SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

^{___________________________}

~~FORM~~ ☑~~10-Q~~

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

(~~973~~) (973) 407-2000

^{___________________________}

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 ☑ No ☐ Realogy Group LLC Yes ☐ No ☑

Indicate by check mark whether the Registrants have submitted electronically every Interactive Data File required to be submitted 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 such files).

Realogy Holdings Corp. Yes ☑ No ☐ Realogy Group LLC Yes ☑ No ☐

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

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 ☑ Realogy Group LLC Yes ☐ No ☑

There were ~~114,323,679~~114,340,545 shares of Common Stock, $0.01 par value, of Realogy Holdings Corp. outstanding as of ~~August 6,~~November 5, 2019.

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 Amended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time (the "Senior Secured Credit Agreement") that governs our senior secured credit facility (the "Senior Secured Credit Facility", which includes our "Revolving Credit Facility" and our "Term Loan B") and the Term Loan A Agreement dated as of October 23, 2015, as amended from time to time (the "Term Loan A Agreement") that governs our senior secured term loan A credit facility (the "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.

As used in this Quarterly Report on Form 10-Q, the terms "5.25% Senior Notes", "4.875% Senior Notes" and "9.375% Senior Notes" refer to our 5.25% Senior Notes due 2021, our 4.875% Senior Notes due 2023, and our 9.375% Senior Notes due 2027, respectively, and are referred to collectively as the "Unsecured Notes." The term "4.50% Senior Notes" refers to our 4.50% Senior Notes due 2019 (paid in full in February 2019).

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as "believe," "expect," "anticipate," "intend," "project," "estimate," "plan," 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.

In particular, information appearing under "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, it is based on management's current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, we can give no assurance that any such expectation or belief will result or will be achieved or accomplished.

The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

•adverse developments or the absence of sustained improvement in general business, economic or political conditions or the U.S. residential real estate markets, either regionally or nationally, including but not limited to:


◦	~~a decline or a lack of improvement in the number of homesales;~~


◦	~~stagnant or declining home prices;~~


◦	~~a reduction in the affordability of housing;~~


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


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


◦	~~a lack of improvement or deceleration in the building of new housing and/or irregular timing or volume of new development closings;~~


◦	the potential negative impact of certain provisions of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) on (i) home values over time in states with high property, sales and state and local income taxes and (ii) homeownership rates; and/or


◦	the impact of recessions, slow economic growth, or a deterioration in other economic factors that particularly impact the residential real estate market and the business segments in which we operate whether broadly or by geography and price segments;

◦a decline or a lack of improvement in the number of homesales;

◦stagnant or declining home prices;

◦a reduction in the affordability of housing;

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

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

◦a lack of improvement or deceleration in the building of new housing and/or irregular timing or volume of new development closings;

◦the potential negative impact of certain provisions of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) on (i) home values over time in states with high property, sales and state and local income taxes and (ii) homeownership rates; and/or

◦the impact of recessions, slow economic growth, or a deterioration in other economic factors that particularly impact the residential real estate market and the business segments in which we operate whether broadly or by geography and price segments;

•the impact of increased competition in the industry and for the affiliation of independent sales agents on our results of operations and market share, including competition from:


◦	~~real estate brokerages, including those seeking to disrupt historic real estate brokerage models;~~


◦	~~other industry participants seeking to eliminate brokers or agents from, or minimize the role they play in, the homesale transaction; and~~


◦	~~other industry participants otherwise competing for a portion of gross commission income;~~

◦real estate brokerages, including those seeking to disrupt historic real estate brokerage models;

◦other industry participants seeking to eliminate brokers or agents from, or minimize the role they play in, the homesale transaction; and

◦other industry participants otherwise competing for a portion of gross commission income;

•continuing pressure on the share of gross commission income paid by our company owned brokerages and affiliated franchisees to affiliated independent sales agents and independent sales agent teams;

•our inability to successfully develop or procure technology that supports our strategy to grow the base of independent sales agents at our company owned and franchisee real estate brokerages;

•our geographic and high-end market concentration, including the heightened competition for independent sales agents in those geographies and price points;

•our inability to enter into franchise agreements with new franchisees or renew existing franchise agreements, including at current contractual royalty rates without increasing the amount and prevalence of sales incentives;

•the lack of revenue growth or declining profitability of our franchisees and company owned brokerage operations or declines in other revenue streams, such as third-party listing fees;

•negative industry or business trends (including further declines in our market capitalization) may have ana further impact on our valuation of goodwill and intangibles;

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•the extent of the negative impact of the discontinuation of the USAA program in the third quarter of 2019 on the Company’s revenues and profits derived from affinity program referrals from our Broker Network (including revenue to Relocation Services, Franchised Services and Owned Brokerage Services);

•the loss of aanother significant affinity client or multiple significant relocation clients or changes in corporate relocation practices resulting in fewer employee relocations or reduced relocation benefits ~~and/or~~as well as the effect of increasing competition in corporate relocation;


•	•risks related to our planned sale of our employee relocation business to SIRVA Worldwide, Inc., a subsidiary of SIRVA, Inc., including with respect to matters of timing, anticipated benefits and the financial impact to our business; •an increase in the experienced claims losses of our title underwriter; •~~experienced~~ ~~claims losses of our title underwriter;~~

our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (2) privacy or data security laws and regulations, (3) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws and (4) antitrust laws and regulations;

•risks relating to our ability to return capital to stockholders including, among other risks, the restrictions contained in our debt agreements, in particular the indenture governing the 9.375% Senior Notes;

•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 and risks relating to our ability to refinance or repay our indebtedness or incur additional indebtedness; and

•risks and growing costs related to both cybersecurity threats to our data and customer, franchisee, employee and independent sales agent data, as well as those related to our compliance with the growing number of laws, regulations and other requirements related to the protection of personal information.

More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"), particularly under the captions "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." 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.

All forward-looking statements herein speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into this report. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this report. 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.

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Realogy Holdings Corp. and its subsidiaries (the "Company") as of ~~June~~September 30, 2019, and the related condensed consolidated statements of operations and comprehensive (loss) income ~~(loss)~~ for the three-month and ~~six-month~~nine-month periods ended ~~June~~September 30, 2019 and2018, and of cash flows for the ~~six-month~~nine-month periods ended ~~June~~September 30, 2019 and2018, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of operations, comprehensive income, equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 26, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheetinformation as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. 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 PCAOB, 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

~~August 8,~~November 7, 2019

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of Realogy Group LLC

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries (the "Company") as of ~~June~~September 30, 2019, and the related condensed consolidated statements of operations and comprehensive (loss) income ~~(loss)~~ for the three-month and ~~six-month~~nine-month periods ended ~~June~~September 30, 2019 and 2018, and of cash flows for the ~~six-month~~nine-month periods ended ~~June~~September 30, 2019 and 2018, including the related notes (collectively referred to as the "interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, 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, the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of operations, comprehensive income, and of cash flows for the year then ended (not presented herein), and in our report dated February 26, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB 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 PCAOB 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

November 7, 2019

~~August 8, 2019~~

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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						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
Revenues
Gross commission income	$	1,201	$	1,246	$	3,310	$	3,536
Service revenue	269		268		710		728
Franchise fees	108		109		290		302
Other	51		53		168		159
Net revenues	1,629		1,676		4,478		4,725
Expenses
Commission and other agent-related costs	875		902		2,405		2,556
Operating	388		387		1,158		1,171
Marketing	64		63		202		199
General and administrative	85		80		262		244
Former parent legacy cost, net	1		—		1		—
Restructuring costs, net	11		9		32		45
Impairments	183		—		186		—
Depreciation and amortization	50		49		149		146
Interest expense, net	66		41		210		120
(Gain) loss on the early extinguishment of debt	(10)		—		(5)		7
Total expenses	1,713		1,531		4,600		4,488
(Loss) income before income taxes, equity in (earnings) losses and noncontrolling interests	(84)		145		(122)		237
Income tax (benefit) expense	(8)		40		(9)		73
Equity in (earnings) losses of unconsolidated entities	(7)		1		(15)		3
Net (loss) income	(69)		104		(98)		161
Less: Net income attributable to noncontrolling interests	(1)		(1)		(2)		(2)
Net (loss) income attributable to Realogy Holdings and Realogy Group	$	(70)	$	103	$	(100)	$	159

(Loss) earnings per share attributable to Realogy Holdings:
Basic (loss) earnings per share	$	(0.61)	$	0.84	$	(0.88)	$	1.26
Diluted (loss) earnings per share	$	(0.61)	$	0.83	$	(0.88)	$	1.25
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic	114.3		122.7		114.2		126.5
Diluted	114.3		123.6		114.2		127.6

Three Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 �� 2018
Revenues
Gross commission income $ 1,310
$ 1,388
$ 2,109
$ 2,290
Service revenue 253
263
441
460
Franchise fees 112
114
182
193
Other 60
55
117
106
Net revenues 1,735
1,820
2,849
3,049
Expenses
Commission and other agent-related costs 955
1,009
1,530
1,654
Operating 390
392
770
784
Marketing 69
69
138
136
General and administrative 82
75
177
164
Restructuring costs, net 9
6
21
36
Impairment 2
—
3
—
Depreciation and amortization 50
49
99
97
Interest expense, net 81
46
144
79
Loss on the early extinguishment of debt —
—
5
7
Total expenses 1,638
1,646
2,887
2,957
Income (loss) before income taxes, equity in (earnings) losses and noncontrolling interests 97
174
(38 ) 92
Income tax expense (benefit) 34
52
(1 ) 33
Equity in (earnings) losses of unconsolidated entities (7 ) (2 ) (8 ) 2
Net income (loss) 70
124
(29 ) 57
Less: Net income attributable to noncontrolling interests (1 ) (1 ) (1 ) (1 )
Net income (loss) attributable to Realogy Holdings and Realogy Group $ 69
$ 123
$ (30 ) $ 56

Earnings (loss) per share attributable to Realogy Holdings:
Basic earnings (loss) per share $ 0.60
$ 0.97
$ (0.26 ) $ 0.44
Diluted earnings (loss) per share $ 0.60
$ 0.96
$ (0.26 ) $ 0.43
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic 114.3
126.5
114.1
128.4
Diluted 114.9
127.6
114.1
129.7

See Notes to Condensed Consolidated Financial Statements.

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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ~~(LOSS)~~

(In millions)

(Unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
Net (loss) income	$	(69)	$	104	$	(98)	$	161
Currency translation adjustment	(1)		—		(1)		(2)
Defined benefit pension plan—amortization of actuarial loss to periodic pension cost	1		—		2		1
Other comprehensive income (loss), before tax	—		—		1		(1)
Income tax expense related to items of other comprehensive income amounts	1		—		1		—
Other comprehensive loss, net of tax	(1)		—		—		(1)
Comprehensive (loss) income	(70)		104		(98)		160
Less: comprehensive income attributable to noncontrolling interests	(1)		(1)		(2)		(2)
Comprehensive (loss) income attributable to Realogy Holdings and Realogy Group	$	(71)	$	103	$	(100)	$	158

Three Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 2018
Net income (loss) $ 70
$ 124
$ (29 ) $ 57
Currency translation adjustment (1 ) (3 ) —
(2 )
Defined benefit pension plan - amortization of actuarial loss to periodic pension cost —
—
1
1
Other comprehensive (loss) income, before tax (1 ) (3 ) 1
(1 )
Income tax expense related to items of other comprehensive income amounts —
—
—
—
Other comprehensive (loss) income, net of tax (1 ) (3 ) 1
(1 )
Comprehensive income (loss) 69
121
(28 ) 56
Less: comprehensive income attributable to noncontrolling interests (1 ) (1 ) (1 ) (1 )
Comprehensive income (loss) attributable to Realogy Holdings and Realogy Group $ 68
$ 120
$ (29 ) $ 55

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)


	September 30, 2019		December 31, 2018

ASSETS
Current assets:
Cash and cash equivalents	$	266	$	225
Restricted cash	12		13
Trade receivables (net of allowance for doubtful accounts of $12 and $9)	155		146
Relocation receivables	268		231
Other current assets	161		153
Total current assets	862		768
Property and equipment, net	315		304
Operating lease assets, net	538		—
Goodwill	3,532		3,712
Trademarks	749		749
Franchise agreements, net	1,176		1,227
Other intangibles, net	232		254
Other non-current assets	313		276
Total assets	$	7,717	$	7,290
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	145	$	147
Securitization obligations	228		231
Current portion of long-term debt	304		748
Current portion of operating lease liabilities	129		—
Accrued expenses and other current liabilities	412		401
Total current liabilities	1,218		1,527
Long-term debt	3,221		2,800
Long-term operating lease liabilities	471		—
Deferred income taxes	374		389
Other non-current liabilities	250		259
Total liabilities	5,534		4,975
Commitments and contingencies (Note 9)
Equity:
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, NaN issued and outstanding at September 30, 2019 and December 31, 2018	—		—
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 114,335,466 shares issued and outstanding at September 30, 2019 and 114,620,499 shares issued and outstanding at December 31, 2018	1		1
Additional paid-in capital	4,837		4,869
Accumulated deficit	(2,607)		(2,507)
Accumulated other comprehensive loss	(52)		(52)
Total stockholders' equity	2,179		2,311
Noncontrolling interests	4		4
Total equity	2,183		2,315
Total liabilities and equity	$	7,717	$	7,290

June 30,
2019 December 31,
2018

ASSETS
Current assets:
Cash and cash equivalents $ 270
$ 225
Restricted cash 8
13
Trade receivables (net of allowance for doubtful accounts of $12 and $9) 185
146
Relocation receivables 290
231
Other current assets 157
153
Total current assets 910
768
Property and equipment, net 311
304
Operating lease assets, net 536
—
Goodwill 3,712
3,712
Trademarks 749
749
Franchise agreements, net 1,193
1,227
Other intangibles, net 240
254
Other non-current assets 303
276
Total assets $ 7,954
$ 7,290
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 198
$ 147
Securitization obligations 204
231
Current portion of long-term debt 364
748
Current portion of operating lease liabilities 131
—
Accrued expenses and other current liabilities 383
401
Total current liabilities 1,280
1,527
Long-term debt 3,325
2,800
Long-term operating lease liabilities 465
—
Deferred income taxes 385
389
Other non-current liabilities 246
259
Total liabilities 5,701
4,975
Commitments and contingencies (Note 9)
Equity:
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at June 30, 2019 and December 31, 2018 —
—
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 114,303,786 shares issued and outstanding at June 30, 2019 and 114,620,499 shares issued and outstanding at December 31, 2018 1
1
Additional paid-in capital 4,837
4,869
Accumulated deficit (2,537 ) (2,507 )
Accumulated other comprehensive loss (51 ) (52 )
Total stockholders' equity 2,250
2,311
Noncontrolling interests 3
4
Total equity 2,253
2,315
Total liabilities and equity $ 7,954
$ 7,290

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)


	Nine Months Ended September 30,
	2019		2018
Operating Activities
Net (loss) income	$	(98)	$	161
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	149		146
Deferred income taxes	(16)		59
Impairments	186		—
Amortization of deferred financing costs and debt discount	7		11
(Gain) loss on the early extinguishment of debt	(5)		7
Equity in (earnings) losses of unconsolidated entities	(15)		3
Stock-based compensation	25		31
Mark-to-market adjustments on derivatives	49		(20)
Other adjustments to net income	(4)		(1)
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables	(8)		(26)
Relocation receivables	(38)		(112)
Other assets	(4)		(15)
Accounts payable, accrued expenses and other liabilities	2		(18)
Dividends received from unconsolidated entities	2		3
Other, net	(2)		(5)
Net cash provided by operating activities	230		224
Investing Activities
Property and equipment additions	(78)		(73)
Payments for acquisitions, net of cash acquired	(1)		(1)
Investment in unconsolidated entities	(10)		(15)
Proceeds from investments in unconsolidated entities	—		19
Other, net	3		10
Net cash used in investing activities	(86)		(60)
Financing Activities
Net change in Revolving Credit Facility	(5)		180
Payments for refinancing of Term Loan B	—		(4)
Proceeds from refinancing of Term Loan A & A-1	—		17
Proceeds from issuance of Senior Notes	550		—
Redemption and repurchases of Senior Notes	(533)		—
Amortization payments on term loan facilities	(22)		(17)
Net change in securitization obligations	(3)		70
Debt issuance costs	(9)		(16)
Cash paid for fees associated with early extinguishment of debt	(5)		—
Repurchase of common stock	(20)		(302)
Dividends paid on common stock	(31)		(34)
Taxes paid related to net share settlement for stock-based compensation	(6)		(10)
Payments of contingent consideration related to acquisitions	(3)		(21)
Other, net	(17)		(23)
Net cash used in financing activities	(104)		(160)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	—		(1)
Net increase in cash, cash equivalents and restricted cash	40		3
Cash, cash equivalents and restricted cash, beginning of period	238		234
Cash, cash equivalents and restricted cash, end of period	$	278	$	237
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $6 for both periods presented)	$	130	$	118
Income tax payments, net	7		10

Six Months Ended
June 30,
2019 2018
Operating Activities
Net (loss) income $ (29 ) $ 57
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 99
97
Deferred income taxes (4 ) 22
Impairment 3
—
Amortization of deferred financing costs and debt discount 5
7
Loss on the early extinguishment of debt 5
7
Equity in (earnings) losses of unconsolidated entities (8 ) 2
Stock-based compensation 15
21
Mark-to-market adjustments on derivatives 38
(13 )
Other adjustments to net (loss) income (3 ) 1
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables (38 ) (44 )
Relocation receivables (59 ) (114 )
Other assets (9 ) (18 )
Accounts payable, accrued expenses and other liabilities 41
(13 )
Dividends received from unconsolidated entities 1
1
Other, net (1 ) (4 )
Net cash provided by operating activities 56
9
Investing Activities
Property and equipment additions (54 ) (49 )
Payments for acquisitions, net of cash acquired (1 ) (1 )
Investment in unconsolidated entities (10 ) (15 )
Proceeds from investments in unconsolidated entities —
19
Other, net 3
1
Net cash used in investing activities (62 ) (45 )
Financing Activities
Net change in Revolving Credit Facility 60
242
Payments for refinancing of Term Loan B —
(4 )
Proceeds from refinancing of Term Loan A & A-1 —
17
Proceeds from issuance of Senior Notes 550
—
Redemption of Senior Notes (450 ) —
Amortization payments on term loan facilities (15 ) (10 )
Net change in securitization obligations (27 ) 67
Debt issuance costs (9 ) (16 )
Cash paid for fees associated with early extinguishment of debt (4 ) —
Repurchase of common stock (20 ) (200 )
Dividends paid on common stock (21 ) (23 )
Taxes paid related to net share settlement for stock-based compensation (6 ) (10 )
Payments of contingent consideration related to acquisitions (2 ) (4 )
Other, net (10 ) (17 )
Net cash provided by financing activities 46
42
Effect of changes in exchange rates on cash, cash equivalents and restricted cash —
(1 )
Net increase in cash, cash equivalents and restricted cash 40
5
Cash, cash equivalents and restricted cash, beginning of period 238
234
Cash, cash equivalents and restricted cash, end of period $ 278
$ 239
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $4 for both periods presented) $ 99
$ 87
Income tax payments, net 6
8

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~~

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 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 unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of Realogy Holdings and Realogy Group's financial position as of ~~June~~September 30, 2019 and the results of operations and comprehensive (loss) income for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 and cash flows for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018. The Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, ~~2018~~.2018.

As discussed in further detail below under Recently Adopted Accounting Pronouncements, effective January 1, 2019, the Company adopted Accounting Standard Update No. 2016-02 (Topic 842) "Leases". The adoption of this standard is reflected in the amounts and disclosures set forth in this Form 10-Q.

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 ~~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.

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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 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.

The following table summarizes fair value measurements by level at ~~June~~September 30, 2019 for assets and liabilities measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total
Deferred compensation plan assets (included in other non-current assets)	$	2	$	—	$	—	$	2
Interest rate swaps (included in other current and non-current liabilities)	—		60		—		60
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)	—		—		4		4

Level I Level II Level III Total
Deferred compensation plan assets (included in other non-current assets) $ 2
$ —
$ —
$ 2
Interest rate swaps (included in other non-current liabilities) —
48
—
48
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) —
—
5
5

The following table summarizes fair value measurements by level at December 31, 2018 for assets and liabilities measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total
Deferred compensation plan assets (included in other non-current assets)	$	2	$	—	$	—	$	2
Interest rate swaps (included in other non-current assets)	—		6		—		6
Interest rate swaps (included in other non-current liabilities)	—		16		—		16
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)	—		—		10		10

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, 2018	$	10
Additions: contingent consideration related to acquisitions completed during the period	—
Reductions: payments of contingent consideration	(4)
Changes in fair value (reflected in general and administrative expenses)	(2)
Fair value of contingent consideration at September 30, 2019	$	4

Level III
Fair value of contingent consideration at December 31, 2018 $ 10
Additions: contingent consideration related to acquisitions completed during the period —
Reductions: payments of contingent consideration (3 )
Changes in fair value (reflected in General and administrative expenses) (2 )
Fair value of contingent consideration at June 30, 2019 $ 5

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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, 2019				December 31, 2018					September 30, 2019						December 31, 2018
Debt	Principal Amount		Estimated Fair Value (a)		Principal Amount		Estimated Fair Value (a)		Debt	Principal Amount		Estimated Fair Value (a)		Principal Amount		Estimated Fair Value (a)
Senior Secured Credit Facility:									Senior Secured Credit Facility:
Revolving Credit Facility	$	330	$	330	$	270	$	270	Revolving Credit Facility	$	265	$	265	$	270	$	270
Term Loan B	1,064		990		1,069		1,010		Term Loan B	1,061		1,009		1,069		1,010
Term Loan A Facility:									Term Loan A Facility:
Term Loan A	727		707		736		707		Term Loan A	722		695		736		707
4.50% Senior Notes	—		—		450		447		4.50% Senior Notes	—		—		450		447
5.25% Senior Notes	550		533		550		524		5.25% Senior Notes	550		547		550		524
4.875% Senior Notes	500		451		500		434		4.875% Senior Notes	407		377		500		434
9.375% Senior Notes	550		482		—		—		9.375% Senior Notes	550		507		—		—
Securitization obligations	204		204		231		231		Securitization obligations	228		228		231		231

_______________


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

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

Equity Method Investments

At ~~June~~September 30, 2019 and December 31, 2018, the Company had various equity method investments aggregating ~~$60~~$66 million and $51 million, respectively, which are recorded within other non-current assets on the accompanying Condensed Consolidated Balance Sheets. The investment balances at ~~June~~September 30, 2019 and December 31, 2018 included ~~$52~~$57 million and $43 million, respectively, for the Company's investment in Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity").

For the three months ended ~~June~~September 30, 2019 and 2018, the Company recorded equity earnings of $7 million and $2equity losses of $1 million, respectively, at the Title and Settlement Services segment. For the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, the Company recorded equity earnings of $8$15 million and equity losses of $2$3 million, respectively, at the Title and Settlement Services segment.

The Company received $1$2 million and $3 million in cash dividends from equity method investments during ~~both~~ the ~~six~~nine months ended ~~June~~September 30, 2019 and ~~2018.~~2018, respectively. The Company invested $2 million and $4 million of cash into Guaranteed Rate Affinity during the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively.

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 in the period in which they occur. The provision for income taxes was a benefit of $8 million and an expense of ~~$34 million and $52~~$40 million for the three months ended ~~June~~September 30, 2019 and 2018, respectively, and a benefit of $1$9 million and an expense of ~~$33~~$73 million for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively.

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 Swiss Franc, Euro, British Pound ~~Euro~~ and Canadian 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~~September 30, 2019, the Company had outstanding foreign currency forward contracts in an asset position with a fair value of less than $1 million and a notional value of ~~$28~~$33 million. As of December 31, 2018, the Company had outstanding foreign currency forward contracts in a liability position with a fair value of less than $1 million and a notional value of $27 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. As of ~~June~~September 30, 2019, the Company had interest rate swaps with an aggregate notional value of $1,600 million to offset the variability in cash flows resulting from the term loan facilities as follows:

Notional Value (in millions)

Commencement Date

Expiration Date

$600

August 2015

August 2020

$450

November 2017

November 2022

$400

August 2020

August 2025

$150

November 2022

November 2027

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:

Not Designated as Hedging Instruments Balance Sheet Location June 30, 2019 December 31, 2018
Interest rate swap contracts Other non-current assets $ —
$ 6
Other non-current liabilities 48
16


Not Designated as Hedging Instruments	Balance Sheet Location		September 30, 2019			December 31, 2018
Interest rate swap contracts	Other non-current assets		$	—		$	6
		Other current and non-current liabilities			60			16

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
Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Interest rate swap contracts Interest expense $ 24
$ —
$ 38
$ (12 )
Foreign exchange contracts Operating expense —
(1 ) —
(1 )


Derivative Instruments Not Designated as Hedging Instruments	Location of (Gain) or Loss Recognized for Derivative Instruments	(Gain) or Loss Recognized on Derivatives
							Three Months Ended September 30,							Nine Months Ended September 30,
						2019			2018			2019	2018
Interest rate swap contracts	Interest expense	$	12	$	(7)		$	50		$	(19)
Foreign exchange contracts	Operating expense	(1)		—			(1)			(1)

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 $8$12 million and $13 million at ~~June~~September 30, 2019 and December 31, 2018, respectively.

Revenue

Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue standard. The Company's revenue is disaggregated by major revenue categories on our Condensed Consolidated Statements of Operations and further disaggregated by business segment as follows:


	Three Months Ended September 30,
	Real Estate Franchise Services						Company Owned Real Estate Brokerage Services						Relocation Services						Title & Settlement Services						Corporate and Other	Total Company
	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Gross commission income (a)	$	—	$	—	$	1,201	$	1,246	$	—	$	—	$	—	$	—	$	—	$	—	$	1,201	$	1,246
Service revenue (b)	—		—		2		3		102		107		165		158		—		—		269		268
Franchise fees (c)	186		189		—		—		—		—		—		—		(78)		(80)		108		109
Other (d)	30		32		19		19		1		1		5		4		(4)		(3)		51		53
Net revenues	$	216	$	221	$	1,222	$	1,268	$	103	$	108	$	170	$	162	$	(82)	$	(83)	$	1,629	$	1,676

Three Months Ended June 30,
Real Estate Franchise Services Company Owned Brokerage Services Relocation Services Title & Settlement Services Corporate and Other Total Company
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Gross commission income (a) $ —
$ —
$ 1,310
$ 1,388
$ —
$ —
$ —
$ —
$ —
$ —
$ 1,310
$ 1,388
Service revenue (b) —
—
3
2
96
104
154
157
—
—
253
263
Franchise fees (c) 196
203
—
—
—
—
—
—
(84 ) (89 ) 112
114
Other (d) 38
34
18
18
1
1
6
5
(3 ) (3 ) 60
55
Net revenues $ 234
$ 237
$ 1,331
$ 1,408
$ 97
$ 105
$ 160
$ 162
$ (87 ) $ (92 ) $ 1,735
$ 1,820


	Nine Months Ended September 30,
	Real Estate Franchise Services						Company Owned Real Estate Brokerage Services						Relocation Services						Title & Settlement Services						Corporate and Other	Total Company
	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Gross commission income (a)	$	—	$	—	$	3,310	$	3,536	$	—	$	—	$	—	$	—	$	—	$	—	$	3,310	$	3,536
Service revenue (b)	—		—		7		7		273		289		430		432		—		—		710		728
Franchise fees (c)	505		531		—		—		—		—		—		—		(215)		(229)		290		302
Other (d)	108		103		52		50		3		3		14		12		(9)		(9)		168		159
Net revenues	$	613	$	634	$	3,369	$	3,593	$	276	$	292	$	444	$	444	$	(224)	$	(238)	$	4,478	$	4,725

Six Months Ended June 30,
Real Estate Franchise Services Company Owned Brokerage Services Relocation Services Title & Settlement Services Corporate and Other Total Company
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Gross commission income (a) $ —
$ —
$ 2,109
$ 2,290
$ —
$ —
$ —
$ —
$ —
$ —
$ 2,109
$ 2,290
Service revenue (b) —
—
5
4
171
182
265
274
—
—
441
460
Franchise fees (c) 319
342
—
—
—
—
—
—
(137 ) (149 ) 182
193
Other (d) 78
71
33
31
2
2
9
8
(5 ) (6 ) 117
106
Net revenues $ 397
$ 413
$ 2,147
$ 2,325
$ 173
$ 184
$ 274
$ 282
$ (142 ) $ (155 ) $ 2,849
$ 3,049

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______________


~~(a)~~	~~Consists primarily of revenues related to gross commission income at the Company Owned Brokerage Services segment which is recognized at a point in time at the closing of a homesale transaction.~~


~~(b)~~	Service revenue primarily consists of title and escrow fees at the Title and Settlement Services segment, which are recognized at a point in time at the closing of a homesale transaction, and relocation fees at the Relocation Services segment, which are recognized as revenue when or as the related performance obligation is satisfied, which is dependent on the type of service performed.


~~(c)~~	Franchise fees at the Real Estate Franchise Services segment primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction).


~~(d)~~	Other revenue is comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees, third-party listing fees and other miscellaneous revenues across all of the business segments.

(a)Consists primarily of revenues related to gross commission income at the Company Owned Real Estate Brokerage Services segment which is recognized at a point in time at the closing of a homesale transaction.

(b)Service revenue primarily consists of title and escrow fees at the Title and Settlement Services segment, which are recognized at a point in time at the closing of a homesale transaction, and relocation fees at the Relocation Services segment, which are recognized as revenue when or as the related performance obligation is satisfied, which is dependent on the type of service performed.

(c)Franchise fees at the Real Estate Franchise Services segment primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction).

(d)Other revenue is comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees, third-party listing fees and other miscellaneous revenues across all of the business segments.

The following table shows the change in the Company's contract liabilities (deferred revenue) related to revenue contracts by reportable segment for the period:


	Beginning Balance at January 1, 2019		Additions during the period		Recognized as Revenue during the period			Ending Balance at June 30, 2019			Beginning Balance at January 1, 2019		Additions during the period		Recognized as Revenue during the period		Ending Balance at September 30, 2019
Real Estate Franchise Services:										Real Estate Franchise Services:
Deferred area development fees (a)	$	54	$	1	$	(5	)	$	50	Deferred area development fees (a)	$	54	$	1	$	(6)	$	49
Deferred brand marketing fund fees (b)	12		46		(52		)	6		Deferred brand marketing fund fees (b)	12		69		(72)		9
Other deferred income related to revenue contracts	12		17		(21		)	8		Other deferred income related to revenue contracts	12		24		(27)		9
Total Real Estate Franchise Services	78		64		(78		)	64		Total Real Estate Franchise Services	78		94		(105)		67
Company Owned Real Estate Brokerage Services:										Company Owned Real Estate Brokerage Services:
Advanced commissions related to development business (c)	10		1		(1		)	10		Advanced commissions related to development business (c)	10		2		(2)		10
Other deferred income related to revenue contracts	4		4		(4		)	4		Other deferred income related to revenue contracts	4		5		(5)		4
Total Company Owned Real Estate Brokerage Services	14		5		(5		)	14		Total Company Owned Real Estate Brokerage Services	14		7		(7)		14
Relocation Services:										Relocation Services:
Deferred broker network fees (d)	—		9		(4		)	5		Deferred broker network fees (d)	—		10		(6)		4
Deferred outsourcing fees (e)	4		32		(30		)	6		Deferred outsourcing fees (e)	4		44		(44)		4
Other deferred income related to revenue contracts	5		14		(14		)	5		Other deferred income related to revenue contracts	5		19		(20)		4
Total Relocation Services	9		55		(48		)	16		Total Relocation Services	9		73		(70)		12
Total	$	101	$	124	$	(131	)	$	94	Total	$	101	$	174	$	(182)	$	93

_______________

~~(a)~~

The Company collects initial area development fees ("ADF") for international territory transactions, which are recorded as deferred revenue when received and recognized into franchise revenue over the average 25 year life of the related franchise agreement as consideration for the right to access and benefit from Realogy’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination.


~~(b)~~	~~Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment.~~


~~(c)~~	~~New development closings generally have a development period of between 18 and 24 months from contracted date to closing.~~

~~(d)~~

(a)The Company collects initial area development fees ("ADF") for international territory transactions, which are recorded as deferred revenue when received and recognized into franchise revenue over the average 25 year life of the related franchise agreement as consideration for the right to access and benefit from Realogy’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination.

(b)Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment.

(c)New development closings generally have a development period of between 18 and 24 months from contracted date to closing.

(d)Network fees are generally billed annually and recognized into revenue on a straight-line basis each month during the membership period.

(e)Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type.


~~(e)~~	Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type.

Recently Adopted Accounting Pronouncements

In January 2017, the FASB issued Accounting Standard Update No. 2017-04 (Topic 350), "Simplifying the Test of Goodwill Impairment." This update simplifies how the Company is required to test goodwill for impairment by eliminating step two, which requires a hypothetical purchase price allocation, from the goodwill impairment test. Under the new guidance, goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard is effective for interim or annual goodwill impairment tests during fiscal years beginning after December 15, 2019, with early adoption permitted, and should be applied prospectively. The Company elected to early adopt this standard and the new goodwill impairment guidance was applied to our goodwill impairment test performed as of September 1, 2019.

In August 2018, the SEC issued a final rule that amends certain disclosure requirements as part of the SEC’s overall project to improve disclosure effectiveness and simplify compliance. The final rule eliminates redundant, duplicative and

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overlapping requirements which are substantially similar to current GAAP or other SEC disclosure requirements, as well as amends or removes outdated and superseded requirements. However, in some situations, the amendments expanded disclosure requirements, such as an analysis of changes in stockholders’ equity will now be required for the current and comparative quarter and year-to-date interim periods. The Company applied the amendments in the final rule to its Annual Report on Form 10-K for the year ended December 31, 2018 and the interim disclosure requirements to this quarterly report on Form 10-Q.

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Adoption of the New Leasing Standard

In February 2016, the FASB issued Accounting Standard Update No. 2016-02 (Topic 842) "Leases" (the "new leasing standard") which requires virtually all leases to be recognized on the balance sheet. Effective January 1, 2019, the Company adopted the new leasing standard using the modified retrospective transition approach with optional transition relief and recognized the cumulative effect of applying the new leasing standard to existing contracts on the balance sheet on January 1, 2019. Therefore, results for reporting periods beginning after January 1, 2019 are presented under the new leasing standard; however, the comparative prior period amounts have not been restated and continue to be reported in accordance with historic accounting under ASC Topic 840. The most significant effects of adoption of the new leasing standard relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for operating leases. The new leasing standard did not impact our Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows. The impact of the changes to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard were as follows:

Balance Sheet accounts prior to the new leasing standard adoption adjustments Adjustments due to the adoption of the new leasing standard Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Current assets:
Other current assets $ 153
$ (14 ) $ 139
Total current assets 768
(14 ) 754
Operating lease assets, net —
567
567
Other non-current assets 276
(1 ) 275
Total assets (a) $ 7,290
$ 552
$ 7,842

LIABILITIES AND EQUITY
Current liabilities:
Current portion of operating lease liabilities $ —
$ 126
$ 126
Accrued expenses and other current liabilities 401
(12 ) 389
Total current liabilities 1,527
114
1,641
Long-term operating lease liabilities —
500
500
Other non-current liabilities 259
(62 ) 197
Total liabilities 4,975
552
5,527
Total equity 2,315
—
2,315
Total liabilities and equity $ 7,290
$ 552
$ 7,842


	Balance Sheet accounts prior to the new leasing standard adoption adjustments		Adjustments due to the adoption of the new leasing standard		Balance Sheet accounts after the new leasing standard adoption adjustments
ASSETS
Current assets:
Other current assets	$	153	$	(14)	$	139
Total current assets	768		(14)		754
Operating lease assets, net	—		567		567
Other non-current assets	276		(1)		275
Total assets (a)	$	7,290	$	552	$	7,842

LIABILITIES AND EQUITY
Current liabilities:
Current portion of operating lease liabilities	$	—	$	126	$	126
Accrued expenses and other current liabilities	401		(12)		389
Total current liabilities	1,527		114		1,641
Long-term operating lease liabilities	—		500		500
Other non-current liabilities	259		(62)		197
Total liabilities	4,975		552		5,527
Total equity	2,315		—		2,315
Total liabilities and equity	$	7,290	$	552	$	7,842

_______________


~~(a)~~	The $552 million adjustment to Total assets due to the adoption of the new leasing standard consists of $414 million at the Company Owned Brokerage Services segment, $52 million at the Corporate and Other segment, $46 million at the Title and Settlement Services segment and $40 million at the Relocation Services Segment.

(a)The $552 million adjustment to Total assets due to the adoption of the new leasing standard consists of $414 million at the Company Owned Real Estate Brokerage Services segment, $52 million at the Corporate and Other segment, $46 million at the Title and Settlement Services segment and $40 million at the Relocation Services Segment.

The Company elected a package of practical expedients that were consequently applied to all leases. The Company did not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases, nor whether previously capitalized initial direct costs would qualify for capitalization under the new standard. Upon transition, the Company did not elect to use hindsight with respect to lease renewals and purchase options when accounting for existing leases, as well as assessing the impairment of right-of-use assets. Therefore, lease terms largely remained unchanged. In addition, the Company elected the short-term lease recognition exemption and did not recognize a lease obligation and right-of-use asset on its balance sheet for all leases with terms of 12 months or less.

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The Company elected the practical expedient to combine lease and non-lease components in total gross rent for all of its leases which resulted in a larger lease liability recorded on the balance sheet.

~~Table of Contents~~

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). Recently issued ASUs 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.


2.	~~LEASES~~

2. LEASES

The Company's lease portfolio consists primarily of office space and equipment. The Company has approximately ~~1,000~~1,100 real estate leases with lease terms ranging from less than 1 year to 17 years and includes the Company's brokerage sales offices, regional and branch offices for our title and relocation businesses, corporate headquarters, regional headquarters, and facilities serving as local administration, training and storage. The Company's brokerage sales offices are generally located in shopping centers and small office parks, typically with lease terms of 1 year to 5 years. In addition, the Company has equipment leases which primarily consist of furniture, computers and other office equipment.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. At lease commencement, the Company records a liability for its lease obligation measured at the present value of future lease payments and a right-of-use asset equal to the lease liability adjusted for prepayments and lease incentives. The Company uses its collateralized incremental borrowing rate to calculate the present value of lease liabilities as most of its leases do not provide an implicit rate that is readily determinable.The Company does not recognize a lease obligation and right-of-use asset on its balance sheet for any leases with an initial term of 12 months or less. Some real estate leases include one or more options to renew or terminate a lease. The exercise of a lease renewal or termination option is assessed at commencement of the lease and only reflected in the lease term if the Company is reasonably certain to exercise the option. The Company has lease agreements that contain both lease and non-lease components, such as common area maintenance fees, and has made a policy election to combine both fixed lease and non-lease components in total gross rent for all of its leases. E~~xpense~~Expense for operating leases is recognized on a straight-line basis over the lease term.

Supplemental balance sheet information related to the Company's leases was as follows:

Lease Type Balance Sheet Classification June 30, 2019
Assets:
Operating lease assets Operating lease assets, net $ 536
Finance lease assets (1) Property and equipment, net 39
Total lease assets, net $ 575

Liabilities:
Current:
Operating lease liabilities Current portion of operating lease liabilities $ 131
Finance lease liabilities Accrued expenses and other current liabilities 12
Non-current:
Operating lease liabilities Long-term operating lease liabilities 465
Finance lease liabilities Other non-current liabilities 21
Total lease liabilities $ 629

Weighted Average Lease Term and Discount Rate
Weighted average remaining lease term (years):
Operating leases 5.6
Finance leases 3.3

Weighted average discount rate:
Operating leases 5.3 %
Finance leases 4.0 %

~~_______________~~

~~(1)~~Lease Type

Balance Sheet Classification

September 30, 2019

Assets:

Operating lease assets

Operating lease assets, net

538

Finance lease assets ~~are recorded~~(a)

Property and equipment, net

Total lease assets, net

576

Liabilities:

Current:

Operating lease liabilities

Current portion of ~~accumulated amortization of $35~~operating lease liabilities

129

Finance lease liabilities

Accrued expenses and other current liabilities

Non-current:

Operating lease liabilities

Long-term operating lease liabilities

471

Finance lease liabilities

Other non-current liabilities

Total lease liabilities

632

Weighted Average Lease Term and Discount Rate

Weighted average remaining lease term (years):

Operating leases

5.7

Finance leases

3.2

Weighted average discount rate:

Operating leases

5.2

Finance leases

4.0

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_______________

(a)Finance lease assets are recorded net of accumulated amortization of $36 million.

~~Table of Contents~~

As of ~~June~~September 30, 2019, maturities of lease liabilities by fiscal year were as follows:

Maturity of Lease Liabilities Operating Leases Finance Leases Total
Remaining 2019 $ 77
$ 6
$ 83
2020 156
11
167
2021 126
9
135
2022 100
6
106
2023 74
2
76
Thereafter 162
1
163
Total lease payments 695
35
730
Less: Interest 99
2
101
Present value of lease liabilities $ 596
$ 33
$ 629


Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
Remaining 2019	$	30	$	3	$	33
2020	162		12		174
2021	135		10		145
2022	109		6		115
2023	82		3		85
Thereafter	181		—		181
Total lease payments	699		34		733
Less: Interest	99		2		101
Present value of lease liabilities	$	600	$	32	$	632

As previously disclosed in our 2018 Annual Report on Form 10-K and under historical lease accounting guidance, future minimum lease payments for noncancelable operating leases as of December 31, 2018 were as follows:


Year	As of December 31, 2018
2019	$	165
2020	144
2021	120
2022	95
2023	79
Thereafter	196
Total	$	799

Supplemental income statement information related to the Company's leases is as follows:


	Three Months Ended		Nine Months Ended
Lease Costs	September 30, 2019		September 30, 2019
Operating lease costs	$	42	$	125
Finance lease costs:
Amortization of leased assets	3		10
Interest on lease liabilities	—		1
Other lease costs (a)	9		22
Impairment loss	3		5
Less: Sublease income, gross	1		2
Net lease cost	$	56	$	161

Three Months Ended Six Months Ended
Lease Costs June 30, 2019 June 30, 2019
Operating lease costs $ 41
$ 83
Finance lease costs:
Amortization of leased assets 4
7
Interest on lease liabilities 1
1
Other lease costs (1) 6
13
Impairment loss 1
2
Less: Sublease income, gross —
1
Net lease cost $ 53
$ 105
_______________

~~_______________~~(a)


~~(1)~~	Primarily consists of variable lease costs.

Supplemental cash flow information related to leases was as follows:

Six Months Ended
June 30, 2019
Supplemental cash flow information:
Operating cash flows from operating leases $ 83
Operating cash flows from finance leases 1
Financing cash flows from finance leases 8

Supplemental non-cash information:
Lease assets obtained in exchange for lease obligations:
Operating leases $ 43
Finance leases 9


	Nine Months Ended
	September 30, 2019
Supplemental cash flow information:
Operating cash flows from operating leases	$	127
Operating cash flows from finance leases	1
Financing cash flows from finance leases	11

Supplemental non-cash information:
Lease assets obtained in exchange for lease obligations:
Operating leases	$	88
Finance leases	12

Significant non-cash transactions included finance lease additions of $8$11 million for the ~~six~~nine months ended ~~June~~September 30, 2018, which resulted in non-cash additions to property and equipment, net and other non-current liabilities.

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3. INTANGIBLE ASSETS


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
Balance at December 31, 2018	$	2,292	$	906	$	360	$	154	$	3,712
Goodwill acquired	—		—		—		—		—
Impairment loss	—		(180)		—		—		(180)
Balance at September 30, 2019	$	2,292	$	726	$	360	$	154	$	3,532

Accumulated impairment losses (a)	$	1,023	$	338	$	281	$	324	$	1,966

Real Estate
Franchise
Services

Company
Owned
Brokerage
Services

Relocation
Services

Title and
Settlement
Services

Total
Company
Gross goodwill as of December 31, 2018 $ 3,315
$ 1,064
$ 641
$ 478
$ 5,498
Accumulated impairment losses (1,023 ) (158 ) (281 ) (324 ) (1,786 )
Balance at December 31, 2018 2,292
906
360
154
3,712
Goodwill acquired —
—
—
—
—
Balance at June 30, 2019 $ 2,292
$ 906
$ 360
$ 154
$ 3,712
_______________

(a)Includes impairment charges which reduced goodwill by $180 million, $1,279 million and $507 million during the third quarter of 2019, fourth quarter of 2008 and fourth quarter of 2007, respectively.

Goodwill and indefinite-lived intangibles are not amortized, but are subject to impairment testing. The testing compares carrying values to fair values and, when appropriate, the carrying value is reduced to fair value.

As a result of the interim impairment test, the Company recognized a goodwill impairment charge totaling $180 million related to the Company Owned Real Estate Brokerage Services segment. The results of the Company's interim impairment test indicated no other impairment charges were required for the other reporting segments or indefinite-lived intangibles. Management evaluated the effect of lowering the estimated fair value for each of the passing reporting units by 10% and determined no impairment of goodwill or other indefinite-lived intangible assets would have been recognized under this evaluation.

The Company estimated the fair value of each reporting unit using the income approach, utilizing long-term cash flow forecasts adjusted for terminal value assumptions. We determine the fair value of our reporting segments utilizing our best estimate of future revenues, operating expenses including commission expense, cash flows, market and general economic conditions, trends in the industry, as well as assumptions that we believe marketplace participants would utilize including discount rates, cost of capital, trademark royalty rates, and long-term growth rates. The trademark royalty rate was determined by reviewing similar trademark agreements with third parties. Although we believe our assumptions are reasonable, actual results may vary significantly. These impairment tests involve the use of accounting estimates and assumptions, changes in which could materially impact our financial condition or operating performance if actual results differ from such estimates and assumptions. To address this uncertainty, we perform a sensitivity analysis on key estimates and assumptions.

Intangible assets are as follows:


	As of September 30, 2019										As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable—Franchise agreements (a)	$	2,019	$	843	$	1,176	$	2,019	$	792	$	1,227
Indefinite life—Trademarks (b)	$	749			$	749	$	749			$	749
Other Intangibles
Amortizable—License agreements (c)	$	45	$	12	$	33	$	45	$	11	$	34
Amortizable—Customer relationships (d)	549		376		173		549		359		190
Indefinite life—Title plant shares (e)	19				19		18				18
Amortizable—Other (f)	30		23		7		33		21		12
Total Other Intangibles	$	643	$	411	$	232	$	645	$	391	$	254

As of June 30, 2019 As of December 31, 2018

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount
Amortizable—Franchise agreements (a) $ 2,019
$ 826
$ 1,193
$ 2,019
$ 792
$ 1,227
Indefinite life—Trademarks (b) $ 749
$ 749
$ 749
$ 749
Other Intangibles
Amortizable—License agreements (c) $ 45
$ 11
$ 34
$ 45
$ 11
$ 34
Amortizable—Customer relationships (d) 549
371
178
549
359
190
Indefinite life—Title plant shares (e) 19
19
18
18
Amortizable—Other (f) 33
24
9
33
21
12
Total Other Intangibles $ 646
$ 406
$ 240
$ 645
$ 391
$ 254

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_______________


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


~~(b)~~	~~Primarily related to real estate franchise brands and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time.~~

~~(c)~~

~~Relates to the Sotheby’s International Realty~~Generally amortized over a period of 30 years.

(b)Primarily related to real estate franchise brands and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time.

(c)Relates to the Sotheby’s International Realty^® and Better Homes and Gardens^® ~~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 our Company Owned Real Estate Brokerage Services segment. These relationships are being amortized over a period of 2 to 20 years.

(e)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)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.


~~(d)~~	Relates to the customer relationships at the Relocation Services segment, the Title and Settlement 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)~~	~~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)~~	~~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.~~

Intangible asset amortization expense is as follows:

Three Months Ended
June 30,

Six Months Ended
June 30,
2019 2018 2019 2018
Franchise agreements $ 17
$ 17
$ 34
$ 34
Customer relationships 6
6
12
12
Other 1
1
2
3
Total $ 24
$ 24
$ 48
$ 49


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Franchise agreements	$	17	$	17	$	51	$	51
License agreements	1		1		1		1
Customer relationships	5		5		17		17
Other	2		1		4		4
Total	$	25	$	24	$	73	$	73

Based on the Company’s amortizable intangible assets as of ~~June~~September 30, 2019, the Company expects related amortization expense for the remainder of 2019, the ~~four~~4 succeeding years and thereafter to be approximately ~~$49~~$24 million, $95 million, $93 million, $92 million, $91 million and $994 million, respectively.

4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

~~Table of Contents~~


4.	~~ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES~~

Accrued expenses and other current liabilities consisted of:


	September 30, 2019		December 31, 2018
Accrued payroll and related employee costs	$	107	$	118
Accrued volume incentives	32		37
Accrued commissions	38		30
Restructuring accruals	11		15
Deferred income	53		59
Accrued interest	46		15
Current portion of finance/capital lease liabilities	12		12
Due to former parent	18		21
Other	95		94
Total accrued expenses and other current liabilities	$	412	$	401

June 30, 2019 December 31, 2018
Accrued payroll and related employee costs $ 111
$ 118
Accrued volume incentives 23
37
Accrued commissions 48
30
Restructuring accruals 13
15
Deferred income 55
59
Accrued interest 22
15
Current portion of finance/capital lease liabilities 12
12
Due to former parent 18
21
Other 81
94
Total accrued expenses and other current liabilities $ 383
$ 401

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5. SHORT AND LONG-TERM DEBT

Total indebtedness is as follows:

June 30, 2019 December 31, 2018
Senior Secured Credit Facility:
Revolving Credit Facility $ 330
$ 270
Term Loan B 1,049
1,053
Term Loan A Facility:
Term Loan A 723
732
4.50% Senior Notes —
449
5.25% Senior Notes 548
547
4.875% Senior Notes 497
497
9.375% Senior Notes 542
—
Total Short-Term & Long-Term Debt $ 3,689
$ 3,548
Securitization Obligations:
Apple Ridge Funding LLC $ 193
$ 218
Cartus Financing Limited 11
13
Total Securitization Obligations $ 204
$ 231


	September 30, 2019		December 31, 2018
Senior Secured Credit Facility:
Revolving Credit Facility	$	265	$	270
Term Loan B	1,047		1,053
Term Loan A Facility:
Term Loan A	718		732
4.50% Senior Notes	—		449
5.25% Senior Notes	548		547
4.875% Senior Notes	405		497
9.375% Senior Notes	542		—
Total Short-Term & Long-Term Debt	$	3,525	$	3,548
Securitization Obligations:
Apple Ridge Funding LLC	$	216	$	218
Cartus Financing Limited	12		13
Total Securitization Obligations	$	228	$	231

Indebtedness Table

As of ~~June~~September 30, 2019, the Company’s borrowing arrangements were as follows:


	Interest Rate	Expiration Date		Principal Amount			Unamortized Discount and Debt Issuance Costs		Net Amount
Senior Secured Credit Facility:
Revolving Credit Facility (1)	(2)	February 2023		$	265		$ *		$	265
Term Loan B	(3)	February 2025		1,061			14		1,047
Term Loan A Facility:
Term Loan A	(4)	February 2023		722			4		718
Senior Notes	5.25%	December 2021		550			2		548
Senior Notes	4.875%	June 2023		407			2		405
Senior Notes	9.375%	April 2027		550			8		542
Securitization obligations: (5)
Apple Ridge Funding LLC (6)			June 2020			216		*			216
Cartus Financing Limited (7)			August 2020			12		*			12
Total (8)									$	3,783		$	30	$	3,753

Interest
Rate Expiration
Date Principal Amount Unamortized Discount and Debt Issuance Costs Net Amount
Senior Secured Credit Facility:
Revolving Credit Facility (1) (2) February 2023 $ 330
$ *
$ 330
Term Loan B (3) February 2025 1,064
15
1,049
Term Loan A Facility:
Term Loan A (4) February 2023 727
4
723
Senior Notes 5.25% December 2021 550
2
548
Senior Notes 4.875% June 2023 500
3
497
Senior Notes 9.375% April 2027 550
8
542
Securitization obligations: (5)
Apple Ridge Funding LLC (6) June 2020 193
*
193
Cartus Financing Limited (7) August 2019 11
*
11
Total (8) $ 3,925
$ 32
$ 3,893
_______________

*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 September 30, 2019, the Company had $1,425 million of borrowing capacity under its Revolving Credit Facility. The Revolving Credit Facility expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. On November 5, 2019, the Company had $255 million in outstanding borrowings under the Revolving Credit Facility and $27 million of outstanding letters of credit.

(2)Interest rates with respect to revolving loans under the Senior Secured Credit Facility at September 30, 2019 were based on, at the Company's option, (a) adjusted London Interbank Offering Rate ("LIBOR") plus an additional margin or (b) JP Morgan Chase Bank, N.A.'s prime rate ("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's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended September 30, 2019.

(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 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%).

1920

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(4)The Term Loan A provides for quarterly amortization payments, which commenced on June 30, 2018, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A 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's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended September 30, 2019.

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


*	~~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, 2019, the Company had $1,425 million of borrowing capacity under its Revolving Credit Facility. The Revolving Credit Facility expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. In March 2019, the Company increased the borrowing capacity under its Revolving Credit Facility to $1,425 million from $1,400 million. On August 6, 2019, the Company had $265 million in outstanding borrowings under the Revolving Credit Facility.

~~(2)~~

Interest rates with respect to revolving loans under the Senior Secured Credit Facility at June 30, 2019 were based on, at the Company's option, (a) adjusted London Interbank Offering Rate ("LIBOR") plus an additional margin or (b) JP Morgan Chase Bank, N.A.'s prime rate ("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's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended June 30, 2019.


~~(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 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%).

~~(4)~~

The Term Loan A provides for quarterly amortization payments, which commenced on June 30, 2018, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A 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's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended June 30, 2019.


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


~~(6)~~	In June 2019, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2020. As of June 30, 2019, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $57 million of available capacity.


~~(7)~~	Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of June 30, 2019, the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $8 million of available capacity.


~~(8)~~	~~Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $58 million utilized at a weighted average rate of 3.33% at June 30, 2019.~~

(6)As of September 30, 2019, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $34 million of available capacity.

(7)Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of September 30, 2019, the Company had $18 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 million of available capacity. In August 2019, Realogy Group extended the existing Cartus Financing Limited securitization program to August 2020.

(8)Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $56 million utilized at a weighted average rate of 3.33% at September 30, 2019.

Maturities Table

As of ~~June~~September 30, 2019, the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for the remainder of 2019 and each of the next four years is as follows:


Year	Amount		Year	Amount
Remaining 2019 (a)	$	344	Remaining 2019 (a)	$	273
2020	44		2020	44
2021	612		2021	612
2022	81		2022	81
2023	1,075		2023	981

_______________

~~(a)~~

Remaining 2019 includes amortization payments totaling $9 million and $5 million for the Term Loan A and Term Loan B facilities, respectively, as well as $330 million of revolver borrowings under the Revolving Credit Facility which expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. The current portion of long-term debt of $364 million shown on the condensed consolidated balance sheet consists of four quarters of amortization payments totaling $23 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, and $330 million of revolver borrowings under the Revolving Credit Facility.

(a)Remaining 2019 includes amortization payments totaling $5 million and $3 million for the Term Loan A and Term Loan B facilities, respectively, as well as $265 million of revolver borrowings under the Revolving Credit Facility which expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. The current portion of long-term debt of $304 million shown on the condensed consolidated balance sheet consists of four quarters of amortization payments totaling $28 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, and $265 million of revolver borrowings under the Revolving Credit Facility.

Senior Secured Credit Facility

In February 2018, Realogy Group entered into fifth and sixth amendments to the Amended and Restated Senior Secured Credit Agreement dated as of March 5, 2013 (as amended, amended and restated, modified or supplemented from time to time, the "Senior Secured Credit Agreement") that respectively (i) replaced the approximately $1,100 million Term Loan B due July 2022 with a new $1,080 million Term Loan B due February 2025 and (ii) increased the borrowing capacity under its Revolving Credit Facility to $1,400 million from the prior $1,050 million and extended the maturity date to February 2023 from October 2020.

~~Table of Contents~~

On March 27, 2019, Realogy Group entered into an incremental assumption agreement to the Senior Secured Credit Agreement that provided for an incremental revolving facility commitment of $25 million, increasing the borrowing capacity under the Revolving Credit Facility to $1,425 million.

The Senior Secured Credit Agreement provides for:

~~(a)~~

the Term Loan B issued in the original aggregate principal amount of $1,080 million with a maturity date of February 2025. 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 2.25% (with a LIBOR floor of 0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%); and

~~(b)~~

a $1,425 million Revolving Credit Facility with a maturity date of February 2023, which includes a $125 million letter of credit 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:

(a)the Term Loan B issued in the original aggregate principal amount of $1,080 million with a maturity date of February 2025. 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 2.25% (with a LIBOR floor of 0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%); and

Table of Contents

(b)a $1,425 million Revolving Credit Facility with a maturity date of February 2023, which includes a $125 million letter of credit 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:


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 Senior Secured Credit Agreement permits the Company to obtain up to $500 million of additional credit facilities on a combined basis with the Term Loan A Agreement (less any amounts previously incurred under this provision) 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 Senior Secured Credit Agreement also permits the Company to issue senior secured or unsecured notes in lieu of any incremental facility.

The obligations under the 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 Senior Secured Credit Agreement contains financial, affirmative and negative covenants and requires Realogy Group to maintain (so long as the Revolving Credit Facility is outstanding) a senior secured leverage ratio, not to exceed 4.75 to ~~1.00~~.1.00. The leverage ratio is tested quarterly regardless of the amount of borrowings outstanding and letters of credit issued under the Revolving Credit Facility at the testing date. Total senior secured net debt does not include unsecured indebtedness, including the Unsecured Notes as well as the securitization obligations. At ~~June~~September 30, 2019, Realogy Group was in compliance with the senior secured leverage ratio covenant.

Term Loan A Facility

In February 2018, Realogy Group entered into a second amendment to the Term Loan A Agreement. Under the amendment, the Company aggregated the existing $435 million Term Loan A and $355 million Term Loan A-1 tranches due October 2020 and July 2021, respectively, into a new single tranche of $750 million Term Loan A due February 2023. The Term Loan A provides for quarterly amortization payments totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, which commenced on June 30, 2018 and continue through February 8, 2023. The interest rates with respect to 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 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 Senior Secured Credit Agreement, the Term Loan A Agreement permits the Company to obtain up to $500 million of additional credit facilities on a combined basis with the Senior Secured Credit Agreement (less any amounts previously incurred under this provision) 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 the Company to issue senior secured or unsecured notes in lieu of any incremental facility. The Term Loan A Agreement contains negative covenants consistent with those included in the Senior Secured Credit Agreement.

In February 2019, the Company used borrowings under its Revolving Credit Facility and cash on hand to fund the redemption of all of its outstanding $450 million 4.50% Senior Notes. In March 2019, the Company issued $550 million of 9.375% Senior Notes due in April 2027. The Company used $540 million of the net proceeds to repay a portion of outstanding borrowings under its Revolving Credit Facility.

During the third quarter of 2019, Realogy Group used cash on hand to repurchase $93 million of its 4.875% Senior Notes in open market purchases at an aggregate purchase price of $83 million, plus accrued interest to the repurchase date. In conjunction with the repurchase, the Company recorded a gain on the early extinguishment of debt of $10 million.

The 5.25% Senior Notes, 4.875% Senior Notes and the 9.375% Senior Notes (collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on December 1, 2021, June 1, 2023 and April 1, 2027, respectively. Interest on the Unsecured Notes is payable each year semiannually on June 1 and December 1 for both the 5.25% Senior Notes and 4.875% Senior Notes, and April 1 and October 1 for the 9.375% Senior Notes.

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.

The indentures governing the Unsecured Notes contain various negative covenants that limit Realogy Group's and its restricted subsidiaries’ ability to take certain actions, which covenants are subject to a number of important exceptions and qualifications. These covenants include limitations on Realogy Group's and its restricted subsidiaries’ ability to (a) incur or guarantee additional indebtedness, or issue disqualified stock or preferred stock, (b) pay dividends or make distributions to their stockholders, (c) repurchase or redeem capital stock, (d) make investments or acquisitions, (e) incur restrictions on the ability of certain of their subsidiaries to pay dividends or to make other payments to Realogy Group, (f) enter into transactions with affiliates, (g) create liens, (h) merge or consolidate with other companies or transfer all or substantially all of their assets, (i) transfer or sell assets, including capital stock of subsidiaries and (j) prepay, redeem or repurchase debt that is subordinated in right of payment to the Unsecured Notes.

The covenants in the indenture governing the 9.375% Senior Notes are substantially similar to the covenants in the indentures governing the other Unsecured Notes, with certain exceptions, including several changes relating to Realogy Group’s ability to make restricted payments, and, in particular, its ability to repurchase shares and pay dividends. Specifically, (a) the cumulative credit basket for restricted payments (i) was reset to ~~zero~~0 and builds from January 1, 2019, (ii) builds at 25% of Consolidated Net Income (as defined in the indenture governing the 9.375% Senior Notes) when the consolidated leverage ratio (as defined below) is equal to or greater than 4.0 to 1.0 (and 50% of Consolidated Net Income when it is less than 4.0 to 1.0) and, consistent with the indentures governing the other Unsecured Notes, is reduced by 100% of the deficit when Consolidated Net Income is a deficit and (iii) may not be used when the consolidated leverage ratio is equal to or greater than 4.0 to 1.0; (b) the $100 million general restricted payment basket may be used only for Restricted Investments (as defined in the indenture governing the 9.375% Senior Notes); (c) the indenture governing the 9.375% Senior Notes requires the consolidated leverage ratio to be less than 3.0 to 1.0 to use the unlimited general restricted payment basket (which payments will reduce the cumulative credit basket, but not below zero); and (d) the indenture governing the 9.375% Senior Notes contains a new restricted payment basket that may be used for up to $45 million of dividends per calendar year.

The consolidated leverage ratio is measured by dividing Realogy Group's total net debt by the trailing four quarters EBITDA. EBITDA, as defined in the indenture governing the 9.375% Senior Notes, is substantially similar to EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Net debt under the indenture is Realogy Group's total indebtedness (excluding securitizations) less (i) its cash and cash equivalents in excess of restricted cash and (ii) a $200 million seasonality adjustment permitted when measuring the ratio on a date during the period of March 1 to May 31.

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 which expires in December 2019. At ~~June~~September 30, 2019, the capacity of the facility was $66 million, with ~~$58~~$56 million being utilized and at December 31, 2018, the capacity was $66 million, with $63 million being utilized.

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.

Securitization Obligations

Realogy Group has secured obligations through Apple Ridge Funding LLC under a securitization program which expires in June 2020. As of ~~June~~September 30, 2019, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program with ~~$193~~$216 million being utilized.

Realogy Group, through a special purpose entity known as Cartus Financing Limited, has agreements providing for a £10 million revolving loan facility and a £5 million working capital ~~facility which expires in~~facility. In August ~~2019.~~2019, Realogy Group extended the existing Cartus Financing Limited securitization program to August 2020. As of ~~June~~September 30, 2019, there were ~~$11~~$12 million of outstanding borrowings under the facilities. 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 Agreement and the indentures governing the Unsecured Notes.

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 ~~$292~~$271 million and ~~$238~~$238 million of underlying relocation receivables and other related relocation assets at ~~June~~September 30, 2019 and December 31, 2018,, 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 $2 million for both the three months ended ~~June~~September 30, 2019 and 2018, and $4$6 million for both the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018. 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 business where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was ~~4.4%~~4.3% and 3.7% for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018,, respectively.

Gain/Loss on the Early Extinguishment of Debt and Write-Off of Financing Costs

~~As a result of~~During the ~~refinancing transaction in February~~nine months ended September 30, 2019, the Company recorded a ~~loss~~gain on the early extinguishment of debt of $5 million which consisted of a $10 million gain as a result of the repurchase of $93 million of its 4.875% Senior Notes during the ~~six months ended June 30,~~third quarter of 2019, partially offset by a $5 million loss as a result of the refinancing transactions in the first quarter of 2019.

As a result of the refinancing transactions in February 2018, the Company recorded a loss on the early extinguishment of debt of $7 million and wrote off financing costs of $2 million to interest expense during the ~~six~~nine months ended ~~June~~September 30, 2018.

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6.	~~RESTRUCTURING COSTS~~

6. RESTRUCTURING COSTS

Restructuring charges were $9$11 million and ~~$21~~$32 million for the three and ~~six~~nine months ended ~~June~~September 30, 2019, respectively, and $6$9 million and ~~$36~~$45 million for the three and ~~six~~nine months ended ~~June~~September 30, 2018, respectively. The components of the restructuring charges for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 were as follows:

(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, amortization of lease assets that will continue to be incurred under the contract for its remaining term without economic benefit to the Company, accelerated depreciation on asset disposals and other facility and employee relocation related costs.

(3)Internal use software impairment relates to development costs capitalized for a project that was determined to not meet the Company's strategic goals when analyzed by the Company's new leadership team.

(4)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.

(5)The three and nine months ended September 30, 2019 include $10 million and $28 million, respectively, of expense related to the Facility and Operational Efficiencies Program and $1 million and $4 million, respectively, of expense related to prior restructuring programs. Restructuring charges for three and nine months ended September 30, 2018 relate to prior restructuring programs.

Facility and Operational Efficiencies Program

Beginning in the first quarter of 2019, the Company commenced the implementation of a plan to accelerate its office consolidation to reduce storefront costs, as well as institute other operational efficiencies to drive profitability. In addition, the Company commenced a plan to transform and centralize certain aspects of the operational support and drive changes in how it serves its affiliated independent sales agents from a marketing and technology perspective to help such agents be more productive and enable them to make their businesses more profitable. In the fourth quarter of 2019, the Company expanded its operational efficiencies program to focus on workforce optimization. This workforce optimization initiative is focused on consolidating similar or overlapping roles, reducing the number of hierarchical layers and streamlining work and decision making. Separately, the Company also reduced headcount in the third quarter in connection with the wind down of a former affinity program.

The following is a reconciliation of the beginning and ending reserve balances related to the Facility and Operational Efficiencies Program:


	Personnel-related costs		Facility-related costs (1)		Other restructuring costs		Total
Balance at December 31, 2018	$	—	$	—	$	—	$	—
Restructuring charges	17		10		1		28
Costs paid or otherwise settled	(14)		(6)		(1)		(21)
Balance at September 30, 2019	$	3	$	4	$	—	$	7

(1)In addition, the Company incurred an additional $5 million related to lease asset impairments in connection with the Facility and Operational Efficiencies Program during the nine months ended September 30, 2019.

~~_______________~~25


~~(1)~~	In addition, the Company incurred an additional $2 million related to lease asset impairments in connection with the Facility and Operational Efficiencies Program during the six months ended June 30, 2019.

The following table shows the total costs currently expected to be incurred by type of cost related to the Facility and Operational Efficiencies Program:

Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred
Personnel-related costs $ 13
$ 13
$ —
Facility-related costs (1) 41
5
36
Total $ 54
$ 18
$ 36


	Total amount expected to be incurred		Amount incurred through September 30, 2019		Total amount remaining to be incurred
Personnel-related costs	$	24	$	17	$	7
Facility-related costs (1)	41		10		31
Other restructuring costs	1		1		—
Total	$	66	$	28	$	38

(1)Facility-related costs includes lease asset impairments expected to be incurred under the Facility and Operational Efficiencies Program.

The following table shows the total costs currently expected to be incurred by reportable segment related to the Facility and Operational Efficiencies Program:

Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred
Real Estate Franchise Services $ —
$ —
$ —
Company Owned Real Estate Brokerage Services 44
10
34
Relocation Services 4
4
—
Title and Settlement Services 1
1
—
Corporate and Other 5
3
2
Total $ 54
$ 18
$ 36


	Total amount expected to be incurred		Amount incurred through September 30, 2019		Total amount remaining to be incurred
Real Estate Franchise Services	$	4	$	1	$	3
Company Owned Real Estate Brokerage Services	47		17		30
Relocation Services	5		5		—
Title and Settlement Services	1		1		—
Corporate and Other	9		4		5
Total	$	66	$	28	$	38

Leadership Realignment and Other Restructuring Activities

Beginning in the first quarter of 2018, the Company commenced the implementation of a plan to drive its business forward and enhance stockholder value. The key aspects of this plan included senior leadership realignment, an enhanced focus on technology and talent, as well as further attention to office footprint and other operational efficiencies. The activities undertaken in connection with the restructuring plan are complete. At December 31, 2018, the remaining liability was $20 million. During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company incurred personnel-related costs of $3 million, paid or settled costs of $7$11 million and reclassified $5$4 million to offset related lease assets upon adoption of the new leasing standard, resulting in a remaining accrual of ~~$11~~$8 million, primarily related to personnel and facility related liabilities.


	Three Months Ended September 30, 2019
	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non- controlling Interests		Total Equity


	Shares	Amount
Balance at June 30, 2019	114.3	$	1	$	4,837	$	(2,537)	$	(51)	$	3	$	2,253
Net (loss) income	—	—		—		(70)		—		1		(69)
Other comprehensive loss	—	—		—		—		(1)		—		(1)
Stock-based compensation	—	—		10		—		—		—		10
Dividends declared ($0.09 per share)	—	—		(10)		—		—		—		(10)
Balance at September 30, 2019	114.3	$	1	$	4,837	$	(2,607)	$	(52)	$	4	$	2,183

Three Months Ended June 30, 2019
Common Stock
Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests

Total
Equity

Shares Amount
Balance at March 31, 2019 114.2
$ 1
$ 4,841
$ (2,606 ) $ (50 ) $ 3
$ 2,189
Net Income —
—
—
69
—
1
70
Other comprehensive loss —
—
—
—
(1 ) —
(1 )
Stock-based compensation —
—
7
—
—
—
7
Issuance of shares for vesting of equity awards 0.1
—
—
—
—
—
—
Dividends declared ($0.09 per share) —
—
(11 ) —
—
(1 ) (12 )
Balance at June 30, 2019 114.3
$ 1
$ 4,837
$ (2,537 ) $ (51 ) $ 3
$ 2,253

Three Months Ended June 30, 2018
Common Stock
Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests

Total
Equity

Shares Amount
Balance at March 31, 2018 128.8
$ 1
$ 5,179
$ (2,711 ) $ (44 ) $ 3
$ 2,428
Net Income —
—
—
123
—
1
124
Other comprehensive loss —
—
—
—
(3 ) —
(3 )
Repurchase of common stock (4.3 ) —
(106 ) —
—
—
(106 )
Stock-based compensation —
—
12
—
—
—
12
Issuance of shares for vesting of equity awards 0.2
—
—
—
—
—
—
Shares withheld for taxes on equity awards (0.1 ) —
(1 ) —
—
—
(1 )
Dividends declared ($0.09 per share) —
—
(11 ) —
—
(1 ) (12 )
Balance at June 30, 2018 124.6
$ 1
$ 5,073
$ (2,588 ) $ (47 ) $ 3
$ 2,442
26

Table of Contents


	Three Months Ended September 30, 2018
	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non- controlling Interests		Total Equity


	Shares	Amount
Balance at June 30, 2018	124.6	$	1	$	5,073	$	(2,588)	$	(47)	$	3	$	2,442
Net income	—	—		—		103		—		1		104
Repurchase of common stock	(4.7)	—		(102)		—		—		—		(102)
Stock-based compensation	—	—		10		—		—		—		10
Dividends declared ($0.09 per share)	—	—		(11)		—		—		—		(11)
Balance at September 30, 2018	119.9	$	1	$	4,970	$	(2,485)	$	(47)	$	4	$	2,443

Six Months Ended June 30, 2019
Common Stock
Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests

Total
Equity

Shares Amount
Balance at December 31, 2018 114.6
$ 1
$ 4,869
$ (2,507 ) $ (52 ) $ 4
$ 2,315
Net Loss —
—
—
(30 ) —
1
(29 )
Other comprehensive income —
—
—
—
1
—
1
Repurchase of common stock (1.2 ) —
(20 ) —
—
—
(20 )
Stock-based compensation —
—
15
—
—
—
15
Issuance of shares for vesting of equity awards 1.3
—
—
—
—
—
—
Shares withheld for taxes on equity awards (0.4 ) —
(6 ) —
—
—
(6 )
Dividends declared ($0.18 per share) —
—
(21 ) —
—
(2 ) (23 )
Balance at June 30, 2019 114.3
$ 1
$ 4,837
$ (2,537 ) $ (51 ) $ 3
$ 2,253


	Nine Months Ended September 30, 2019
	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non- controlling Interests		Total Equity


	Shares	Amount
Balance at December 31, 2018	114.6	$	1	$	4,869	$	(2,507)	$	(52)	$	4	$	2,315
Net (loss) income	—	—		—		(100)		—		2		(98)
Repurchase of common stock	(1.2)	—		(20)		—		—		—		(20)
Stock-based compensation	—	—		25		—		—		—		25
Issuance of shares for vesting of equity awards	1.3	—		—		—		—		—		—
Shares withheld for taxes on equity awards	(0.4)	—		(6)		—		—		—		(6)
Dividends declared ($0.27 per share)	—	—		(31)		—		—		(2)		(33)
Balance at September 30, 2019	114.3	$	1	$	4,837	$	(2,607)	$	(52)	$	4	$	2,183

Six Months Ended June 30, 2018
Common Stock
Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests

Total
Equity

Shares Amount
Balance at December 31, 2017 131.6
$ 1
$ 5,285
$ (2,631 ) $ (37 ) $ 4
$ 2,622
Cumulative effect of adoption of new accounting pronouncements —
—
—
(13 ) (9 ) —
(22 )
Net Income —
—
—
56
—
1
57
Other comprehensive loss —
—
—
—
(1 ) —
(1 )
Repurchase of common stock (7.8 ) —
(200 ) —
—
—
(200 )
Stock-based compensation —
—
21
—
—
—
21
Issuance of shares for vesting of equity awards 1.2
—
—
—
—
—
—
Shares withheld for taxes on equity awards (0.4 ) —
(10 ) —
—
—
(10 )
Dividends declared ($0.18 per share) —
—
(23 ) —
—
(2 ) (25 )
Balance at June 30, 2018 124.6
$ 1
$ 5,073
$ (2,588 ) $ (47 ) $ 3
$ 2,442


	Nine Months Ended September 30, 2018
	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non- controlling Interests		Total Equity


	Shares	Amount
Balance at December 31, 2017	131.6	$	1	$	5,285	$	(2,631)	$	(37)	$	4	$	2,622
Cumulative effect of adoption of new accounting pronouncements	—	—		—		(13)		(9)		—		(22)
Net income	—	—		—		159		—		2		161
Other comprehensive loss	—	—		—		—		(1)		—		(1)
Repurchase of common stock	(12.5)	—		(302)		—		—		—		(302)
Stock-based compensation	—	—		31		—		—		—		31
Issuance of shares for vesting of equity awards	1.2	—		—		—		—		—		—
Shares withheld for taxes on equity awards	(0.4)	—		(10)		—		—		—		(10)
Dividends declared ($0.27 per share)	—	—		(34)		—		—		(2)		(36)
Balance at September 30, 2018	119.9	$	1	$	4,970	$	(2,485)	$	(47)	$	4	$	2,443

Condensed Consolidated Statement of Changes in Equity for Realogy Group

The Company has not included a statement of changes in equity for Realogy Group as the operating results of Group are consistent with the operating results of Realogy Holdings as all revenue and expenses of Realogy Group flow up to Realogy Holdings and there are no incremental activities at the Realogy Holdings level. The only difference between Realogy Group and Realogy Holdings is that the $1 million in par value of common stock in Realogy Holdings' equity is included in additional paid in capital in Realogy Group's equity.

Stock Repurchases

The Company may repurchase shares of its common stock under authorizations 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.

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The Company's Board of Directors authorized a share repurchase program of up to $275 million, $300 million, $350 million and $175 million of the Company's common stock in February 2016, 2017, 2018 and 2019, respectively.

In the first quarter of 2019, the Company repurchased and retired 1.2 million shares of common stock for $20 million at a weighted average market price of $17.21 per share. The Company did not repurchase any shares under the share repurchase programs during the second ~~quarter~~and third quarters of 2019. As of ~~June~~September 30, 2019, the Company had repurchased and retired 35.5 million shares of common stock for an aggregate of $896 million at a total weighted average market price of $25.22 per share. As of ~~June~~September 30, 2019, $204 million remained available for repurchase under the share repurchase programs.

The restrictive covenants in the indenture governing the 9.375% Senior Notes restrict the Company's ability to repurchase shares. See "Note 5. Short and Long-Term Debt—Unsecured Notes."

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Stock-Based Compensation

During the first quarter of 2019,, the Company granted 0.9 million shares of non-qualified stock options with a weighted average exercise price of $13.45, restricted stock units related to 2.5 million shares with a weighted average grant date fair value of $13.53 and performance stock units related to 1.2 million shares with a weighted average grant date fair value of $11.08.

~~Dividend Policy~~Dividends

~~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.~~ The Board declared and paid a quarterly cash dividend of $0.09 per share on the Company’s common stock during ~~both~~ the first, second and ~~second~~third quarters of 2019.

~~The declaration and payment of any future dividend will be subject to~~ In early November 2019, the ~~discretion of the~~Company's Board of Directors ~~and~~determined that, effective immediately, it will ~~depend on~~no longer pay 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. The restrictive covenants in the indenture governing the 9.375% Senior Notes restrict the Company's ability to declare dividends in excess of $45 million per year. See Note 5. "Short and Long-Term Debt—~~Unsecured Notes" for additional information.~~quarterly cash dividend.

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


8.	~~EARNINGS (LOSS) PER SHARE~~

8. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share attributable to Realogy Holdings

Basic earnings (loss) per share is computed based on net income (loss) 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.


	Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except per share data)	2019		2018		2019			2018		(in millions, except per share data)	2019		2018		2019		2018
Net income (loss) attributable to Realogy Holdings stockholders	$	69	$	123	$	(30	)	$	56
Net (loss) income attributable to Realogy Holdings stockholders										Net (loss) income attributable to Realogy Holdings stockholders	$	(70)	$	103	$	(100)	$	159
Basic weighted average shares	114.3		126.5		114.1			128.4		Basic weighted average shares	114.3		122.7		114.2		126.5
Stock options, restricted stock units and performance share units (a)(b)	0.6		1.1		—			1.3		Stock options, restricted stock units and performance share units (a)(b)	—		0.9		—		1.1
Weighted average diluted shares	114.9		127.6		114.1			129.7		Weighted average diluted shares	114.3		123.6		114.2		127.6
Earnings (Loss) Per Share:
(Loss) Earnings Per Share:										(Loss) Earnings Per Share:
Basic	$	0.60	$	0.97	$	(0.26	)	$	0.44	Basic	$	(0.61)	$	0.84	$	(0.88)	$	1.26
Diluted	$	0.60	$	0.96	$	(0.26	)	$	0.43	Diluted	$	(0.61)	$	0.83	$	(0.88)	$	1.25

(a)The Company was in a net loss position for the three and nine months ended September 30, 2019 and therefore the impact of incentive equity awards were excluded from the computation of dilutive loss per share as the inclusion of such amounts would be anti-dilutive. At September 30, 2019, the number of shares of common stock issuable for incentive equity awards, with performance awards based on the achievement of target amounts, was 10.8 million.

(b)The three and nine months ended September 30, 2018, respectively, exclude 7.4 million and 7.2 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.

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9.	~~COMMITMENTS AND CONTINGENCIES~~

9. COMMITMENTS AND CONTINGENCIES

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 independent residential real estate sales agents engaged by ~~NRT~~the Company Owned Real Estate Brokerage Services segment or by affiliated franchisees—under certain state or federal laws—are potentially employees instead of independent contractors, and they or regulators therefore may bring claims against ~~NRT~~the Company Owned Real Estate Brokerage Services segment for breach of contract, wage and hour classification claims, wrongful discharge, unemployment and workers' compensation and could seek benefits, back wages, overtime, indemnification, penalties related to classification practices and expense reimbursement available to employees or similar claims against our franchise operations as an alleged joint employer of an affiliated franchisee’s independent sales agents;

•concerning other employment law matters, including other types of worker classification claims as well as wage and hour claims and retaliation claims;

•concerning anti-trust and anti-competition matters;

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

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

•concerning alleged RESPA or state real estate law violations;

•concerning claims related to the Telephone Consumer Protection Act, including autodialer claims;

•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;

•concerning breach of obligations to make websites and other services accessible for consumers with disabilities;

•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;

•concerning information security and cyber-crime, including claims under new and emerging data privacy laws related to the protection of customer, employee or third-party information, as well as those related to the diversion of homesale transaction closing funds; and

•those related to general fraud claims.

Whitlach v. Premier Valley, Inc. d/b/a Century 21 M&M and Century 21 Real Estate LLC (Superior Court of California, ~~Alameda~~Stanislaus County). This was filed as a putative class action complaint on December 20, 2018 by plaintiff James Whitlach against Premier Valley Inc., a Century 21 Real Estate independently-owned franchisee doing business as Century 21 M&M (“Century 21 M&M”). The complaint also names Century 21 Real Estate LLC, a wholly-owned subsidiary of the Company and the franchisor of Century 21 Real Estate (“Century 21”), as an alleged joint employer of the franchisee’s independent sales agents and seeks to certify a class that could potentially include all agents of both Century 21 M&M and Century 21 in California. The plaintiff alleges that Century 21 M&M misclassified all of its independent real estate agents, salespeople, sales professionals, broker associates and other similar positions as independent contractors, failed to pay minimum wages, failed to provide meal and rest breaks, failed to pay timely wages, failed to keep proper records, failed to provide appropriate wage statements, made unlawful deductions from wages, and failed to reimburse plaintiff and the putative class for business related expenses, resulting in violations of the California Labor Code. The complaint also asserts an unfair business practice claim based on the alleged violations described above.

On February 15, 2019, the plaintiff amended his complaint to assert claims pursuant to the California Private Attorneys General Act (“PAGA”). The PAGA claims included in the amended complaint are substantively similar to those asserted in the original complaint. Under California law, PAGA claims are generally not subject to arbitration and may result in exposure in the form of additional penalties. In April 2019, the defendants filed motions to compel arbitration of the ~~non-PAGA~~non-

PAGA claims and to stay the PAGA claims pending resolution of the arbitrable ~~claims and to change venue.~~claims. On June 5, 2019, the court dismissed the plaintiff’s non-PAGA claims without prejudice and withdrew the defendants’ motion to compel arbitration by stipulation of the parties. The plaintiff continues to pursue his PAGA claims as a representative of purported "aggrieved employees" as defined by PAGA. The plaintiff currently seeks, as the representative of all purported aggrieved employees, all non-individualized relief available to the purported aggrieved employees under PAGA, as well as attorneys’ fees.

Fenley v. Realogy Franchise Group LLC, Sotheby’s International Realty, Inc., Wish Properties, Inc. and DOES 1-100 (Superior Court of California, Kern County). This is a putative class action complaint filed on April 25, 2019 by plaintiff Elizabeth Fenley against Wish Properties, Inc, a Sotheby’s International Realty independently-owned franchisee doing business as Wish Sotheby’s International Realty (“Wish SIR”). The complaint also names Realogy Franchise Group LLC and Sotheby’s International Realty, Inc., wholly-owned subsidiaries of the Company, as alleged joint employers of the franchisee’s independent sales agents and seeks to certify a class that could potentially include all agents in California affiliated with any Realogy Franchise Group brand. The plaintiff alleges that all defendants are jointly responsible for misclassifying Wish SIR’s agents as independent contractors and failed to reimburse for business expenses, provide accurate wage statements and pay wages timely, all in violation of the California Labor Code. The complaint also asserts an unfair business practice claim based on the violations previously described. The plaintiff seeks reimbursement of allegedly necessary expenses, liquidated damages, waiting time penalties, civil penalties, pre- and post-judgment interest, restitution, injunctive relief, and attorneys’ fees and costs. On ~~July 26,~~September 17, 2019, ~~Wish SIR filed a motion~~the Court denied the defendants’ motions to compel ~~arbitration and stay all legal proceedings pending conclusion of the~~ arbitration. ~~On the same day, Realogy Franchise Group LLC and Sotheby’s International Realty, Inc. filed their own motion to compel arbitration and a joinder in Wish SIR’s motion.~~

These cases raise various previously unlitigated claims and the PAGA claims in the Whitlach matter add additional litigation, financial and operating uncertainties. There are similar classification cases pending against several other brokerages in the state of California and developments in one or more of those cases could impact progress in these cases.

Moehrl, Cole, Darnell, Nager, Ramey, Sawbill Strategic, Inc., Umpa and Ruh v. The National Association of Realtors, Realogy Holdings Corp., Homeservices of America, Inc., BHH Affiliates, LLC, The Long & Foster Companies, Inc., RE/MAX LLC, and Keller Williams Realty, Inc. (U.S. District Court for the Northern District of Illinois). This amended putative class action complaint (the "amended Moehler complaint"), filed on June 14, 2019, (i) consolidates the Moehrl and Sawbill litigation reported in our Form 10-Q for the period ended March 31, 2019, (ii) adds certain plaintiffs and defendants, and (iii) serves as a response to the separate motions to dismiss filed on May 17, 2019 in the prior Moehrl litigation by each of NAR and the Company (along with the other defendants named in the prior Moehrl complaint).

In the amended Moehrl complaint, the plaintiffs allege that the defendants engaged in a continuing contract, combination, or conspiracy to unreasonably restrain trade and commerce in violation of Section 1 of the Sherman Act because defendant NAR allegedly established mandatory anticompetitive policies for the multiple listing services and its member brokers that require brokers to make an offer of buyer broker compensation when listing a property. The plaintiffs further allege that the defendant franchisors conspired with NAR by requiring their respective franchisees to comply with NAR’s policies and Code of Ethics. The plaintiffs seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer broker commissions or to otherwise restrict competition among buyer brokers, an award of damages and/or restitution, attorneys fees and costs of suit. Plaintiffs' counsel has filed a motion to appoint lead counsel in the case, which has yet to be decided by the court. On August 9, 2019, NAR and the Company (together with the other defendants named in the amended Moehler complaint) each filed separate motions to dismiss this litigation. The plaintiffs filed their opposition to the motions to dismiss on September 13, 2019, and the defendants filed their replies in support of the motions on October 18, 2019.

Sitzer and Winger v. The National Association of Realtors, Realogy Holdings Corp., Homeservices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc. (U.S. District Court for the Western District of Missouri). This is a putative class action complaint filed on April 29, 2019 and amended on June 21, 2019 by plaintiffs Joshua Sitzer and Amy Winger against NAR, the Company, Homeservices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc. The complaint contains substantially similar allegations, and seeks the same relief under the Sherman Act, as the ~~Sawbill~~ ~~and~~ Moehrl ~~litigations.~~litigation. The Sitzer litigation is limited both in allegations and relief sought to the State of Missouri and includes an additional cause of action for alleged violation of the Missouri Merchandising Practices Act, or MMPA. On ~~July 10,~~ August 22,

2019, ~~defendants filed~~the Court denied defendants' motions to transfer the Sitzermatter to the U.S. District Court for the Northern District of ~~Illinois. On August 5,~~Illinois and on October 16, 2019, denied the motions to dismiss this litigation filed respectively by NAR and the Company (together with the other ~~defendants~~ named ~~in the~~ ~~Sitzer~~ ~~complaint) each filed separate motions to dismiss this litigation.~~brokerage/franchisor defendants).

Tanaskovic v. Realogy Holdings Corp., et. al. (U.S. District Court for the District of New Jersey). This is a putative class action complaint filed on July 11, 2019 by plaintiff Sasa Tanaskovic against the Company and certain of its current and former executive officers. The lawsuit alleges violations of Sections 10(b), 20(a) and Rule 10b-5 of the Exchange Act in connection with allegedly false and misleading statements made by the Company about its business, operations, and prospects. The plaintiffs seek, among other things, compensatory damages for purchasers of the Company’s common stock between February 24, 2017 through May 22, 2019, as well as attorneys’ fees and costs. On September 9, 2019, plaintiff Tanaskovic and a new plaintiff, Locals 302 and 612 of the International Union of Operating Engineers-Employers Construction Industry Retirement Trust (the “Retirement Trust”), each filed a motion to be appointed lead plaintiff and for approval of its selection of counsel. On September 23, 2019, plaintiff Tanaskovic withdrew its motion and plaintiff Retirement Trust filed a notice that its motion is unopposed.

Fried v. Realogy Holdings Corp., et al. (U.S. District Court for the District of New Jersey). This is a putative derivative action filed on October 23, 2019 by plaintiff Adam Fried against the Company (as nominal defendant) and certain of its current and former executive officers and members of its Board of Directors (as defendants). The lawsuit alleges violations of Section 14(a) of the Exchange Act and breach of fiduciary duties for, among other things, allegedly false and misleading statements made by the Company about its business, operations and prospects as well as unjust enrichment claims. The plaintiff seeks, among other things, compensatory damages, disgorgement of improper compensation, certain reforms to the Company’s corporate governance and internal procedures and attorneys’ fees and costs.

The Company disputes the allegations in each of the captioned matters described above and will vigorously defend these actions. Given the early stages of each of these cases, we cannot estimate a range of reasonably possible losses for this 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 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.

Realogy Holdings Corp., NRT New York LLC (d/b/a The Corcoran Group), Sotheby’s International Realty, Inc., Coldwell Banker Residential Brokerage Company, Coldwell Banker Residential Real Estate LLC, NRT West, Inc., Martha Turner Properties, L.P. And Better Homes and Gardens Real Estate LLC v. Urban Compass, Inc., and Compass, Inc.

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, the fiduciary duties of brokers, 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 agents, antitrust and anti-competition claims, general fraud claims (including wire fraud associated with third-party diversion of funds from a brokerage transaction), employment law claims, including claims challenging the classification of our sales agents as independent contractors, wage and hour classification claims and claims alleging violations of RESPA, state consumer fraud statutes or federal consumer protection 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. In addition, with the increasing requirements resulting from government laws and regulations concerning data breach notifications and data privacy and protection obligations, claims associated with these laws may become more common. While most litigation involves claims against the Company, from time to time the Company commences litigation, including litigation against former employees, franchisees and competitors when it alleges that such persons or entities have breached agreements or engaged in other wrongful conduct.

Cendant Corporate Liabilities and 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~~4 independent companies—~~one~~1 for each of Cendant's business units—real estate services (Realogy Group), travel distribution services ("Travelport"), hospitality services, including timeshare resorts ("Wyndham Worldwide"), and vehicle rental ("Avis Budget Group"). Pursuant to the Separation and Distribution Agreement dated as of July 27, 2006 among Cendant, Realogy Group, Wyndham Worldwide and Travelport (the "Separation and Distribution Agreement"), 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.

The due to former parent balance was $18 million at ~~June~~September 30, 2019 and $21 million at December 31, 2018, respectively. The due to former parent balance was comprised of the Company’s portion of the following: (i) Cendant’s remaining 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.

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.

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~~.$250 thousand. These escrow and trust deposits totaled ~~$685~~$640 million at ~~June~~September 30, 2019 and $426 million at December 31, ~~2018~~.2018. 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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~~10.~~	~~SEGMENT INFORMATION~~

10. 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 Operating EBITDA. Operating 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), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, ~~asset~~ impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. The Company’s presentation of Operating EBITDA may not be comparable to similar measures used by other companies.

(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 $82 million and $224 million for the three and nine months ended September 30, 2019, respectively, and $83 million and $238 million for the three and nine months ended September 30, 2018, 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 $11 million and $29 million for the three and nine months ended September 30, 2019, respectively, and $10 million and $30 million for the three and nine months ended September 30, 2018, respectively. 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.


	Operating EBITDA
	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Real Estate Franchise Services	$	153	$	161	$	406	$	439
Company Owned Real Estate Brokerage Services	31		43		16		59
Relocation Services	34		39		63		72
Title and Settlement Services	31		20		54		45
Corporate and Other (a)	(26)		(21)		(75)		(63)

Less: Depreciation and amortization (b)	50		49		149		148
Interest expense, net	66		41		210		120
Income tax (benefit) expense	(8)		40		(9)		73
Restructuring costs, net (c)	11		9		32		45
Impairments (d)	183		—		186		—
Former parent legacy cost (e)	1		—		1		—
(Gain) loss on the early extinguishment of debt (e)	(10)		—		(5)		7
Net (loss) income attributable to Realogy Holdings and Realogy Group	$	(70)	$	103	$	(100)	$	159

Operating EBITDA
Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Real Estate Franchise Services $ 163
$ 173
$ 253
$ 278
Company Owned Real Estate Brokerage Services 47
61
(15 ) 16
Relocation Services 27
34
29
33
Title and Settlement Services 32
31
23
25
Corporate and Other (a) (24 ) (23 ) (49 ) (42 )

Less: Depreciation and amortization (b) 50
49
99
99
Interest expense, net 81
46
144
79
Income tax expense (benefit) 34
52
(1 ) 33
Restructuring costs, net (c) 9
6
21
36
Impairment 2
—
3
—
Loss on the early extinguishment of debt (d) —
—
5
7
Net income (loss) attributable to Realogy Holdings and Realogy Group $ 69
$ 123
$ (30 ) $ 56

(a)Includes the elimination of transactions between segments.

(b)Depreciation and amortization for the nine months ended September 30, 2018 includes $2 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in (earnings) losses of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.

(c)The three months ended ~~June~~September 30, ~~2018~~2019 includes restructuring charges of $4$1 million in the Real Estate Franchise Services segment, $8 million in the Company Owned Real Estate Brokerage Services segment, $1 million in the Relocation Services segment and $1 million in Corporate and Other.

(d)Impairments for the three and nine months ended September 30, 2019 includes a goodwill impairment charge of $180 million at the Company Owned Real Estate Brokerage Services segment. In addition, other impairment charges, primarily related to lease asset impairments, of $3 million and $6 million were incurred for the three and nine months ended September 30, 2019, respectively.

(e)Former parent legacy items and (gain) loss on the early extinguishment of debt is recorded in the Corporate and Other segment.

11. SUBSEQUENT EVENTS

Entry into Definitive Agreement to Sell Employee Relocation Business; Realogy to Retain Cartus Affinity and Broker-to-Broker Business

As reported by the Company on a Current Report on Form 8-K filed on November 7, 2019, the Company announced a definitive purchase agreement under which SIRVA Worldwide, Inc., a subsidiary of SIRVA, Inc. (collectively, “SIRVA”), will acquire its global employee relocation business. The transaction is valued at $400 million, and is expected to close in the first half of 2020, subject to the receipt of required regulatory clearances and other closing conditions. SIRVA is a portfolio company of Madison Dearborn Partners (MDP), a leading private equity firm.

The transaction includes all of the employee relocation assets of Cartus, but does not include Cartus’ affinity business, which delivers home selling and buying assistance to members of affinity clients, nor its Broker Network, made up of agents and brokers from Realogy’s residential real estate brands and certain independent real estate brokers. Under the terms of the agreement, the Company will receive $375 million in cash at closing and a $25 million deferred payment after the closing of the transaction, subject to certain adjustments set forth in the purchase agreement. The Company intends to use the substantial majority of the net proceeds to pay down corporate debt.

Completion of the planned sale is subject to certain closing conditions, including the expiration or termination of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act and the receipt of other required regulatory clearances. There can be no assurance that any of such conditions will be satisfied and that the planned sale will be successfully completed on a timely basis or at all. Each of the Company and SIRVA have the right to terminate the purchase agreement under certain circumstances.

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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 2018 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, or MD&A, contains forward-looking statements. See "Forward-Looking Statements" in this report and "Forward-Looking Statements" and "Risk Factors" in our 2018 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 and launched franchise sales of the Corcoran~~^® ~~brand in January 2019. As of June~~

•Real Estate Franchise Services (known as the Franchised Services)—franchises the Century 21^®, Coldwell Banker^®, Coldwell Banker Commercial^®, ERA^®, Sotheby's International Realty^® and Better Homes and Gardens^® Real Estate brand names and launched franchise sales of the Corcoran^® brand in January 2019. As of September 30, 2019, our ~~real estate franchise systems and proprietary brands had approximately 299,800 independent sales agents worldwide,~~ ~~including approximately 188,600 independent sales agents operating in the U.S.~~ (which included approximately 51,000 company owned brokerage independent sales agents). As of June 30, 2019, our real estate franchise systems and proprietary brands had approximately 17,000 offices worldwide in 114 countries and territories~~, including approximately 5,900 brokerage offices in the U.S.~~ ~~(which included approximately 740 company owned brokerage offices)~~.

•

~~Company Owned Real Estate Brokerage Services~~ (known as NRT)—operates a full-service real estate brokerage business with approximately 740 owned and operated brokerage offices with approximately 51,000 independent sales agents principally under the Coldwell Banker^®~~, Corcoran~~^®~~, Sotheby’s International Realty~~^®~~, ZipRealty~~^®~~, Citi Habitats~~^SM ~~and Climb Real Estate~~^® brand names in many of the largest metropolitan areas in the U.S. This segment also included the Company's share of earnings for our PHH Home Loans venture, which was sold to PHH in the first quarter of 2018 and we transitioned to our new mortgage origination joint venture, Guaranteed Rate Affinity, which is ~~included in the financial results of the Title and Settlement Services segment~~.

•

~~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 individual's employer), 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. This segment also includes the Company's share of equity earnings and losses for our Guaranteed Rate Affinity mortgage origination joint venture.

~~We pursue technology-enabled solutions for the~~ real estate ~~brokerages~~franchise systems and proprietary brands had approximately 300,400 independent sales agents worldwide, including approximately 190,000 independent sales agents operating in the U.S. (which included approximately 51,600 company owned brokerage independent sales agents). As of September 30, 2019, our real estate franchise ~~system~~systems and proprietary brands had approximately 16,900 offices worldwide in 113 countries and territories, including approximately 5,900 brokerage offices in the U.S. (which included approximately 720 company owned brokerage offices).

•Company Owned Real Estate Brokerage Services (known as the Owned Brokerage Services)—operates a full-service real estate brokerage business with approximately 720 owned and operated brokerage offices with approximately 51,600 independent sales agents principally under the Coldwell Banker^®, Corcoran^®, Sotheby’s International Realty^®, ZipRealty^®, Citi Habitats^SM and Climb Real Estate^® brand names in many of the largest metropolitan areas in the U.S. This segment also included the Company's share of earnings for our PHH Home Loans venture, which was sold to PHH in the first quarter of 2018 and we transitioned to our new mortgage origination joint venture, Guaranteed Rate Affinity, which is included in the financial results of the Title and Settlement Services segment.

•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 individual's employer), 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. This segment also includes the Company's share of equity earnings and losses for our Guaranteed Rate Affinity mortgage origination joint venture.

Our technology and data group pursues technology-enabled solutions to support our business units and franchisees as well as independent sales agents affiliated with our Owned Brokerage and Franchised Services and their ~~customers, including through ZapLabs LLC, our wholly-owned subsidiary.~~customers.

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RECENT DEVELOPMENTS

Entry into Definitive Agreement to Sell Employee Relocation Business; Realogy to Retain Cartus Affinity and Broker-to-Broker Business

As reported by us on a Current Report on Form 8-K filed on November 7, 2019, we announced a definitive purchase agreement under which SIRVA Worldwide, Inc., a subsidiary of SIRVA, Inc. (collectively, “SIRVA”), will acquire our global employee relocation business. The transaction is valued at $400 million, and is expected to close in the first half of 2020, subject to the receipt of required regulatory clearances and other closing conditions. SIRVA is a portfolio company of Madison Dearborn Partners (MDP), a leading private equity firm.

The transaction includes all of the employee relocation assets of Cartus, but does not include Cartus’ affinity business, which delivers home selling and buying assistance to members of affinity clients, nor its Broker Network, made up of agents and brokers from Realogy’s residential real estate brands and certain independent real estate brokers. Under the terms of the agreement, we will receive $375 million in cash at closing and a $25 million deferred payment after the closing of the transaction, subject to certain adjustments set forth in the purchase agreement. We intend to use the substantial majority of the net proceeds to pay down corporate debt.

Product Launches

The Owned Brokerage and Franchised Services have launched strategic initiatives focused on addressing current market dynamics by expanding our base of affiliated independent sales agents and affiliated franchisees, providing them with compelling data and technology products and services, generating high quality leads, and enhancing the consumer experience to move affiliated agents closer to the customer. Throughout the year, we have delivered numerous technology-driven products designed to meet these goals across our business units.

For example, in October 2019, we evolved our iBuying offerings through the launch of RealSure, a consumer program created to improve the home selling and buying experience through two core products, RealSure Sell and RealSure Mortgage. The programs, created in partnership with Home Partners of America, will be in 10 U.S. markets and build on and replace our cataLIST program. Under the RealSure Sell product, sellers with qualifying properties receive a cash offer valid for 45 days immediately upon listing, and during this time frame have the opportunity to pursue a better price by marketing their property with an affiliated independent sales agent. Sellers who are enrolled in RealSure Sell can utilize RealSure Mortgage to make an offer on their next home without sale or financing contingencies before their current home is sold by leveraging their RealSure Sell cash offer.

In September 2019, we launched RealVitalize, a home improvement program that provides home sellers with home improvement resources prior to or during the home listing period with no up-front costs or interest charges. The pilot program is currently available in select markets through the Coldwell Banker branded operations of our Owned Brokerage Services with a national roll-out planned later this year.

The Owned Brokerage Services also continued to roll-out a collection of marketing tools aimed at increasing independent agent success, including Listing Concierge—a full service solution for the design, creation and distribution of automated customized property listings—as well as products designed to facilitate agent branding and customer prospecting. We intend to continue to advance these marketing initiatives.

These programs are intended to support the continued expansion of commission plans other than the traditional graduated commission model by the Owned Brokerage Services, including commission plans that charge agents for certain activities.

In addition, the Franchised Services continued to pursue strategic initiatives intended to add new franchisees and widen the base of independent sales agents, including the introduction of new pricing model structure for one brand, launch of Corcoran as a new franchise brand and expansion of the historical scope of potential franchisee candidates.

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Lead Generation Programs

In October 2019, we announced an agreement to create a new real estate benefits program exclusively for AARP members. Expected to launch nationally in early 2020, this first-ever real estate services program for AARP’s 38 million members will be available when members buy or sell a home through one of our participating residential real estate brands.

On September 7, 2019, Cartus launched the new Realogy Military Reward Program for U.S. military personnel, veterans and their families in connection with the previously announced discontinuation of its affinity program with USAA. The Realogy Military Reward Program seeks to provide access to benefits similar to those offered under the former USAA affinity program.

In July 2019, we launched “TurnKey” in collaboration with Amazon in 15 U.S. cities. Under the TurnKey program, the Company matches highly-ranked independent sales agents affiliated with certain Realogy brands to participating homebuyers who will receive complementary Amazon services and products paid by Realogy.

Leads generated by the programs described above form part of the Cartus affinity business. Referrals from these programs have been or are handled by the Cartus Broker Network, a network of real estate brokers from the Owned Brokerage Services, Franchised Services and certain independent real estate brokers. The Cartus Broker Network closed approximately 80,000 homesale transactions for the Company and its brands in 2018 and approximately 61,000 such closings for the nine months ended September 30, 2019 (which we refer as “in-network homesale transactions”).

The Cartus affinity business is highly-concentrated and the USAA program represented a significant portion of this business and the in-network homesale transactions for Realogy and its brands. We expect that in 2020, the USAA program discontinuation will likely have a material impact on earnings at Cartus and will result in a reduction in in-network homesale transactions for Realogy and its brands. The foregoing does not take into account potential positive offsets driven by the Company’s other existing and new affinity and lead generation programs, macro-economic changes, cost-savings initiatives and other management actions.

Repurchase of Senior Notes

During the third quarter of 2019, the Company repurchased $93 million of its 4.875% Senior Notes through open market purchases at an aggregate purchase price of $83 million. The Company recorded a gain on the early extinguishment of debt of $10 million.

Impairment of Goodwill

During the third quarter of 2019, the Company determined that the decrease in the stock price of the Company and the impact on future earnings related to the discontinuation of the USAA program qualified as triggering events for all of its reporting segments and accordingly the Company performed an impairment analysis of goodwill and indefinite-lived intangible assets as of September 1, 2019. This analysis resulted in recognition of a goodwill impairment charge totaling $180 million related to the Owned Brokerage Services segment. The impairment charge is recorded on a separate line in the accompanying Condensed Consolidated Statements of Operations and is non-cash in nature.

Facility and Operational Efficiencies Program

Beginning in the first quarter of 2019, we commenced the implementation of a plan to accelerate our office consolidation to reduce our storefront costs, as well as institute other operational efficiencies to drive profitability. In addition, beginning in the first quarter of 2019, we commenced a plan to transform and centralize certain aspects of our operational support and drive changes in how we serve our affiliated independent sales agents from a marketing and technology perspective to help such agents be more productive and enable them to make their businesses more profitable. In the third quarter we expanded our operational efficiencies program to focus on workforce optimization. This workforce optimization initiative is focused on consolidating similar or overlapping roles, reducing the number of hierarchical layers and streamlining work and decision making. Separately, we also reduced headcount in the third quarter in connection with the wind down of the USAA affinity program.

Total restructuring costs of approximately $66 million are currently anticipated to be incurred through the end of 2019 with $28 million incurred through the third quarter of 2019. As of September 30, 2019, cost savings related to these restructuring activities were estimated to be approximately $50 million on an annual run rate basis, with approximately $30 million of those cost savings expected to be realized in 2019. In addition to the approximately $30 million of cost savings expected from restructuring activities, there are approximately $40 million of additional cost savings initiatives being

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implemented and expected to be realized in 2019. These costs savings are designed to partially offset inflation and other costs.

The following table reflects the total amount of restructuring costs for the Company's Facility and Operational Efficiencies program by reportable segment:


	Total amount expected to be incurred		Amount incurred through September 30, 2019		Total amount remaining to be incurred
Real Estate Franchise Services	$	4	$	1	$	3
Company Owned Real Estate Brokerage Services	47		17		30
Relocation Services	5		5		—
Title and Settlement Services	1		1		—
Corporate and Other	9		4		5
Total	$	66	$	28	$	38

CURRENT BUSINESS AND INDUSTRY TRENDS

According to the National Association of Realtors ("NAR"), during the ~~first half of~~nine months ended September 30, 2019, homesale transaction ~~volume decreased~~volume increased 1% due to ~~a 4% decrease in the number of homesale transactions, partially offset by~~ a 3% increase in the average homesale ~~price.~~price, partially offset by a 2% decrease in the number of homesale transactions.

During 2018, the housing market faced challenging conditions that intensified in severity during the last four months of the year, including reduced affordability, constrained inventory, higher average homesale prices and mortgage rate volatility, as well as a number of other factors, such as personal income tax reform. We are unable to extrapolate the relative impact that each of these individual factors may have had on regional and local housing markets. While we believe that the difficult market environment in late 2018 continued to negatively impact the first half of 2019, we believe that incremental improvement in certain industry fundamentals, in particular declines in average mortgage rates and, to a lesser extent, increases in affordability, ~~together with a decelerated rise in home price,~~ contributed to ~~marginal~~ improvement in recent market conditions. We believe this is reflected in the 6% increase in homesale transaction volume in the third quarter of 2019 reported by NAR versus flat homesale transaction volume in the second quarter of 2019 ~~reported by NAR versus~~and the 4% ~~decline~~decrease in homesale transaction volume in the first quarter of 2019 reported by NAR.

During the three months ended ~~June~~September 30, 2019, ~~RFG and NRT~~ homesale transaction volume on a combined basis for Franchised and Owned Brokerage Services decreased 3%1% compared to the three months ended ~~June~~September 30, 2018, which represents a lower rate of decline when compared to the first ~~quarter~~and second quarters of 2019, where ~~RFG~~Franchised and ~~NRT~~Owned Brokerage Services homesale transaction volume on a combined basis declined 9% and 3% compared to the ~~three months ended March 31, 2018.~~first and second quarters of 2018, respectively.

~~RFG and NRT homesale~~Homesale transaction volume on a combined basis for Franchised and Owned Brokerage Services decreased 5%4% during the ~~six~~nine months ended ~~June~~September 30, 2019 compared to the ~~six~~nine months ended ~~June~~September 30, 2018. ~~NRT's~~Homesale transaction volume at our Owned Brokerage Services decreased 7%6%, as a result of a 7%5% decrease in existing homesale transactions and a 1% decrease in ~~the~~ average homesale ~~price. RFG's~~price, and homesale transaction volume at our Franchised Services decreased 4%3%, as a result of a 6%5% decrease in existing homesale transactions, partially offset by a 2%3% increase in average homesale price.

We believe that while the industry fundamentals in late 2018 described above drove a significant portion of our decline in homesale transaction volume in the first half of 2019, our results for the second ~~quarter~~and third quarters of 2019 reflect some of the modest improvements in market conditions also described above. However, during both the three- and ~~six-month~~nine-month periods ended ~~June~~September 30, 2019, we were also negatively impacted by the intense competitive environment as well as our geographic ~~concentration.~~concentration, in particular for our Owned Brokerage Operations in California and the New York metropolitan area.

Specifically, the intensity of competition for the affiliation of ~~independent~~independent sales agents ~~which has increased considerably starting in late 2018 (including in the high-end real estate market),~~ negatively impacted recruitment and retention efforts at both ~~company owned~~our Owned Brokerage and ~~franchised brokerages. This intense competition~~Franchised Services. While the number of independent sales agents affiliated with our Owned Brokerage Services grew approximately 3% in 2019, that gain did not fully offset the decline in homesale transaction volume driven by the loss of more productive independent sales agents over the same period. Further, the number of independent sales agents in the U.S. affiliated with our Franchised Services (excluding our Owned Brokerage Services) was down approximately 2% in 2019, driven by the competitive environment for independent sales agents as well as franchisee terminations, including the loss of a large franchisee during the second quarter.

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These competitive factors drove a loss in our market share for the ~~first half of~~nine months ended September 30, 2019 compared to full-year ~~2018, which~~2018. This loss of market share contributed to the decline in homesale transaction volume at both ~~NRT~~Owned Brokerage and ~~RFG~~Franchised Services and ~~could~~is expected to continue to adversely impact results. We believe that certain owned-brokerage competitors have investors that appear to be supportive of a model that pursues increases in market share over profitability, which not only exacerbates competition for independent sales agents, but places additional pressure on the share of commission income received by the agent.

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~~As of their most recent release on July 30, 2019, NAR is forecasting existing homesale transaction volume to increase 4% for the full year 2019 compared to 2018.~~ ~~NAR's~~ ~~quarterly year-over-year forecasts for homesale transaction volume for 2019 compared to 2018 are as follows:~~

~~_______________~~


~~(a)~~	~~Q1 and Q2 homesale transaction volume is calculated using existing homesale transactions and average price as of the most recent NAR press release on July 23, 2019.~~


~~(b)~~	~~Forecasted homesale transaction volume is calculated using seasonally adjusted homesale transactions and median price as of the most recent NAR forecast release on July 30, 2019.~~

Inventory. Although inventory levels have shown some signs of improvement during the first half of 2019, ~~low~~inventory levels declined during the third quarter of 2019 compared to the third quarter of 2018. Low housing inventory levels continue to be an industry-wide concern, in particular in certain highly sought-after geographies and at lower price points. According to NAR, the inventory of existing homes for sale in the U.S. increased from 1.53 million as of December 2018 to ~~1.93~~1.83 million as of ~~June 2019 which is consistent with June 2018.~~September 2019. As a result, inventory has increased ~~from~~from 3.7 months of supply in December 2018 to ~~4.4~~4.1 months as of ~~June~~September 2019. However, ~~these~~according to NAR, year-over-year inventory levels in 2019 were down 1% in July, 4% in August and 3% in September as compared to the same months in 2018 and inventory levels continue to be significantly below the 10-year average of 5.8 months, the 15-year average of 6.1 months and the 25-year average of 5.8 months.

Mortgage Rates. According to Freddie Mac, mortgage rates on commitments for a 30-year, conventional, fixed-rate first mortgage averaged ~~4.00%~~3.67% for the ~~second~~third quarter of 2019 compared to ~~4.54%~~4.57% for the ~~second~~third quarter of 2018. While mortgage rates reached as high as 4.87% in November 2018, rates have ~~recently~~ moderated during 2019, and on ~~June~~September 30, 2019 were ~~3.80%~~3.61%, according to Freddie Mac. Increases in mortgage rates adversely impact housing affordability and we have been and could ~~continue to~~again be negatively impacted by a rising interest rate environment. For example, a rise in mortgage rates could result in decreased homesale transaction volume if potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home or, similarly, if potential home buyers choose to rent rather than pay higher mortgage rates.

~~Affordability~~Affordability. The fixed housing affordability index, as reported by NAR, increased from 142 for ~~May~~August 2018 to ~~150~~160 for ~~May 2019. As noted above,~~August 2019, which we believe ~~that a decelerated rise in home prices contributed~~is primarily attributable to ~~the increase in affordability.~~lower mortgage rates and wage growth. A housing affordability 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.

Recruitment and Retention of Independent Sales Agents; Commission Income. Recruitment and retention of independent sales agents and independent sales agent teams are critical to the business and financial results of a brokerage, including our company owned brokerages and those operated by our affiliated franchisees. Competition for independent sales agents in our industry, including within our franchise system, is high, in particular with respect to more productive sales agents. We believe that a variety of factors in recent years have negatively impacted the recruitment and retention of independent sales agents in the industry and has increasingly impacted the recruitment and retention of top producing agents. Such factors include increasing competition (which has particularly intensified in the last several quarters), increasing levels of commissions paid to agents ~~possibly including up front~~(including up-front payments and ~~equity,~~equity), changes in the spending

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patterns of independent sales agents (as more independent sales agents purchase services from third-parties outside of their affiliated broker) and the growth in independent sales agent teams. The continued competition for productive agents could continue to have a negative impact on our homesale transaction volume and market share and could continue to put upward pressure on the average share of commissions earned by independent sales agents.

~~NRT~~Non-traditional market participants. While real estate brokers using historical real estate brokerage models typically compete for business primarily on the basis of services offered, brokerage commission, reputation, utilization of technology and ~~RFG have launched strategic initiatives focused~~personal contacts, participants pursuing non-traditional methods of marketing real estate may compete in other ways, including companies that employ technologies intended to disrupt historic real estate brokerage models or minimize or eliminate the role traditional brokers and sales agents perform in the homesale transaction process.

A growing number of companies are competing in non-traditional ways for a portion of the gross commission income generated by homesale transactions. For example, many iBuying business models seek to disintermediate real estate brokers and independent sales agents from buyers and sellers of homes either entirely or by reducing brokerage commissions that may be earned on ~~addressing current market dynamics~~those transactions. In addition, listing aggregators and other web-based real estate service providers compete for our Owned Brokerage Services business by ~~expanding~~establishing relationships with independent sales agents and/or buyers and sellers of homes, ultimately seeking to direct transactions and act as the intermediary between the consumer and agent. They also increasingly charge brokerages and independent sales agents additional fees for new and existing services, which puts pressure on the profitability of other industry participants, including agents and brokers, competes for part of

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Franchised Services revenue through referral or other fees and could dilute our ~~base of affiliated~~relationships with our franchisees and our franchisees' relationships with their independent sales agents and ~~affiliated franchisees, providing them~~buyers and sellers of homes. We also currently receive listing fees for our provision of real estate listings under an agreement that expires in March 2022. The continuation of such arrangement, and our ability to enter into similar arrangements with ~~compelling data~~other third-parties, is subject to a variety of factors, including changes in the way such parties access this information and ~~technology products~~the competitive landscape.

See "Recent Developments" above for a discussion of product launches and ~~services, generating high quality leads, and enhancing the consumer experience to move affiliated agents closer to the customer.~~

For example, in July 2019, we announced the launch of “TurnKey” in collaboration with Amazon in 15 U.S. cities. Under the TurnKey program, we (via Cartus) will match highly ranked independent sales agents affiliated with certain Realogy brands to participating homebuyers who will receive complementary Amazon services and products paid by Realogy.

NRT continues to expand the use of commission plans other than the traditional graduated commission model, including plans that charge agents for certain activities. Separately, we recently introduced a collection of marketing tools aimed at increasing independent agent success, including Listing Concierge—a full service solutionlead generation programs for the ~~design, creation~~benefit of our Owned Brokerage and distribution of automated customized property listings—as well as products designed to facilitate agent branding and customer prospecting. We intend to further advance these marketing initiatives throughout 2019.

In late 2018, in collaboration with Home Partners of America, we also launched the cataLIST Program—a quick-cash sale program that keeps the independent sales agent at the center of the transaction. The program is currently available in select markets (Atlanta, Greater Dallas and Tampa) and expansion to additional markets is planned in 2019, as well as the launch of complementary build-on offerings.

~~In addition, RFG is implementing strategic initiatives~~Franchised Operations intended to add new franchisees and widen the base of independent sales agents, including through the expansion of RFG’s historical scope of potential franchisee candidates as well as through a new pricing model structure for one brand and new franchise brands.

~~Facility and Operational Efficiencies Program.~~ Beginning in the first quarter of 2019, we commenced the implementation of a plan to accelerate our office consolidation to reduce our storefront costs, as well as institute other operational efficiencies to drive profitability. In addition, beginning in the first quarter of 2019, we commenced a plan to transform and centralize certain aspects of our operational support and drive changes in how we serve our affiliated independent sales agents from a marketing and technology perspective to help such agents be more productive and enable them to make their businesses more profitable.

Total restructuring costs of approximately $54 million are currently anticipated to be incurred through the end of 2019. As of June 30, 2019, cost savings related to these restructuring activities were estimated to be approximately $50 million on an annual run rate basis, with approximately $30 million of those cost savings expected to be realized in 2019. In addition to the $30 million of cost savings from restructuring activities, there are approximately $40 million of additional cost savings initiatives being implemented and expected to be realized in 2019. These costs savings are designed to partially offset inflation and other costs.

~~The following table reflects the total amount of restructuring costs for the Company's Facility and Operational Efficiencies program by reportable segment:~~

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address current market dynamics.

Existing Homesales

For the ~~six~~nine months ended ~~June~~September 30, 2019 compared to the same period in 2018, NAR existing homesale ~~transactions~~transactions decreased to ~~2.5~~4 million homes or down 4%2%. For the ~~six~~nine months ended ~~June~~September 30, 2019, ~~RFG and NRT~~ homesale transactions on a combined basis for Franchised and Owned Brokerage Services decreased 6%5% compared to the same period in 2018 due primarily to challenging market fundamentals, the impact of competition (including on our market share), the loss of certain franchisees and geographic concentration ~~(in particular at NRT in California).~~of the Owned Brokerage Services. The quarterly and annual year-over-year trends in homesale transactions are as follows:

~~_______________~~


~~(a)~~	~~Q1 and Q2 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.~~

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_______________

(a)Q1, Q2 and Q3 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.

As of their most recent releases, NAR is forecasting existing homesale transactions to increase 5%4% in 2020 while Fannie Mae is forecasting existing homesale transactions to increase 1% for the same period.

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Existing Homesale Price

For the ~~six~~nine months ended ~~June~~September 30, 2019 compared to the same period in 2018, NAR existing homesale average price increased 3%. For the ~~six~~nine months ended ~~June~~September 30, 2019, ~~RFG and NRT's~~ average homesale price on a combined basis for Franchised and Owned Brokerage Services increased 1% compared to the same period in ~~2018 and consisted of RFG's average homesale price increase of 2%, partially offset by NRT's average homesale price decrease of 1%. NRT's~~2018. The Owned Brokerage Services' geographic concentration ~~in California~~ and exposure to the high-end of the market plus the associated competitive pressures drove the year-over-year decline in homesale price compared to the overall industry. The quarterly and annual year-over-year trends in the price of homes are as follows:

~~_______________~~


~~(a)~~	~~Q1 and Q2 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.~~

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_______________

(a)Q1, Q2 and Q3 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.

As of their most recent releases, NAR is forecasting median existing homesale price to increase 3%4% in 2020 while Fannie Mae is forecasting median existing homesale price to increase 4%1% in 2020.

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* * *

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, demographic trends such as generational transitions, increases in U.S. household formation, mortgage rate levels and mortgage availability, certain tax benefits, job growth, increases in renters that qualify as homebuyers, the inherent attributes of homeownership versus renting and the influence of local housing dynamics of inventory supply versus demand. At this time, certain of these factors are trending favorably, such as mortgage rate levels, household formation and job growth. Factors that may negatively affect growth in the housing industry include:

•continued insufficient inventory levels or stagnant and/or declining home prices;

•a reduction in the affordability of homes;

•higher mortgage rates due to increases in long-term interest rates and increasing down payment requirements as well as reduced availability of mortgage financing;

•certain provisions of the 2017 Tax Act that directly impact traditional incentives associated with home ownership and may reduce the financial distinction between renting and owning a home, including those that reduce the amount that certain taxpayers would be allowed to deduct for home mortgage interest or state, local and property ~~taxes;~~taxes as well as certain state tax reform, such as the "mansion tax" in New York;

•decelerated or lack of building of new housing for homesales, increased building of new rental properties, or irregular timing of new development closings leading to lower unit sales at ~~NRT,~~our Owned Brokerage Services, which has relationships with developers, primarily in major cities, to provide marketing and brokerage services in new developments;

•homeowners retaining their homes for longer periods of time;

•changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, or decide not to, purchase a home, as well as changing preferences to rent versus purchase a home;

•decreasing consumer confidence in the economy and/or the residential real estate market;

•an increase in potential homebuyers with low credit ratings 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;

•economic stagnation or contraction in the U.S. economy;

•weak credit markets and/or instability of financial institutions;

•increased levels of unemployment and/or stagnant wage growth in the U.S.;

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

•other legislative or regulatory reforms, including but not limited to reform that adversely impacts the financing of the U.S. housing market, changes relating to RESPA, potential reform of Fannie Mae and Freddie Mac, immigration reform, and further potential tax code reform;

•renewed high levels of foreclosure activity;

•natural disasters, such as hurricanes, earthquakes, wildfires, mudslides and other events that disrupt local or regional real estate markets; and

•geopolitical and economic instability.

Many of the trends impacting our businesses that derive revenue from homesales also impact Cartus, which is the leading provider of global relocation services. In addition to general residential housing trends, key drivers of Cartus are global corporate spending on relocation services, which continue to shift to lower cost relocation benefits as corporate clients engage in cost reduction initiatives and/or restructuring programs as well as 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

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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;

~~Table of Contents~~•

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~~the Owned Brokerage Services' results;

•comparability is also diminished 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 material in the past, 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~~the Franchised and ~~NRT,~~Owned Brokerage Services, we measure operating performance using the following key operating metrics: (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.

For ~~RFG,~~Franchised Services, we also use net royalty per side, which represents the royalty payment to ~~RFG~~Franchised Services for each homesale transaction side taking into account royalty rates, average broker commission rates, volume incentives achieved and other incentives. We utilize net royalty per side as it includes the impact of changes in average homesale price as well as all incentives and represents the royalty revenue impact of each incremental side.

For ~~NRT,~~Owned Brokerage Services, we also use gross commission income per side, which represents gross commission income divided by closed homesale sides. Gross commission income includes commissions earned in homesale transactions and certain other activities, primarily leasing and property management transactions. ~~NRT,~~The Owned Brokerage Services, as a franchisee of ~~RFG,~~the Franchised Services, pays a royalty fee of 6% per transaction to ~~RFG~~the Franchised Services from the commission earned on a real estate transaction. The remainder of gross commission income is split between the broker ~~(NRT)~~(the Owned Brokerage Services) and the independent sales agent.

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. The USAA affinity program represented a significant portion of new referrals on a historical basis and for the third quarter of 2019. The discontinuation of this program in September 2019 is expected to result in a significant reduction in such referrals commencing with the fourth quarter of 2019.

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

Table of Contents

not significantly impacted by a change in homesale price. Although the average mortgage rate declined in 2019 compared to 2018, we believe that increases in mortgage rates in the future ~~will~~would most likely have a negative impact on refinancing title and closing units.

~~Table of Contents~~

The following table presents our drivers for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018. See "Results of Operations" below for a discussion as to how these drivers affected our business for the periods presented.


																		Three Months Ended September 30,														Nine Months Ended September 30,
	Three Months Ended June 30,								Six Months Ended June 30,									2019			2018			% Change		2019			2018			% Change
	2019			2018			% Change		2019			2018			% Change
RFG (a)
Franchised Services (a)																	Franchised Services (a)
Closed homesale sides	301,377			313,278			(4	%)	504,039			537,268			(6	%)	Closed homesale sides	299,937			308,917			(3)	%	803,976			846,185			(5)	%
Average homesale price	$	318,799		$	312,087		2	%	$	310,581		$	303,955		2	%	Average homesale price	$	314,984		$	305,398		3	%	$	312,224		$	304,482		3	%
Average homesale broker commission rate	2.47		%	2.48		%	(1	) bps	2.47		%	2.49		%	(2	) bps	Average homesale broker commission rate	2.47		%	2.47		%	—	bps	2.47		%	2.48		%	(1)	bps
Net royalty per side (b)	$	331		$	336		(1	%)	$	320		$	325		(2	%)
NRT
Net royalty per side																	Net royalty per side	$	329		$	322		2	%	$	323		$	324		—	%
Owned Brokerage Services																	Owned Brokerage Services
Closed homesale sides	95,251			100,745			(5	%)	155,693			166,842			(7	%)	Closed homesale sides	92,399			94,241			(2)	%	248,092			261,083			(5)	%
Average homesale price	$	540,725		$	537,748		1	%	$	529,543		$	532,706		(1	%)	Average homesale price	$	509,425		$	513,403		(1)	%	$	522,050		$	525,738		(1)	%
Average homesale broker commission rate	2.41		%	2.43		%	(2	) bps	2.41		%	2.44		%	(3	) bps	Average homesale broker commission rate	2.41		%	2.44		%	(3)	bps	2.41		%	2.44		%	(3)	bps
Gross commission income per side	$	13,758		$	13,804		—	%	$	13,546		$	13,750		(1	%)	Gross commission income per side	$	13,000		$	13,227		(2)	%	$	13,343		$	13,545		(1)	%
Cartus																	Cartus
Initiations	50,586			53,230			(5	%)	89,070			91,183			(2	%)	Initiations	39,589			42,718			(7)	%	128,659			133,901			(4)	%
Referrals	24,141			25,562			(6	%)	39,020			41,088			(5	%)	Referrals	25,085			24,769			1	%	64,105			65,857			(3)	%
TRG
Title Resource Group																	Title Resource Group
Purchase title and closing units	42,202			46,189			(9	%)	70,246			77,930			(10	%)	Purchase title and closing units	41,619			43,836			(5)	%	111,865			121,766			(8)	%
Refinance title and closing units	5,270			4,782			10	%	9,281			10,192			(9	%)	Refinance title and closing units	8,014			4,264			88	%	17,295			14,456			20	%
Average fee per closing unit	$	2,356		$	2,282		3	%	$	2,320		$	2,231		4	%	Average fee per closing unit	$	2,288		$	2,229		3	%	$	2,308		$	2,231		3	%

(a)Includes all franchisees except for our Owned Brokerage Services.

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 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 agents or by an increase in volume or other incentives paid to franchisees.

Since 2014, we have experienced approximately a one basis point decline in the average homesale broker commission rate each year, which we believe has been largely attributable to increases in average homesale prices (as higher priced homes tend to have a lower broker commission) and, to a lesser extent, competitors providing fewer or similar services for a reduced fee.

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. Most of our third-party franchisees are subject to a 6% royalty rate and entitled to volume incentives, although a royalty fee generally equal to 5% of franchisee commission (capped at a set amount per independent sales agent per year) is applicable to franchisees operating under the "capped fee model" that was launched for our Better Homes and Gardens^® Real Estate franchise business in January 2019. Volume incentives are calculated as a progressive percentage of the applicable franchisee's eligible annual gross commission income and generally result in a net or effective royalty rate ranging from 6% to 3% for the franchisee. Volume incentives increase or decrease as the franchisee's gross commission income generated increases or decreases, respectively. We have the right to adjust the annual volume incentive tables on an annual basis in response to changing market conditions. In addition, some of our larger franchisees have a flat royalty rate of less than 6% and are not eligible for volume incentives.

Other incentives may also be used as consideration to attract new franchisees, grow franchisees (including through independent sales agent recruitment) or extend existing franchise agreements, although such incentives are generally not available to most franchisees, and, in contrast to volume incentives, the majority are not homesale transaction based. We face significant competition from other national real estate brokerage brand franchisors for franchisees and we expect that

the trend of increasing incentives will continue in the future in order to attract, retain, and help grow certain franchisees.

Transaction volume growth has exceeded royalty revenue growth due primarily to the growth in gross commission income generated by our top 250 franchisees and our increased use of other sales incentives, both of which directly impact royalty revenue. Over the past several years, our top 250 franchisees have grown faster than our other franchisees through organic growth and market consolidation. If the amount of gross commission income generated by our top 250 franchisees continue to grow at a quicker pace relative to our other franchisees, we would expect our royalty revenue to continue to increase, but at a slower pace than homesale transaction volume. Likewise, our royalty revenue would continue to increase, but at a slower pace than homesale transaction volume, if the gross commission income generated by all of our franchisees grows faster than the applicable annual volume incentive table increase or if we increase our use of standard volume or other incentives. However, in the event that the gross commission income generated by our franchisees increases as a result of increased transaction volume, we would expect to recognize an increase in overall royalty payments to us.

~~NRT has~~Our Owned Brokerage Services have 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~~our Franchised Services have franchised offices that are more widely dispersed across the United States. Accordingly, operating results and homesale statistics may differ between ~~NRT~~our Owned Brokerage and ~~RFG~~our Franchised Services based upon geographic presence and the corresponding homesale activity in each geographic region. In addition, the share of commissions earned by independent sales agents directly impacts the margin earned by ~~NRT.~~our Owned Brokerage Services. Such share of commissions earned by independent sales agents varies by region and commission schedules are generally progressive to incentivize sales agents to achieve higher levels of production. Commission share has been and we expect will continue to be subject to upward pressure in favor of the independent sales agent for a variety of factors, including more aggressive recruitment and retention activities taken by us and our competitors as well as growth in independent sales agent teams.

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 Operating EBITDA. Operating 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), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, ~~asset~~ impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. Our presentation of Operating EBITDA may not be comparable to similarly titled measures used by other companies.

Three Months Ended ~~June~~ September 30, 2019 vs. Three Months Ended~~June~~ September 30, 2018

Our consolidated results comprised the following:

Three Months Ended June 30,
2019 2018 Change
Net revenues $ 1,735
$ 1,820
$ (85 )
Total expenses 1,638
1,646
(8 )
Income before income taxes, equity in earnings and noncontrolling interests 97
174
(77 )
Income tax expense 34
52
(18 )
Equity in earnings of unconsolidated entities (7 ) (2 ) (5 )
Net income 70
124
(54 )
Less: Net income attributable to noncontrolling interests (1 ) (1 ) —
Net income attributable to Realogy Holdings and Realogy Group $ 69
$ 123
$ (54 )

Net revenues decreased ~~$85~~$47 million or 5%3% for the three months ended ~~June~~September 30, 2019 compared with the three months ended ~~June~~September 30, 2018 primarily driven by lower homesale transaction volume at ~~NRT.~~our Owned Brokerage Services.

Total expenses for the ~~second~~third quarter of 2019 ~~decreased $8~~increased $182 million compared to the ~~second~~third quarter of 2018 primarily due to:

•an impairment charge of $180 million which reduced goodwill at the Owned Brokerage Services segment;

•a $25 million net increase in interest expense primarily due to a ~~$54~~$19 million net expense related to our mark-to-market adjustments for our interest rate swaps that resulted in losses of $12 million during the third quarter of 2019 compared to gains of $7 million during the third quarter of 2018, and a $6 million increase in interest expense primarily due to the refinancing of Senior Notes in the first quarter of 2019; and

•a $6 million increase in operating and general and administrative expenses primarily due to employee-related and other operating costs,

partially offset by;

•a $27 million decrease in commission and other sales agent-related costs primarily as a result of the impact of lower homesale transaction volume at ~~NRT.~~our Owned Brokerage Services; and

•a $10 million gain on the early extinguishment of debt as a result of the repurchase of Senior Notes completed in the third quarter of 2019.

Earnings from equity investments were $7 million during the third quarter of 2019 compared to losses of $1 million during the third quarter of 2018 primarily due to an improvement in earnings of Guaranteed Rate Affinity.

During the third quarter of 2019, we incurred $11 million of restructuring costs primarily related to the Company's restructuring program focused on office consolidation and instituting operational efficiencies to drive profitability. The Company expects the estimated total cost of the plan to be approximately $66 million, with $28 million incurred through the third quarter of 2019. See Note 6, "Restructuring Costs", in the 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 in the period in which they occur. The provision for income taxes was a benefit of $8 million for the three months ended September 30, 2019 compared to an expense of $40 million for the three months ended September 30, 2018. Our effective tax rate was 10% and 28% for the three months ended September 30, 2019 and September 30, 2018, respectively. The effective tax rate for the three months ended September 30, 2019 was primarily impacted by discrete items in the quarter related to the goodwill impairment charge and equity awards which expired during the third quarter of 2019.

The following table reflects the results of each of our reportable segments during the three months ended September 30, 2019 and 2018:

(a)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by our Owned Brokerage Services segment of $82 million and $83 million during the three months ended September 30, 2019 and 2018, respectively.

(b)Restructuring charges incurred for the three months ended September 30, 2019 include $1 million at the Franchised Services segment, $8 million at the Owned Brokerage Services segment, $1 million at the Relocation Services segment and $1 million at the Corporate and Other segment. Restructuring charges incurred for the three months ended September 30, 2018 include $1 million at the Franchised Services segment and $8 million at the Owned Brokerage Services segment.

(c)Impairments for the three months ended September 30, 2019 includes a goodwill impairment charge of $180 million which reduced goodwill at the Owned Brokerage Services segment and $3 million of other impairment charges related to lease asset impairments.

(d)Former parent legacy items and gain on the early extinguishment of debt is recorded in the Corporate and Other segment. During the third quarter of 2019, the Company repurchased $93 million of its 4.875% Senior Notes through open market purchases resulting in a gain on the early extinguishment of debt of $10 million.

As described in the aforementioned table, Operating EBITDA margin for "Total Company" expressed as a percentage of revenues remained flat at 14% for the three months ended September 30, 2019 compared to the same period in 2018. On a segment basis, our Franchised Services segment margin decreased 2 percentage points to 71% from 73% primarily due to a decrease in royalty revenue. Our Owned Brokerage Services segment margin remained flat at 3%. Our Relocation Services segment margin decreased 3 percentage points to 33% from 36% primarily due to a decrease in international and referral revenues. Our Title and Settlement Services segment margin increased 6 percentage points to 18% from 12% primarily as a result of an increase in earnings from equity investments and an increase in refinancing revenue.

The Corporate and Other segment Operating EBITDA for the three months ended September 30, 2019 decreased $5 million to negative $26 million primarily due to an increase in employee-related and other costs.

Franchised and Owned Brokerage Services on a Combined Basis

The following table reflects our Franchised and Owned Brokerage Services results before the intercompany royalties and marketing fees as well as on a combined basis to show the Operating EBITDA contribution of these business units to the overall Operating EBITDA of the Company. The Operating EBITDA margin for the combined segments decreased 1 percentage point from 15% to 14% primarily due to lower transaction volume during the third quarter of 2019 compared to the third quarter of 2018:


	Revenues					$ Change		% Change		Operating EBITDA					$ Change		% Change		Operating EBITDA Margin		Change
	2019		2018							2019		2018							2019	2018
Franchised Services (a)	$	134	$	138	(4)	(3)	%	$	71	$	78	(7)	(9)	%	53	%	57	%	(4)
Owned Brokerage Services (a)	1,222		1,268		(46)	(4)	%	113		126		(13)	(10)	%	9	%	10	%	(1)
Franchised and Owned Brokerage Services Combined	$	1,356	$	1,406	(50)	(4)	%	$	184	$	204	(20)	(10)	%	14	%	15	%	(1)

(a)The segment numbers noted above do not reflect the impact of intercompany royalties and marketing fees paid by our Owned Brokerage Services to our Franchised Services of $82 million and $83 million during the three months ended September 30, 2019 and 2018, respectively.

Real Estate Franchise Services (Franchised Services)

Revenues decreased $5 million to $216 million and Operating EBITDA decreased $8 million to $153 million for the three months ended September 30, 2019 compared with the same period in 2018.

Revenues decreased $5 million primarily as a result of a $2 million decrease in intercompany royalties received from our Owned Brokerage Services segment, a $1 million decrease in third-party domestic franchisee royalty revenue and a $1 million decrease in international area development fee revenue.

Our Franchised Services segment revenue includes intercompany royalties received from our Owned Brokerage Services segment of $78 million and $80 million during the third quarter of 2019 and 2018, respectively, which are eliminated in consolidation against the expense reflected in our Owned Brokerage Services segment results.

The $8 million decrease in Operating EBITDA was principally due to the $5 million decrease in revenues discussed above and a $3 million increase in other operating costs.

Company Owned Real Estate Brokerage (Owned Brokerage Services)

Revenues decreased $46 million to $1,222 million and Operating EBITDA decreased $12 million to $31 million for the three months ended September 30, 2019 compared with the same period in 2018.

The revenue decrease of $46 million was primarily driven by a 3% decrease in homesale transaction volume at our Owned Brokerage Services segment. Our Owned Brokerage Services segment saw lower transaction volume primarily driven by the competitive environment as well as our geographic concentration.

Operating EBITDA decreased $12 million primarily due to the $46 million decrease in revenues discussed above partially offset by:

•a $27 million decrease in commission expenses paid to independent sales agents from $902 million in the third quarter of 2018 to $875 million in the third quarter of 2019. Commission expense decreased primarily as a result of the impact of lower homesale transaction volume as discussed above;

•a $5 million decrease in other costs including occupancy costs, employee-related costs and other ~~sales agent-related costs was~~operating costs; and


Commission File No. 001-35674			Commission File No. 333-148153
REALOGY HOLDINGS CORP.			REALOGY GROUP LLC
(Exact name of registrant as specified in its charter)			(Exact name of registrant as specified in its charter)
20-8050955			20-4381990
(I.R.S. Employer Identification Number)			(I.R.S. Employer Identification Number)


			Page
Introductory Note					1
Forward-Looking Statements					2

PART I			~~Page~~FINANCIAL INFORMATION
Item 1.			~~Introductory Note~~Financial Statements	14
~~Forward-Looking Statements~~			2

~~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~~nine months ended ~~June~~September 30, 2019 and 2018	6
			Condensed Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~ for the three and ~~six~~ni ne months ended ~~June~~September 30, 2019 and 2018	7
			Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2019 and December 31, 2018	8
			Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~Sept ember 30, 2019 and 2018	9
			Notes to Condensed Consolidated Financial Statements	10
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	3335
Item 3.			Quantitative and Qualitative Disclosures about Market Risks	5459
Item 4.			Controls and Procedures	5560
PART II			OTHER INFORMATION
Item 1.			~~OTHER INFORMATION~~Legal Proceedings	5662
Item 1.1A.			~~Legal Proceedings~~Risk Factors	5662
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	5663
Item 6.			Exhibits	5763
Signatures					5864
Exhibit Index					5965



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			��	2018
Revenues
Gross commission income	$	1,310		$	1,388		$	2,109			$	2,290
Service revenue	253			263			441				460
Franchise fees	112			114			182				193
Other	60			55			117				106
Net revenues	1,735			1,820			2,849				3,049
Expenses
Commission and other agent-related costs	955			1,009			1,530				1,654
Operating	390			392			770				784
Marketing	69			69			138				136
General and administrative	82			75			177				164
Restructuring costs, net	9			6			21				36
Impairment	2			—			3				—
Depreciation and amortization	50			49			99				97
Interest expense, net	81			46			144				79
Loss on the early extinguishment of debt	—			—			5				7
Total expenses	1,638			1,646			2,887				2,957
Income (loss) before income taxes, equity in (earnings) losses and noncontrolling interests	97			174			(38		)		92
Income tax expense (benefit)	34			52			(1		)		33
Equity in (earnings) losses of unconsolidated entities	(7		)	(2		)	(8		)		2
Net income (loss)	70			124			(29		)		57
Less: Net income attributable to noncontrolling interests	(1		)	(1		)	(1		)		(1		)
Net income (loss) attributable to Realogy Holdings and Realogy Group	$	69		$	123		$	(30	)		$	56

Earnings (loss) per share attributable to Realogy Holdings:
Basic earnings (loss) per share	$	0.60		$	0.97		$	(0.26	)		$	0.44
Diluted earnings (loss) per share	$	0.60		$	0.96		$	(0.26	)		$	0.43
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic	114.3			126.5			114.1				128.4
Diluted	114.9			127.6			114.1				129.7



	June 30, 2019			December 31, 2018
	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	270		$	225
Restricted cash	8			13
Trade receivables (net of allowance for doubtful accounts of $12 and $9)	185			146
Relocation receivables	290			231
Other current assets	157			153
Total current assets	910			768
Property and equipment, net	311			304
Operating lease assets, net	536			—
Goodwill	3,712			3,712
Trademarks	749			749
Franchise agreements, net	1,193			1,227
Other intangibles, net	240			254
Other non-current assets	303			276
Total assets	$	7,954		$	7,290
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	198		$	147
Securitization obligations	204			231
Current portion of long-term debt	364			748
Current portion of operating lease liabilities	131			—
Accrued expenses and other current liabilities	383			401
Total current liabilities	1,280			1,527
Long-term debt	3,325			2,800
Long-term operating lease liabilities	465			—
Deferred income taxes	385			389
Other non-current liabilities	246			259
Total liabilities	5,701			4,975
Commitments and contingencies (Note 9)
Equity:
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at June 30, 2019 and December 31, 2018	—			—
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 114,303,786 shares issued and outstanding at June 30, 2019 and 114,620,499 shares issued and outstanding at December 31, 2018	1			1
Additional paid-in capital	4,837			4,869
Accumulated deficit	(2,537		)	(2,507		)
Accumulated other comprehensive loss	(51		)	(52		)
Total stockholders' equity	2,250			2,311
Noncontrolling interests	3			4
Total equity	2,253			2,315
Total liabilities and equity	$	7,954		$	7,290



	Three Months Ended June 30,
	Real Estate Franchise Services				Company Owned Brokerage Services				Relocation Services				Title & Settlement Services				Corporate and Other						Total Company
	2019		2018		2019		2018		2019		2018		2019		2018		2019			2018			2019		2018
Gross commission income (a)	$	—	$	—	$	1,310	$	1,388	$	—	$	—	$	—	$	—	$	—		$	—		$	1,310	$	1,388
Service revenue (b)	—		—		3		2		96		104		154		157		—			—			253		263
Franchise fees (c)	196		203		—		—		—		—		—		—		(84		)	(89		)	112		114
Other (d)	38		34		18		18		1		1		6		5		(3		)	(3		)	60		55
Net revenues	$	234	$	237	$	1,331	$	1,408	$	97	$	105	$	160	$	162	$	(87	)	$	(92	)	$	1,735	$	1,820



Lease Type	Balance Sheet Classification	June 30, 2019
Assets:
Operating lease assets	Operating lease assets, net	$	536
Finance lease assets (1)	Property and equipment, net	39
Total lease assets, net		$	575

Liabilities:
Current:
Operating lease liabilities	Current portion of operating lease liabilities	$	131
Finance lease liabilities	Accrued expenses and other current liabilities	12
Non-current:
Operating lease liabilities	Long-term operating lease liabilities	465
Finance lease liabilities	Other non-current liabilities	21
Total lease liabilities		$	629

Weighted Average Lease Term and Discount Rate
Weighted average remaining lease term (years):
Operating leases		5.6
Finance leases		3.3

Weighted average discount rate:
Operating leases		5.3		%
Finance leases		4.0		%



	As of June 30, 2019						As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable—Franchise agreements (a)	$	2,019	$	826	$	1,193	$	2,019	$	792	$	1,227
Indefinite life—Trademarks (b)	$	749			$	749	$	749			$	749
Other Intangibles
Amortizable—License agreements (c)	$	45	$	11	$	34	$	45	$	11	$	34
Amortizable—Customer relationships (d)	549		371		178		549		359		190
Indefinite life—Title plant shares (e)	19				19		18				18
Amortizable—Other (f)	33		24		9		33		21		12
Total Other Intangibles	$	646	$	406	$	240	$	645	$	391	$	254


~~(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, amortization of lease assets that will continue to be incurred under the contract for its remaining term without economic benefit to the Company, accelerated depreciation on asset disposals and other facility and employee relocation related costs.


~~(3)~~	Internal use software impairment relates to development costs capitalized for a project that was determined to not meet the Company's strategic goals when analyzed by the Company's new leadership team.



	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
Personnel-related costs	$	13	$	13	$	—
Facility-related costs (1)	41		5		36
Total	$	54	$	18	$	36


~~(1)~~	~~Facility-related costs includes lease asset impairments expected to be incurred under the Facility and Operational Efficiencies Program.~~



	Three Months Ended June 30, 2019
	Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity


	Shares	Amount
Balance at March 31, 2019	114.2	$	1	$	4,841		$	(2,606	)	$	(50	)	$	3		$	2,189
Net Income	—	—		—			69			—			1			70
Other comprehensive loss	—	—		—			—			(1		)	—			(1		)
Stock-based compensation	—	—		7			—			—			—			7
Issuance of shares for vesting of equity awards	0.1	—		—			—			—			—			—
Dividends declared ($0.09 per share)	—	—		(11		)	—			—			(1		)	(12		)
Balance at June 30, 2019	114.3	$	1	$	4,837		$	(2,537	)	$	(51	)	$	3		$	2,253



	Three Months Ended June 30, 2018
	Common Stock				Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity


	Shares		Amount
Balance at March 31, 2018	128.8		$	1	$	5,179		$	(2,711	)	$	(44	)	$	3		$	2,428
Net Income	—		—		—			123			—			1			124
Other comprehensive loss	—		—		—			—			(3		)	—			(3		)
Repurchase of common stock	(4.3	)	—		(106		)	—			—			—			(106		)
Stock-based compensation	—		—		12			—			—			—			12
Issuance of shares for vesting of equity awards	0.2		—		—			—			—			—			—
Shares withheld for taxes on equity awards	(0.1	)	—		(1		)	—			—			—			(1		)
Dividends declared ($0.09 per share)	—		—		(11		)	—			—			(1		)	(12		)
Balance at June 30, 2018	124.6		$	1	$	5,073		$	(2,588	)	$	(47	)	$	3		$	2,442



	Six Months Ended June 30, 2019
	Common Stock				Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity


	Shares		Amount
Balance at December 31, 2018	114.6		$	1	$	4,869		$	(2,507	)	$	(52	)	$	4		$	2,315
Net Loss	—		—		—			(30		)	—			1			(29		)
Other comprehensive income	—		—		—			—			1			—			1
Repurchase of common stock	(1.2	)	—		(20		)	—			—			—			(20		)
Stock-based compensation	—		—		15			—			—			—			15
Issuance of shares for vesting of equity awards	1.3		—		—			—			—			—			—
Shares withheld for taxes on equity awards	(0.4	)	—		(6		)	—			—			—			(6		)
Dividends declared ($0.18 per share)	—		—		(21		)	—			—			(2		)	(23		)
Balance at June 30, 2019	114.3		$	1	$	4,837		$	(2,537	)	$	(51	)	$	3		$	2,253



	Six Months Ended June 30, 2018
	Common Stock				Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity


	Shares		Amount
Balance at December 31, 2017	131.6		$	1	$	5,285		$	(2,631	)	$	(37	)	$	4		$	2,622
Cumulative effect of adoption of new accounting pronouncements	—		—		—			(13		)	(9		)	—			(22		)
Net Income	—		—		—			56			—			1			57
Other comprehensive loss	—		—		—			—			(1		)	—			(1		)
Repurchase of common stock	(7.8	)	—		(200		)	—			—			—			(200		)
Stock-based compensation	—		—		21			—			—			—			21
Issuance of shares for vesting of equity awards	1.2		—		—			—			—			—			—
Shares withheld for taxes on equity awards	(0.4	)	—		(10		)	—			—			—			(10		)
Dividends declared ($0.18 per share)	—		—		(23		)	—			—			(2		)	(25		)
Balance at June 30, 2018	124.6		$	1	$	5,073		$	(2,588	)	$	(47	)	$	3		$	2,442


	Revenues (a) (b)													Revenues (a) (b)
	Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018				2019		2018		2019		2018
Real Estate Franchise Services	$	234		$	237		$	397		$	413		Real Estate Franchise Services	$	216	$	221	$	613	$	634
Company Owned Real Estate Brokerage Services	1,331			1,408			2,147			2,325			Company Owned Real Estate Brokerage Services	1,222		1,268		3,369		3,593
Relocation Services	97			105			173			184			Relocation Services	103		108		276		292
Title and Settlement Services	160			162			274			282			Title and Settlement Services	170		162		444		444
Corporate and Other (c)	(87		)	(92		)	(142		)	(155		)	Corporate and Other (c)	(82)		(83)		(224)		(238)
Total Company	$	1,735		$	1,820		$	2,849		$	3,049		Total Company	$	1,629	$	1,676	$	4,478	$	4,725


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


~~(b)~~	Depreciation and amortization for the six months ended June 30, 2018 includes $2 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in (earnings) losses of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.


~~(c)~~	The three months ended June 30, 2019 includes restructuring charges of $6 million in the Company Owned Real Estate Brokerage Services segment, $1 million in the Relocation Services segment, $1 million in the Title and Settlement Services segment and $1 million in Corporate and Other.


~~(d)~~	~~Loss on the early extinguishment of debt is recorded in the Corporate and Other segment.~~


	Revenues (a)						$ Change		% Change		Operating EBITDA								$ Change				% Change		Operating EBITDA Margin		Change
	2019		2018								2019		2018												2019	2018
Franchised Services	$	216	$	221	$	(5)	(2)	%	$	153	$	161	$	(8)	(5)	%			71	%			73	%	(2)
Owned Brokerage Services	1,222		1,268		(46)		(4)		31		43		(12)		(28)				3				3		—
Relocation Services	103		108		(5)		(5)		34		39		(5)		(13)				33				36		(3)
Title and Settlement Services	170		162		8		5		31		20		11		55				18				12		6
Corporate and Other	(82)		(83)		1		*		(26)		(21)		(5)		*
Total Company	$	1,629	$	1,676	$	(47)	(3)	%	$	223	$	242	$	(19)	(8)	%			14	%			14	%	—
Less: Depreciation and amortization																	50				49
Interest expense, net																	66				41
Income tax (benefit) expense																	(8)				40
Restructuring costs, net (b)																	11				9
Impairments (c)																	183				—
Former parent legacy cost, net (d)																	1				—
Gain on the early extinguishment of debt (d)																	(10)				—
Net (loss) income attributable to Realogy Holdings and Realogy Group																	$	(70)			$	103


~~(a)~~	Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT of $87 million and $92 million during the three months ended June 30, 2019 and 2018, respectively.


~~(b)~~	Restructuring charges incurred for the three months ended June 30, 2019 include $6 million at NRT, $1 million at Cartus, $1 million at TRG and $1 million at Corporate and Other. Restructuring charges incurred for the three months ended June 30, 2018 include $4 million at NRT, $1 million at Cartus and $1 million at TRG.


~~(a)~~	The RFG and NRT segment numbers noted above do not reflect the impact of intercompany royalties and marketing fees paid by NRT to RFG of $87 million and $92 million during the three months ended June 30, 2019 and 2018, respectively.


~~(c)~~	Restructuring charges incurred for the six months ended June 30, 2019 include $10 million at NRT, $4 million at Cartus, $2 million at TRG and $5 million at Corporate and Other. Restructuring charges incurred for the six months ended June 30, 2018 include $2 million at RFG, $21 million at NRT, $9 million at Cartus, $2 million at TRG and $2 million at Corporate and Other.


			Less		Equals		Plus			Equals						Less		Equals		Plus		Equals
	Year Ended		Six Months Ended		Six Months Ended		Six Months Ended			Twelve Months Ended				Year Ended		Nine Months Ended		Three Months Ended		Nine Months Ended		Twelve Months Ended
	December 31, 2018		June 30, 2018		December 31, 2018		June 30, 2019			June 30, 2019				December 31, 2018		September 30, 2018		December 31, 2018		September 30, 2019		September 30, 2019
Net income (loss) attributable to Realogy Group (a)	$	137	$	56	$	81	$	(30	)	$	51		Net income (loss) attributable to Realogy Group (a)	$	137	$	159	$	(22)	$	(100)	$	(122)
Income tax expense (benefit)	65		33		32		(1		)	31			Income tax expense (benefit)	65		73		(8)		(9)		(17)
Income (loss) before income taxes	202		89		113		(31		)	82			Income (loss) before income taxes	202		232		(30)		(109)		(139)
Depreciation and amortization (b)	197		99		98		99			197			Depreciation and amortization (b)	197		148		49		149		198
Interest expense, net	190		79		111		144			255			Interest expense, net	190		120		70		210		280
Restructuring costs, net	58		36		22		21			43			Restructuring costs, net	58		45		13		32		45
Impairment	—		—		—		3			3
Impairments													Impairments	—		—		—		186		186
Former parent legacy cost, net	4		—		4		—			4			Former parent legacy cost, net	4		—		4		1		5
Loss on the early extinguishment of debt	7		7		—		5			5
Loss (gain) on the early extinguishment of debt													Loss (gain) on the early extinguishment of debt	7		7		—		(5)		(5)
Operating EBITDA (c)	658		310		348		241			589			Operating EBITDA (c)	658		552		106		464		570
Bank covenant adjustments:	Bank covenant adjustments:												Bank covenant adjustments:
Pro forma effect of business optimization initiatives (d)	Pro forma effect of business optimization initiatives (d)									28			Pro forma effect of business optimization initiatives (d)											30
Non-cash charges (e)	Non-cash charges (e)									33			Non-cash charges (e)											38
Pro forma effect of acquisitions and new franchisees (f)	Pro forma effect of acquisitions and new franchisees (f)									3			Pro forma effect of acquisitions and new franchisees (f)											2
Incremental securitization interest costs (g)	Incremental securitization interest costs (g)									3			Incremental securitization interest costs (g)											3
EBITDA as defined by the Senior Secured Credit Agreement	EBITDA as defined by the Senior Secured Credit Agreement									$	656		EBITDA as defined by the Senior Secured Credit Agreement											$	643
Total senior secured net debt (h)	Total senior secured net debt (h)									$	1,991		Total senior secured net debt (h)											$	1,931
Senior secured leverage ratio	Senior secured leverage ratio									3.04		x	Senior secured leverage ratio											3.00		x


~~(b)~~	Depreciation and amortization for the year ended December 31, 2018 and the first quarter of 2018 includes $2 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in (earnings) losses of unconsolidated entities" line on the Condensed Consolidated Statements of Operations during those periods.


~~(c)~~	Operating EBITDA consists of: (i) $242 million for the third quarter of 2018, (ii) $106 million for the fourth quarter of 2018, (iii) negative $4 million for the first quarter of 2019 and (iv) $245 million for the second quarter of 2019.


~~(d)~~	~~Represents the four-quarter pro forma effect of business optimization initiatives.~~


~~(e)~~	Represents the elimination of non-cash expenses including $34 million of stock-based compensation expense partially offset by $1 million of other items for the four-quarter period ended June 30, 2019.


~~(g)~~	~~Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the four-quarter period ended June 30, 2019.~~