 includes ~~$12~~$5 million of restructuring charges ~~discussed further below. EBITDA for~~in NRT and $4 million related to loss on the ~~three months ended June 30, 2015 includes a net benefit~~early extinguishment of ~~$1 million of former parent legacy items.~~debt.

EBITDA for the three months ended March 31, 2016 includes $9 million of restructuring charges reflected above as follows: $2 million in NRT, $2 million in Cartus and $5 million in Corporate and Other, and a net cost of $1 million of former parent legacy items included in Corporate and Other.

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EBITDA before restructuring charges was ~~$275~~$57 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to ~~$265~~$64 million for the three months ended ~~June 30, 2015.~~March 31, 2016. EBITDA before restructuring charges by reportable segment for the three months ended ~~June 30, 2016~~March 31, 2017 was as follows:


	Three Months Ended June 30,													Three Months Ended March 31,
	2016								2015					2017								2016
	EBITDA			Restructuring Charges		EBITDA Before Restructuring			EBITDA			% Change		EBITDA			Restructuring Charges		EBITDA Before Restructuring			EBITDA Before Restructuring			% Change
Real Estate Franchise Services	$	149		$	3	$	152		$	146		4	%	$	102		$	—	$	102		$	92		11	%
Company Owned Real Estate Brokerage Services	78			7		85			97			(12	)%	(26		)	5		(21		)	(19		)	(11	)%
Relocation Services	29			1		30			29			3	%	1			—		1			7			(86	)%
Title and Settlement Services	26			—		26			20			30	%	2			—		2			—			*
Corporate and Other	(19		)	1		(18		)	(27		)	*		(27		)	—		(27		)	(16		)	*
Total Company	$	263		$	12	$	275		$	265		4	%	$	52		$	5	$	57		$	64		(11	)%

_______________


*	not meaningful

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As described in the aforementioned table, EBITDA margin for "Total Company" expressed as a percentage of revenues ~~remained flat at 16%~~decreased 1 percentage point to 4% from 5% for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the same period in ~~2015. Excluding restructuring charges in the second quarter of 2016 related to the Company's business optimization plan, the "Total Company" EBITDA~~2016. On a segment basis, RFG's margin increased 1 percentage point to ~~17%. On a segment basis, RFG's margin decreased 2 percentage points~~60% from 59% due to ~~67% from 69%; however excluding restructuring charges~~an increase in ~~the second quarter of 2016, RFG's margin remained flat at 69%. NRT's margin decreased 2 percentage points to 6% from 8%; however excluding restructuring charges in the second quarter of 2016,~~homesale transaction volume. NRT's margin decreased 1 percentage point to 7%negative 3% from negative 2% primarily due to restructuring charges and losses related to its equity investment in PHH Home Loans during the first quarter of 2017. Cartus' margin decreased 5 percentage points to 1% from 6% primarily due to a decrease in international and other revenue ~~and lower equity earnings related to our investment in PHH Home Loans. Cartus' margin remained flat at 27%; however excluding restructuring charges in~~during the ~~second~~first quarter of ~~2016, Cartus' margin increased 1 percentage point~~2017 compared to ~~28%.~~the same period in 2016. TRG's margin increased 12 percentage ~~point~~points to ~~17%~~2% from ~~16%~~zero primarily due to the positive margin impact of purchase title and closing unit volume increases and an increase in the average fee per closing unit during the first quarter of 2017 compared to the ~~second~~first quarter of ~~2015.~~2016.

The following table reflects RFG and NRT results on a combined basis for the three months ended March 31, 2017 and 2016. The EBITDA margin for the combined segments has remained flat at 8%:



	Revenues (a)				% Change		EBITDA Before Restructuring (b)				% Change		Margin				Change
	2017		2016		% Change		2017		2016		% Change		2017		2016		Change
RFG and NRT Combined	$	1,006	$	940	7	%	$	81	$	73	11	%	8	%	8	%	—

_______________


(a)	Excludes transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT to RFG of $61 million and $58 million during the three months ended March 31, 2017 and March 31, 2016, respectively.


(b)	EBITDA for the combined RFG and NRT segments excludes $5 million and $2 million of restructuring charges for the three months ended March 31, 2017 and March 31, 2016, respectively.

Corporate and Other EBITDA for the three months ended ~~June 30, 2016 improved $8~~March 31, 2017 declined $6 million to negative ~~$19~~$27 million primarily due to a $5 million increase in employee costs, $4 million related to the ~~absence~~loss on the early extinguishment of $6debt as a result of the refinancing transaction during the first quarter of 2017 and $3 million of ~~expenses related to certain transaction~~professional fees and occupancy costs, ~~associated with the acquisition of Coldwell Banker United in 2015, as well as~~partially offset by a $3$5 million decrease in ~~employee-related costs.~~restructuring charges during the first quarter of 2017 compared to the first quarter of 2016.

Real Estate Franchise Services (RFG)

Revenues increased $8$13 million to ~~$221~~$170 million and EBITDA increased $3$10 million to ~~$149~~$102 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared with the same period in ~~2015.~~2016.

The increase in revenue was primarily driven by a $4$5 million increase in third-party domestic franchisee royalty revenue due to a 3%6% increase in the average homesale price and a 4%3% increase in the number of homesale transactions, ~~as well as~~partially offset by a $4slight decrease in the net effective royalty rate and the average broker commission rate. Revenue also increased due to a $3 million increase in royalties received from NRT and a $3 million increase in other ~~revenue primarily related to other marketing-related activities and the timing of brand conferences and franchisee events.~~revenue. Brand marketing revenue and expense both increased ~~$1 million. These increases were partially offset by a $1~~$2 million ~~decrease~~primarily due to the level of advertising spending during the first quarter of 2017 compared to the same period in ~~royalties received from NRT.~~2016.

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The intercompany royalties received from NRT of ~~$82~~$59 million and ~~$83~~$56 million during the ~~second~~first quarter of ~~2016~~2017 and ~~2015,~~2016, respectively, are eliminated in consolidation. See "Company Owned Real Estate Brokerage Services" for a discussion of the drivers related to intercompany royalties paid to RFG.

The $3$10 million increase in EBITDA was principally due to the $8$13 million increase in revenues discussed above, partially offset by ~~restructuring costs of $3~~a $2 million ~~related to the Company's business optimization plan~~increase in brand marketing expense discussed above and a $3$1 million increase in expenses related to the timing of brand conferences and franchisee events.

Company Owned Real Estate Brokerage Services (NRT)

Revenues ~~decreased $21~~increased $56 million to ~~$1,268~~$897 million and EBITDA declined ~~$19~~$5 million to ~~$78~~negative $26 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared with the same period in ~~2015.~~2016.

~~Revenue decreased $21~~The revenue increase of $56 million ~~which included~~was comprised of a $38 million ~~decrease primarily in~~increase due to higher commission income earned on homesale transactions by our existing brokerage operations ~~partially offset by~~and an $18 million increase ~~of $17 million~~in revenue due to commission income earned from ~~acquisitions completed after the second quarter of 2015.~~acquisitions. The revenue ~~decrease~~increase was driven by a ~~2% decrease~~4% increase in the number of homesale transactions and a 3% increase in the average price of homes, ~~and a 1% decrease in the number of homesale transactions,~~partially offset by a 31 basis point ~~increase~~decrease in the average broker commission rate. Homesale transactions and average sales price decreased due to a continued slowing of activity in the high-end markets served by NRT, the cumulative impact of aggressive recruiting of certain of our independent sales associates and inventory constraints in many of the markets served by NRT.

EBITDA decreased ~~$19~~$5 million primarily due to:

a $47 million increase in commission expenses paid to independent sales associates from $558 million in the ~~$21~~first quarter of 2016 to $605 million ~~decrease~~ in ~~revenues discussed above;~~the first quarter of 2017. The increase in commission expense is due to an increase of $37 million by our existing brokerage operations and a $10 million increase related to acquisitions;

$75 million in restructuring costs related to the Company's business optimization ~~plan;~~

~~a $3 million decrease in equity earnings related to our investment in PHH Home Loans; and~~

~~a $2 million increase in marketing expenses driven by higher advertising spending.~~

~~These decreases were partially offset by:~~

a $13 million decrease in commission expenses paid to independent real estate sales associates from $877 million in the second quarter of 2015 to $864 million in the second quarter of 2016, as a result of the decrease in revenues discussed above. The decrease is net of a $10 million increase attributable to acquisitions;

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a $2 million decrease in employee-related costs comprised of a $5 million decrease in incentive accruals partially offset by a $2 million increase attributable to acquisitions and $1 million increase in other employee costs; and

~~a $1 million decrease in royalties paid to RFG from $83 million in the second quarter of 2015 to $82 million in the second quarter of 2016.~~

~~Relocation Services (Cartus)~~

~~Revenues increased $1 million to $109 million and EBITDA remained flat at $29 million for the three months ended June 30, 2016 compared with the same quarter in 2015.~~

Revenues increased $1 million as a result of a $3 million increase in international revenue, a $2 million increase in affinity referral revenue and a $1 million increase in at-risk revenue, offset by a $6 million decrease in non-affinity referral revenue due to lower broker-to-broker volume and the absence of a large group move which occurred in 2015.

EBITDA remained flat as a result of a $3 million net positive impact from foreign currency exchange rates in the second quarter of 2016 compared to the second quarter of 2015, as well as the increase in revenues discussed above, offset by a $2 million increase in other operating expense primarily related to higher at-risk volume and $1 million in restructuring costs related to the Company's business optimization plan.

~~Title and Settlement Services (TRG)~~

~~Revenues increased $21 million to $149 million and EBITDA increased $6 million to $26 million for the three months ended June 30, 2016 compared with the same quarter in 2015.~~

The increase in revenues was driven by a $20 million increase in resale revenue due to a 23% increase in resale title and closing units for which acquisitions accounted for 25 percentage points of the change and a $1 million increase in refinancing revenue as a result of a 14% increase in refinancing title and closing units for which acquisitions accounted for 16 percentage points of the change.

EBITDA increased $6 million as a result of the increase in revenues discussed above, partially offset by a $7 million increase in variable operating costs and an increase of $9 million in employee-related costs, both of which were primarily due to higher volume as a result of acquisitions.

~~Six Months Ended June 30, 2016vs. Six Months Ended June 30, 2015~~

~~Our consolidated results comprised the following:~~

Six Months Ended June 30,
2016 2015 Change
Net revenues $ 2,796
$ 2,713
$ 83
Total expenses (1) 2,709
2,614
95
Income before income taxes, equity in earnings and noncontrolling interests 87
99
(12 )
Income tax expense 40
42
(2 )
Equity in earnings of unconsolidated entities (5 ) (9 ) 4
Net income 52
66
(14 )
Less: Net income attributable to noncontrolling interests (2 ) (1 ) (1 )
Net income attributable to Realogy Holdings and Realogy Group $ 50
$ 65
$ (15 )

~~_______________~~


~~(1)~~	Total expenses for the six months ended June 30, 2016 includes $21 million restructuring charges and a net cost of $1 million of former parent legacy items. Total expenses for the six months ended June 30, 2015 includes a net benefit of $1 million of former parent legacy items. There were no restructuring charges during the six months ended June 30, 2015.

Net revenues increased $83 million or 3% for the six months ended June 30, 2016 compared with the six months ended June 30, 2015, principally due to an increase in revenues at RFG primarily driven by higher homesale transaction volume and an increase in revenue at TRG due to the impact of acquisitions completed in the second half of 2015.

~~Total expenses increased $95 million or 4% primarily due to:~~

~~a $36 million increase in operating and general and administrative expenses primarily driven by:~~

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◦	~~$24 million of additional employee-related costs associated with acquisitions completed after the second quarter of 2015;~~


◦	~~an $18 million increase in variable operating costs at TRG primarily related to volume increases as a result of acquisitions completed after the second quarter of 2015; and~~


◦	~~a $2 million increase in employee-related costs primarily due to salary and merit increases, partially offset by a $9 million decrease in employee-related costs due to lower incentive accruals,~~

~~partially offset by~~


◦	~~the absence of $6 million of expenses related to certain transaction costs associated with the acquisition of Coldwell Banker United and the settlement of a legal matter in 2015.~~

~~$21 million in restructuring charges related to the Company's business optimization initiative;~~

~~a $15 million increase in commission and other sales associate-related costs due to the increase in homesale transaction volume at NRT;~~

a $14 million increase in interest expense for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 primarily due to the impact of mark-to-market adjustments for our interest rate swaps which resulted in losses of $45 millionplan in the first ~~half~~quarter of ~~2016~~2017 compared to ~~losses of $11~~$2 million in the same period ~~of 2015, partially offset by the impact of lower interest expense as a result of a reduction~~ in ~~total outstanding indebtedness and weighted average interest rate. Before the mark-to-market adjustments~~2016;

$4 million in losses for our ~~interest rate swaps, interest expense was $87 million and $107 million during the first half of 2016 and 2015, respectively; and~~

~~an $8 million increase in marketing expenses due to higher advertising spending at NRT and TRG;~~

~~Equity in earnings of unconsolidated entities declined $4 million primarily due to a $5 million decrease in earnings from PHH Home Loans.~~

The Company incurred $21 million of restructuring charges associated with the business optimization initiative during the first half of 2016 which consisted of personnel-related costs, facility-related costs and other restructuring-related costs. See Note 6, "Restructuring Costs", in the consolidated financial statements for additional information.

The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income or loss before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The provision for income taxes was $40 million for the six months ended June 30, 2016 compared to $42 million for the six months ended June 30, 2015. Our federal and state blended statutory rate is estimated to be 40% for 2016. Our effective tax rate for the six months ended June 30, 2016 was 43% and was impacted by a discrete item related to equity ~~awards for which the market value at vesting was lower than at the date of grant. Our effective tax rate for the six months ended June 30, 2015 was 39%.~~

~~Following is a more detailed discussion of the results of each of our reportable segments during the six months ended June 30, 2016 and 2015:~~

Revenues (a)
%
Change
EBITDA (b)
%
Change
Margin Change
2016 2015 2016 2015 2016 2015
RFG $ 378
$ 364
4 % $ 241
$ 232
4 % 64 % 64 % —
NRT 2,109
2,085
1
57
81
(30 ) 3
4
(1 )
Cartus 192
193
(1 ) 34
36
(6 ) 18
19
(1 )
TRG 260
215
21
26
17
53
10
8
2
Corporate and Other (143 ) (144 ) *
(40 ) (43 ) *

Total Company $ 2,796
$ 2,713
3 % $ 318
$ 323
(2 )% 11 % 12 % (1 )
Less: Depreciation and amortization 96
98

Interest expense, net 132
118

Income tax expense 40
42

Net income attributable to Realogy Holdings and Realogy Group $ 50
$ 65

~~_______________~~


*	~~not meaningful~~


~~(a)~~	Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT of $143 million and $144 million for the six months ended June 30, 2016 and 2015, respectively.

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~~(b)~~	EBITDA for the six months ended June 30, 2016 includes $21 million restructuring charges discussed further below and a net cost of $1 million of former parent legacy items. EBITDA for the six months ended June 30, 2015 includes a net benefit of $1 million of former parent legacy items.

EBITDA before restructuring charges was $339 million for the six months ended June 30, 2016 compared to $323 million for the six months ended June 30, 2015. EBITDA before restructuring charges by reportable segment for the six months ended June 30, 2016 was as follows:

Six Months Ended June 30,
2016 2015
EBITDA Restructuring Charges EBITDA Before Restructuring EBITDA %
Change
Real Estate Franchise Services $ 241
$ 3
$ 244
$ 232
5 %
Company Owned Real Estate Brokerage Services 57
9
66
81
(19 )%
Relocation Services 34
3
37
36
3 %
Title and Settlement Services 26
—
26
17
53 %
Corporate and Other (40 ) 6
(34 ) (43 ) *
Total Company $ 318
$ 21
$ 339
$ 323
5 %

~~_______________~~


*	~~not meaningful~~

As described in the aforementioned table, EBITDA margin for "Total Company" expressed as a percentage of revenues decreased 1 percentage point to 11% from 12% for the six months ended June 30, 2016 compared to the same period in ~~2015~~. Excluding restructuring charges during the first half of 2016 related to the Company's business optimization plan, the "Total Company" EBITDA margin would have remained flat at 12%. On a segment basis, RFG's margin remained flat at 64%; however it increased 1 percentage point to 65% excluding restructuring charges during the first half of 2016. NRT's margin declined to 3% from 4%. The 1 percentage point decrease was due to restructuring charges as well as the decrease in equity earnings related to our investment in PHH Home Loans. Cartus' margin decreased 1 percentage point to 18% from 19%; however excluding restructuring charges during the first half 2016, Cartus' margin remained flat at 19%. The Title and Settlement Services segment margin increased 2 percentage points to 10% from 8% primarily due to the positive margin impact of volume increases due to acquisitions and the average fee per closing unit compared to the first half of 2015.

Corporate and Other EBITDA for the six months ended June 30, 2016 improved $3 million to negative $40 million primarily due to the absence of $6 million of expenses related to certain transaction costs associated with the acquisition of Coldwell Banker United and the settlement of a legal matter in 2015, as well as a $2 million decrease in employee-related costs, partially offset by $6 million in restructuring charges related to the Company's business optimization plan.

~~Real Estate Franchise Services (RFG)~~

~~Revenues increased $14 million to $378 million and EBITDA increased $9 million to $241 million for the six months ended June 30, 2016 compared with the same period in 2015.~~

The increase in revenue was primarily driven by a $6 million increase in third-party domestic franchisee royalty revenue due to a 3% increase in the average homesale price and a 4% increase in the number of homesale transactions, as well as an $8 million increase in other revenue primarily related to other marketing-related activities and the timing of brand conferences and franchisee events and a $1 million increase in royalties received from NRT. Brand marketing revenue decreased $2 million and related expense decreased $1 million primarily due to the timing of advertising spending during the first half of 2016 compared to the same period in 2015.

The intercompany royalties received from NRT of $138 million and $137 million during the six months ended June 30, 2016 and June 30, 2015, respectively, are eliminated in consolidation. See "Company Owned Real Estate Brokerage Services" for a discussion of the drivers related to intercompany royalties paid to RFG.

The $9 million increase in EBITDA was principally due to the $14 million increase in revenues, partially offset by a $3 million increase in expenses related to the timing of brand conferences and franchisee events and $3 million in restructuring costs related to the Company's business optimization plan.

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~~Company Owned Real Estate Brokerage Services (NRT)~~

~~Revenues increased $24 million to $2,109 million and EBITDA declined $24 million to $57 million for the six months ended June 30, 2016 compared with the same period in 2015.~~

Revenue increased $24 million which included $49 million due to commission income earned from acquisitions completed after the second quarter of 2015, partially offset by a $25 million decrease primarily in commission income earned on homesale transactions by our existing brokerage operations. The revenue increase was driven by a 2% increase in the number of homesale transactions and a 2 basis point increase in the average broker commission rate, partially offset by a 2% decrease in the average price of homes. The revenue increase was negatively impacted by continued slowing of activity in the high-end markets served by NRT, the cumulative impact of aggressive recruiting of certain of our independent sales associates and inventory constraints in many of the markets served by NRT.

~~EBITDA decreased $24 million primarily due to:~~

a $15 million increase in commission expenses paid to independent real estate sales associates from $1,407 million in first half of 2015 to $1,422 million in the first half of 2016, as a result of the increase in revenues discussed above. The increase includes $30 million attributable to acquisitions;

~~$9 million in restructuring costs related to the Company's business optimization plan;~~

~~an $8 million increase in employee-related costs related to acquisitions;~~

~~a $5 million decrease in equity earnings related to our~~method investment in PHH Home Loans;

a ~~$4 million increase in occupancy costs related to acquisitions;~~

a $3 ~~million increase in marketing expenses primarily related to acquisitions; and~~

~~a $1~~ million increase in royalties paid to RFG from ~~$137~~$56 million in the first ~~half~~quarter of ~~2015~~2016 to ~~$138~~$59 million in the first ~~half~~quarter of ~~2016~~2017;

a $2 million increase in occupancy costs primarily related to acquisitions;

a $2 million increase in employee-related costs due to a $6 million increase attributable to acquisitions, partially offset by a $4 million decrease due to expense reduction initiatives; and

a $1 million increase in marketing expenses related to acquisitions.

These ~~cost increases~~decreases were partially offset by ~~the~~a $56 million increase in revenues discussed above.

Relocation Services (Cartus)

Revenues decreased $1$6 million to ~~$192~~$77 million and EBITDA decreased $2$4 million to ~~$34~~$1 million for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 compared with the same period in ~~2015.~~2016.

Revenues decreased $1$6 million as a result of a $9$3 million decrease in ~~non-affinity referral~~international revenue including the impact of foreign currency exchange rates and a $3 million decrease in other revenue due to lower broker-to-broker volume, the absence of a large group move which occurred in 2015 and lower relocation referral volume, partially offset by higher average fees, and a $2 million decrease in other revenue. These decreases were offset by a $4 million increase in international revenue, a $3 million increase in affinity referrals and a $2 million increase in at-risk revenue due to higher volume.

EBITDA decreased $2$4 million as a result of ~~$3 million in restructuring costs related to~~ the ~~Company's business optimization plan, a $3 million increase in other operating expenses primarily related to higher at-risk volume and the $1~~$6 million decrease in revenues discussed above, partially offset by ~~a $5~~the absence of $2 million ~~net positive impact from foreign currency exchange rates in~~of restructuring costs incurred during the first ~~half~~quarter of ~~2016 compared to the same period in 2015.~~2016.

Title and Settlement Services (TRG)

Revenues increased ~~$45~~$9 million to ~~$260~~$120 million and EBITDA increased $9$2 million to ~~$26~~$2 million for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 compared with the same period in ~~2015.~~2016.

The increase in revenues was driven by ~~a $34~~an $8 million increase in resale revenue ~~due to~~driven by a ~~28%~~7% increase in resale title and closing units ~~for~~of which all was contributed by acquisitions, ~~accounted for 27 percentage points of the change,~~as well as a $3$2 million increase of underwriter revenue due to volume increases. These increases were offset by a $1 million decrease in refinancing ~~revenue as a result of an 8% increase in refinancing title and closing units for which acquisitions accounted for 16 percentage points of the change and a $5 million increase in underwriter revenues.~~revenue.

EBITDA increased $9$2 million as a result of the $9 million increase in revenues discussed above, partially offset by an ~~$18~~increase of $4 million in employee-related costs related to acquisitions and a $3 million increase in variable operating ~~costs and a $19 million increase in employee-related costs, both~~costs.

Table of ~~which were primarily due to acquisitions.~~Contents

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Condition


	June 30, 2016		December 31, 2015		Change		March 31, 2017		December 31, 2016		Change
Total assets	$	7,630	$	7,531	$	99	$	7,330	$	7,421	$	(91	)
Total liabilities	5,206		5,109		97		4,955		4,952		3
Total equity	2,424		2,422		2		2,375		2,469		(94		)

For the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, total assets ~~increased $99~~decreased $91 million primarily due to a ~~$111~~$69 million ~~increase in trade and relocation receivables due to seasonal increases in volume, an $8 million increase~~decrease in cash and cash equivalents, a ~~$13~~$26 million ~~increase~~decrease in ~~goodwill from acquisitions at NRT~~trade and relocation receivables and a ~~$20 million increase in other non-current assets primarily due to increases in sales incentives and other investments, partially offset by a $52~~$26 million net decrease in franchise agreements and other amortizable intangible assets due to ~~amortization.~~amortization, partially offset by increases of $10 million and $16 million in other current and non-current assets, respectively, primarily due to higher prepaid expenses.

Total liabilities increased ~~$97~~$3 million due to a ~~$34 million increase in other non-current liabilities due to an increase in interest rate swaps, a $33 million increase in securitization obligations due to seasonal increases at Cartus, a $30~~$104 million increase in corporate debt ~~as a result of debt transactions completed during~~primarily due to additional borrowings under the ~~first half of 2016, a $13 million increase in accounts payable and a $32 million increase in deferred tax liabilities. These increases were~~Revolving Credit Facility, partially offset by a ~~$45~~$35 million decrease in accrued expenses and other current liabilities primarily due to the ~~payout~~payment of ~~incentive accruals.~~annual bonuses in the first quarter of 2017, a $33 million decrease in securitization obligations due to lower volume at Cartus, a $15 million decrease in accounts payable, a $10 million decrease in deferred tax liabilities and a $9 million decrease in other non-current liabilities.

Total equity ~~increased $2~~decreased $94 million primarily due to ~~net income of $50 million for the six months ended June 30, 2016 partially offset by~~ a ~~$46~~$66 million decrease in additional paid in capital, primarily related to the Company's repurchase of $57 million of common stock and $13 million of dividend payments partially offset by stock-based compensation activity ~~during~~of $2 million, and a net loss of $28 million for the ~~first half of 2016.~~three months ended March 31, 2017.

Liquidity and Capital Resources

Our primary liquidity needs have been to service our debt and finance our working capital and capital expenditures, which we have historically satisfied with cash flows from operations and funds available under our revolving credit facilities and securitization facilities. ~~Given the significant reduction in our indebtedness and annual interest expense that resulted~~

from our October 2012 initial public offering and related transactions, as well as our indebtedness repayments and refinancings, we generated positive cash flows from operations in 2013, 2014 and 2015. After giving effect to the debt refinancing transactions completed from 2013 through the first half of 2016, our outstanding indebtedness, excluding securitizations, has been reduced by approximately $593 million since the beginning of 2013. In ~~July 2016,~~January 2017, the Company ~~amended~~increased the borrowing capacity under its ~~Senior Secured~~Revolving Credit Facility ~~and entered into a New Term Loan B~~from $815 million to replace the Existing Term Loan B. The New Term Loan B was issued in the amount of $1,100 million with a maturity date in July 2022. Additionally, the Company entered into a New Term Loan A in the amount of $355 million with a maturity date in July 2021. The Company used the net proceeds from the New Term Loan B and New Term Loan A, along with revolver borrowings and cash on-hand, to pay off the Existing Term Loan B of $1,858 million. Based upon our current debt projections for 2016, we expect our cash interest run rate to be reduced to approximately $170$1,050 million.

We intend to use future cash flow primarily to acquire stock under our share repurchase program, pay dividends, fund acquisitions, enter into strategic relationships and reduce indebtedness. In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 ~~million.~~million of the Company’s common stock. In February 2017, our Board authorized a new share repurchase program of up to an additional $300 million of the Company's common stock. Repurchases under these programs may be made at management's discretion from time to time on the open market, ~~transactions,~~pursuant to Rule 10b5-1 trading plans or ~~through~~ privately negotiated transactions. The size and timing of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. ~~From~~The repurchase programs have no time limit and may be suspended or discontinued at any time.

As of March 31, 2017, the ~~date of authorization through June 30, 2016, we~~Company had repurchased and retired 29.3 million shares of common stock under the February 2016 share repurchase program for ~~$67~~an aggregate of $259 million at a weighted average market price of ~~$32.45~~$27.93 per share, including 2.2 million shares of common stock repurchased during the first quarter of 2017 for $60 million at a weighted average market price of $27.82 per share. As of March 31, 2017, approximately $16 million remained available for repurchase under the February 2016 share repurchase program and $300 million remained available for repurchase under the February 2017 share repurchase plan.

During the period April 1, 2017 through May 2, 2017, we repurchased an additional 0.7 million shares at a weighted average market price of $29.48. Giving effect to these repurchases, all of the remaining capacity under the February 2016 program has been utilized and as of May 2, 2017, we had approximately $296 million of remaining capacity authorized under the February 2017 repurchase program.

We ~~may~~ also from time to time seek to repurchase our outstanding notes, through tender offers, open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

~~On August 3, 2016, the Company’s Board of Directors approved the initiation of~~initiated a quarterly ~~cash dividend policy on its common stock and declared a~~ cash dividend of $0.09 per share in August 2016 and paid cash dividends in August 2016, December 2016 and March 2017. During the first quarter of ~~the Company’s common stock, payable on August 31, 2016~~2017, we returned $13 million to stockholders through the payment of ~~record as of the close of business on August 17, 2016.~~cash dividends. The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreement, and the

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indenture governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant.

We may also from time to time seek to repurchase our outstanding notes through tender offers, open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

We are currently experiencing a recovery in the residential real estate ~~market due to inventory constraints and other local market dynamics. Moreover,~~market; however, if the residential real estate market or the economy as a whole does not continue to improve or worsens, our business, financial condition and liquidity may be materially adversely affected, including our ability to access capital and grow our business.

Historically, operating results and revenues for all of our businesses have been strongest in the second and third quarters of the calendar year. A significant portion of the expenses we incur in our real estate brokerage operations are related to marketing activities and commissions and therefore, are variable. However, many of our other expenses, such as interest payments, facilities costs and certain personnel-related costs, are fixed and cannot be reduced during a seasonal slowdown. Consequently, our debt balances are generally at their highest levels at or around the end of the first quarter of every year.

Our liquidity position has significantly improved but continues to be impacted by our remaining interest expense and would be adversely impacted by: (i) a halt in the recovery of the residential real estate market, (ii) a significant increase in LIBOR or ABR, or (iii) our inability to access our relocation securitization programs.

We will continue to evaluate potential refinancing and financing transactions. There can be no assurance as to which, if any, of these alternatives we may pursue as the choice of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our existing financing agreements and the consents we may need to obtain under the relevant documents. There can be no assurance that financing will be available to us on acceptable terms or at all.

~~Table of Contents~~

Cash Flows

At ~~June 30, 2016,~~March 31, 2017, we had ~~$423~~$205 million of cash and cash equivalents, ~~an increase~~a decrease of $8$69 million compared to the balance of ~~$415~~$274 million at December 31, ~~2015.~~2016. The following table summarizes our cash flows for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 and ~~2015:~~2016:


	Six Months Ended June 30,									Three Months Ended March 31,
	2016			2015			Change			2017			2016			Change
Cash provided by (used in):
Cash used in:
Operating activities	$	98		$	73		$	25		$	(12	)	$	(64	)	$	52
Investing activities	(58		)	(121		)	63			(31		)	(34		)	3
Financing activities	(31		)	95			(126		)	(27		)	(34		)	7
Effects of change in exchange rates on cash and cash equivalents	(1		)	(1		)	—			1			—			1
Net change in cash and cash equivalents	$	8		$	46		$	(38	)	$	(69	)	$	(132	)	$	63

For the ~~six~~three months ended ~~June 30, 2016, $25~~March 31, 2017, $52 million ~~more~~less cash was ~~provided by~~used in operating activities compared to the same period in ~~2015.~~2016. The change was principally due to ~~$26 million of additional cash provided by operating results and $72~~$32 million more cash provided ~~due to a~~by the net ~~decrease~~change in relocation and trade receivables, ~~partially offset by $54~~$27 million ~~more~~less cash used for accounts payable, accrued expenses and other liabilities and $7 million ~~more~~of additional cash ~~used for other~~provided by operating ~~activities and $5~~results, partially offset by $14 million more cash used due to an increase in other assets.

For the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, we used ~~$63~~$3 million less cash for investing activities compared to the same period in ~~2015~~2016 primarily due to ~~$60~~$12 million less cash used for acquisition related ~~payments.~~payments, partially offset by $6 million more cash used for property and equipment additions.

For the ~~six~~three months ended ~~June 30, 2016, $31~~March 31, 2017, $27 million of cash was used for financing activities compared to ~~$95~~$34 million of cash ~~provided~~used during the same period in ~~2015.~~2016. For the ~~six~~three months ended ~~June 30, 2016, $31~~March 31, 2017, $27 million of cash was used for:

~~repayment~~$57 million for the repurchase of ~~$500~~our common stock;

$33 million net decrease in securitization borrowings;

$13 million of dividend payments;

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$10 million of quarterly amortization payments on the term loan facilities;

$10 million of tax payments related to ~~retire~~net share settlement for stock-based compensation;

$6 million of debt issuance costs;

$5 million of other financing payments primarily related to capital leases and interest rate swaps; and

$4 million for payments of contingent consideration;

partially offset by,

$110 million of additional borrowings under the ~~3.375% Senior Notes at maturity;~~Revolving Credit Facility.

~~net~~ For the three months ended March 31, 2016, $34 million of cash was used for:

repayment of $200 million of borrowings under the Revolving Credit Facility;

$6733 million for the repurchase of our common stock;

$2027 million decrease in net securitization obligation borrowings;

$10 million of quarterly amortization payments on the term loan facilities;

$104 million for payments of contingent consideration; ~~and~~

$124 million of other financing payments primarily related to interest rate ~~swaps~~swaps; and ~~capital leases;~~

$4 million of tax payments related to net share settlement for stock-based compensation;

partially offset by,

•$~~750~~250 million of proceeds from the issuance of 5.25% Senior ~~Notes of $250 million and 4.875% Senior Notes of $500 million; and~~

~~a $34 million net increase in securitization obligation borrowings.~~

For the six months ended June 30, 2015, $95 million of cash was provided by financing activities as a result of $120 million of net securitization obligation borrowings, partially offset by $10 million of repayments of the term loan facility, $11 million of other financing related payments and $5 million for payments of contingent consideration.Notes.

Financial Obligations

Indebtedness Table

As of ~~June 30, 2016,~~March 31, 2017, the Company’s borrowing arrangements were as follows:


	Interest Rate	Expiration Date	Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Amount		Interest Rate	Expiration Date	Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Amount
Senior Secured Credit Facility:
Revolving Credit Facility (1)	(2)	October 2020	$	—	$ *		$	—	(2)	October 2020	$	310	$ *		$	310
Term Loan B	(3)	March 2020	1,858		25		1,833		(3)	July 2022	1,092		23		1,069
Term Loan A Facility:
Term Loan A	(4)	October 2020	424		2		422		(4)	October 2020	408		2		406
Term Loan A-1									(5)	July 2021	348		3		345
Senior Notes	4.50%	April 2019	450		13		437		4.50%	April 2019	450		10		440
Senior Notes	5.25%	December 2021	550		6		544		5.25%	December 2021	550		5		545
Senior Notes	4.875%	June 2023	500		4		496		4.875%	June 2023	500		4		496
Securitization obligations: (5)
Apple Ridge Funding LLC (6)		June 2017	269		*		269
Cartus Financing Limited (7)		August 2016	11		*		11
Total (8)			$	4,062	$	50	$	4,012
Securitization obligations: (6)
Apple Ridge Funding LLC (7)										June 2017	160		*		160
Cartus Financing Limited (8)										August 2017	12		*		12
Total (9)									Total (9)		$	3,830	$	47	$	3,783

_______________


*	The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets.

(1)

As of ~~June 30, 2016,~~March 31, 2017, the Company had ~~$815~~$1,050 million of borrowing capacity under its Revolving Credit ~~Facility. On August 2, 2016, the Company had $225 million outstanding borrowings on the Revolving Credit~~ Facility leaving ~~$590~~$740 million of available capacity. The ~~increase~~revolving credit facility expires in October 2020, but is classified on the balance sheet as current due to the revolving nature of the facility. The outstanding borrowings ~~compared to June 30, 2016 was a result~~and capacity are the same as of ~~amending and reducing the borrowings under the Term Loan B in July 2016. See Note 12, "Subsequent Events" for a description of the transaction.~~May 3, 2017.

(2)


(3)	The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus ~~3.00% (with a~~ ~~LIBOR~~ ~~floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus 2.00%~~

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2.25% (with a LIBOR floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus 1.25% (with an ABR floor of 1.75%).

(4)

The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling per annum 5%, 5%, 7.5%, 10.0% and 12.5% of the original principal amount of the Term Loan A in 2016, 2017, 2018, 2019 and 2020, respectively. The interest rates with respect to term loans under the Term Loan A ~~Facility~~ are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended ~~June 30, 2016.~~March 31, 2017.

(5)


(6)	Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.


~~(6)~~(7)	~~In June 2016, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2017.~~ As of ~~June 30, 2016,~~March 31, 2017, the Company had $325 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving ~~$56~~$165 million of available capacity.


~~(7)~~(8)	Consists of a ~~£20~~£10 million revolving loan facility and a £5 million working capital facility. As of ~~June 30, 2016,~~March 31, 2017, the Company had ~~$33~~$19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving ~~$22~~$7 million of available capacity.

~~(8)~~(9)

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Debt Transactions

In the second quarter, the Company used $400 million of revolver borrowings and a portion of cash on hand to retire the $500 million of 3.375% Senior Notes at maturity. The Company also issued $500 million of 4.875% Senior Notes due 2023 and used the proceeds to temporarily reduce revolver borrowings.

In July 2016, the Company refinanced its existing $1,858 million Term Loan B due July 2020. The New Term Loan B was issued at par in the amount of $1,100 million with a maturity date in July 2022. Concurrently,January 2017, the Company entered into a ~~New Term Loan A in~~fourth amendment (the “Fourth Amendment”) to the ~~amount of $355 million with a maturity date in July 2021 under its~~Senior Secured Credit Agreement. The Fourth Amendment reprices the existing Term Loan ~~A Facility and on terms substantially similar to its~~B issued under the Senior Secured Credit Agreement through a refinancing of the existing term loan with a new Term Loan A.B. The ~~Company used~~interest rate with respect to the ~~net proceeds from the New~~new Term Loan B ~~and New Term Loan A, along with revolver borrowings~~is based on, at the Company’s option, adjusted LIBOR plus 2.25% (with a floor of ~~$225 million and cash on-hand, to repay~~0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%). The maturity date for the ~~Existing~~new Term Loan B ~~reducing Term Loan B borrowings from $1,858 million to $1,100 million.~~

~~See Note 12, "Subsequent Events" for a detailed description of the~~ remains July ~~2016 Refinancing of~~20, 2022, and all other material provisions under the Senior Secured ~~Term Loan B and Entry~~Credit Agreement remain unchanged. The Company also entered into ~~a New Term Loan A~~.

~~Pro forma Indebtedness Table~~

~~The following table sets forth the Company's cash and cash equivalents balance and outstanding borrowings under the Company's borrowing arrangements on a pro forma basis giving effect~~an Incremental Assumption Agreement to the ~~transactions described above:~~

Senior Secured Credit Agreement pursuant to which the Company increased the borrowing capacity under its Revolving Credit Facility to $1,050 million from the existing $815 million.

As of June 30, 2016
Actual As Adjusted
Cash and cash equivalents (1) $ 423
$ 234
Senior Secured Credit Facility:
Revolving Credit Facility (2) $ —
$ 225
Existing Term Loan B 1,858
—
New Term Loan B —
1,100
Term Loan A Facility:
Existing Term Loan A 424
424
New Term Loan A —
355
4.50% Senior Notes 450
450
5.25% Senior Notes 550
550
4.875% Senior Notes 500
500
Securitization obligations:
Apple Ridge Funding LLC 269
269
Cartus Financing Limited 11
11
Total Debt $ 4,062
$ 3,884

~~_______________~~

~~(1)~~

As adjusted cash and cash equivalents reflects proceeds of $1,100 million from the issuance of the New Term Loan B, proceeds of $355 million from the issuance of the New Term Loan A, $225 million of borrowings on the Revolving Credit Facility and $189 million of cash on hand to redeem all of the outstanding $1,858 million of the Existing Term Loan B and pay related debt issuance costs and accrued interest of $11 million.


~~(2)~~	~~As adjusted revolver borrowings reflect $225 million of outstanding borrowings on the Revolving Credit Facility, leaving $590 million of available capacity.~~

See Note 5, "Short and Long-Term Debt", into the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements for additional information on the Company's indebtedness.

Covenants under the Senior Secured Credit Facility, Term Loan A Facility and Indentures

The Senior Secured Credit Facility, Term Loan A Facility, the Unsecured Letter of Credit Facility and the indentures governing the Unsecured Notes contain various covenants that limit (subject to certain exceptions) Realogy Group’s ability to, among other things:

incur or guarantee additional debt or issue disqualified stock or preferred stock;

pay dividends or make distributions to Realogy Group’s stockholders, including Realogy Holdings;

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repurchase or redeem capital stock;

make loans, investments or acquisitions;

incur restrictions on the ability of certain of Realogy Group's subsidiaries to pay dividends or to make other payments to Realogy Group;

enter into transactions with affiliates;

create liens;

merge or consolidate with other companies or transfer all or substantially all of Realogy Group's and its material subsidiaries' assets;

transfer or sell assets, including capital stock of subsidiaries; and

prepay, redeem or repurchase subordinated indebtedness.

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As a result of the covenants to which we remain subject, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. In addition, the Senior Secured Credit Facility and Term Loan A Facility require us to maintain a senior secured leverage ratio.

The senior secured leverage ratio, not to exceed 4.75 to 1.00, is tested quarterly. In this report, the Company refers to the term "Adjusted (Covenant) EBITDA" to mean EBITDA as so defined for purposes of determining compliance with the senior secured leverage covenant. The senior secured leverage ratio measured at any applicable quarter end is Realogy Group's total senior secured net debt divided by the trailing twelve month Adjusted (Covenant) EBITDA. Total senior secured net debt does not include unsecured indebtedness, including the Unsecured Notes, as well as the securitization obligations.

See Note 5, "Short and Long-Term Debt—Senior Secured Credit Facility" and "Short and Long-Term Debt—Term Loan A Facility" into the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements for additional information.

Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of "non-GAAP financial measures," such as EBITDA, Operating EBITDA and Adjusted (Covenant) EBITDA and the ratios related thereto. These measures are derived on the basis of methodologies other than in accordance with GAAP.

EBITDA is defined by us as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations) and income taxes and is our primary non-GAAP measure.

Operating EBITDA is defined by us as EBITDA before restructuring, early extinguishment of debt and legacy items and is used as a supplementary financial measure. Operating EBITDA calculated for a twelve-month period is presented because the Company believes these items do not directly affect the operating results of the Company and accordingly should be excluded in comparing operating results. Operating EBITDA does not include pro-forma adjustments for business optimization initiatives and acquisitions or non-cash adjustments such as stock-based compensation expense, used to calculate Adjusted (Covenant) EBITDA in the Senior Secured Credit Facility and the Term Loan A Facility senior secured leverage ratio.

Adjusted (Covenant) EBITDA calculated for a twelve-month period is presented to demonstrate our compliance with the senior secured leverage ratio covenant in the Senior Secured Credit Facility and the Term Loan A Facility. Adjusted (Covenant) EBITDA calculated for a twelve-month period corresponds to the definition of "EBITDA," calculated on a "pro forma basis," used in the Senior Secured Credit Facility and the Term Loan A Facility to calculate the senior secured leverage ratio. Adjusted (Covenant) EBITDA includes adjustments to EBITDA for restructuring costs, former parent legacy cost (benefit) items, net, loss on the early extinguishment of debt, non-cash charges and incremental securitization interest costs, as well as pro forma cost savings for restructuring initiatives, the pro forma effect of business optimization initiatives and the pro forma effect of acquisitions and new franchisees, in each case calculated as of the beginning of the twelve-month period.

We present EBITDA, Operating EBITDA and Adjusted (Covenant) EBITDA because we believe EBITDA, Operating EBITDA and Adjusted (Covenant) EBITDA are useful as supplemental measures in evaluating the performance of our operating businesses and provide greater transparency into our results of operations. Our management, including our chief operating decision maker, uses EBITDA as a factor in evaluating the performance of our business. EBITDA, Operating

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EBITDA and Adjusted (Covenant) EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP.

We believe EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles, which may vary for different companies for reasons unrelated to operating performance. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an EBITDA measure when reporting their results.

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EBITDA, Operating EBITDA and Adjusted (Covenant) EBITDA have limitations as analytical tools, and you should not consider EBITDA, Operating EBITDA or Adjusted (Covenant) EBITDA either in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:

these measures do not reflect changes in, or cash required for, our working capital needs;

these measures do not reflect our interest expense (except for interest related to our securitization obligations), or the cash requirements necessary to service interest or principal payments on our debt;

these measures do not reflect our income tax expense or the cash requirements to pay our taxes;

these measures do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these measures do not reflect any cash requirements for such replacements; and

other companies may calculate these measures differently so they may not be comparable.

In addition to the limitations described above, Adjusted (Covenant) EBITDA includes pro forma cost savings, the pro forma effect of business optimization initiatives and the pro forma full period effect of acquisitions and new franchisees. These adjustments may not reflect the actual cost savings or pro forma effect recognized in future periods.

A reconciliation of net income attributable to Realogy Group to EBITDA, Operating EBITDA and Adjusted (Covenant) EBITDA for the twelve months ended ~~June 30, 2016~~March 31, 2017 are set forth in the following table:

Less Equals Plus Equals
Year Ended Six Months Ended Six Months
Ended Six Months Ended Twelve Months
Ended
December 31,
2015 June 30,
2015 December 31,
2015 June 30,
2016 June 30,
2016
Net income attributable to Realogy Group (a) $ 184
$ 65
$ 119
$ 50
$ 169
Income tax expense 110
42
68
40
108
Income before income taxes 294
107
187
90
277
Interest expense, net 231
118
113
132
245
Depreciation and amortization 201
98
103
96
199
EBITDA (b) 726
323
403
318
721
EBITDA adjustments:
Restructuring costs 31
Former parent legacy benefit, net (13 )
Loss on the early extinguishment of debt 48
Operating EBITDA 787
Bank covenant adjustments:
Pro forma effect of business optimization initiatives (c) 36
Non-cash charges (d) 41
Pro forma effect of acquisitions and new franchisees (e) 9
Incremental securitization interest costs (f) 4
Adjusted (Covenant) EBITDA $ 877
Total senior secured net debt (g) $ 1,947
Senior secured leverage ratio 2.22 x

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			Less			Equals		Plus			Equals
	Year Ended		Three Months Ended			Nine Months Ended		Three Months Ended			Twelve Months Ended
	December 31, 2016		March 31, 2016			December 31, 2016		March 31, 2017			March 31, 2017
Net income (loss) attributable to Realogy Group (a)	$	213	$	(42	)	$	255	$	(28	)	$	227
Income tax expense / (benefit)	144		(24		)	168		(9		)	159
Income before income taxes	357		(66		)	423		(37		)	386
Interest expense, net	174		73			101		39			140
Depreciation and amortization	202		48			154		50			204
EBITDA (b)	733		55			678		52			730
EBITDA adjustments:
Restructuring costs											35
Former parent legacy cost (benefit), net											(3		)
Loss on the early extinguishment of debt											4
Operating EBITDA											766
Bank covenant adjustments:
Pro forma effect of business optimization initiatives (c)											30
Non-cash charges (d)											46
Pro forma effect of acquisitions and new franchisees (e)											19
Incremental securitization interest costs (f)											4
Adjusted (Covenant) EBITDA											$	865
Total senior secured net debt (g)											$	2,033
Senior secured leverage ratio											2.35		x

_______________

(a)

Net income (loss) attributable to Realogy consists of: (i) income of ~~$110 million for the third quarter of 2015, (ii) income of $9 million for the fourth quarter of 2015, (iii) a loss of $42 million for the first quarter of 2016 and (iv) income of~~ $92 million for the second quarter of ~~2016.~~2016, (ii) income of $106 million for the third quarter of 2016, (iii) income of $57 million for the fourth quarter of 2016 and (iv) a loss of $28 million for the first quarter of 2017.


(b)	EBITDA consists of: (i) ~~$309 million for the third quarter of 2015, (ii) $94 million for the fourth quarter of 2015, (iii) $55 million for the first quarter of 2016 and (iv)~~ $263 million for the second quarter of ~~2016.~~2016, (ii) $270 million for the third quarter of 2016, (iii) $145 million for the fourth quarter of 2016 and (iv) $52 million for the first quarter of 2017.


(c)	Represents the twelve-month pro forma effect of business optimization initiatives.

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(d)	Represents the elimination of non-cash expenses, including ~~$56~~$57 million of stock-based compensation expense less ~~$10~~$8 million for the change in the allowance for doubtful accounts and notes reserves, ~~and $5~~$2 million of foreign exchange benefit and $1 million of other items from ~~July~~April 1, ~~2015~~2016 through ~~June 30, 2016.~~March 31, 2017.

(e)

Represents the estimated impact of acquisitions and franchise sales activity, net of brokerages that exited our franchise system as if these changes had occurred on ~~July~~April 1, ~~2015.~~2016. Franchisee sales activity is comprised of new franchise agreements as well as growth through acquisitions and independent sales associate recruitment by existing franchisees with our assistance. We have made a number of assumptions in calculating such estimates and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired entities or entered into the franchise contracts as of ~~July~~April 1, ~~2015.~~2016.


(f)	Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended ~~June 30, 2016.~~March 31, 2017.

(g)

Represents total borrowings under the Senior Secured Credit Facility and borrowings secured by a first priority lien on our assets of ~~$2,282~~$2,158 million plus $27 million of capital lease obligations less ~~$362~~$152 million of readily available cash as of ~~June 30, 2016.~~March 31, 2017. Pursuant to the terms of our Senior Secured Credit Facility and Term Loan A Facility, total senior secured net debt does not include our securitization obligations or unsecured indebtedness, including the Unsecured Notes.

Set forth in the table below is a reconciliation of net ~~income~~loss attributable to Realogy to EBITDA and Operating EBITDA for the three-month periods ended ~~June 30, 2016~~March 31, 2017 and ~~2015:~~2016:


	Three Months Ended					Three Months Ended
	June 30, 2016		June 30, 2015			March 31, 2017			March 31, 2016
Net income attributable to Realogy	$	92	$	97
Income tax expense	64		66
Income before income taxes	156		163
Net loss attributable to Realogy						$	(28	)	$	(42	)
Income tax benefit						(9		)	(24		)
Loss before income taxes						(37		)	(66		)
Interest expense, net	59		50			39			73
Depreciation and amortization	48		52			50			48
EBITDA	263		265			52			55
EBITDA adjustments:
Restructuring costs	12		—			5			9
Former parent legacy benefit, net	—		(1		)
Former parent legacy cost, net						—			1
Loss on the early extinguishment of debt						4			—
Operating EBITDA	$	275	$	264		$	61		$	65

Contractual Obligations

~~See "Financial Obligations" for a description of the Company's recent debt transactions.~~ All ~~other~~ future contractual obligations as of ~~June 30, 2016~~March 31, 2017 have not changed materially from the amounts reported in our ~~2015~~2016 Form 10-K.

Critical Accounting Policies

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our combined results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.

These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016, which includes a description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results.

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Recently Issued Accounting Pronouncements

See Note 1, "Basis of ~~the Notes~~Presentation", to the Condensed Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risks.

We are exposed to market risk from changes in interest rates primarily through our senior secured debt. At ~~June 30, 2016,~~March 31, 2017, our primary interest rate exposure was to interest rate fluctuations, specifically LIBOR,, due to its impact on our variable rate borrowings of our Revolving Credit Facility and Term Loan B under the Senior Secured Credit Agreement and the Term Loan A Facility. Given that our borrowings under the Senior Secured Credit Agreement and Term Loan A Facility are generally based upon LIBOR,, this rate will be the Company's primary market risk exposure for the foreseeable future. We do not have significant exposure to foreign currency risk nor do we expect to have significant exposure to foreign currency risk in the foreseeable future.

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on earnings, fair values and cash flows based on a hypothetical change (increase and decrease) in interest rates. We exclude the fair values of relocation receivables and advances and securitization borrowings from our sensitivity analysis because we believe the interest rate risk on these assets and liabilities is mitigated as the rate we earn on relocation receivables and advances and the rate we incur on our securitization borrowings are based on similar variable indices.

At ~~June 30, 2016,~~March 31, 2017, we had variable interest rate long-term debt from our outstanding term loans and revolver of ~~$2,282~~$2,158 million, which excludes ~~$280~~$172 million of securitization obligations. The weighted average interest rate on the outstanding term loans and revolver at ~~June 30, 2016~~March 31, 2017 was ~~3.51%~~3.11%. The interest rate with respect to the Term Loan B is based on adjusted LIBOR plus ~~3.00%~~2.25% (with a LIBOR floor of 0.75%). The interest ~~rate~~rates with respect to the Revolving Credit Facility and term loans under the Term Loan A Facility isare based on adjusted LIBOR plus an additional margin subject to adjustment based on the current senior secured leverage ratio. Based on the ~~June 30, 2016~~March 31, 2017 senior secured leverage ratio, the LIBOR margin was 2.00%. At ~~June 30, 2016~~March 31, 2017, the one-month LIBOR rate was ~~0.47%~~0.98%; therefore, we have estimated that a 0.25% increase in LIBOR would have a $1$5 million impact on our annual interest expense.

We have entered into interest rate swaps with a notional value of $1,475 million to manage a portion of our exposure to changes in interest rates associated with our variable rate borrowings. Our interest rate swaps are as follows:



Notional Value (in millions)	Commencement Date	Expiration Date
$225	July 2012	February 2018
$200	January 2013	February 2018
$600	August 2015	August 2020
$450	November 2017	November 2022

The swaps help protect our outstanding variable rate borrowings from future interest rate volatility. The fixed interest rates on the swaps range from 2.07% to 2.89%. The Company had a liability for the fair value of the interest rate swaps of$8227 million at ~~June 30, 2016.~~March 31, 2017. The fair value of these interest rate swaps is subject to movements in LIBOR and will fluctuate in future periods. We have estimated that a 0.25% increase in the LIBOR yield curve would increase the fair value of our interest rate swaps by ~~$12~~$11 million and would decrease interest expense. While these results may be used as a benchmark, they should not be viewed as a forecast of future results.

Item 4. Controls and Procedures.

Controls and Procedures for Realogy Holdings Corp.

(a)

Realogy Holdings Corp. ("Realogy Holdings") maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Realogy Holdings' management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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(b)

As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Holdings has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Holdings' disclosure controls and procedures are effective at the "reasonable assurance" level.

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procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Holdings' disclosure controls and procedures are effective at the "reasonable assurance" level.


(c)	There has not been any change in Realogy Holdings' internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Controls and Procedures for Realogy Group LLC

(a)

Realogy Group LLC ("Realogy Group") maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Realogy Group's management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

(b)

As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Group has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Group's disclosure controls and procedures are effective at the "reasonable assurance" level.


(c)	There has not been any change in Realogy Group's internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Other Financial Information

The Condensed Consolidated Financial Statements as of ~~June 30, 2016~~March 31, 2017 and for the ~~three and six-month~~three-month periods ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~ have been reviewed by PricewaterhouseCoopers LLP, an independent registered public accounting firm. Their reports, dated ~~August~~May 4, ~~2016,~~2017, are included on pages 4 and 5. The reports of PricewaterhouseCoopers LLP state that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 (the "Act") for their report on the unaudited financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

~~Legal—Real Estate Business~~

See Note 10, "Commitments and Contingencies—Litigation", to the Condensed Consolidated Financial Statements included elsewhere in this Report for additional information on the Company's legal proceedings, including a description of the Strader, et al. and Hall v. PHH Corporation, et al. (U.S. District Court for the Central District of California). This is a purported class action brought by four California residents against 15 defendants, including Realogy and certain of its subsidiaries, PHH Corporation and PHH Home Loans, LLC (a joint venture between Realogy and PHH), alleging violations of Section 8(a) of RESPA. Plaintiffs seek to represent two subclasses comprised of all persons in the United States who, since January 31, 2005, (1) obtained a RESPA-covered mortgage loan from either (a) PHH Home Loans, LLC or one of its subsidiaries, or (b) one of the mortgage services managed by PHH Corporation for other lenders, and (2) paid a fee for title insurance or settlement services to TRG or one of its subsidiaries. Plaintiffs allege, among other things, that PHH Home Loans, LLC operates in violation of RESPA and that the other defendants violate RESPA by referring business to one another under agreements or arrangements that are prohibited by RESPA. Plaintiffs seek treble damages and an award of attorneys’ fees, costs and disbursements. On February 5, 2016, the defendants filed a motion to dismiss the case claiming that not only do the claims lack merit, but they are time-barred under RESPA's one-year statute of limitations. On April 5, 2016, the court granted defendants' motion to dismiss with leave for the plaintiffs to amend their complaint. Plaintiffs filed a second amended complaint on April 21, 2016, and a third amended complaint on May 12, 2016. On May 26, 2016 we filed a motion to dismiss the third amended complaint. The Court has not yet decided that motion. litigation.

The case raises significant and various previously unlitigated claims. As with all class action litigation, the case is inherently complex and subject to many uncertainties. We believe that we and the joint venture have complied with RESPA, the regulations promulgated thereunder and existing regulatory guidance. There can be no assurance, however, that if the action continues and a large class is subsequently certified, the plaintiffs will not seek a substantial damage award, penalties and other remedies. Given the early stage of this case and the novel claims and issues presented, we cannot estimate a range of reasonably potential losses for this litigation. The Company will vigorously defend this action.

The Company is involved in certain other claims and legal actions arising in the ordinary course of our business. Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, franchising arrangements, actions against our title company alleging it knew or should have known that others were committing mortgage fraud, brokerage disputes like the failure to disclose hidden defects in the property such as mold, other brokerage claims associated with listing information and property history, vicarious liability based upon conduct of individuals or entities outside of our control, including franchisees and independent sales associates, antitrust and anti-competition claims, general fraud claims, employment law claims, including claims challenging the classification of our sales associates as independent contractors, wage and hour classification claims and claims alleging violations of RESPA or state consumer fraud statutes. While the results of such claims and legal actions cannot be predicted with certainty, we do not believe based on information currently available to us that the final outcome of current proceedings against the Company will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

~~Legal—Cendant Corporate Litigation~~

~~* * *~~

The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable.

Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits or regulatory proceedings challenging practices that have broad impact can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company

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could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.

Litigation and claims against other participants in the residential real estate industry may impact the Company when the rulings in those cases cover practices common to the broader industry. Examples may include claims associated with RESPA compliance, broker fiduciary duties, and sales agent classification. ~~Similarly,~~One such case is PHH Corp. vs. Consumer Financial Protection Bureau, No. 15-1177. On October 11, 2016, a three-judge panel of the United States Court of Appeals for the D.C. Circuit issued a decision in that case addressing the constitutionality of the CFPB's structure as a single-Director independent agency where the CFPB Director can only be removed by the President of the U.S. for "cause" as well as various important RESPA issues, including that: (1) Section 8(c)(2) of RESPA (which permits “bona fide” payments for goods and services actually performed), remains a viable exception under RESPA and does not constitute a payment for a referral in violation of RESPA where the amount paid does not exceed the reasonable market value of the goods or services; (2) new CFPB interpretations of RESPA cannot be enforced on a retroactive basis where there is reliance on prior regulatory interpretations; and (3) the CFPB is bound by the three-year statute of limitations for government enforcement of RESPA. On February 16, 2017, the full D.C. Circuit Court of Appeals agreed to hear an appeal of the October 11, 2016 decision and vacated that decision pending the appeal.

The Company also may be impacted by litigation and other claims against companies in other industries. Rulings on matters such as the enforcement of arbitration and class waiver agreements and worker classification may adversely affect the Company and other residential real estate industry participants as a result of the classification of sales associates as independent contractors, irrespective of the fact that the parties subject to the rulings are in a different industry. There is active worker classification litigation in numerous jurisdictions, including Massachusetts, California, New Jersey and New York, against a variety of industries where the plaintiffs seek to reclassify independent contractors as employees or to challenge the use of federal and state minimum wage and overtime exemptions. To the extent the defendants are unsuccessful in these types of litigation matters, and we or our franchisees cannot distinguish our or their practices (or our industry’s practices), we and our franchisees could face significant liability and could be required to modify certain business relationships, either of which could materially and adversely impact our financial condition and results of operations. There also are changing employment-related regulatory interpretations at both the federal and state levels that could create risks around historic practices and that could require changes in business practices, both for us and our franchisees.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


(c)	The following table sets forth information relating to repurchase of shares of our common stock during the quarter ended March 31, 2017:



Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of a Publicly Announced Programs ⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs ⁽¹⁾
January 1-31, 2017	310,647	$26.00	310,647	$	68,327,017
February 1-28, 2017	261,206	$26.50	261,206	$	361,405,058
March 1 - 31, 2017 ⁽²⁾	1,585,008	$28.39	1,585,008	$	316,406,681

_______________

(1)

In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 million of the Company’s common stock. ~~Repurchases may be made at management's discretion from time to time on the open market transactions, Rule 10b5-1 trading plans or through privately negotiated transactions. The size and timing~~As of ~~these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The~~March 31, 2017, approximately $16 million remained available for repurchase ~~program has no time limit and may be suspended or discontinued at any time. All of the repurchased common stock has been retired.~~under this

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program. In February 2017, our Board authorized a new share repurchase program of up to an additional $300 million of the Company's common stock. Repurchases under these programs may be made at management's discretion from time to time on the open market, pursuant to Rule 10b5-1 trading plans or privately negotiated transactions. The ~~following table sets forth information relating to~~size and timing of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The repurchase programs have no time limit and may be suspended or discontinued at any time. All of ~~shares of our~~the repurchased common stock ~~during~~has been retired.


(2)	Includes 226,352 of shares purchased for which the trade date occurred in late March 2017 while settlement occurred in April 2017.

During the ~~quarter ended June 30, 2016:~~

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
May 1-31, 2016 975,000
$31.41 975,000
$ 210,925,250
June 1-30, 2016 75,000
$32.72 75,000
$ 208,471,250
period April 1, 2017 through May 2, 2017, we repurchased an additional 0.7 million shares at a weighted average market price of $29.48. Giving effect to these repurchases, all of the remaining capacity under the February 2016 program has been utilized and as of May 2, 2017, we had approximately $296 million of remaining capacity authorized under the February 2017 repurchase program.

Item 5. Other Information.

On ~~August 1, 2016, Matthew Espe was appointed to~~May 3, 2017, based upon the recommendations of its Compensation Committee and Nominating and Corporate Governance Committee, the Board of Directors ~~(the “Board”)~~ of Realogy Holdings ~~Corp. (“Realogy Holdings”)~~approved a one-time equity grant in fully vested shares to the members and chairs of the two Ad Hoc Committees that had been formed in October 2016: the Ad Hoc Succession Planning Committee and the ~~Board~~Ad Hoc Strategy Committee as follows: the Chair of ~~Managers~~each committee received shares with a grant date fair value of $20,000, and the other members of each committee received shares with a grant date fair value of $15,000, in each case based upon the closing sale price of the common stock of Realogy ~~Holdings' indirect wholly owned subsidiary, Realogy Group LLC.~~

~~Mr. Espe has been determined by the Board to be an independent director for purposes of the listing standards of The New York Stock Exchange. With Mr. Espe’s appointment, the Realogy~~ Holdings ~~Board now consists of ten directors, eight of whom are independent directors.~~

Mr. Espe, age 58, most recently served as the president and chief executive officer of Armstrong World Industries, Inc., a publicly traded global producer of flooring products and ceiling systems, from July 2010 until March 2015 when Armstrong split into two companies. Before joining Armstrong, he was chairman and chief executive officer of Ricoh Americas. Prior to that role, Mr. Espe was chairman of the board of directors and chief executive officer of IKON Office Solutions, Inc. from 2002 to 2008. Mr. Espe began his career at General Electric Company. He was with GE for more than 20 years, where he served in various leadership roles in Europe, Asia and the United States, last as president and chief executive officer of GE Lighting.

~~The Realogy Holdings Board has not yet determined the committee or committees of the Board~~ on ~~which Mr. Espe will serve.~~

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Mr. Espe will receive compensation for his service as a Realogy Holdings director in accordance with the Realogy Holdings' director compensation guidelines set forth in the Company’s annual proxy statement and Item 5 of Part II of Realogy Holdings’ Form 10-Q for the three months ended March 31, 2016.

There have been no transactions and there are no currently proposed transactions in which the Realogy Holdings or Realogy Group was or is to be a participant and in which Mr. Espe had or will have a direct or indirect material interest that requires disclosure pursuant to Item 404(a) of Regulation S-K.May 3, 2017.

Item 6. Exhibits.

See Exhibit Index.

5451

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

REALOGY HOLDINGS CORP.

and

REALOGY GROUP LLC

(Registrants)

Date: ~~August~~May 4, ~~2016~~2017

/S/ ANTHONY E. HULL

Anthony E. Hull

Executive Vice President and

Chief Financial Officer

Date: ~~August~~May 4, ~~2016~~2017

/S/ TIMOTHY B. GUSTAVSON

Timothy B. Gustavson

Senior Vice President,

Chief Accounting Officer and

Controller

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EXHIBIT INDEX

Exhibit Description

~~4.1~~10.1

~~Indenture,~~Fourth Amendment, dated as of ~~June 1, 2016, among Realogy Group LLC, as Issuer, Realogy Co-Issuer Corp., as Co-Issuer, Realogy Holdings Corp.,~~January 23, 2017, to the ~~Note Guarantors (as defined therein),~~Amended and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the 4.875% Senior Notes due 2023 (Incorporated by reference to Exhibit 4.1 to Registrants' Current Report on Form 8-K filed with the Securities and Exchange Commission on June 3, 2016).

~~10.1~~

~~Amendment to Note Purchase~~Restated Credit Agreement, dated as of ~~June 1, 2016,~~March 5, 2013, as amended, among ~~Apple Ridge Funding~~Realogy Intermediate Holdings LLC, ~~Cartus Corporation,~~ Realogy Group LLC, the ~~Managing Agents, Committed Purchasers~~several lenders parties thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent for the lenders, and ~~Conduit Purchasers, and Crédit Agricole Corporate and Investment Bank, as Administrative Agent~~the other agents parties thereto (Incorporated by reference to Exhibit 10.1 to Registrants' Current Report on Form 8-K filed ~~with~~on January 23, 2017).


10.2	Incremental Assumption Agreement, dated as of January 23, 2017, among Realogy Intermediate Holdings LLC, Realogy Group LLC, the ~~Securities~~financial institutions party thereto, and ~~Exchange Commission~~JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.2 to Registrants' Current Report on ~~June 3, 2016)~~Form 8-K filed on January 23, 2017).


10.3	Employment Agreement dated March 13, 2017, between Realogy Holdings Corp. and Richard A. Smith (Incorporated by reference to Exhibit 10.1 to Registrants' Current Report on Form 8-K filed on March 17, 2017).


10.4	Letter Agreement dated February 23, 2017, between Realogy Holdings Corp. and Alexander E. Perriello (Incorporated by reference to Exhibit 10.20 to Registrants' Form 10-K for the year ended December 31, 2017).


15.1*	Letter Regarding Unaudited Interim Financial Statements.


31.1*	Certification of the Chief Executive Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.


31.2*	Certification of the Chief Financial Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.


31.3*	Certification of the Chief Executive Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.


31.4*	Certification of the Chief Financial Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.


32.1*	Certification for Realogy Holdings Corp. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2*	Certification for Realogy Group LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS ^	XBRL Instance Document.


101.SCH ^	XBRL Taxonomy Extension Schema Document.


101.CAL^	XBRL Taxonomy Extension Calculation Linkbase Document.


101.DEF ^	XBRL Taxonomy Extension Definition Linkbase Document.


101.LAB ^	XBRL Taxonomy Extension Label Linkbase Document.


101.PRE ^	XBRL Taxonomy Extension Presentation Linkbase Document.

______________


*	Filed herewith.


^	Furnished electronically with this report.

5653



	2016 RTSR PSU
Grant date fair value	$	28.15
Expected volatility	28.1		%
Volatility of XHB	19.4		%
Correlation coefficient	0.58
Risk-free interest rate	0.9		%
Dividend yield	—



	2016 Options
Grant date fair value	$	10.97
Expected volatility	31.7		%
Expected term (years)	6.25
Risk-free interest rate	1.3		%
Dividend yield	—



	Options		Weighted Average Exercise Price
Outstanding at January 1, 2016	3.15		$	31.42
Granted	0.30		32.63
Exercised (a) (b)	(0.05	)	20.82
Forfeited/Expired	(0.02	)	33.42
Outstanding at June 30, 2016 (c)	3.38		$	31.68



	Full Year 2015 vs. 2014		First Quarter 2016 vs. 2015
RFG	5	%	4	%
NRT	2	%	1	%



	As of June 30, 2016
	Actual		As Adjusted
Cash and cash equivalents (1)	$	423	$	234
Senior Secured Credit Facility:
Revolving Credit Facility (2)	$	—	$	225
Existing Term Loan B	1,858		—
New Term Loan B	—		1,100
Term Loan A Facility:
Existing Term Loan A	424		424
New Term Loan A	—		355
4.50% Senior Notes	450		450
5.25% Senior Notes	550		550
4.875% Senior Notes	500		500
Securitization obligations:
Apple Ridge Funding LLC	269		269
Cartus Financing Limited	11		11
Total Debt	$	4,062	$	3,884