Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2018 | Feb. 22, 2019 | |
Document Information [Line Items] | ||
Document Period End Date | Dec. 31, 2018 | |
Entity Registrant Name | REALOGY HOLDINGS CORP. | |
Entity Central Index Key | 1,398,987 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-K | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 113,485,998 | |
Entity Shell Company | false | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 2.8 | |
Realogy [Member] | ||
Document Information [Line Items] | ||
Entity Registrant Name | REALOGY GROUP LLC | |
Entity Central Index Key | 1,355,001 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | Yes | |
Entity Current Reporting Status | No | |
Realogy Group LLC [Member] | ||
Document Information [Line Items] | ||
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenues | ||||||
Net revenues | [1],[2] | $ 6,079 | $ 6,114 | [3] | $ 5,810 | [3] |
Expenses | ||||||
Commission and other agent-related costs | 3,282 | 3,230 | 2,945 | |||
Operating | 1,548 | 1,544 | 1,542 | |||
Marketing | 258 | 261 | 241 | |||
General and administrative | 328 | 364 | 321 | |||
Former parent legacy cost (benefit), net | [4] | 4 | (10) | (2) | ||
Restructuring costs, net | [5],[6] | 58 | 12 | 39 | ||
Depreciation and amortization | 195 | 198 | [7] | 202 | [8] | |
Interest expense, net | 190 | 158 | 174 | |||
Loss on the early extinguishment of debt | [4] | 7 | 5 | 0 | ||
Other expense (income), net | 0 | 1 | (1) | |||
Total expenses | 5,870 | 5,763 | 5,461 | |||
Income before income taxes, equity in losses (earnings) and noncontrolling interests | 209 | 351 | 349 | |||
Income tax expense (benefit) | [9] | 65 | (65) | 144 | ||
Equity in losses (earnings) of unconsolidated entities | 4 | (18) | (12) | |||
Net income | 140 | 434 | 217 | |||
Less: Net income attributable to noncontrolling interests | (3) | (3) | (4) | |||
Net income attributable to Realogy Holdings and Realogy Group | $ 137 | $ 431 | $ 213 | |||
Earnings per share attributable to Realogy Holdings: | ||||||
Basic earnings per share | $ 1.10 | $ 3.15 | $ 1.47 | |||
Diluted earnings per share | $ 1.09 | $ 3.11 | $ 1.46 | |||
Weighted average common and common equivalent shares of Realogy Holdings outstanding: | ||||||
Basic | 124 | 136.7 | 144.5 | |||
Diluted | 125.3 | 138.4 | 145.8 | |||
Gross Commission Income | ||||||
Revenues | ||||||
Net revenues | [10] | $ 4,533 | $ 4,576 | [3] | $ 4,277 | [3] |
Service revenue | ||||||
Revenues | ||||||
Net revenues | [11] | 947 | 938 | [3] | 955 | [3] |
Franchise fees | ||||||
Revenues | ||||||
Net revenues | [12] | 393 | 396 | [3] | 372 | [3] |
Other | ||||||
Revenues | ||||||
Net revenues | [13] | $ 206 | $ 204 | [3] | $ 206 | [3] |
[1] | Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $39 million, $40 million and $43 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions. | |||||
[2] | 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 $306 million, $311 million and $293 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are eliminated through the Corporate and Other line. | |||||
[3] | Prior period amounts have not been adjusted under the modified retrospective method. | |||||
[4] | Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. | |||||
[5] | The year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. | |||||
[6] | The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment.The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment.The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. | |||||
[7] | Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016, respectively. | |||||
[8] | Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million, respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. | |||||
[9] | Income tax benefit for the year ended December 31, 2017 reflects the impact of the 2017 Tax Act. | |||||
[10] | Approximately 75% of the Company's total net 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. | |||||
[11] | Approximately 15% of the Company's total net revenues related to service fees primarily consisting 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. Relocation fees at the Relocation Services segment primarily include: (i) referral fees which are recognized at a point in time of the closing of a homesale transaction, (ii) outsourcing fees, which are management fees charged to clients frequently related to a bundle of relocation services performed and are recognized over the average time period to complete a move, and (iii) referral commissions from third party suppliers which are recognized at the time of the completion of the related service. | |||||
[12] | Approximately 5% of the Company's total net revenues related to franchise fees at the Real Estate Franchise Services segment, primarily domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). | |||||
[13] | Approximately 5% of the Company's total net revenues related to other revenue, which comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees and other miscellaneous revenues across all of the business segments. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 140 | $ 434 | $ 217 |
Currency translation adjustment | (3) | 3 | (5) |
Defined Benefit Plans: | |||
Actuarial loss for the plans | (6) | (1) | (3) |
Less: amortization of actuarial loss to periodic pension cost | (2) | (2) | (1) |
Defined benefit plans | (4) | 1 | (2) |
Other comprehensive (loss) income, before tax | (7) | 4 | (7) |
Income tax (benefit) expense related to items of other comprehensive (loss) income amounts | (1) | 1 | (3) |
Other comprehensive (loss) income, net of tax | (6) | 3 | (4) |
Comprehensive income | 134 | 437 | 213 |
Less: comprehensive income attributable to noncontrolling interests | (3) | (3) | (4) |
Comprehensive income attributable to Realogy Holdings and Realogy Group | $ 131 | $ 434 | $ 209 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 225 | $ 227 |
Restricted cash | 13 | 7 |
Trade receivables (net of allowance for doubtful accounts of $9 and $11) | 146 | 153 |
Relocation receivables | 231 | 223 |
Other current assets | 153 | 179 |
Total current assets | 768 | 789 |
Property and equipment, net | 304 | 289 |
Goodwill | 3,712 | 3,710 |
Trademarks | 749 | 749 |
Franchise agreements, net | 1,227 | 1,294 |
Other intangibles, net | 254 | 284 |
Other non-current assets | 276 | 222 |
Total assets | 7,290 | 7,337 |
Current liabilities: | ||
Accounts payable | 147 | 156 |
Securitization obligations | 231 | 194 |
Current portion of long-term debt | 748 | 127 |
Accrued expenses and other current liabilities | 401 | 478 |
Total current liabilities | 1,527 | 955 |
Long-term debt | 2,800 | 3,221 |
Deferred income taxes | 389 | 327 |
Other non-current liabilities | 259 | 212 |
Total liabilities | 4,975 | 4,715 |
Commitments and contingencies (Note 13) | ||
Equity: | ||
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at December 31, 2018 and December 31, 2017 | 0 | 0 |
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 114,620,499 shares issued and outstanding at December 31, 2018 and 131,636,870 shares issued and outstanding at December 31, 2017 | 1 | 1 |
Additional paid-in capital | 4,869 | 5,285 |
Accumulated deficit | (2,507) | (2,631) |
Accumulated other comprehensive loss | (52) | (37) |
Total stockholders' equity | 2,311 | 2,618 |
Noncontrolling interests | 4 | 4 |
Total equity | 2,315 | 2,622 |
Total liabilities and equity | $ 7,290 | $ 7,337 |
Consolidated Balance Sheet Pare
Consolidated Balance Sheet Parenthetical - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 9 | $ 11 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares outstanding | 114,620,499 | 131,636,870 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Operating Activities | |||||
Net income | $ 140 | $ 434 | $ 217 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 195 | 198 | [1] | 202 | [2] |
Deferred income taxes | 71 | (63) | 124 | ||
Amortization of deferred financing costs and discount | 15 | 16 | 16 | ||
Loss on the early extinguishment of debt | 7 | 5 | 0 | ||
Equity in losses (earnings) of unconsolidated entities | 4 | (18) | (12) | ||
Stock-based compensation | 40 | 52 | 57 | ||
Mark-to-market adjustments on derivatives | 3 | (2) | 4 | ||
Other adjustments to net income | 0 | 1 | (4) | ||
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions: | |||||
Trade receivables | 7 | (1) | (10) | ||
Relocation receivables | (9) | 23 | 31 | ||
Other assets | (6) | (25) | (22) | ||
Accounts payable, accrued expenses and other liabilities | (71) | 9 | (17) | ||
Dividends received from unconsolidated entities | 3 | 52 | 11 | ||
Other, net | (5) | (14) | (11) | ||
Net cash provided by operating activities | 394 | 667 | 586 | ||
Investing Activities | |||||
Property and equipment additions | (105) | (99) | (87) | ||
Payments for acquisitions, net of cash acquired | (1) | (18) | (95) | ||
Investment in unconsolidated entities | (15) | (55) | 0 | ||
Proceeds from investments in unconsolidated entities | 19 | 11 | 0 | ||
Other, net | 11 | 15 | (9) | ||
Net cash used in investing activities | (91) | (146) | (191) | ||
Financing Activities | |||||
Net change in revolving credit facilities | 200 | (130) | 0 | ||
Payments for refinancing of Term Loan B | (4) | 0 | (758) | ||
Proceeds from refinancing of Term Loan A & A-1 | 17 | 0 | 355 | ||
Amortization payments on term loan facilities | (25) | (42) | (41) | ||
Proceeds from issuance of Senior Notes | 0 | 0 | 750 | ||
Redemption of Senior Notes | 0 | 0 | (500) | ||
Net change in securitization obligations | 38 | (11) | (40) | ||
Debt issuance costs | (16) | (6) | (16) | ||
Cash paid for fees associated with early extinguishment of debt | 0 | (1) | 0 | ||
Repurchase of common stock | (402) | (280) | (195) | ||
Dividends paid on common stock | (45) | (49) | (26) | ||
Proceeds from exercise of stock options | 1 | 8 | 2 | ||
Taxes paid related to net share settlement for stock-based compensation | (10) | (11) | (6) | ||
Payments of contingent consideration related to acquisitions | (22) | (22) | (25) | ||
Other, net | (29) | (26) | (34) | ||
Net cash used in financing activities | (297) | (570) | (534) | ||
Effect of changes in exchange rates on cash, cash equivalents and restricted cash | (2) | 2 | (3) | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 4 | (47) | (142) | ||
Cash, cash equivalents and restricted cash, beginning of period | 234 | 281 | 423 | ||
Cash, cash equivalents and restricted cash, end of period | 238 | 234 | 281 | ||
Supplemental Disclosure of Cash Flow Information | |||||
Interest payments (including securitization interest of $9, $7 and $6 respectively) | 185 | 172 | 181 | ||
Income tax payments, net | 7 | 12 | 24 | ||
Securitization Interest | $ 9 | $ 7 | $ 6 | ||
[1] | Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016, respectively. | ||||
[2] | Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million, respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. |
Consolidated Statements Of Equi
Consolidated Statements Of Equity (Deficit) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- controlling Interests | |
Balance (in shares) at at Dec. 31, 2015 | 146,700,000 | ||||||
Balance at Dec. 31, 2015 | $ 2,422 | $ 1 | $ 5,733 | $ (3,280) | $ (36) | $ 4 | |
Net income | 217 | 213 | 4 | ||||
Other comprehensive income (loss) | $ (4) | (4) | [1] | ||||
Stock Repurchased and Retired During Period, Shares | (7,100,000) | (6,900,000) | |||||
Stock Repurchased and Retired During Period, Value | $ (195) | (195) | |||||
Exercise of stock options (in shares) | 100,000 | ||||||
Exercise of stock options | 2 | 2 | |||||
Stock-based compensation | 57 | 57 | |||||
Issuance of shares for vesting of equity awards | 500,000 | ||||||
Shares withheld for taxes on equity awards (in shares) | (200,000) | ||||||
Shares withheld for taxes on equity awards | (6) | (6) | |||||
Dividends, Common Stock, Cash | (26) | ||||||
Dividends ($0.36 per share) | (3) | ||||||
Dividends Total Equity | (29) | ||||||
Balance (in shares) at at Dec. 31, 2016 | 140,200,000 | ||||||
Balance at Dec. 31, 2016 | $ 2,469 | $ 1 | 5,565 | (3,062) | (40) | 5 | |
Dividends, Per Share | $ 0.18 | ||||||
Net income | $ 434 | 431 | 3 | ||||
Other comprehensive income (loss) | $ 3 | 3 | [1] | ||||
Stock Repurchased and Retired During Period, Shares | (9,400,000) | (9,500,000) | |||||
Stock Repurchased and Retired During Period, Value | $ (280) | (280) | |||||
Exercise of stock options (in shares) | 300,000 | ||||||
Exercise of stock options | 8 | 8 | |||||
Stock-based compensation | 52 | 52 | |||||
Issuance of shares for vesting of equity awards | 1,000,000 | ||||||
Shares withheld for taxes on equity awards (in shares) | (400,000) | ||||||
Shares withheld for taxes on equity awards | (11) | (11) | |||||
Dividends, Common Stock, Cash | (49) | ||||||
Dividends ($0.36 per share) | (4) | ||||||
Dividends Total Equity | $ (53) | ||||||
Balance (in shares) at at Dec. 31, 2017 | 131,636,870 | 131,600,000 | |||||
Balance at Dec. 31, 2017 | $ 2,622 | $ 1 | 5,285 | (2,631) | (37) | 4 | |
Dividends, Per Share | $ 0.36 | ||||||
Net income | $ 140 | 137 | 3 | ||||
Other comprehensive income (loss) | $ (6) | (6) | |||||
Stock Repurchased and Retired During Period, Shares | (17,900,000) | (17,900,000) | |||||
Stock Repurchased and Retired During Period, Value | $ (402) | (402) | |||||
Exercise of stock options (in shares) | 0 | ||||||
Exercise of stock options | 1 | 1 | |||||
Stock-based compensation | 40 | 40 | |||||
Issuance of shares for vesting of equity awards | 1,200,000 | ||||||
Shares withheld for taxes on equity awards (in shares) | (300,000) | ||||||
Shares withheld for taxes on equity awards | (10) | (10) | |||||
Dividends, Common Stock, Cash | (45) | ||||||
Dividends ($0.36 per share) | (3) | ||||||
Dividends Total Equity | $ (48) | ||||||
Balance (in shares) at at Dec. 31, 2018 | 114,620,499 | 114,600,000 | |||||
Balance at Dec. 31, 2018 | $ 2,315 | $ 1 | $ 4,869 | $ (2,507) | $ (52) | $ 4 | |
Dividends, Per Share | $ 0.36 | ||||||
[1] | As of December 31, 2018, the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests. |
Note 1. Basis of Presentation B
Note 1. Basis of Presentation Basis of Presentation (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation [Text Block] | 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 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 consolidated financial statements. The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated. Business Description The Company reports its operations in the following four business segments (the number of offices and agents are unaudited): • Real Estate Franchise Services (known as Realogy Franchise Group or RFG)—franchises the Century 21 ® , Coldwell Banker ® , Coldwell Banker Commercial ® , ERA ® , Sotheby's International Realty ® and Better Homes and Gardens ® Real Estate brand names. As of December 31, 2018 , our real estate franchise systems and proprietary brands had approximately 299,400 independent sales agents worldwide, including approximately 191,700 independent sales agents operating in the U.S. (which included approximately 50,200 company owned brokerage independent sales agents). As of December 31, 2018 , our real estate franchise systems and proprietary brands had approximately 16,600 offices worldwide in 113 countries and territories, including approximately 6,000 brokerage offices in the U.S. ( which included approximately 760 company owned brokerage offices). • Company Owned Real Estate Brokerage Services (known as NRT)—operates a full-service real estate brokerage business with approximately 760 owned and operated brokerage offices with approximately 50,200 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 with 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. |
Note 2. Summary of Significant
Note 2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES In presenting the consolidated financial statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates. REVENUE RECOGNITION See Note 3, "Revenue Recognition", for further discussion. CONSOLIDATION The Company consolidates any variable interest entity ("VIE") for which it is the primary beneficiary with a controlling financial interest. Also, the Company consolidates an entity not deemed a VIE if its ownership, direct or indirect, exceeds 50% of the outstanding voting shares of an entity and/or it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity method or at fair value with changes in fair value recognized in net income, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee. The Company measures all other investments at fair value with changes in fair value recognized in net income or in the case that an equity investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. CASH AND CASH EQUIVALENTS The Company considers highly liquid investments with remaining maturities not exceeding three months at the date of purchase to be cash equivalents. 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 $13 million and $7 million at December 31, 2018 and 2017 , respectively. ALLOWANCE FOR DOUBTFUL ACCOUNTS The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current developments and includes specific accounts for which payment has become unlikely. The process by which the Company calculates the allowance begins in the individual business units where specific problem accounts are identified and reserved primarily based upon the age profile of the receivables and specific payment issues. ADVERTISING EXPENSES Advertising costs are generally expensed in the period incurred. Advertising expenses, recorded within the marketing expense line item on the Company’s Consolidated Statements of Operations, were approximately $207 million , $211 million and $198 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. DEBT ISSUANCE COSTS Debt issuance costs include costs incurred in connection with obtaining debt and extending existing debt. These financing costs are presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount, with the exception of the debt issuance costs related to the Revolving Credit Facility and securitization obligations which are classified as a deferred financing asset within other assets. The debt issuance costs are amortized via the effective interest method and the amortization period is the life of the related debt. INCOME TAXES The Company’s provision for income taxes is determined using the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. These differences are based upon estimated differences between the book and tax basis of the assets and liabilities for the Company. Certain tax assets and liabilities of the Company may be adjusted in connection with the finalization of income tax audits. The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that all or some portion of the recorded deferred tax balances will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. 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 and interest rate swaps to manage its exposure to future interest rate volatility associated with its variable rate borrowings. The Company has not elected to utilize hedge accounting for these instruments; therefore, any change in fair value is recorded in the Consolidated Statements of Operations. However, the fluctuations in the value of these instruments generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. See Note 16, "Risk Management and Fair Value of Financial Instruments", for further discussion. INVESTMENTS The Company owned 49.9% of PHH Home Loans, a mortgage origination venture formed in 2005 for the purpose of originating and selling mortgage loans primarily sourced through the Company’s real estate brokerage and relocation businesses, while PHH Corporation ("PHH") owned the remaining percentage. In February 2017, Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreed to form a new mortgage origination joint venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"). During the third and fourth quarters of 2017, Guaranteed Rate Affinity, acquired certain assets of the mortgage operations of PHH Home Loans, including its four regional centers and employees across the United States, but not its mortgage assets. Guaranteed Rate Affinity began doing business in August 2017 on a phased-in basis. Guaranteed Rate Affinity originates and markets its mortgage lending services to the Company's real estate brokerage and relocation subsidiaries as well as other real estate brokerage companies across the country. Guaranteed Rate owns a controlling 50.1% stake of Guaranteed Rate Affinity and the Company owns 49.9% . The Company has certain governance rights related to the joint venture, however it does not have control of the day-to-day operations of Guaranteed Rate Affinity. While the equity earnings or losses related to PHH Home Loans were included in the financial results of the Company Owned Real Estate Brokerage Services segment, the equity earnings or losses related to Guaranteed Rate Affinity are included in the financial results of the Title and Settlement Services segment. At December 31, 2018 and 2017 , the Company had various equity method investments aggregating $51 million and $74 million , respectively, which are recorded within other current and non-current assets on the accompanying Consolidated Balance Sheets. The $51 million investment balance at December 31, 2018 included $43 million for the Company's investment in Guaranteed Rate Affinity. The $74 million investment balance at December 31, 2017 included $48 million for the Company's investment in Guaranteed Rate Affinity and $19 million for the Company's remaining investment in PHH Home Loans. During the first quarter of 2018, the Company's interest in PHH Home Loans was sold to a subsidiary of PHH Corporation and the Company received net cash proceeds of $19 million reducing the investment balance in PHH Home Loans to zero . For the year ended December 31, 2018 , the Company recorded equity losses of $4 million at the Title and Settlement Services segment primarily related to losses from the operations of Guaranteed Rate Affinity. For the year ended December 31, 2017 , the Company recorded equity earnings of $18 million which consisted of $35 million of earnings from the sale of PHH Home Loans' assets to Guaranteed Rate Affinity, partially offset by $7 million of exit costs and losses of $6 million from the continuing operations of PHH Home Loans. In addition, there was a $4 million loss from equity method investments at the Title and Settlement Services segment primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $3 million of amortization of intangible assets recorded in purchase accounting. For the year ended December 31, 2016 , the Company recorded equity earnings of $12 million , which consisted of $8 million relating to its investment in PHH Home Loans. The Company received $3 million , $63 million and $11 million in cash dividends from equity method investments during the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company invested $4 million and $55 million of cash into Guaranteed Rate Affinity during the years ended December 31, 2018 and 2017 , respectively. PROPERTY AND EQUIPMENT Property and equipment (including leasehold improvements) are initially recorded at cost, net of accumulated depreciation and amortization. Depreciation, recorded as a component of depreciation and amortization on the Consolidated Statements of Operations, is computed utilizing the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements, also recorded as a component of depreciation and amortization, is computed utilizing the straight-line method over the estimated benefit period of the related assets or the lease term, if shorter. Useful lives are 30 years for buildings, up to 20 years for leasehold improvements, and from 3 to 7 years for furniture, fixtures and equipment. The Company capitalizes the costs of software developed for internal use which commences during the development phase of the project. The Company amortizes software developed or obtained for internal use on a straight-line basis, generally from 1 to 5 years, when such software is ready for use. The net carrying value of software developed or obtained for internal use was $93 million and $86 million at December 31, 2018 and 2017 , respectively. IMPAIRMENT OF GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Indefinite-lived intangible assets primarily consist of trademarks acquired in business combinations. Goodwill and indefinite-lived assets are not amortized, but are subject to impairment testing. The aggregate carrying values of our goodwill and other indefinite-lived intangible assets were $3,712 million and $767 million , respectively, at December 31, 2018 and are subject to impairment testing annually as of October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when appropriate, the carrying value is reduced to fair value. In testing goodwill, the fair value of our reporting units is estimated utilizing a discounted cash flow approach utilizing long-term cash flow forecasts and our annual operating plans adjusted for terminal value assumptions. We determine the fair value of our reporting units utilizing our best estimate of future revenues, operating expenses including commission expense, cash flows, market and general economic conditions 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 sensitivity analysis on key estimates and assumptions. Based upon the impairment analysis performed in the fourth quarter of 2018 , 2017 and 2016 , there was no impairment of goodwill or other indefinite-lived intangible assets for these years. Management evaluated the effect of lowering the estimated fair value for each of the reporting units by 10% and determined that no impairment of goodwill would have been recognized under this evaluation for 2018 , 2017 or 2016 . The Company evaluates the recoverability of its other long-lived assets, including amortizable intangible assets, if circumstances indicate an impairment may have occurred. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, then the carrying value of such assets is reduced to fair value through a charge to the Company’s Consolidated Statements of Operations. There were no impairments relating to other long-lived assets, including amortizable intangible assets, during 2018 , 2017 or 2016 . SUPPLEMENTAL CASH FLOW INFORMATION Significant non-cash transactions in 2018 , 2017 and 2016 included $20 million , $18 million and $14 million , respectively, in capital lease additions, which resulted in non-cash additions to property and equipment, net and other non-current liabilities. STOCK-BASED COMPENSATION The Company grants stock-based awards to certain senior management, employees and directors including non-qualified stock options, restricted stock, restricted stock units and performance share units . The fair value of non-qualified stock options is estimated using the Black-Scholes option pricing model on the grant date and is recognized as expense over the service period based on the vesting requirements. The fair value of r estricted stock, restricted stock units and performance share units without a market condition is measured based on the closing price of the Company's common stock on the grant date and is recognized as expense over the service period of the award, or when requisite performance metrics or milestones are probable of being achieved . The fair value of awards with a market condition are estimated using the Monte Carlo simulation method and expense is recognized on a straight-line basis over the requisite service period of the award. The Company recognizes forfeitures as they occur. Determining the fair value of stock-based awards at the grant date requires considerable judgment, including estimating expected volatility and expected term, risk-free rate. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update ("ASUs") No. 2014-09 (Topic 606) " Revenue from Contracts with Customers " (the "new revenue standard"). The Company adopted the new revenue standard on January 1, 2018 using the modified retrospective transition method in which the cumulative effect of applying the new revenue standard was recognized as an adjustment to the opening balance of retained earnings. See Note 3, "Revenue Recognition", for further details. In February 2018, the FASB issued a new standard which permits companies to reclassify certain income tax effects resulting from the 2017 Tax Act, called "stranded tax effects", from accumulated other comprehensive income ("AOCI") to retained earnings. According to the new guidance, the reclassification amount should include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of enactment of the 2017 Tax Act related to items remaining in AOCI. The guidance is effective for all companies for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption is permitted. The Company early adopted this standard in the first quarter of 2018 which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit for $9 million . The Company’s accounting policy for releasing income tax effects from AOCI is to release those effects when our entire portfolio of the type of item is liquidated. In June 2018, the FASB issued a new standard related to non-employee share-based payment accounting. The new guidance eliminates specific accounting for non-employee share-based payments and aligns the treatment for awards issued to employees and non-employees reducing the complexity of measurement of non-employee awards and creating a single accounting model. The new standard is applied to all new awards granted after the date of adoption. The Company elected to early adopt this guidance during the second quarter of 2018. There was an immaterial impact upon adoption. 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 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. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact of all Accounting Standards Updates. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In February 2016, the FASB issued its new standard on leases which requires virtually all leases to be recognized on the balance sheet. Lessees will recognize a right-of-use asset and a lease liability for all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for lease incentives, prepayments and initial direct costs. For income statement purposes, leases will be classified as either operating or finance leases. Operating leases will result in straight-line expense, similar to current operating leases, while finance leases will result in a front-loaded expense pattern, similar to current capital leases. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The new standard was effective on January 1, 2019, with early adoption permitted, initially requiring a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. In July 2018, the FASB issued an ASU that allows entities to elect an optional transition relief giving companies the option to apply the provisions of the new guidance at the effective date (e.g., January 1, 2019), as opposed to the earliest comparative period presented in the financial statements under the modified retrospective transition approach (January 1, 2017), and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company will adopt the new standard during the first quarter of 2019 and will elect the optional transition relief. The new standard allows for an optional package of practical expedients during transition which permit companies to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company will elect this package of practical expedients; however, the Company will not elect the use of hindsight practical expedients and therefore current lease terms largely remained unchanged. The new standard also allows practical expedients for future accounting under the new standard. The Company will elect the short-term lease recognition exemption and will not recognize a lease obligation and right-of-use asset on its balance sheet for all leases with terms of 12 months or less. The Company also will elect the practical expedient to not separate lease and non-lease components for all of its leases resulting in a larger lease liability recorded on the balance sheet. The Company evaluated the impact of the standard on its consolidated financial statements and believes that the most significant effects of adoption relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for real estate operating leases. On adoption, the Company currently expects to recognize total lease liabilities ranging from $650 million to $670 million with corresponding right-of-use assets of $595 million to $615 million based on the present value of the remaining minimum rental payments partially offset by the reclassification of existing deferred rent liabilities. The Company has revised and implemented policies and internal controls, as well as a new lease management system to account for leases under the new guidance. |
Note 3. Revenue Recognition Rev
Note 3. Revenue Recognition Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer | 3. REVENUE RECOGNITION Adoption of the New Revenue Standard Effective January 1, 2018, the Company adopted the new revenue standard using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard; however, the comparative prior period amounts have not been restated and continue to be reported in accordance with historic accounting under ASC Topic 605. The majority of the Company's revenue continues to be recognized at the completion of a homesale transaction under the new revenue standard, however as a result of the adoption the Company recognized additional contract liabilities and deferred assets associated with certain other revenue streams. As of January 1, 2018, the Company recorded a net debit to its opening Accumulated deficit of $22 million , net of tax, due to the cumulative impact of adopting the new revenue standard, with the impact primarily related to the recognition of additional contract liabilities for initial area development fees and deferred assets for prepaid commissions. Contract Liabilities for Initial Area Development Fees ("ADF"): Contract liabilities are recorded when cash payments are received or due in advance of the Company's performance. The Company records these as deferred revenues and are classified as current or non-current liabilities in the Consolidated Balance Sheets based on the expected timing of revenue recognition. The Real Estate Franchise Services segment collects an initial ADF for international territory transactions, which are recorded as deferred revenue when received and recognized into revenue over the term of the agreement, typically 25 years, 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. ADFs were recognized as revenue upfront when received under historical guidance. Prepaid Commissions: The incremental direct costs of obtaining a contract, which primarily consist of franchise sales commissions, are deferred and amortized generally over the estimated life of the customer relationship for domestic and international contracts. The Company classifies prepaid commissions as current or non-current assets in the Consolidated Balance Sheets based on the expected timing of recognizing expense. The Real Estate Franchise Services segment recognizes a deferred asset for commissions paid to Realogy franchise sales employees upon the sale of a new franchise. The amount of commissions is calculated as a percentage of the anticipated gross commission income of the new franchisee or the amount of the ADF and is amortized on a straight-line basis over the estimated life of franchise customer relationships, 30 years for domestic franchise agreements, or the agreement term for international franchise agreements which is generally 25 years. Franchise sales commissions were expensed upfront when paid under historical guidance. Practical Expedients and Exemptions: The Company elected to apply the practical expedient that only requires the Company to apply the revenue standard to contracts that were open as of the beginning of the earliest period presented which impacted the amount of prepaid commissions capitalized. The majority of the Company's contracts are transactional in nature or have a duration of one-year or less. Accordingly, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The cumulative effect of the changes made to the Consolidated Balance Sheets for the adoption of the new revenue standard were as follows: Balance Sheet accounts prior to the new revenue standard adoption adjustments Adjustments due to the adoption of the new revenue standard Balance Sheet accounts after the new revenue standard adoption adjustments ASSETS Current assets: Trade receivables $ 153 $ 1 $ 154 Other current assets 179 2 181 Total current assets 789 3 792 Other non-current assets 222 23 245 Total assets $ 7,337 $ 26 $ 7,363 LIABILITIES AND EQUITY Current liabilities: Accrued expenses and other current liabilities $ 478 $ 2 $ 480 Total current liabilities 955 2 957 Deferred income taxes 327 (8 ) 319 Other non-current liabilities 212 54 266 Total liabilities 4,715 48 4,763 Equity: Accumulated deficit (a) (2,622 ) (22 ) (2,644 ) Accumulated other comprehensive loss (a) (46 ) — (46 ) Total stockholders' equity 2,618 (22 ) 2,596 Total equity 2,622 (22 ) 2,600 Total liabilities and equity $ 7,337 $ 26 $ 7,363 _______________ (a) Beginning balances have been adjusted for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million . See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. The impact of adopting the new revenue standard, as compared to historic guidance under ASC Topic 605, was immaterial to the Company's Consolidated Financial Statements as of and for the year ended December 31, 2018 . Revenue Recognition 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 new revenue standard. The Company's revenue is disaggregated by major revenue categories on our Consolidated Statements of Operations and further disaggregated by business segment as follows: Years Ended December 31, 2018 vs December 31, 2017 (e) Real Estate Company Relocation Title and Corporate and Other Total 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 Gross commission income (a) $ — $ — $ 4,533 $ 4,576 $ — $ — $ — $ — $ — $ — $ 4,533 $ 4,576 Service revenue (b) — — 9 9 374 378 564 551 — — 947 938 Franchise fees (c) 688 695 — — — — — — (295 ) (299 ) 393 396 Other (d) 132 135 65 58 4 4 16 19 (11 ) (12 ) 206 204 Net revenues $ 820 $ 830 $ 4,607 $ 4,643 $ 378 $ 382 $ 580 $ 570 $ (306 ) $ (311 ) $ 6,079 $ 6,114 Years Ended December 31, 2017 vs December 31, 2016 (e) Real Estate Company Relocation Title and Corporate and Other Total 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Gross commission income (a) $ — $ — $ 4,576 $ 4,277 $ — $ — $ — $ — $ — $ — $ 4,576 $ 4,277 Service revenue (b) — — 9 3 378 401 551 551 — — 938 955 Franchise fees (c) 695 654 — — — — — — (299 ) (282 ) 396 372 Other (d) 135 127 58 64 4 4 19 22 (12 ) (11 ) 204 206 Net revenues $ 830 $ 781 $ 4,643 $ 4,344 $ 382 $ 405 $ 570 $ 573 $ (311 ) $ (293 ) $ 6,114 $ 5,810 _______________ (a) Approximately 75% of the Company's total net 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) Approximately 15% of the Company's total net revenues related to service fees primarily consisting 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. Relocation fees at the Relocation Services segment primarily include: (i) referral fees which are recognized at a point in time of the closing of a homesale transaction, (ii) outsourcing fees, which are management fees charged to clients frequently related to a bundle of relocation services performed and are recognized over the average time period to complete a move, and (iii) referral commissions from third party suppliers which are recognized at the time of the completion of the related service. (c) Approximately 5% of the Company's total net revenues related to franchise fees at the Real Estate Franchise Services segment, primarily domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). (d) Approximately 5% of the Company's total net revenues related to other revenue, which comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees and other miscellaneous revenues across all of the business segments. (e) Prior period amounts have not been adjusted under the modified retrospective method. The Company's revenue streams are discussed further below by business segment: Real Estate Franchise Services The Company franchises its real estate brands to real estate brokerage businesses that are independently owned and operated. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a gross percentage (generally 6% ) of the franchisee’s gross commission income. Royalty fees are accrued as the underlying franchisee revenue is earned (upon close of the homesale transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Non-standard sales incentives are recorded as a reduction to revenue ratably over the related performance period or from the date of issuance through the remaining life of the related franchise agreement. Franchise revenue also includes domestic initial franchise fees which are generally non-refundable and recognized by the Company as revenue upon the execution or opening of a new franchisee office to cover the upfront costs associated with opening the franchisee for business under one of Realogy’s brands. The Company also earns marketing fees from its franchisees and utilizes such fees to fund marketing campaigns on behalf of its franchisees. As such, brand marketing fund fees are recorded as deferred revenue when received and recognized into revenue as earned when these funds are spent on marketing activities. The balance for deferred brand marketing fund fees decrease d from $13 million at January 1, 2018 to $12 million at December 31, 2018 primarily due to amounts recognized into revenue matching expenses for marketing activities, partially offset by additional fees received from franchisees during the year ended December 31, 2018 . The Company collects initial ADFs 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. The balance for deferred ADFs decrease d from $58 million at January 1, 2018 to $54 million at December 31, 2018 due to revenues of $5 million recognized during the year ended December 31, 2018 that were included in the deferred revenue balance at the beginning of the period, partially offset by $1 million of additional area development fees received during the year ended December 31, 2018 . In addition, the Company recognizes a deferred asset for commissions paid to Realogy franchise sales employees upon the sale of a new franchise as these are considered costs of obtaining a contract with a customer that are expected to provide benefits to the Company for longer than one year. The amount of commissions is calculated as a percentage of the anticipated gross commission income of the new franchisee or ADF and is amortized over 30 years for domestic franchise agreements or the agreement term for international franchise agreements (generally 25 years). The amount of prepaid commissions was $24 million at January 1, 2018 and $25 million at December 31, 2018 . Company Owned Real Estate Brokerage Services As an owner-operator of real estate brokerages, the Company assists home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue at a point in time which is upon the closing of a real estate transaction (i.e., purchase or sale of a home). These revenues are referred to as gross commission income. The commissions the Company pays to real estate agents are recognized concurrently with associated revenues and presented as the commission and other agent-related costs line item on the accompanying Consolidated Statements of Operations. The Company has relationships with developers, primarily in major cities, to provide marketing and brokerage services in new developments. New development closings generally have a development period of between 18 and 24 months from contracted date to closing. In some cases, the Company receives advanced commissions which are recorded as deferred revenue when received and recognized as revenue when the new development closes. The balance of advanced commissions related to developments was a liability of $10 million at both January 1, 2018 and December 31, 2018 . During the year ended December 31, 2018 , the balance increased $6 million related to additional commissions received for new developments, offset by a $6 million decrease due to revenues recognized on units closed. Relocation Services The Company provides relocation services to corporate and government clients for the transfer of their employees ("transferees"). Such services include homesale assistance including the purchasing and/or selling of a transferee’s home and providing home equity advances to transferees (generally guaranteed by the individual's employer), arranging household goods moving services, and other relocation services such as expense processing, relocation policy counseling, relocation-related accounting, coordinating visa and immigration support, intercultural and language training and destination services. In the majority of relocation transactions, the gain or loss on the sale of a transferee’s home is generally borne by the individual's employer. C lients may pay an outsourcing management fee that can cover several of the relocation services listed above, according to the clients' specific needs. In addition, the Company provides home buying and selling assistance to members of Affinity organizations. The Company earns referral commission revenue primarily from real estate brokers for the home sale and purchase for transferees a nd Affinity members, which is recognized at a point in time when the underlying property closes. Revenues from other third-party service providers where the Company earns a referral commission are recognized at the point in time at the completion of services. Furthermore, the Company generally earns interest income on the funds it advances on behalf of the transferring employee, which is recorded within other revenue (as is the corresponding interest expense on the securitization obligations) in the accompanying Consolidated Statements of Operations. The Company earns revenues from outsourcing management fees charged to clients for the performance and facilitation of relocation services. 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. The balance for outsourcing management fees decrease d from $5 million on January 1, 2018 to $4 million on December 31, 2018 . During the year ended December 31, 2018 , the balance increased $62 million primarily related to additions due to new management fees billed on new relocation files in advance of the Company satisfying its performance obligation, offset by a $63 million decrease as a result of revenues recognized as the performance obligations were satisfied. The Relocation Services segment manages the Cartus Broker Network, which is a network of real estate brokers consisting of our company owned brokerage operations, select franchisees and independent real estate brokers who have been approved to become members. Network fees are billed in the fourth quarter of the previous year for the following year's membership. Starting with 2019 membership fees, the network fees were billed in the first quarter of 2019, resulting in a zero balance at the end of 2018. These fees are recognized into revenue on a straight-line basis each month during the membership period. The balance for Cartus Broker Membership decrease d from $8 million at January 1, 2018 to zero at December 31, 2018 due to $12 million of revenues recognized during the year ended December 31, 2018 that were included in the deferred revenue balance at the beginning of the period, offset by a $4 million increase related to new network fees. Title and Settlement Services The Company provides title and closing services, which include title search procedures for title insurance policies, homesale escrow and other closing services. Title revenues and title and closing service fees are recorded at a point in time which occurs at the time a homesale transaction or refinancing closes. The Company also owns an underwriter of title insurance. For unaffiliated agents, the underwriter recognizes policy premium revenue on a gross basis (before deduction of agent commission) upon notice of policy issuance from the agent. For affiliated title agents, the underwriter recognizes the incremental policy premium revenue upon the effective date of the title policy as the agent commission revenue is already recognized by the affiliated title agent. Contract Balances (Deferred Revenue) The following table shows the change in the Company's contract liabilities related to revenue contracts by reportable segment for the period: Year Ended December 31, 2018 Beginning Balance at January 1, 2018 Additions during the period Recognized as Revenue during the period Ending Balance at December 31, 2018 Real Estate Franchise Services (a) $ 79 $ 118 $ (119 ) $ 78 Company Owned Real Estate Brokerage Services 17 19 (18 ) 18 Relocation Services 18 87 (96 ) 9 Total $ 114 $ 224 $ (233 ) $ 105 _______________ (a) Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment. |
Note 4. Intangible Assets Intan
Note 4. Intangible Assets Intangible Assets (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure | 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 January 1, 2016 $ 2,292 $ 841 $ 360 $ 125 $ 3,618 Goodwill acquired (a) — 52 — 20 72 Balance at December 31, 2016 2,292 893 360 145 3,690 Goodwill acquired (b) — 11 — 9 20 Balance at December 31, 2017 2,292 904 360 154 3,710 Goodwill acquired (c) — 2 — — 2 Balance at December 31, 2018 $ 2,292 $ 906 $ 360 $ 154 $ 3,712 Goodwill and accumulated impairment summary Gross goodwill $ 3,315 $ 1,064 $ 641 $ 478 $ 5,498 Accumulated impairment losses (d) (1,023 ) (158 ) (281 ) (324 ) (1,786 ) Balance at December 31, 2018 $ 2,292 $ 906 $ 360 $ 154 $ 3,712 _______________ (a) Goodwill acquired during the year ended December 31, 2016 relates to the acquisition of eleven real estate brokerage operations and one title and settlement operation. (b) Goodwill acquired during the year ended December 31, 2017 relates to the acquisition of sixteen real estate brokerage operations and two title and settlement operations. (c) Goodwill acquired during the year ended December 31, 2018 relates to the acquisition of three real estate brokerage operations. (d) During the fourth quarter of 2008 and 2007 the Company recorded impairment charges, which reduced goodwill by $1,279 million and $507 million , respectively. No goodwill or unamortized intangible asset impairments have been recorded since 2008. Intangible assets are as follows: As of December 31, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable—Franchise agreements (a) $ 2,019 $ 792 $ 1,227 $ 2,019 $ 725 $ 1,294 Indefinite life—Trademarks (b) $ 749 $ 749 $ 749 $ 749 Other Intangibles Amortizable—License agreements (c) $ 45 $ 11 $ 34 $ 45 $ 10 $ 35 Amortizable—Customer relationships (d) 549 359 190 549 335 214 Indefinite life—Title plant shares (e) 18 18 18 18 Amortizable—Pendings and listings (f) — — — 2 1 1 Amortizable—Other (g) 33 21 12 33 17 16 Total Other Intangibles $ 645 $ 391 $ 254 $ 647 $ 363 $ 284 _______________ (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 ® 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) Generally amortized over a period of 5 months . (g) Consists of covenants not to compete which are amortized over their contract lives and other intangibles which are generally amortized over periods ranging from 5 to 10 years. Intangible asset amortization expense is as follows: For the Year Ended December 31, 2018 2017 2016 Franchise agreements $ 67 $ 67 $ 67 License agreements 1 1 1 Customer relationships 24 25 28 Pendings and listings 1 4 12 Other 4 5 5 Total $ 97 $ 102 $ 113 Based on the Company’s amortizable intangible assets as of December 31, 2018 , the Company expects related amortization expense to be approximately $97 million , $95 million , $93 million , $92 million , $91 million and $995 million in 2019 , 2020 , 2021 , 2022 , 2023 and thereafter, respectively. |
Note 5. Franchising and Marketi
Note 5. Franchising and Marketing Activities Franchising and Marketing Activities (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Franchising and Marketing Activities [Abstract] | |
Franchisors [Text Block] | FRANCHISING AND MARKETING ACTIVITIES Franchise fee revenue includes domestic initial franchise fees and international area development fees of $6 million , $8 million and $8 million for each of the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company’s real estate franchisees may receive volume incentives on their royalty payments. Such annual incentives are based upon the amount of the franchisees commission income earned and paid to the Company during the calendar year. Each brand has several different annual incentive schedules currently in effect. Franchise fee revenue is recorded net of annual volume incentives provided to real estate franchisees of $52 million , $62 million and $56 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company’s wholly-owned real estate brokerage services segment, NRT, pays royalties to the Company’s franchise business; however, such amounts are eliminated in consolidation. NRT paid royalties to the Real Estate Franchise Services segment of $295 million , $299 million and $282 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Marketing fees are generally paid by the Company’s real estate franchisees and are generally calculated based on a specified percentage of gross closed commissions earned on real estate transactions, and may be subject to certain minimum and maximum payments. Brand marketing fund revenue was $86 million , $87 million and $83 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, which included marketing fees paid to the Real Estate Franchise Services segment from NRT of $11 million , $12 million and $11 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. As provided for in the franchise agreements and generally at the Company’s discretion, all of these fees are to be expended for marketing purposes. The number of franchised and company owned offices in operation are as follows: (Unaudited) As of December 31, 2018 2017 2016 Franchised: Century 21 ® 9,637 7,973 7,330 ERA ® 2,331 2,298 2,347 Coldwell Banker ® 2,380 2,330 2,289 Coldwell Banker Commercial ® 171 180 180 Sotheby’s International Realty ® 949 905 836 Better Homes and Gardens ® Real Estate 362 353 332 Total Franchised 15,830 14,039 13,314 Company Owned: Coldwell Banker ® 672 707 708 Sotheby’s International Realty ® 41 41 41 Corcoran ® /Other 42 41 40 Total Company Owned 755 789 789 The number of franchised and company owned offices (in the aggregate) changed as follows: (Unaudited) For the Year Ended December 31, 2018 2017 2016 Franchised: Beginning balance 14,039 13,314 12,771 Additions 2,149 1,137 847 Terminations (358 ) (412 ) (304 ) Ending balance 15,830 14,039 13,314 Company Owned: Beginning balance 789 789 787 Additions 8 20 38 Closures (42 ) (20 ) (36 ) Ending balance 755 789 789 As of December 31, 2018 , there were an insignificant number of franchise agreements that were executed for which offices are not yet operating. Additionally, as of December 31, 2018 , there were an insignificant number of franchise agreements pending termination. In order to assist franchisees in converting to one of the Company’s brands or as an incentive to renew their franchise agreement, the Company may at its discretion, provide non-standard incentives, primarily in the form of conversion notes. Provided the franchisee meets certain minimum annual revenue thresholds during the term of the notes and is in compliance with the terms of the franchise agreement, the amount of the note is forgiven annually in equal ratable amounts generally over the life of the franchise agreement. Otherwise, related principal is due and payable to the Company. The amount of such franchisee conversion notes were $131 million and $124 million , at December 31, 2018 and 2017 , respectively. These notes are principally classified within other non-current assets in the Company’s Consolidated Balance Sheets. The Company recorded a contra-revenue in the statement of operations related to the forgiveness and impairment of these notes and other sales incentives of $29 million , $25 million and $24 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Note 6. Property and Equipment,
Note 6. Property and Equipment, Net Property and Equipment, Net (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of: December 31, 2018 2017 Furniture, fixtures and equipment $ 274 $ 281 Capitalized software 401 366 Building and leasehold improvements 290 265 Land 3 3 Gross property and equipment 968 915 Less: accumulated depreciation (664 ) (626 ) Property and equipment, net $ 304 $ 289 The Company recorded depreciation expense related to property and equipment of $98 million , $96 million and $89 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Note 7. Accrued Expenses And Ot
Note 7. Accrued Expenses And Other Current Liabilities Accrued Expenses And Other Current Liabilities (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses And Other Current Liabilities | 7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of: December 31, 2018 2017 Accrued payroll and related employee costs $ 118 $ 140 Accrued volume incentives 37 41 Accrued commissions 30 38 Restructuring accruals 15 5 Deferred income 59 68 Accrued interest 15 13 Contingent consideration for acquisitions 8 26 Due to former parent 21 18 Other 98 129 Total accrued expenses and other current liabilities $ 401 $ 478 |
Note 8. Short And Long-Term Deb
Note 8. Short And Long-Term Debt Short and Long-Term Debt (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Short And Long-Term Debt | SHORT AND LONG-TERM DEBT Total indebtedness is as follows: December 31, 2018 2017 Senior Secured Credit Facility: Revolving Credit Facility $ 270 $ 70 Term Loan B 1,053 1,063 Term Loan A Facility: Term Loan A 732 390 Term Loan A-1 — 339 4.50% Senior Notes 449 444 5.25% Senior Notes 547 546 4.875% Senior Notes 497 496 Total Short-Term & Long-Term Debt $ 3,548 $ 3,348 Securitization Obligations: Apple Ridge Funding LLC $ 218 $ 181 Cartus Financing Limited 13 13 Total Securitization Obligations $ 231 $ 194 Indebtedness Table As of December 31, 2018 , 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 $ 270 $ * $ 270 Term Loan B (3) February 2025 1,069 16 1,053 Term Loan A Facility: Term Loan A (4) February 2023 736 4 732 Senior Notes 4.50% April 2019 450 1 449 Senior Notes 5.25% December 2021 550 3 547 Senior Notes 4.875% June 2023 500 3 497 Securitization obligations: (5) Apple Ridge Funding LLC (6) June 2019 218 * 218 Cartus Financing Limited (7) August 2019 13 * 13 Total (8) $ 3,806 $ 27 $ 3,779 _______________ * 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 December 31, 2018 , the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019 , the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. (2) Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018 . (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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018 . (5) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. (6) As of December 31, 2018 , the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $32 million of available capacity. (7) Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of December 31, 2018 , the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 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 $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 . Maturities Table As of December 31, 2018 , the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for each of the next five years is as follows: Year Amount 2019 (a) $ 749 2020 44 2021 612 2022 81 2023 1,075 _______________ (a) Consists of $450 million of 4.50% Senior Notes due in April 2019, four quarters of 2019 amortization payments totaling $18 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, as well as $270 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. On February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. See Note 19, "Subsequent Events" for further details. Senior Secured Credit Facility In July 2016, the Company entered into a third amendment (the "Third Amendment") to the Amended and Restated Credit Agreement dated as of March 5, 2013, as amended. The Third Amendment replaced the $1,858 million Term Loan B due March 2020 with a new $1,100 million Term Loan B due July 20, 2022. In January 2017, the Company entered into a fourth amendment (the "Fourth Amendment") to the Amended and Restated Credit Agreement that repriced the Term Loan B through a refinancing of the existing term loan with a new Term Loan B reducing the interest rate by 75 basis points. In February 2018, the Company entered into a fifth amendment (the "Fifth Amendment") to the Amended and Restated Credit Agreement (as amended, amended and restated, modified or supplemented from time to time, the "Senior Secured Credit Agreement") that replaced the approximately $1,100 million Term Loan B due July 2022 with a new $1,080 million Term Loan B due February 2025. In January 2017, the Company entered into an Incremental Assumption Agreement to the Senior Secured Credit Agreement pursuant to which the Company increased the borrowing capacity under its Revolving Credit Facility to $1,050 million from the existing $815 million . In February 2018, the Company entered into the sixth amendment (the "Sixth Amendment") to the Amended and Restated Senior Secured Credit Agreement which 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. 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 $1,400 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 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 us 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 . The leverage ratio is tested quarterly regardless of the amount of borrowings outstanding and letters of credit issued under the revolver 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 December 31, 2018 , Realogy Group was in compliance with the senior secured leverage ratio covenant. Term Loan A Facility In October 2015, Realogy Group entered into the Term Loan A senior secured credit agreement which provides for a five -year, $435 million loan issued at par with a maturity date of October 23, 2020 (the “Term Loan A”) and has terms substantially similar to the Senior Secured Credit Agreement. In July 2016, Realogy Group entered into a first amendment to the Term Loan A senior secured credit agreement. Under the amendment, the Company issued the Term Loan A-1 in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A. In February 2018, Realogy Group entered into a second amendment to the Term Loan A senior secured credit 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 commence 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 Facility permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and the Company, without the consent of the existing lenders under the Term Loan A, plus an unlimited amount if the Company's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Term Loan A Facility also permits us to issue senior secured or unsecured notes in lieu of any incremental facility. Unsecured Notes The 4.50% Senior Notes, 5.25% Senior Notes and 4.875% Senior Notes (collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on April 15, 2019, December 1, 2021 and June 1, 2023, respectively. Interest on the Unsecured Notes is payable each year semiannually on April 15 and October 15 for the 4.50% Senior Notes and June 1 and December 1 for both the 5.25% Senior Notes and 4.875% Senior Notes. 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 affirmative and negative covenants of Realogy Group and the subsidiary guarantors. On February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. See Note 19, "Subsequent Events" for further details. 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 December 31, 2018 , the capacity of the facility was $66 million , with $63 million being utilized and at December 31, 2017 , the capacity was $74 million , with $69 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 2019. As of December 31, 2018 , the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program with $218 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 August 2019. As of December 31, 2018 , there were $13 million of outstanding borrowings on 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 Facility 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 $238 million and $218 million of underlying relocation receivables and other related relocation assets at December 31, 2018 and 2017 , 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 Consolidated Balance Sheets. Interest incurred in connection with borrowings under these facilities amounted to $9 million and $7 million for the years ended December 31, 2018 and 2017 , respectively. This interest is recorded within net revenues in the accompanying 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 3.8% and 3.3% for the years ended December 31, 2018 and 2017 , respectively. Loss on the Early Extinguishment of Debt and Write-Off of Financing Costs 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 year ended December 31, 2018. As a result of the refinancing transaction in January 2017 and a reduction of the Unsecured Letter of Credit Facility in September of 2017, the Company recorded losses on the early extinguishment of debt of $5 million during the year ended December 31, 2017. |
Note 9. Employee Benefit Plans
Note 9. Employee Benefit Plans Employee Benefit Plans (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS DEFINED BENEFIT PENSION PLAN The Company’s defined benefit pension plan was closed to new entrants as of July 1, 1997 and existing participants do not accrue any additional benefits. The net periodic pension cost for 2018 was less than $1 million and was comprised of interest cost of approximately $5 million and the amortization of the actuarial net loss of $2 million , offset by a benefit of $7 million for the expected return on assets. The net periodic pension cost for 2017 was $1 million and was comprised of interest cost of approximately $6 million and the amortization of the actuarial net loss of $2 million , partially offset by a benefit of $7 million for the expected return on assets. At December 31, 2018 and 2017 , the accumulated benefit obligation of this plan was $128 million and $145 million , respectively, and the fair value of the plan assets were $90 million and $108 million , respectively, resulting in an unfunded accumulated benefit obligation of $38 million and $37 million , respectively, which is recorded in Other non-current liabilities in the Consolidated Balance Sheets. Estimated future benefit payments as of December 31, 2018 are as follows: Year Amount 2019 $ 9 2020 9 2021 9 2022 9 2023 9 2024 through 2028 45 The minimum funding required during 2019 is estimated to be $3 million . The following table presents the fair values of plan assets by category as of December 31, 2018 : Asset Category Quoted Price in Active Market for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Total Cash and cash equivalents $ 3 $ — $ — $ 3 Equity securities — 43 — 43 Fixed income securities — 44 — 44 Total $ 3 $ 87 $ — $ 90 The following table presents the fair values of plan assets by category as of December 31, 2017 : Asset Category Quoted Price in Active Market for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Total Cash and cash equivalents $ 1 $ — $ — $ 1 Equity securities — 71 — 71 Fixed income securities — 36 — 36 Total $ 1 $ 107 $ — $ 108 OTHER EMPLOYEE BENEFIT PLANS The Company also maintains post-retirement health and welfare plans for certain subsidiaries and a non-qualified pension plan for certain individuals. At December 31, 2018 and 2017 , the related projected benefit obligation for these plans accrued on the Company’s Consolidated Balance Sheets (primarily within other non-current liabilities) was $5 million and $6 million , respectively. DEFINED CONTRIBUTION SAVINGS PLAN The Company sponsors a defined contribution savings plan that provides certain of its eligible employees an opportunity to accumulate funds for retirement and has a Company match for a portion of the contributions made by participating employees. The Company’s cost for contributions to this plan was $16 million , $16 million and $15 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Note 10. Income Taxes Income Ta
Note 10. Income Taxes Income Taxes (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES The components of pretax income for domestic and foreign operations consisted of the following: Year Ended December 31, 2018 2017 2016 Domestic $ 204 $ 365 $ 351 Foreign 1 4 10 Pretax income $ 205 $ 369 $ 361 The components of income tax expense (benefit) consisted of the following: Year Ended December 31, 2018 2017 2016 Current: Federal $ (13 ) $ (7 ) $ 10 State 5 4 8 Foreign 2 1 2 Total current (6 ) (2 ) 20 Deferred: Federal 62 (72 ) 107 State 9 9 16 Foreign — — 1 Total deferred 71 (63 ) 124 Income tax expense (benefit) $ 65 $ (65 ) $ 144 The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), which became law on December 22, 2017, reduced the U.S. Federal corporate tax rate from 35% to 21% for tax years beginning in 2018. The $65 million income tax benefit in 2017 included a tax benefit of approximately $184 million due to the re-measurement of the Company’s net deferred tax liabilities associated with the 2017 Tax Act and a $32 million reduction in the Company's reserve for uncertain tax positions, partially offset by current operating results. A reconciliation of the Company’s effective income tax rate at the U.S. federal statutory rate of 21% to the actual expense was as follows: Year Ended December 31, 2018 2017 2016 Federal statutory rate 21 % 35 % 35 % State and local income taxes, net of federal tax benefits 6 4 4 Impact of the 2017 Tax Act — (50 ) — Non-deductible equity compensation 2 1 1 Non-deductible executive compensation 1 — — Other permanent differences 1 1 — Uncertain tax positions (1 ) (9 ) — Net change in valuation allowance 2 1 — Other — (1 ) — Effective tax rate 32 % (18 %) 40 % Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the deferred income tax assets and liabilities, as of December 31, are as follows: 2018 2017 Deferred income tax assets: Net operating loss carryforwards $ 241 $ 288 Tax credit carryforwards 24 35 Accrued liabilities and deferred income 92 85 Minimum pension obligations 16 16 Provision for doubtful accounts 7 8 Liability for unrecognized tax benefits 1 1 Interest rate swaps 5 2 Total deferred tax assets 386 435 Less: valuation allowance (18 ) (13 ) Total deferred income tax assets after valuation allowance 368 422 Deferred income tax liabilities: Depreciation and amortization 747 736 Prepaid expenses 8 2 Basis difference in investment in joint ventures 1 10 Total deferred tax liabilities 756 748 Net deferred income tax liabilities $ (388 ) $ (326 ) Deferred tax assets and deferred tax liabilities are netted by tax jurisdiction. The net deferred income tax liability of $388 million as of December 31, 2018 is included in the accompanying Consolidated Balance Sheets with $389 million in deferred income taxes (non-current liabilities) and $1 million in other non-current assets. The net deferred income tax liability of $326 million as of December 31, 2017 is included in the accompanying Consolidated Balance Sheets with $327 million in deferred income taxes (non-current liabilities) and $1 million in other non-current assets. As of December 31, 2018 , the Company had gross federal and state net operating loss carryforwards of $855 million . The federal net operating loss carryforwards expire between 2029 and 2033 and the state net operating loss carryforwards expire between 2019 and 2033. Accounting for Uncertainty in Income Taxes The Company utilizes the FASB guidance for accounting for uncertainty in income taxes, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company reflects changes in its liability for unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. As of December 31, 2018 , the Company’s gross liability for unrecognized tax benefits was $20 million , of which $17 million would affect the Company’s effective tax rate, if recognized. The Company does not expect that its unrecognized tax benefits will significantly change over the next 12 months. The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Tax returns for the 2006 through 2018 tax years remain subject to examination by federal and certain state tax authorities. In significant foreign jurisdictions, tax returns for the 2008 through 2018 tax years generally remain subject to examination by their respective tax authorities. The Company believes that it is reasonably possible that the total amount of its unrecognized tax benefits could decrease by $1 million in certain taxing jurisdictions where the statute of limitations is set to expire within the next 12 months . The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. The Company recognized a reduction of interest expense of $1 million for the year ended December 31, 2018 , a reduction of interest expense of $2 million for the year ended December 31, 2017 and a reduction of interest expense of $4 million for the year ended December 31, 2016 . The rollforward of unrecognized tax benefits are summarized in the table below: Unrecognized tax benefits—January 1, 2016 $ 78 Gross increases—tax positions in prior periods 3 Reduction due to lapse of statute of limitations (3 ) Unrecognized tax benefits—December 31, 2016 78 Gross increases—tax positions in prior periods 1 Gross decreases—tax positions in prior periods (54 ) Reduction due to lapse of statute of limitations (3 ) Unrecognized tax benefits—December 31, 2017 22 Reduction due to lapse of statute of limitations (2 ) Unrecognized tax benefits—December 31, 2018 $ 20 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. Tax Sharing Agreement Under the Tax Sharing Agreement with Cendant, Wyndham Worldwide and Travelport, the Company is generally responsible for 62.5% of payments made to settle claims with respect to tax periods ending on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries, the operations (or former operations) of which were determined by Cendant not to relate specifically to the respective businesses of Realogy, Wyndham Worldwide, Avis Budget or Travelport. With respect to any remaining residual legacy Cendant tax liabilities, the Company and its former parent believe there is appropriate support for the positions taken on Cendant’s tax returns. However, tax audits and any related litigation, including disputes or litigation on the allocation of tax liabilities between parties under the Tax Sharing Agreement, could result in outcomes for the Company that are different from those reflected in the Company’s historical financial statements. |
Note 11. Restructuring Costs Re
Note 11. Restructuring Costs Restructuring Costs (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | RESTRUCTURING COSTS Restructuring charges for the years ended December 31, 2018 , 2017 and 2016 were $58 million , $12 million and $39 million , respectively. The components of the restructuring charges for the years ended December 31, 2018 , 2017 and 2016 were as follows: Years Ended December 31, 2018 2017 2016 Personnel-related costs (1) $ 25 $ 7 $ 22 Facility-related costs (2) 22 4 11 Internal use software impairment (3) 11 — — Other restructuring costs (4) — 1 6 Total restructuring charges (5) $ 58 $ 12 $ 39 _______________ (1) Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition. (2) Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments, net of applicable sublease income, 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 year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. 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 include senior leadership realignment, an enhanced focus on technology and talent, as well as further attention on office footprint and other operational efficiencies. The following is a reconciliation of the beginning and ending reserve balances for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Personnel-related costs Facility-related costs Internal use software impairment Total Balance at December 31, 2017 $ — $ — $ — $ — Restructuring charges 25 20 11 56 Costs paid or otherwise settled (18 ) (7 ) (11 ) (36 ) Balance at December 31, 2018 $ 7 $ 13 $ — $ 20 The following table shows the total costs currently expected to be incurred by type of cost for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred Personnel-related costs $ 27 $ 25 $ 2 Facility-related costs 20 20 — Internal use software impairment 11 11 — Total $ 58 $ 56 $ 2 The following table shows the total costs currently expected to be incurred by reportable segment for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred Real Estate Franchise Services $ 3 $ 3 $ — Company Owned Real Estate Brokerage Services 37 36 1 Relocation Services 11 11 — Title and Settlement Services 3 3 — Corporate and Other 4 3 1 Total $ 58 $ 56 $ 2 Business Optimization Initiative During the fourth quarter of 2015, the Company began a business optimization initiative that focused on maximizing the efficiency and effectiveness of the cost structure of each of the Company's business units. The action was designed to improve client service levels across each of the business units while enhancing the Company's profitability and incremental margins. The plan focused on several key areas of opportunity which include process improvement efficiencies, office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. The expected costs of activities undertaken in connection with the restructuring plan are largely complete. At December 31, 2017 , the remaining liability was $7 million . During the year ended December 31, 2018 , the Company incurred facility-related costs of $2 million and paid or settled costs of $7 million , resulting in a remaining accrual of $2 million . |
Note 12. Stock-Based Compensati
Note 12. Stock-Based Compensation Stock-Based Compensation (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company grants stock-based compensation awards to certain senior management, employees and directors including non-qualified stock options, restricted stock units ("RSUs"), performance restricted stock units ("PRSUs") and performance share units ("PSUs"). The Company's stockholders approved the 2018 Long-Term Incentive Plan (the "2018 Plan") at the 2018 Annual Meeting of Stockholders held on May 2, 2018. Upon approval of the 2018 Plan, the 2012 Amended and Restated Long-Term Incentive Plan, as amended (the "2012 Plan") was terminated, no future awards were permitted to be granted under the 2012 Plan, and any shares available for future issuance under the 2012 Plan were canceled. Under the 2018 Plan, 6 million shares were authorized for issuance plus any shares that expire or are forfeited under the 2012 Plan after March 1, 2018. As of December 31, 2018, there are approximately 5 million shares available for future grants. Each of the 2012 and 2018 Plan includes a retirement provision for equity grants which provide for continued vesting of awards once an employee has attained the age of 65 years , or 55 years of age or older plus at least ten years of tenure with the Company, provided they have been employed or provided services to the Company for one year following the date of grant or start of the performance period. A summary of activity for the year ended December 31, 2018 is presented below (number of shares in millions): Restricted Stock Units Weighted Average Grant Date Fair Value Performance Share Units (a) Weighted Average Grant Date Fair Value Options (e) Weighted Average Exercise Price Outstanding at January 1, 2018 2.0 $ 31.71 1.8 $ 33.16 3.6 $ 31.75 Granted 1.5 25.39 0.5 25.11 0.4 25.35 Distributed/Exercised (0.9 ) (b) 33.67 (0.4 ) (c) 42.14 — — Forfeited/Expired (0.1 ) 27.80 (0.1 ) 27.99 (0.2 ) 38.28 Outstanding at December 31, 2018 2.5 $ 27.32 1.8 $ 28.13 3.8 (d) $ 30.92 _______________ (a) The PSU amounts in the table are shown at the target amount of the award. (b) The total fair value of RSUs which were distributed during the year ended December 31, 2018 was $30 million . (c) The total fair value of PSUs which were distributed during the year ended December 31, 2018 was $15 million , which includes the distribution of PSUs awarded in 2015 subject to performance over the three-year performance period ended December 31, 2017, at a fair value of $9 million . Amounts distributed do not include 0.2 million PSUs awarded in 2016 subject to achievement against performance over the three-year period ended and vested December 31, 2018, at a fair value of $5 million and at a weighted average grant date fair value of $34.00 . These PSUs were distributed in early 2019. (d) Options outstanding at December 31, 2018 have an intrinsic value of zero and have a weighted average remaining contractual life of 5.3 years . (e) The following table summarizes information regarding exercisable stock options as of December 31, 2018 : Range of Exercise Prices Options Vested Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life $15.00 to $50.00 2.6 $ 28.82 $ — 4.1 years $50.01 and above 0.1 $ 137.50 $ — 1.9 years Awards granted annually include a mix of RSUs (PRSUs for the CEO and direct reports in 2017 and 2016), options and PSUs. The RSUs and PRSUs vest over three years, with 33.33% vesting on each anniversary of the grant date. The fair value of RSUs and PRSUs are equal to the closing sale price of the Company's common stock on the date of grant. Time-vesting of the PRSUs granted to the CEO and direct reports in 2017 and 2016 was subject to achievement of a minimum EBITDA performance goal during the year that the award was granted. The PSUs are incentives that reward grantees based upon the Company's financial performance over a three -year performance period which begins January 1st of the grant year and ends on December 31st of the third year following the grant year. There are two PSU awards: one is based upon the total stockholder return of Realogy's common stock relative to the total stockholder return of the SPDR S&P Homebuilders Index ("XHB") (the "RTSR award"), and the other is based upon the achievement of cumulative free cash flow goals. The number of shares that may be issued under each PSU award is variable and based upon the extent to which the performance goals are achieved over the performance period (with a range of payout from 0% to 175% of target for the RTSR award and 0% to 200% of target for the achievement of cumulative free cash flow award). The shares earned will be distributed during the first quarter after the end of the performance period. The fair value of PSUs without a market condition is equal to the closing sale price of the Company's common stock on the date of grant. The fair value of the PSU RTSR awards was estimated on the date of grant using the Monte Carlo Simulation method utilizing the following assumptions: 2018 RTSR PSU 2017 RTSR PSU 2016 RTSR PSU Weighted average grant date fair value $ 25.45 $ 27.98 $ 27.99 Weighted average expected volatility (a) 29.8 % 29.0 % 28.1 % Weighted average volatility of XHB 17.9 % 18.4 % 19.4 % Weighted average correlation coefficient 0.44 0.53 0.58 Weighted average risk-free interest rate 2.6 % 1.5 % 0.9 % Weighted average dividend yield — — — _______________ (a) Expected volatility is based on historical volatilities of the Company and select comparable companies. The stock options have a maximum term of ten years and vest over four years, with 25% vesting on each anniversary date of the grant date. The options have an exercise price equal to the closing sale price of the Company's common stock on the date of grant. The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions: 2018 Options 2017 Options 2016 Options Weighted average grant date fair value $ 7.12 $ 8.61 $ 10.81 Weighted average expected volatility (a) 28.5 % 30.7 % 31.7 % Weighted average expected term (years) (b) 6.25 6.25 6.25 Weighted average risk-free interest rate (c) 2.7 % 2.0 % 1.3 % Weighted average dividend yield 1.4 % 1.2 % 0.1 % _______________ (a) Expected volatility was based on historical volatilities of the Company and select comparable companies. (b) The expected term of the options granted represents the period of time that options are expected to be outstanding and is based on the simplified method. (c) The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options. Stock-Based Compensation Expense As of December 31, 2018 , based on current performance achievement expectations, there was $42 million of unrecognized compensation cost related to incentive equity awards under the plans which will be recorded in future periods as compensation expense over a remaining weighted average period of approximately 1.9 years . The Company recorded stock-based compensation expense related to the incentive equity awards of $40 million , $52 million and $57 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Note 13. Commitments And Contin
Note 13. Commitments And Contingencies Commitments And Contingencies (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies [Text Block] | COMMITMENTS AND CONTINGENCIES Litigation The Company is involved in claims, legal proceedings, alternative dispute resolution and governmental inquiries related to alleged contract disputes, business practices, intellectual property and other commercial, employment, regulatory and tax matters. Examples of such matters include but are not limited to allegations: • that independent residential real estate sales agents engaged by NRT 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 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 wage and hour claims; • 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 claims for alleged RESPA or state real estate law violations; • 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; • related to copyright law, including infringement actions alleging improper use of copyrighted photographs on websites or in marketing materials without consent of the copyright holder; • 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; • concerning anti-trust and anti-competition matters; and • those related to general fraud claims. Real Estate Business Litigation Whitlach v. Premier Valley, Inc. d/b/a Century 21 M&M and Century 21 Real Estate LLC (California Superior Court for the County of Alameda). This is a putative class action complaint filed 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 a claim pursuant to the California Private Attorneys Generals Act (“PAGA”). The PAGA claim 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. The case raises significant and various previously unlitigated claims and the PAGA claim adds additional financial risks and uncertainties. Given the early stage of this case, we cannot estimate a range of reasonably potential losses for this litigation. The Company will vigorously defend this action. Dodge, et al. v. PHH Corporation, et al., formerly captioned Strader, et al. and Hall v. PHH Corporation, et al. (U.S. District Court for the Central District of California). This is a purported class action brought by four California residents against 15 defendants, including Realogy and certain of its subsidiaries, PHH Corporation and PHH Home Loans, LLC (a joint venture between Realogy and PHH), alleging violations of Section 8(a) of RESPA. On May 19, 2017, the parties agreed in principle to a settlement of the action, pursuant to which the Company agreed to pay approximately $8 million (or one-half of the settlement). In settling the matter, the Company specifically denied any wrongdoing with respect to the claims asserted in the case. As a result of the settlement, the Company accrued $8 million in the second quarter of 2017 and the liability is included in accrued expenses and other current liabilities on the Consolidated Balance Sheets. The Court granted final approval of the settlement effective as of August 27, 2018. 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, actions against our title company alleging it knew or should have known that others were committing mortgage fraud, standard brokerage disputes like the failure to disclose accurate square footage or hidden defects in the property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including franchisees and independent sales 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 or state consumer fraud statutes. While the results of such claims and legal actions cannot be predicted with certainty, we do not believe based on information currently available to us that the final outcome of current proceedings against the Company will have a material adverse effect on our consolidated financial position, results of operations or cash flows. 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. * * * 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. 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 independent companies-one 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 $21 million and $18 million at December 31, 2018 and 2017 , respectively. The due to former parent balance was comprised of the Company’s portion of the following: (i) Cendant’s remaining state and foreign contingent tax liabilities, (ii) accrued interest on contingent tax liabilities, (iii) potential liabilities related to Cendant’s terminated or divested businesses, and (iv) potential liabilities related to the residual portion of accruals for Cendant operations. Tax Matters The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities whereby the outcome of the audits is uncertain. The Company believes there is appropriate support for positions taken on its tax returns. The liabilities that have been recorded represent the best estimates of the probable loss on certain positions and are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. However, the outcomes of tax audits are inherently uncertain. Escrow and Trust Deposits As a service to its customers, the Company administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250 thousand . These escrow and trust deposits totaled $426 million and $469 million at December 31, 2018 and 2017 , respectively. These escrow and trust deposits are not assets of the Company and, therefore, are excluded from the accompanying Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits. Leases The Company is committed to making rental payments under noncancelable operating leases covering various facilities and equipment. Future minimum lease payments required under noncancelable operating leases as of December 31, 2018 are as follows: Year Amount 2019 $ 165 2020 144 2021 120 2022 95 2023 79 Thereafter 196 Total $ 799 Capital lease obligations were $33 million , net of $2 million of imputed interest, at December 31, 2018 and $29 million , net of $2 million of imputed interest, at December 31, 2017 . The Company incurred rent expense of $196 million , $192 million and $186 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Purchase Commitments and Minimum Licensing Fees In the normal course of business, the Company makes various commitments to purchase goods or services from specific suppliers, including those related to capital expenditures. The purchase commitments made by the Company as of December 31, 2018 are approximately $113 million . The Company is required to pay a minimum licensing fee to Sotheby’s which began in 2009 and continues through 2054. The annual minimum licensing fee is approximately $2 million per year. The Company is also required to pay a minimum licensing fee to Meredith Corporation for the licensing of the Better Homes and Gardens Real Estate brand. The annual minimum licensing fee began in 2009 at $0.5 million and increased to $4 million in 2014, where it will generally remain through 2058. Future minimum payments for these purchase commitments and minimum licensing fees as of December 31, 2018 are as follows: Year Amount 2019 $ 71 2020 25 2021 20 2022 9 2023 9 Thereafter 226 Total $ 360 Standard Guarantees/Indemnifications In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company indemnifies another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing: (i) purchases, sales or outsourcing of assets or businesses, (ii) leases and sales of real estate, (iii) licensing of trademarks, (iv) use of derivatives, and (v) issuances of debt securities. The guarantees or indemnifications issued are for the benefit of the: (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in derivative contracts, and (v) underwriters in issuances of securities. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees as the triggering events are not subject to predictability. With respect to certain of the aforementioned guarantees, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential payments to be made. Other Guarantees/Indemnifications In the normal course of business, the Company coordinates numerous events for its franchisees and thus reserves a number of venues with certain minimum guarantees, such as room rentals at hotels local to the conference center. However, such room rentals are paid by each individual franchisee. If the franchisees do not meet the minimum guarantees, the Company is obligated to fulfill the minimum guaranteed fees. The maximum potential amount of future payments that the Company would be required to make under such guarantees is approximately $13 million . The Company would only be required to pay this maximum amount if none of the franchisees conducted their planned events at the reserved venues. Historically, the Company has not been required to make material payments under these guarantees. Insurance and Self-Insurance At December 31, 2018 and 2017 , the Consolidated Balance Sheets include approximately $26 million and $40 million , respectively, of liabilities relating to: (i) self-insured risks for errors and omissions and other legal matters incurred in the ordinary course of business within the Company Owned Real Estate Brokerage Services segment, (ii) vacant dwellings and household goods in transit and storage within the Relocation Services segment, and (iii) premium and claim reserves for the Company’s title underwriting business. The Company may also be subject to legal claims arising from the handling of escrow transactions and closings. The Company’s subsidiary, NRT, carries errors and omissions insurance for errors made during the real estate settlement process of $15 million in the aggregate, subject to a deductible of $1 million per occurrence. In addition, the Company carries an additional errors and omissions insurance policy for Realogy Holdings Corp. and its subsidiaries for errors made for real estate related services up to $45 million in the aggregate, subject to a deductible of $2.5 million per occurrence. This policy also provides excess coverage to NRT creating an aggregate limit of $60 million , subject to the NRT deductible of $1 million per occurrence. The Company issues title insurance policies which provide coverage for real property to mortgage lenders and buyers of real property. When acting as a title agent issuing a policy on behalf of an underwriter, assuming no negligence on part of the title agent, the Company is not liable for losses under those policies but rather the title insurer is typically liable for such losses. The title underwriter which the Company acquired in January 2006 typically underwrites title insurance policies of up to $1.5 million . For policies in excess of $1.5 million , the Company typically obtains a reinsurance policy from a national underwriter to reinsure the excess amount. The Company, as an underwriter, manages our claims losses through strict agent vetting, clear underwriting guidelines, training and frequent communications with our agents. Fraud, defalcation and misconduct by employees are also risks inherent in the business. The Company is the custodian of cash deposited by customers with specific instructions as to its disbursement from escrow, trust and account servicing files. The Company maintains Fidelity insurance covering the loss or theft of funds of up to $30 million per occurrence, subject to a deductible of $750 thousand per occurrence. The Company also maintains self-insurance arrangements relating to health and welfare, workers’ compensation, auto and general liability in addition to other benefits provided to the Company’s employees. The accruals for these self-insurance arrangements totaled approximately $15 million and $16 million at December 31, 2018 and 2017 , respectively. |
Note 14. Equity (Deficit) Equit
Note 14. Equity (Deficit) Equity (Deficit) (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | EQUITY Changes in Accumulated Other Comprehensive Loss The components of accumulated other comprehensive losses are as follows: Currency Translation Adjustments (1) Minimum Pension Liability Adjustment Accumulated Other Comprehensive Loss (2) Balance at January 1, 2016 $ (3 ) $ (33 ) $ (36 ) Other comprehensive loss before reclassifications (5 ) (3 ) (8 ) Amounts reclassified from accumulated other comprehensive income — 1 (3) 1 Income tax benefit 2 1 3 Current period change (3 ) (1 ) (4 ) Balance at December 31, 2016 (6 ) (34 ) (40 ) Other comprehensive income (loss) before reclassifications 3 (1 ) 2 Amounts reclassified from accumulated other comprehensive income — 2 (3) 2 Income tax expense (1 ) — (1 ) Current period change 2 1 3 Balance at December 31, 2017 (4 ) (33 ) (37 ) Adoption of a new accounting pronouncement (1 ) (4) (8 ) (4) (9 ) Other comprehensive loss before reclassifications (3 ) (6 ) (9 ) Amounts reclassified from accumulated other comprehensive income — 2 (3) 2 Income tax benefit — 1 1 Current period change (4 ) (11 ) (15 ) Balance at December 31, 2018 $ (8 ) $ (44 ) $ (52 ) _______________ (1) Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the balance sheet dates and equity accounts are translated at historical spot rates. Revenues and expenses are translated at average exchange rates during the periods presented. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in accumulated other comprehensive income (loss). Gains or losses resulting from foreign currency transactions are included in the Consolidated Statements of Operations. (2) As of December 31, 2018 , the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests. (3) These amounts represent the amortization of actuarial loss to periodic pension cost and were reclassified from accumulated other comprehensive income to the general and administrative expenses line on the statement of operations. (4) These amounts represent adjustments for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million during the first quarter of 2018. See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. Dividend Policy In August 2016, the Company’s Board of Directors approved the initiation of a quarterly cash dividend policy of $0.09 per share on its common stock. The Board declared and paid a quarterly cash dividend of $0.09 per share of the Company's common stock during each quarter of 2018, returning $45 million to stockholders. The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreements, and the indentures governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant. Pursuant to the Company’s policy, the dividends payable in cash are treated as a reduction of additional paid-in capital since the Company is currently in an accumulated deficit position. Realogy Group Statements of Equity for the years ended December 31, 2018 , 2017 and 2016 Total equity for Realogy Group equals that of Realogy Holdings, but the components, common stock and additional paid-in capital are different. The table below presents information regarding the balances and changes in common stock and additional paid-in capital of Realogy Group for each of the three years ended December 31, 2018 , 2017 and 2016 . Realogy Group Stockholder’s Equity Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Non- controlling Interests Total Equity Shares Amount Balance at January 1, 2016 — $ — $ 5,734 $ (3,280 ) $ (36 ) $ 4 $ 2,422 Cumulative effect of adoption of new accounting pronouncements — — — 5 — — 5 Net income — — — 213 — 4 217 Other comprehensive loss — — — — (4 ) — (4 ) Repurchase of Common Stock — — (195 ) — — — (195 ) Contributions from Realogy Holdings — — 2 — — — 2 Stock-based compensation — — 51 — — — 51 Dividends — — (26 ) — — (3 ) (29 ) Balance at December 31, 2016 — $ — $ 5,566 $ (3,062 ) $ (40 ) $ 5 $ 2,469 Net income — — — 431 — 3 434 Other comprehensive income — — — — 3 — 3 Repurchase of Common Stock — — (280 ) — — — (280 ) Contributions from Realogy Holdings — — 8 — — — 8 Stock-based compensation — — 41 — — — 41 Dividends — — (49 ) — — (4 ) (53 ) Balance at December 31, 2017 — $ — $ 5,286 $ (2,631 ) $ (37 ) $ 4 $ 2,622 Cumulative effect of adoption of new accounting pronouncements — — — (13 ) (9 ) — (22 ) Net income — — — 137 — 3 140 Other comprehensive loss — — — — (6 ) — (6 ) Repurchase of Common Stock — — (402 ) — — — (402 ) Contributions from Realogy Holdings — — 1 — — — 1 Stock-based compensation — — 30 — — — 30 Dividends — — (45 ) — — (3 ) (48 ) Balance at December 31, 2018 — $ — $ 4,870 $ (2,507 ) $ (52 ) $ 4 $ 2,315 |
Earnings (Loss) Per Share (Note
Earnings (Loss) Per Share (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | EARNINGS PER SHARE Earnings per share attributable to Realogy Holdings Basic earnings per share is computed based on net income attributable to Realogy Holdings stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Realogy Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options. The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, (in millions, except per share data) 2018 2017 2016 Net income attributable to Realogy Holdings shareholders $ 137 $ 431 $ 213 Basic weighted average shares 124.0 136.7 144.5 Stock options, restricted stock units and performance share units (a) 1.3 1.7 1.3 Weighted average diluted shares 125.3 138.4 145.8 Earnings Per Share: Basic $ 1.10 $ 3.15 $ 1.47 Diluted $ 1.09 $ 3.11 $ 1.46 _______________ (a) Excludes 6.9 million , 5.3 million and 4.5 million shares of common stock issuable for incentive equity awards which includes performance share units based on the achievement of target amounts, for the years ended December 31, 2018 , 2017 and 2016 , respectively, that are anti-dilutive to the diluted earnings per share computation. Under the 2016, 2017 and 2018 share repurchase programs, the Company's Board of Directors authorized up to $925 million of the Company’s common stock. For the year ended December 31, 2018 , the Company repurchased and retired 17.9 million shares of common stock for $402 million at a weighted average market price of $22.47 per share. For the year ended December 31, 2017 , the Company repurchased and retired 9.4 million shares of common stock for $276 million at a weighted average market price of $29.38 per share. For the year ended December 31, 2016 , the Company repurchased and retired 7.1 million shares of common stock for $199 million at a weighted average market price of $27.96 per share, which included 0.2 million shares for which the trade date occurred in late December 2016 while settlement occurred in January 2017. The purchase of shares under these plans reduce the weighted-average number of shares outstanding in the basic earnings per share calculation. |
Risk Management and Fair Value
Risk Management and Fair Value of Financial Instruments (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Risk Management and Fair Value of Financial Instruments [Abstract] | |
Risk Management and Fair Value of Financial Instruments | RISK MANAGEMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS RISK MANAGEMENT The following is a description of the Company’s risk management policies. Interest Rate Risk The Company is exposed to market risk from changes in interest rates primarily through senior secured debt. At December 31, 2018 , the Company's primary interest rate exposure was to interest rate fluctuations, specifically LIBOR, due to its impact on variable rate borrowings of Revolving Credit Facility and Term Loan B under the Senior Secured Credit Agreement and Term Loan A Facility. Given that borrowings under the Senior Secured Credit Agreement and Term Loan A Facility are generally based upon LIBOR, this rate will be the Company's primary market risk exposure for the foreseeable future. At December 31, 2018 , the Company had variable interest rate long-term debt, which was based on LIBOR, from the outstanding term loans and revolver under its Senior Secured Credit Facility and Term Loan A Facility of $2,075 million , excluding $231 million of securitization obligations. The Company has interest rate swaps with an aggregate notional value of $1,600 million to manage a portion of the Company's exposure to changes in interest rate associated with variable rate borrowings. The fixed interest rates on the swaps range from 2.07% to 3.11% . Although we have entered into these interest rate swaps, involving the exchange of floating for fixed rate interest payments, such interest rate swaps do not eliminate interest rate volatility for all of our variable rate indebtedness at December 31, 2018 . In addition, the fair value of the interest rate swaps is also subject to movements in LIBOR and will fluctuate in future periods. The Company has recognized an asset of $6 million and a liability of $16 million for the fair value of the interest rate swaps at December 31, 2018 . Therefore, an increase in the LIBOR yield curve could increase the fair value of the interest rate swaps and decrease interest expense. In the normal course of business, the Company borrows funds under its securitization facilities and utilizes such funds to generate assets on which it generally earns interest income. The Company does not believe it is exposed to significant interest rate risk in connection with these activities as the rate it incurs on such borrowings and the rate it earns on such assets are generally based on similar variable indices, thereby providing a natural hedge. Credit Risk and Exposure The Company is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amounts at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties. As of December 31, 2018 , there were no significant concentrations of credit risk with any individual counterparty or a group of counterparties. The Company actively monitors the credit risk associated with the Company’s receivables. Market Risk Exposure The Company Owned Real Estate Brokerage Services segment, NRT, owns real estate brokerage offices located in and around large metropolitan areas in the U.S. NRT has more offices and realizes more of its revenues in California, Florida and the New York metropolitan area than any other regions of the country. For the year ended December 31, 2018 , NRT generated approximately 27% of its revenues from California, 20% from the New York metropolitan area and 9% from Florida. For the year ended December 31, 2017 , NRT generated approximately 27% of its revenues from California, 22% from the New York metropolitan area and 9% from Florida. For the year ended December 31, 2016 , NRT generated approximately 26% of its revenues from California, 22% from the New York metropolitan area and 9% from Florida. 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 Euro, British Pound, Swiss Franc 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 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 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 . As of December 31, 2017 , 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 $25 million . 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 December 31, 2018 , 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 (a) August 2020 August 2025 $150 (a) November 2022 November 2027 _______________ (a) During the second quarter of 2018, the Company entered into four new forward starting interest rate swaps, two with a notional value of $125 million and two with a notional value of $150 million . 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 Consolidated Statements of Operations. The fair value of derivative instruments was as follows: Liability Derivatives Fair Value Not Designated as Hedging Instruments Balance Sheet Location December 31, 2018 December 31, 2017 Interest rate swap contracts Other non-current assets $ 6 $ — Other current and non-current liabilities $ 16 $ 13 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 Year Ended December 31, 2018 2017 2016 Interest rate swap contracts Interest expense $ 4 $ (4 ) $ 6 Foreign exchange contracts Operating expense (1 ) 2 (2 ) Fair Value Measurements The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level Input: Input Definitions: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure 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 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 following table summarizes fair value measurements by level at December 31, 2017 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) $ 3 $ — $ — $ 3 Interest rate swaps (included in other current and non-current liabilities) — 13 — 13 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 34 34 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, 2017 $ 34 Additions: contingent consideration related to acquisitions completed during the period 1 Reductions: payments of contingent consideration (23 ) Changes in fair value (reflected in the Consolidated Statement of Operations) (2 ) Fair value of contingent consideration at December 31, 2018 $ 10 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: December 31, 2018 December 31, 2017 Debt Principal Amount Estimated Fair Value (a) Principal Amount Estimated Fair Value (a) Senior Secured Credit Facility: Revolving Credit Facility $ 270 $ 270 $ 70 $ 70 Term Loan B 1,069 1,010 1,083 1,085 Term Loan A Facility: Term Loan A 736 707 391 393 Term Loan A-1 — — 342 343 4.50% Senior Notes 450 447 450 457 5.25% Senior Notes 550 524 550 569 4.875% Senior Notes 500 434 500 495 Securitization obligations 231 231 194 194 _______________ (a) The fair value of the Company's indebtedness is categorized as Level II. |
Segment Information (Notes)
Segment Information (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 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, 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. Revenues (a) (b) Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 820 $ 830 $ 781 Company Owned Real Estate Brokerage Services 4,607 4,643 4,344 Relocation Services 378 382 405 Title and Settlement Services 580 570 573 Corporate and Other (c) (306 ) (311 ) (293 ) Total Company $ 6,079 $ 6,114 $ 5,810 _______________ (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 $306 million , $311 million and $293 million for the years ended December 31, 2018 , 2017 and 2016 , 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 $39 million , $40 million and $43 million for the years ended December 31, 2018 , 2017 and 2016 , 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. Set forth in the tables below is a reconciliation of Net income to Operating EBITDA and Operating EBITDA presented by reportable segment for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 Net income attributable to Realogy Holdings and Realogy Group $ 137 $ 431 $ 213 Income tax expense (benefit) (a) 65 (65 ) 144 Income before income taxes 202 366 357 Add: Depreciation and amortization (b) 197 201 202 Interest expense, net 190 158 174 Restructuring costs, net (c) 58 12 39 Former parent legacy cost (benefit) (d) 4 (10 ) (2 ) Loss on the early extinguishment of debt (d) 7 5 — Operating EBITDA $ 658 $ 732 $ 770 Operating EBITDA Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 564 $ 560 $ 520 Company Owned Real Estate Brokerage Services (e) 44 135 159 Relocation Services 86 85 100 Title and Settlement Services 49 59 63 Corporate and Other (d)(f) (85 ) (107 ) (72 ) Total Company $ 658 $ 732 $ 770 ______________ (a) Income tax benefit for the year ended December 31, 2017 reflects the impact of the 2017 Tax Act. (b) Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million , respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. (c) The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment. The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment. The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. (d) Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. (e) Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016 , respectively. (f) Includes the elimination of transactions between segments. Depreciation and Amortization Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 77 $ 79 $ 77 Company Owned Real Estate Brokerage Services 51 50 49 Relocation Services 33 33 31 Title and Settlement Services 13 16 23 Corporate and Other 21 20 22 Total Company $ 195 $ 198 $ 202 Segment Assets As of December 31, 2018 2017 Real Estate Franchise Services $ 4,388 $ 4,413 Company Owned Real Estate Brokerage Services 1,228 1,258 Relocation Services 1,010 1,029 Title and Settlement Services 492 486 Corporate and Other 172 151 Total Company $ 7,290 $ 7,337 Capital Expenditures Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 10 $ 9 $ 8 Company Owned Real Estate Brokerage Services 44 44 44 Relocation Services 13 11 12 Title and Settlement Services 11 13 9 Corporate and Other 27 22 14 Total Company $ 105 $ 99 $ 87 The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries. United States All Other Countries Total On or for the year ended December 31, 2018 Net revenues $ 5,961 $ 118 $ 6,079 Total assets 7,214 76 7,290 Net property and equipment 302 2 304 On or for the year ended December 31, 2017 Net revenues $ 5,997 $ 117 $ 6,114 Total assets 7,261 76 7,337 Net property and equipment 287 2 289 On or for the year ended December 31, 2016 Net revenues $ 5,683 $ 127 $ 5,810 Total assets 7,347 74 7,421 Net property and equipment 265 2 267 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Provided below is selected unaudited quarterly financial data for 2018 and 2017 . 2018 First Second Third Fourth Net revenues Real Estate Franchise Services $ 176 $ 237 $ 221 $ 186 Company Owned Real Estate Brokerage Services 917 1,408 1,268 1,014 Relocation Services 79 105 108 86 Title and Settlement Services 120 162 162 136 Corporate and Other (a) (63 ) (92 ) (83 ) (68 ) Total Company $ 1,229 $ 1,820 $ 1,676 $ 1,354 Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) Real Estate Franchise Services $ 85 $ 152 $ 141 $ 107 Company Owned Real Estate Brokerage Services (76 ) 45 22 (37 ) Relocation Services (14 ) 29 34 9 Title and Settlement Services (8 ) 26 18 1 Corporate and Other (69 ) (78 ) (70 ) (108 ) Total Company $ (82 ) $ 174 $ 145 $ (28 ) Net income (loss) attributable to Realogy Holdings and Realogy Group $ (67 ) $ 123 $ 103 $ (22 ) Earnings (loss) per share attributable to Realogy Holdings (c) : Basic earnings (loss) per share $ (0.51 ) $ 0.97 $ 0.84 $ (0.19 ) Diluted earnings (loss) per share $ (0.51 ) $ 0.96 $ 0.83 $ (0.19 ) _______________ (a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. (b) The quarterly results include the following: • restructuring charges of $30 million , $6 million , $9 million and $13 million in the first, second, third and fourth quarters, respectively; • former parent legacy net cost of $4 million in the fourth quarter; and • a loss on the early extinguishment of debt of $7 million in the first quarter. (c) Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS (see Note 15 "Earnings Per Share" for further information). 2017 First Second Third Fourth Net revenues Real Estate Franchise Services $ 170 $ 237 $ 224 $ 199 Company Owned Real Estate Brokerage Services 897 1,392 1,267 1,087 Relocation Services 77 102 111 92 Title and Settlement Services 120 157 154 139 Corporate and Other (a) (61 ) (95 ) (82 ) (73 ) Total Company $ 1,203 $ 1,793 $ 1,674 $ 1,444 Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) Real Estate Franchise Services $ 82 $ 146 $ 139 $ 113 Company Owned Real Estate Brokerage Services (35 ) 65 36 (14 ) Relocation Services (5 ) 21 32 15 Title and Settlement Services (3 ) 23 19 6 Corporate and Other (73 ) (72 ) (73 ) (71 ) Total Company $ (34 ) $ 183 $ 153 $ 49 Net income (loss) attributable to Realogy Holdings and Realogy Group $ (28 ) $ 109 $ 95 $ 255 Earnings (loss) per share attributable to Realogy Holdings (c) : Basic earnings (loss) per share $ (0.20 ) $ 0.79 $ 0.70 $ 1.91 Diluted earnings (loss) per share $ (0.20 ) $ 0.78 $ 0.69 $ 1.89 _______________ (a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. (b) The quarterly results include the following: • restructuring charges of $5 million , $2 million , $2 million and $3 million in the first, second, third and fourth quarters, respectively; • former parent legacy net benefit of $11 million in the second quarter former parent legacy net cost of $1 million in the third quarter; and • a loss on the early extinguishment of debt of $4 million and $1 million in the first and third quarters, respectively. (c) Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS. |
Note 19. Subsequent Events Subs
Note 19. Subsequent Events Subsequent Events (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Redemption of $450 million of 4.50% Senior Notes On February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. |
Note 2. Summary of Significan_2
Note 2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | USE OF ESTIMATES In presenting the consolidated financial statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates. |
Consolidation, Policy [Policy Text Block] | CONSOLIDATION The Company consolidates any variable interest entity ("VIE") for which it is the primary beneficiary with a controlling financial interest. Also, the Company consolidates an entity not deemed a VIE if its ownership, direct or indirect, exceeds 50% of the outstanding voting shares of an entity and/or it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity method or at fair value with changes in fair value recognized in net income, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee. The Company measures all other investments at fair value with changes in fair value recognized in net income or in the case that an equity investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. |
Cash and Cash Equivalents, Policy [Policy Text Block] | CASH AND CASH EQUIVALENTS The Company considers highly liquid investments with remaining maturities not exceeding three months at the date of purchase to be cash equivalents. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | 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 $13 million and $7 million at December 31, 2018 and 2017 , respectively. |
Receivables, Policy [Policy Text Block] | ALLOWANCE FOR DOUBTFUL ACCOUNTS The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current developments and includes specific accounts for which payment has become unlikely. The process by which the Company calculates the allowance begins in the individual business units where specific problem accounts are identified and reserved primarily based upon the age profile of the receivables and specific payment issues. |
Advertising Costs, Policy [Policy Text Block] | ADVERTISING EXPENSES Advertising costs are generally expensed in the period incurred. Advertising expenses, recorded within the marketing expense line item on the Company’s Consolidated Statements of Operations, were approximately $207 million , $211 million and $198 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Deferred Charges, Policy [Policy Text Block] | DEBT ISSUANCE COSTS Debt issuance costs include costs incurred in connection with obtaining debt and extending existing debt. These financing costs are presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount, with the exception of the debt issuance costs related to the Revolving Credit Facility and securitization obligations which are classified as a deferred financing asset within other assets. The debt issuance costs are amortized via the effective interest method and the amortization period is the life of the related debt. |
Income Tax, Policy [Policy Text Block] | INCOME TAXES The Company’s provision for income taxes is determined using the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. These differences are based upon estimated differences between the book and tax basis of the assets and liabilities for the Company. Certain tax assets and liabilities of the Company may be adjusted in connection with the finalization of income tax audits. The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that all or some portion of the recorded deferred tax balances will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. |
Derivatives, Policy [Policy Text Block] | 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 and interest rate swaps to manage its exposure to future interest rate volatility associated with its variable rate borrowings. The Company has not elected to utilize hedge accounting for these instruments; therefore, any change in fair value is recorded in the Consolidated Statements of Operations. However, the fluctuations in the value of these instruments generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. |
Equity Method Investments [Policy Text Block] | INVESTMENTS The Company owned 49.9% of PHH Home Loans, a mortgage origination venture formed in 2005 for the purpose of originating and selling mortgage loans primarily sourced through the Company’s real estate brokerage and relocation businesses, while PHH Corporation ("PHH") owned the remaining percentage. In February 2017, Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreed to form a new mortgage origination joint venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"). During the third and fourth quarters of 2017, Guaranteed Rate Affinity, acquired certain assets of the mortgage operations of PHH Home Loans, including its four regional centers and employees across the United States, but not its mortgage assets. Guaranteed Rate Affinity began doing business in August 2017 on a phased-in basis. Guaranteed Rate Affinity originates and markets its mortgage lending services to the Company's real estate brokerage and relocation subsidiaries as well as other real estate brokerage companies across the country. Guaranteed Rate owns a controlling 50.1% stake of Guaranteed Rate Affinity and the Company owns 49.9% . The Company has certain governance rights related to the joint venture, however it does not have control of the day-to-day operations of Guaranteed Rate Affinity. While the equity earnings or losses related to PHH Home Loans were included in the financial results of the Company Owned Real Estate Brokerage Services segment, the equity earnings or losses related to Guaranteed Rate Affinity are included in the financial results of the Title and Settlement Services segment. At December 31, 2018 and 2017 , the Company had various equity method investments aggregating $51 million and $74 million , respectively, which are recorded within other current and non-current assets on the accompanying Consolidated Balance Sheets. The $51 million investment balance at December 31, 2018 included $43 million for the Company's investment in Guaranteed Rate Affinity. The $74 million investment balance at December 31, 2017 included $48 million for the Company's investment in Guaranteed Rate Affinity and $19 million for the Company's remaining investment in PHH Home Loans. During the first quarter of 2018, the Company's interest in PHH Home Loans was sold to a subsidiary of PHH Corporation and the Company received net cash proceeds of $19 million reducing the investment balance in PHH Home Loans to zero . For the year ended December 31, 2018 , the Company recorded equity losses of $4 million at the Title and Settlement Services segment primarily related to losses from the operations of Guaranteed Rate Affinity. For the year ended December 31, 2017 , the Company recorded equity earnings of $18 million which consisted of $35 million of earnings from the sale of PHH Home Loans' assets to Guaranteed Rate Affinity, partially offset by $7 million of exit costs and losses of $6 million from the continuing operations of PHH Home Loans. In addition, there was a $4 million loss from equity method investments at the Title and Settlement Services segment primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $3 million of amortization of intangible assets recorded in purchase accounting. For the year ended December 31, 2016 , the Company recorded equity earnings of $12 million , which consisted of $8 million relating to its investment in PHH Home Loans. The Company received $3 million , $63 million and $11 million in cash dividends from equity method investments during the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company invested $4 million and $55 million of cash into Guaranteed Rate Affinity during the years ended December 31, 2018 and 2017 , respectively. |
Property, Plant and Equipment, Policy [Policy Text Block] | PROPERTY AND EQUIPMENT Property and equipment (including leasehold improvements) are initially recorded at cost, net of accumulated depreciation and amortization. Depreciation, recorded as a component of depreciation and amortization on the Consolidated Statements of Operations, is computed utilizing the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements, also recorded as a component of depreciation and amortization, is computed utilizing the straight-line method over the estimated benefit period of the related assets or the lease term, if shorter. Useful lives are 30 years for buildings, up to 20 years for leasehold improvements, and from 3 to 7 years for furniture, fixtures and equipment. The Company capitalizes the costs of software developed for internal use which commences during the development phase of the project. The Company amortizes software developed or obtained for internal use on a straight-line basis, generally from 1 to 5 years, when such software is ready for use. The net carrying value of software developed or obtained for internal use was $93 million and $86 million at December 31, 2018 and 2017 , respectively. |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | IMPAIRMENT OF GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Indefinite-lived intangible assets primarily consist of trademarks acquired in business combinations. Goodwill and indefinite-lived assets are not amortized, but are subject to impairment testing. The aggregate carrying values of our goodwill and other indefinite-lived intangible assets were $3,712 million and $767 million , respectively, at December 31, 2018 and are subject to impairment testing annually as of October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when appropriate, the carrying value is reduced to fair value. In testing goodwill, the fair value of our reporting units is estimated utilizing a discounted cash flow approach utilizing long-term cash flow forecasts and our annual operating plans adjusted for terminal value assumptions. We determine the fair value of our reporting units utilizing our best estimate of future revenues, operating expenses including commission expense, cash flows, market and general economic conditions 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 sensitivity analysis on key estimates and assumptions. Based upon the impairment analysis performed in the fourth quarter of 2018 , 2017 and 2016 , there was no impairment of goodwill or other indefinite-lived intangible assets for these years. Management evaluated the effect of lowering the estimated fair value for each of the reporting units by 10% and determined that no impairment of goodwill would have been recognized under this evaluation for 2018 , 2017 or 2016 . The Company evaluates the recoverability of its other long-lived assets, including amortizable intangible assets, if circumstances indicate an impairment may have occurred. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, then the carrying value of such assets is reduced to fair value through a charge to the Company’s Consolidated Statements of Operations. There were no impairments relating to other long-lived assets, including amortizable intangible assets, during 2018 , 2017 or 2016 . |
Cash Flow, Supplemental Disclosures [Text Block] | SUPPLEMENTAL CASH FLOW INFORMATION Significant non-cash transactions in 2018 , 2017 and 2016 included $20 million , $18 million and $14 million , respectively, in capital lease additions, which resulted in non-cash additions to property and equipment, net and other non-current liabilities. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | STOCK-BASED COMPENSATION The Company grants stock-based awards to certain senior management, employees and directors including non-qualified stock options, restricted stock, restricted stock units and performance share units . The fair value of non-qualified stock options is estimated using the Black-Scholes option pricing model on the grant date and is recognized as expense over the service period based on the vesting requirements. The fair value of r estricted stock, restricted stock units and performance share units without a market condition is measured based on the closing price of the Company's common stock on the grant date and is recognized as expense over the service period of the award, or when requisite performance metrics or milestones are probable of being achieved . The fair value of awards with a market condition are estimated using the Monte Carlo simulation method and expense is recognized on a straight-line basis over the requisite service period of the award. The Company recognizes forfeitures as they occur. Determining the fair value of stock-based awards at the grant date requires considerable judgment, including estimating expected volatility and expected term, risk-free rate. |
New Accounting Pronouncements, Policy [Policy Text Block] | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update ("ASUs") No. 2014-09 (Topic 606) " Revenue from Contracts with Customers " (the "new revenue standard"). The Company adopted the new revenue standard on January 1, 2018 using the modified retrospective transition method in which the cumulative effect of applying the new revenue standard was recognized as an adjustment to the opening balance of retained earnings. See Note 3, "Revenue Recognition", for further details. In February 2018, the FASB issued a new standard which permits companies to reclassify certain income tax effects resulting from the 2017 Tax Act, called "stranded tax effects", from accumulated other comprehensive income ("AOCI") to retained earnings. According to the new guidance, the reclassification amount should include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of enactment of the 2017 Tax Act related to items remaining in AOCI. The guidance is effective for all companies for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption is permitted. The Company early adopted this standard in the first quarter of 2018 which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit for $9 million . The Company’s accounting policy for releasing income tax effects from AOCI is to release those effects when our entire portfolio of the type of item is liquidated. In June 2018, the FASB issued a new standard related to non-employee share-based payment accounting. The new guidance eliminates specific accounting for non-employee share-based payments and aligns the treatment for awards issued to employees and non-employees reducing the complexity of measurement of non-employee awards and creating a single accounting model. The new standard is applied to all new awards granted after the date of adoption. The Company elected to early adopt this guidance during the second quarter of 2018. There was an immaterial impact upon adoption. 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 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. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact of all Accounting Standards Updates. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In February 2016, the FASB issued its new standard on leases which requires virtually all leases to be recognized on the balance sheet. Lessees will recognize a right-of-use asset and a lease liability for all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for lease incentives, prepayments and initial direct costs. For income statement purposes, leases will be classified as either operating or finance leases. Operating leases will result in straight-line expense, similar to current operating leases, while finance leases will result in a front-loaded expense pattern, similar to current capital leases. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The new standard was effective on January 1, 2019, with early adoption permitted, initially requiring a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. In July 2018, the FASB issued an ASU that allows entities to elect an optional transition relief giving companies the option to apply the provisions of the new guidance at the effective date (e.g., January 1, 2019), as opposed to the earliest comparative period presented in the financial statements under the modified retrospective transition approach (January 1, 2017), and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company will adopt the new standard during the first quarter of 2019 and will elect the optional transition relief. The new standard allows for an optional package of practical expedients during transition which permit companies to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company will elect this package of practical expedients; however, the Company will not elect the use of hindsight practical expedients and therefore current lease terms largely remained unchanged. The new standard also allows practical expedients for future accounting under the new standard. The Company will elect the short-term lease recognition exemption and will not recognize a lease obligation and right-of-use asset on its balance sheet for all leases with terms of 12 months or less. The Company also will elect the practical expedient to not separate lease and non-lease components for all of its leases resulting in a larger lease liability recorded on the balance sheet. The Company evaluated the impact of the standard on its consolidated financial statements and believes that the most significant effects of adoption relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for real estate operating leases. On adoption, the Company currently expects to recognize total lease liabilities ranging from $650 million to $670 million with corresponding right-of-use assets of $595 million to $615 million based on the present value of the remaining minimum rental payments partially offset by the reclassification of existing deferred rent liabilities. The Company has revised and implemented policies and internal controls, as well as a new lease management system to account for leases under the new guidance. |
Note 3. Revenue Recognition R_2
Note 3. Revenue Recognition Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition, Policy | Revenue Recognition 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 new revenue standard. The Company's revenue is disaggregated by major revenue categories on our Consolidated Statements of Operations and further disaggregated by business segment as follows: Years Ended December 31, 2018 vs December 31, 2017 (e) Real Estate Company Relocation Title and Corporate and Other Total 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 Gross commission income (a) $ — $ — $ 4,533 $ 4,576 $ — $ — $ — $ — $ — $ — $ 4,533 $ 4,576 Service revenue (b) — — 9 9 374 378 564 551 — — 947 938 Franchise fees (c) 688 695 — — — — — — (295 ) (299 ) 393 396 Other (d) 132 135 65 58 4 4 16 19 (11 ) (12 ) 206 204 Net revenues $ 820 $ 830 $ 4,607 $ 4,643 $ 378 $ 382 $ 580 $ 570 $ (306 ) $ (311 ) $ 6,079 $ 6,114 Years Ended December 31, 2017 vs December 31, 2016 (e) Real Estate Company Relocation Title and Corporate and Other Total 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Gross commission income (a) $ — $ — $ 4,576 $ 4,277 $ — $ — $ — $ — $ — $ — $ 4,576 $ 4,277 Service revenue (b) — — 9 3 378 401 551 551 — — 938 955 Franchise fees (c) 695 654 — — — — — — (299 ) (282 ) 396 372 Other (d) 135 127 58 64 4 4 19 22 (12 ) (11 ) 204 206 Net revenues $ 830 $ 781 $ 4,643 $ 4,344 $ 382 $ 405 $ 570 $ 573 $ (311 ) $ (293 ) $ 6,114 $ 5,810 _______________ (a) Approximately 75% of the Company's total net 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) Approximately 15% of the Company's total net revenues related to service fees primarily consisting 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. Relocation fees at the Relocation Services segment primarily include: (i) referral fees which are recognized at a point in time of the closing of a homesale transaction, (ii) outsourcing fees, which are management fees charged to clients frequently related to a bundle of relocation services performed and are recognized over the average time period to complete a move, and (iii) referral commissions from third party suppliers which are recognized at the time of the completion of the related service. (c) Approximately 5% of the Company's total net revenues related to franchise fees at the Real Estate Franchise Services segment, primarily domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). (d) Approximately 5% of the Company's total net revenues related to other revenue, which comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees and other miscellaneous revenues across all of the business segments. (e) Prior period amounts have not been adjusted under the modified retrospective method. The Company's revenue streams are discussed further below by business segment: Real Estate Franchise Services The Company franchises its real estate brands to real estate brokerage businesses that are independently owned and operated. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a gross percentage (generally 6% ) of the franchisee’s gross commission income. Royalty fees are accrued as the underlying franchisee revenue is earned (upon close of the homesale transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Non-standard sales incentives are recorded as a reduction to revenue ratably over the related performance period or from the date of issuance through the remaining life of the related franchise agreement. Franchise revenue also includes domestic initial franchise fees which are generally non-refundable and recognized by the Company as revenue upon the execution or opening of a new franchisee office to cover the upfront costs associated with opening the franchisee for business under one of Realogy’s brands. The Company also earns marketing fees from its franchisees and utilizes such fees to fund marketing campaigns on behalf of its franchisees. As such, brand marketing fund fees are recorded as deferred revenue when received and recognized into revenue as earned when these funds are spent on marketing activities. The balance for deferred brand marketing fund fees decrease d from $13 million at January 1, 2018 to $12 million at December 31, 2018 primarily due to amounts recognized into revenue matching expenses for marketing activities, partially offset by additional fees received from franchisees during the year ended December 31, 2018 . The Company collects initial ADFs 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. The balance for deferred ADFs decrease d from $58 million at January 1, 2018 to $54 million at December 31, 2018 due to revenues of $5 million recognized during the year ended December 31, 2018 that were included in the deferred revenue balance at the beginning of the period, partially offset by $1 million of additional area development fees received during the year ended December 31, 2018 . In addition, the Company recognizes a deferred asset for commissions paid to Realogy franchise sales employees upon the sale of a new franchise as these are considered costs of obtaining a contract with a customer that are expected to provide benefits to the Company for longer than one year. The amount of commissions is calculated as a percentage of the anticipated gross commission income of the new franchisee or ADF and is amortized over 30 years for domestic franchise agreements or the agreement term for international franchise agreements (generally 25 years). The amount of prepaid commissions was $24 million at January 1, 2018 and $25 million at December 31, 2018 . Company Owned Real Estate Brokerage Services As an owner-operator of real estate brokerages, the Company assists home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue at a point in time which is upon the closing of a real estate transaction (i.e., purchase or sale of a home). These revenues are referred to as gross commission income. The commissions the Company pays to real estate agents are recognized concurrently with associated revenues and presented as the commission and other agent-related costs line item on the accompanying Consolidated Statements of Operations. The Company has relationships with developers, primarily in major cities, to provide marketing and brokerage services in new developments. New development closings generally have a development period of between 18 and 24 months from contracted date to closing. In some cases, the Company receives advanced commissions which are recorded as deferred revenue when received and recognized as revenue when the new development closes. The balance of advanced commissions related to developments was a liability of $10 million at both January 1, 2018 and December 31, 2018 . During the year ended December 31, 2018 , the balance increased $6 million related to additional commissions received for new developments, offset by a $6 million decrease due to revenues recognized on units closed. Relocation Services The Company provides relocation services to corporate and government clients for the transfer of their employees ("transferees"). Such services include homesale assistance including the purchasing and/or selling of a transferee’s home and providing home equity advances to transferees (generally guaranteed by the individual's employer), arranging household goods moving services, and other relocation services such as expense processing, relocation policy counseling, relocation-related accounting, coordinating visa and immigration support, intercultural and language training and destination services. In the majority of relocation transactions, the gain or loss on the sale of a transferee’s home is generally borne by the individual's employer. C lients may pay an outsourcing management fee that can cover several of the relocation services listed above, according to the clients' specific needs. In addition, the Company provides home buying and selling assistance to members of Affinity organizations. The Company earns referral commission revenue primarily from real estate brokers for the home sale and purchase for transferees a nd Affinity members, which is recognized at a point in time when the underlying property closes. Revenues from other third-party service providers where the Company earns a referral commission are recognized at the point in time at the completion of services. Furthermore, the Company generally earns interest income on the funds it advances on behalf of the transferring employee, which is recorded within other revenue (as is the corresponding interest expense on the securitization obligations) in the accompanying Consolidated Statements of Operations. The Company earns revenues from outsourcing management fees charged to clients for the performance and facilitation of relocation services. 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. The balance for outsourcing management fees decrease d from $5 million on January 1, 2018 to $4 million on December 31, 2018 . During the year ended December 31, 2018 , the balance increased $62 million primarily related to additions due to new management fees billed on new relocation files in advance of the Company satisfying its performance obligation, offset by a $63 million decrease as a result of revenues recognized as the performance obligations were satisfied. The Relocation Services segment manages the Cartus Broker Network, which is a network of real estate brokers consisting of our company owned brokerage operations, select franchisees and independent real estate brokers who have been approved to become members. Network fees are billed in the fourth quarter of the previous year for the following year's membership. Starting with 2019 membership fees, the network fees were billed in the first quarter of 2019, resulting in a zero balance at the end of 2018. These fees are recognized into revenue on a straight-line basis each month during the membership period. The balance for Cartus Broker Membership decrease d from $8 million at January 1, 2018 to zero at December 31, 2018 due to $12 million of revenues recognized during the year ended December 31, 2018 that were included in the deferred revenue balance at the beginning of the period, offset by a $4 million increase related to new network fees. Title and Settlement Services The Company provides title and closing services, which include title search procedures for title insurance policies, homesale escrow and other closing services. Title revenues and title and closing service fees are recorded at a point in time which occurs at the time a homesale transaction or refinancing closes. The Company also owns an underwriter of title insurance. For unaffiliated agents, the underwriter recognizes policy premium revenue on a gross basis (before deduction of agent commission) upon notice of policy issuance from the agent. For affiliated title agents, the underwriter recognizes the incremental policy premium revenue upon the effective date of the title policy as the agent commission revenue is already recognized by the affiliated title agent. Contract Balances (Deferred Revenue) The following table shows the change in the Company's contract liabilities related to revenue contracts by reportable segment for the period: Year Ended December 31, 2018 Beginning Balance at January 1, 2018 Additions during the period Recognized as Revenue during the period Ending Balance at December 31, 2018 Real Estate Franchise Services (a) $ 79 $ 118 $ (119 ) $ 78 Company Owned Real Estate Brokerage Services 17 19 (18 ) 18 Relocation Services 18 87 (96 ) 9 Total $ 114 $ 224 $ (233 ) $ 105 _______________ (a) Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment. |
Note 3. Revenue Recognition R_3
Note 3. Revenue Recognition Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to the Consolidated Balance Sheets for the adoption of the new revenue standard were as follows: Balance Sheet accounts prior to the new revenue standard adoption adjustments Adjustments due to the adoption of the new revenue standard Balance Sheet accounts after the new revenue standard adoption adjustments ASSETS Current assets: Trade receivables $ 153 $ 1 $ 154 Other current assets 179 2 181 Total current assets 789 3 792 Other non-current assets 222 23 245 Total assets $ 7,337 $ 26 $ 7,363 LIABILITIES AND EQUITY Current liabilities: Accrued expenses and other current liabilities $ 478 $ 2 $ 480 Total current liabilities 955 2 957 Deferred income taxes 327 (8 ) 319 Other non-current liabilities 212 54 266 Total liabilities 4,715 48 4,763 Equity: Accumulated deficit (a) (2,622 ) (22 ) (2,644 ) Accumulated other comprehensive loss (a) (46 ) — (46 ) Total stockholders' equity 2,618 (22 ) 2,596 Total equity 2,622 (22 ) 2,600 Total liabilities and equity $ 7,337 $ 26 $ 7,363 _______________ (a) Beginning balances have been adjusted for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million . See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. |
Disaggregation of Revenue | The Company's revenue is disaggregated by major revenue categories on our Consolidated Statements of Operations and further disaggregated by business segment as follows: Years Ended December 31, 2018 vs December 31, 2017 (e) Real Estate Company Relocation Title and Corporate and Other Total 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 Gross commission income (a) $ — $ — $ 4,533 $ 4,576 $ — $ — $ — $ — $ — $ — $ 4,533 $ 4,576 Service revenue (b) — — 9 9 374 378 564 551 — — 947 938 Franchise fees (c) 688 695 — — — — — — (295 ) (299 ) 393 396 Other (d) 132 135 65 58 4 4 16 19 (11 ) (12 ) 206 204 Net revenues $ 820 $ 830 $ 4,607 $ 4,643 $ 378 $ 382 $ 580 $ 570 $ (306 ) $ (311 ) $ 6,079 $ 6,114 Years Ended December 31, 2017 vs December 31, 2016 (e) Real Estate Company Relocation Title and Corporate and Other Total 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Gross commission income (a) $ — $ — $ 4,576 $ 4,277 $ — $ — $ — $ — $ — $ — $ 4,576 $ 4,277 Service revenue (b) — — 9 3 378 401 551 551 — — 938 955 Franchise fees (c) 695 654 — — — — — — (299 ) (282 ) 396 372 Other (d) 135 127 58 64 4 4 19 22 (12 ) (11 ) 204 206 Net revenues $ 830 $ 781 $ 4,643 $ 4,344 $ 382 $ 405 $ 570 $ 573 $ (311 ) $ (293 ) $ 6,114 $ 5,810 _______________ (a) Approximately 75% of the Company's total net 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) Approximately 15% of the Company's total net revenues related to service fees primarily consisting 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. Relocation fees at the Relocation Services segment primarily include: (i) referral fees which are recognized at a point in time of the closing of a homesale transaction, (ii) outsourcing fees, which are management fees charged to clients frequently related to a bundle of relocation services performed and are recognized over the average time period to complete a move, and (iii) referral commissions from third party suppliers which are recognized at the time of the completion of the related service. (c) Approximately 5% of the Company's total net revenues related to franchise fees at the Real Estate Franchise Services segment, primarily domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). (d) Approximately 5% of the Company's total net revenues related to other revenue, which comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees and other miscellaneous revenues across all of the business segments. (e) Prior period amounts have not been adjusted under the modified retrospective method. |
Contract with Customer, Asset and Liability | The following table shows the change in the Company's contract liabilities related to revenue contracts by reportable segment for the period: Year Ended December 31, 2018 Beginning Balance at January 1, 2018 Additions during the period Recognized as Revenue during the period Ending Balance at December 31, 2018 Real Estate Franchise Services (a) $ 79 $ 118 $ (119 ) $ 78 Company Owned Real Estate Brokerage Services 17 19 (18 ) 18 Relocation Services 18 87 (96 ) 9 Total $ 114 $ 224 $ (233 ) $ 105 _______________ (a) Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment. |
Note 4. Intangible Assets Int_2
Note 4. Intangible Assets Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | 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 January 1, 2016 $ 2,292 $ 841 $ 360 $ 125 $ 3,618 Goodwill acquired (a) — 52 — 20 72 Balance at December 31, 2016 2,292 893 360 145 3,690 Goodwill acquired (b) — 11 — 9 20 Balance at December 31, 2017 2,292 904 360 154 3,710 Goodwill acquired (c) — 2 — — 2 Balance at December 31, 2018 $ 2,292 $ 906 $ 360 $ 154 $ 3,712 Goodwill and accumulated impairment summary Gross goodwill $ 3,315 $ 1,064 $ 641 $ 478 $ 5,498 Accumulated impairment losses (d) (1,023 ) (158 ) (281 ) (324 ) (1,786 ) Balance at December 31, 2018 $ 2,292 $ 906 $ 360 $ 154 $ 3,712 _______________ (a) Goodwill acquired during the year ended December 31, 2016 relates to the acquisition of eleven real estate brokerage operations and one title and settlement operation. (b) Goodwill acquired during the year ended December 31, 2017 relates to the acquisition of sixteen real estate brokerage operations and two title and settlement operations. (c) Goodwill acquired during the year ended December 31, 2018 relates to the acquisition of three real estate brokerage operations. (d) During the fourth quarter of 2008 and 2007 the Company recorded impairment charges, which reduced goodwill by $1,279 million and $507 million , respectively. No goodwill or unamortized intangible asset impairments have been recorded since 2008 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block] | Intangible assets are as follows: As of December 31, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable—Franchise agreements (a) $ 2,019 $ 792 $ 1,227 $ 2,019 $ 725 $ 1,294 Indefinite life—Trademarks (b) $ 749 $ 749 $ 749 $ 749 Other Intangibles Amortizable—License agreements (c) $ 45 $ 11 $ 34 $ 45 $ 10 $ 35 Amortizable—Customer relationships (d) 549 359 190 549 335 214 Indefinite life—Title plant shares (e) 18 18 18 18 Amortizable—Pendings and listings (f) — — — 2 1 1 Amortizable—Other (g) 33 21 12 33 17 16 Total Other Intangibles $ 645 $ 391 $ 254 $ 647 $ 363 $ 284 _______________ (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 ® 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) Generally amortized over a period of 5 months . (g) Consists of covenants not to compete which are amortized over their contract lives and other intangibles which are generally amortized over periods ranging from 5 to 10 years. |
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Table Text Block] | Intangible asset amortization expense is as follows: For the Year Ended December 31, 2018 2017 2016 Franchise agreements $ 67 $ 67 $ 67 License agreements 1 1 1 Customer relationships 24 25 28 Pendings and listings 1 4 12 Other 4 5 5 Total $ 97 $ 102 $ 113 |
Note 5. Franchising and Marke_2
Note 5. Franchising and Marketing Activities Franchising and Marketing Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Franchising and Marketing Activities [Abstract] | |
Schedule of the Number of Franchised and Company Owned Outlets in Operation [Table Text Block] | The number of franchised and company owned offices in operation are as follows: (Unaudited) As of December 31, 2018 2017 2016 Franchised: Century 21 ® 9,637 7,973 7,330 ERA ® 2,331 2,298 2,347 Coldwell Banker ® 2,380 2,330 2,289 Coldwell Banker Commercial ® 171 180 180 Sotheby’s International Realty ® 949 905 836 Better Homes and Gardens ® Real Estate 362 353 332 Total Franchised 15,830 14,039 13,314 Company Owned: Coldwell Banker ® 672 707 708 Sotheby’s International Realty ® 41 41 41 Corcoran ® /Other 42 41 40 Total Company Owned 755 789 789 |
Schedule of the Changes in the Number of Franchised and Company Owned Outlets [Table Text Block] | The number of franchised and company owned offices (in the aggregate) changed as follows: (Unaudited) For the Year Ended December 31, 2018 2017 2016 Franchised: Beginning balance 14,039 13,314 12,771 Additions 2,149 1,137 847 Terminations (358 ) (412 ) (304 ) Ending balance 15,830 14,039 13,314 Company Owned: Beginning balance 789 789 787 Additions 8 20 38 Closures (42 ) (20 ) (36 ) Ending balance 755 789 789 |
Note 6. Property and Equipmen_2
Note 6. Property and Equipment, Net Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment, net consisted of: December 31, 2018 2017 Furniture, fixtures and equipment $ 274 $ 281 Capitalized software 401 366 Building and leasehold improvements 290 265 Land 3 3 Gross property and equipment 968 915 Less: accumulated depreciation (664 ) (626 ) Property and equipment, net $ 304 $ 289 |
Note 7. Accrued Expenses And _2
Note 7. Accrued Expenses And Other Current Liabilities Accrued Expenses And Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of: December 31, 2018 2017 Accrued payroll and related employee costs $ 118 $ 140 Accrued volume incentives 37 41 Accrued commissions 30 38 Restructuring accruals 15 5 Deferred income 59 68 Accrued interest 15 13 Contingent consideration for acquisitions 8 26 Due to former parent 21 18 Other 98 129 Total accrued expenses and other current liabilities $ 401 $ 478 |
Note 8. Short And Long-Term D_2
Note 8. Short And Long-Term Debt Short and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Total Indebtedness | Total indebtedness is as follows: December 31, 2018 2017 Senior Secured Credit Facility: Revolving Credit Facility $ 270 $ 70 Term Loan B 1,053 1,063 Term Loan A Facility: Term Loan A 732 390 Term Loan A-1 — 339 4.50% Senior Notes 449 444 5.25% Senior Notes 547 546 4.875% Senior Notes 497 496 Total Short-Term & Long-Term Debt $ 3,548 $ 3,348 Securitization Obligations: Apple Ridge Funding LLC $ 218 $ 181 Cartus Financing Limited 13 13 Total Securitization Obligations $ 231 $ 194 |
Schedule of Debt | As of December 31, 2018 , 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 $ 270 $ * $ 270 Term Loan B (3) February 2025 1,069 16 1,053 Term Loan A Facility: Term Loan A (4) February 2023 736 4 732 Senior Notes 4.50% April 2019 450 1 449 Senior Notes 5.25% December 2021 550 3 547 Senior Notes 4.875% June 2023 500 3 497 Securitization obligations: (5) Apple Ridge Funding LLC (6) June 2019 218 * 218 Cartus Financing Limited (7) August 2019 13 * 13 Total (8) $ 3,806 $ 27 $ 3,779 _______________ * 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 December 31, 2018 , the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019 , the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. (2) Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018 . (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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018 . (5) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. (6) As of December 31, 2018 , the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $32 million of available capacity. (7) Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of December 31, 2018 , the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 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 $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 . |
Schedule of Maturities of Long-term Debt | As of December 31, 2018 , the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for each of the next five years is as follows: Year Amount 2019 (a) $ 749 2020 44 2021 612 2022 81 2023 1,075 _______________ (a) Consists of $450 million of 4.50% Senior Notes due in April 2019, four quarters of 2019 amortization payments totaling $18 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, as well as $270 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. On February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. See Note 19, "Subsequent Events" for further details. |
Interest Rate Table for Revolving Credit Facility | 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% |
Interest Rate Table for Term Loan A | 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% |
Note 9. Employee Benefit Plan_2
Note 9. Employee Benefit Plans Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Expected Benefit Payments | Estimated future benefit payments as of December 31, 2018 are as follows: Year Amount 2019 $ 9 2020 9 2021 9 2022 9 2023 9 2024 through 2028 45 |
Schedule of Allocation of Plan Assets | The following table presents the fair values of plan assets by category as of December 31, 2018 : Asset Category Quoted Price in Active Market for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Total Cash and cash equivalents $ 3 $ — $ — $ 3 Equity securities — 43 — 43 Fixed income securities — 44 — 44 Total $ 3 $ 87 $ — $ 90 The following table presents the fair values of plan assets by category as of December 31, 2017 : Asset Category Quoted Price in Active Market for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Total Cash and cash equivalents $ 1 $ — $ — $ 1 Equity securities — 71 — 71 Fixed income securities — 36 — 36 Total $ 1 $ 107 $ — $ 108 |
Note 10. Income Taxes Income _2
Note 10. Income Taxes Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of pre-tax income (loss) for domestic and foreign operations | The components of pretax income for domestic and foreign operations consisted of the following: Year Ended December 31, 2018 2017 2016 Domestic $ 204 $ 365 $ 351 Foreign 1 4 10 Pretax income $ 205 $ 369 $ 361 |
Schedule of income tax provision | The components of income tax expense (benefit) consisted of the following: Year Ended December 31, 2018 2017 2016 Current: Federal $ (13 ) $ (7 ) $ 10 State 5 4 8 Foreign 2 1 2 Total current (6 ) (2 ) 20 Deferred: Federal 62 (72 ) 107 State 9 9 16 Foreign — — 1 Total deferred 71 (63 ) 124 Income tax expense (benefit) $ 65 $ (65 ) $ 144 |
Schedule of effective income tax rate | A reconciliation of the Company’s effective income tax rate at the U.S. federal statutory rate of 21% to the actual expense was as follows: Year Ended December 31, 2018 2017 2016 Federal statutory rate 21 % 35 % 35 % State and local income taxes, net of federal tax benefits 6 4 4 Impact of the 2017 Tax Act — (50 ) — Non-deductible equity compensation 2 1 1 Non-deductible executive compensation 1 — — Other permanent differences 1 1 — Uncertain tax positions (1 ) (9 ) — Net change in valuation allowance 2 1 — Other — (1 ) — Effective tax rate 32 % (18 %) 40 % |
Schedule of deferred income tax assets and liabilities | Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the deferred income tax assets and liabilities, as of December 31, are as follows: 2018 2017 Deferred income tax assets: Net operating loss carryforwards $ 241 $ 288 Tax credit carryforwards 24 35 Accrued liabilities and deferred income 92 85 Minimum pension obligations 16 16 Provision for doubtful accounts 7 8 Liability for unrecognized tax benefits 1 1 Interest rate swaps 5 2 Total deferred tax assets 386 435 Less: valuation allowance (18 ) (13 ) Total deferred income tax assets after valuation allowance 368 422 Deferred income tax liabilities: Depreciation and amortization 747 736 Prepaid expenses 8 2 Basis difference in investment in joint ventures 1 10 Total deferred tax liabilities 756 748 Net deferred income tax liabilities $ (388 ) $ (326 ) |
Schedule of the rollforward of unrecognized tax benefits | The rollforward of unrecognized tax benefits are summarized in the table below: Unrecognized tax benefits—January 1, 2016 $ 78 Gross increases—tax positions in prior periods 3 Reduction due to lapse of statute of limitations (3 ) Unrecognized tax benefits—December 31, 2016 78 Gross increases—tax positions in prior periods 1 Gross decreases—tax positions in prior periods (54 ) Reduction due to lapse of statute of limitations (3 ) Unrecognized tax benefits—December 31, 2017 22 Reduction due to lapse of statute of limitations (2 ) Unrecognized tax benefits—December 31, 2018 $ 20 |
Note 11. Restructuring Costs _2
Note 11. Restructuring Costs Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The components of the restructuring charges for the years ended December 31, 2018 , 2017 and 2016 were as follows: Years Ended December 31, 2018 2017 2016 Personnel-related costs (1) $ 25 $ 7 $ 22 Facility-related costs (2) 22 4 11 Internal use software impairment (3) 11 — — Other restructuring costs (4) — 1 6 Total restructuring charges (5) $ 58 $ 12 $ 39 _______________ (1) Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition. (2) Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments, net of applicable sublease income, 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 year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. |
Schedule of Restructuring Reserve by Type of Cost | The following is a reconciliation of the beginning and ending reserve balances for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Personnel-related costs Facility-related costs Internal use software impairment Total Balance at December 31, 2017 $ — $ — $ — $ — Restructuring charges 25 20 11 56 Costs paid or otherwise settled (18 ) (7 ) (11 ) (36 ) Balance at December 31, 2018 $ 7 $ 13 $ — $ 20 |
Schedule of Expected Restructuring Costs by Cost Type | The following table shows the total costs currently expected to be incurred by type of cost for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred Personnel-related costs $ 27 $ 25 $ 2 Facility-related costs 20 20 — Internal use software impairment 11 11 — Total $ 58 $ 56 $ 2 |
Schedule of Expected Restructuring Costs by Business Segment | The following table shows the total costs currently expected to be incurred by reportable segment for the restructuring program related to Leadership Realignment and Other Restructuring Activities: Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred Real Estate Franchise Services $ 3 $ 3 $ — Company Owned Real Estate Brokerage Services 37 36 1 Relocation Services 11 11 — Title and Settlement Services 3 3 — Corporate and Other 4 3 1 Total $ 58 $ 56 $ 2 |
Note 12. Stock-Based Compensa_2
Note 12. Stock-Based Compensation Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation, Activity | A summary of activity for the year ended December 31, 2018 is presented below (number of shares in millions): Restricted Stock Units Weighted Average Grant Date Fair Value Performance Share Units (a) Weighted Average Grant Date Fair Value Options (e) Weighted Average Exercise Price Outstanding at January 1, 2018 2.0 $ 31.71 1.8 $ 33.16 3.6 $ 31.75 Granted 1.5 25.39 0.5 25.11 0.4 25.35 Distributed/Exercised (0.9 ) (b) 33.67 (0.4 ) (c) 42.14 — — Forfeited/Expired (0.1 ) 27.80 (0.1 ) 27.99 (0.2 ) 38.28 Outstanding at December 31, 2018 2.5 $ 27.32 1.8 $ 28.13 3.8 (d) $ 30.92 _______________ (a) The PSU amounts in the table are shown at the target amount of the award. (b) The total fair value of RSUs which were distributed during the year ended December 31, 2018 was $30 million . (c) The total fair value of PSUs which were distributed during the year ended December 31, 2018 was $15 million , which includes the distribution of PSUs awarded in 2015 subject to performance over the three-year performance period ended December 31, 2017, at a fair value of $9 million . Amounts distributed do not include 0.2 million PSUs awarded in 2016 subject to achievement against performance over the three-year period ended and vested December 31, 2018, at a fair value of $5 million and at a weighted average grant date fair value of $34.00 . These PSUs were distributed in early 2019. (d) Options outstanding at December 31, 2018 have an intrinsic value of zero and have a weighted average remaining contractual life of 5.3 years . (e) The following table summarizes information regarding exercisable stock options as of December 31, 2018 : Range of Exercise Prices Options Vested Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life $15.00 to $50.00 2.6 $ 28.82 $ — 4.1 years $50.01 and above 0.1 $ 137.50 $ — 1.9 years |
Summary of Exercisable Stock Options Activity | The following table summarizes information regarding exercisable stock options as of December 31, 2018 : Range of Exercise Prices Options Vested Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life $15.00 to $50.00 2.6 $ 28.82 $ — 4.1 years $50.01 and above 0.1 $ 137.50 $ — 1.9 years |
Schedule of Market Performance Unit Award Valuation Assumptions | The fair value of the PSU RTSR awards was estimated on the date of grant using the Monte Carlo Simulation method utilizing the following assumptions: 2018 RTSR PSU 2017 RTSR PSU 2016 RTSR PSU Weighted average grant date fair value $ 25.45 $ 27.98 $ 27.99 Weighted average expected volatility (a) 29.8 % 29.0 % 28.1 % Weighted average volatility of XHB 17.9 % 18.4 % 19.4 % Weighted average correlation coefficient 0.44 0.53 0.58 Weighted average risk-free interest rate 2.6 % 1.5 % 0.9 % Weighted average dividend yield — — — _______________ (a) Expected volatility is based on historical volatilities of the Company and select comparable companies. |
Summary of Stock Options Valuation Assumptions | The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions: 2018 Options 2017 Options 2016 Options Weighted average grant date fair value $ 7.12 $ 8.61 $ 10.81 Weighted average expected volatility (a) 28.5 % 30.7 % 31.7 % Weighted average expected term (years) (b) 6.25 6.25 6.25 Weighted average risk-free interest rate (c) 2.7 % 2.0 % 1.3 % Weighted average dividend yield 1.4 % 1.2 % 0.1 % _______________ (a) Expected volatility was based on historical volatilities of the Company and select comparable companies. (b) The expected term of the options granted represents the period of time that options are expected to be outstanding and is based on the simplified method. (c) The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options. |
Note 13. Commitments And Cont_2
Note 13. Commitments And Contingencies Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments required under noncancelable operating leases as of December 31, 2018 are as follows: Year Amount 2019 $ 165 2020 144 2021 120 2022 95 2023 79 Thereafter 196 Total $ 799 |
Schedule of Future Minimum Payments for Purchase Commitments and Licensing Fees | Future minimum payments for these purchase commitments and minimum licensing fees as of December 31, 2018 are as follows: Year Amount 2019 $ 71 2020 25 2021 20 2022 9 2023 9 Thereafter 226 Total $ 360 |
Note 14. Equity (Deficit) Equ_2
Note 14. Equity (Deficit) Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of accumulated other comprehensive losses are as follows: Currency Translation Adjustments (1) Minimum Pension Liability Adjustment Accumulated Other Comprehensive Loss (2) Balance at January 1, 2016 $ (3 ) $ (33 ) $ (36 ) Other comprehensive loss before reclassifications (5 ) (3 ) (8 ) Amounts reclassified from accumulated other comprehensive income — 1 (3) 1 Income tax benefit 2 1 3 Current period change (3 ) (1 ) (4 ) Balance at December 31, 2016 (6 ) (34 ) (40 ) Other comprehensive income (loss) before reclassifications 3 (1 ) 2 Amounts reclassified from accumulated other comprehensive income — 2 (3) 2 Income tax expense (1 ) — (1 ) Current period change 2 1 3 Balance at December 31, 2017 (4 ) (33 ) (37 ) Adoption of a new accounting pronouncement (1 ) (4) (8 ) (4) (9 ) Other comprehensive loss before reclassifications (3 ) (6 ) (9 ) Amounts reclassified from accumulated other comprehensive income — 2 (3) 2 Income tax benefit — 1 1 Current period change (4 ) (11 ) (15 ) Balance at December 31, 2018 $ (8 ) $ (44 ) $ (52 ) _______________ (1) Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the balance sheet dates and equity accounts are translated at historical spot rates. Revenues and expenses are translated at average exchange rates during the periods presented. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in accumulated other comprehensive income (loss). Gains or losses resulting from foreign currency transactions are included in the Consolidated Statements of Operations. (2) As of December 31, 2018 , the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests. (3) These amounts represent the amortization of actuarial loss to periodic pension cost and were reclassified from accumulated other comprehensive income to the general and administrative expenses line on the statement of operations. (4) These amounts represent adjustments for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million during the first quarter of 2018. See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. |
Schedule of Stockholders Equity [Table Text Block] | Realogy Group Stockholder’s Equity Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Non- controlling Interests Total Equity Shares Amount Balance at January 1, 2016 — $ — $ 5,734 $ (3,280 ) $ (36 ) $ 4 $ 2,422 Cumulative effect of adoption of new accounting pronouncements — — — 5 — — 5 Net income — — — 213 — 4 217 Other comprehensive loss — — — — (4 ) — (4 ) Repurchase of Common Stock — — (195 ) — — — (195 ) Contributions from Realogy Holdings — — 2 — — — 2 Stock-based compensation — — 51 — — — 51 Dividends — — (26 ) — — (3 ) (29 ) Balance at December 31, 2016 — $ — $ 5,566 $ (3,062 ) $ (40 ) $ 5 $ 2,469 Net income — — — 431 — 3 434 Other comprehensive income — — — — 3 — 3 Repurchase of Common Stock — — (280 ) — — — (280 ) Contributions from Realogy Holdings — — 8 — — — 8 Stock-based compensation — — 41 — — — 41 Dividends — — (49 ) — — (4 ) (53 ) Balance at December 31, 2017 — $ — $ 5,286 $ (2,631 ) $ (37 ) $ 4 $ 2,622 Cumulative effect of adoption of new accounting pronouncements — — — (13 ) (9 ) — (22 ) Net income — — — 137 — 3 140 Other comprehensive loss — — — — (6 ) — (6 ) Repurchase of Common Stock — — (402 ) — — — (402 ) Contributions from Realogy Holdings — — 1 — — — 1 Stock-based compensation — — 30 — — — 30 Dividends — — (45 ) — — (3 ) (48 ) Balance at December 31, 2018 — $ — $ 4,870 $ (2,507 ) $ (52 ) $ 4 $ 2,315 |
Note 15. Earnings (Loss) Per Sh
Note 15. Earnings (Loss) Per Share Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, (in millions, except per share data) 2018 2017 2016 Net income attributable to Realogy Holdings shareholders $ 137 $ 431 $ 213 Basic weighted average shares 124.0 136.7 144.5 Stock options, restricted stock units and performance share units (a) 1.3 1.7 1.3 Weighted average diluted shares 125.3 138.4 145.8 Earnings Per Share: Basic $ 1.10 $ 3.15 $ 1.47 Diluted $ 1.09 $ 3.11 $ 1.46 _______________ (a) Excludes 6.9 million , 5.3 million and 4.5 million shares of common stock issuable for incentive equity awards which includes performance share units based on the achievement of target amounts, for the years ended December 31, 2018 , 2017 and 2016 , respectively, that are anti-dilutive to the diluted earnings per share computation. |
Risk Management and Fair Valu_2
Risk Management and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risk Management and Fair Value of Financial Instruments [Abstract] | |
Schedule of Derivative Instruments | Notional Value (in millions) Commencement Date Expiration Date $600 August 2015 August 2020 $450 November 2017 November 2022 $400 (a) August 2020 August 2025 $150 (a) November 2022 November 2027 _______________ (a) During the second quarter of 2018, the Company entered into four new forward starting interest rate swaps, two with a notional value of $125 million and two with a notional value of $150 million . |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments was as follows: Liability Derivatives Fair Value Not Designated as Hedging Instruments Balance Sheet Location December 31, 2018 December 31, 2017 Interest rate swap contracts Other non-current assets $ 6 $ — Other current and non-current liabilities $ 16 $ 13 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | 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 Year Ended December 31, 2018 2017 2016 Interest rate swap contracts Interest expense $ 4 $ (4 ) $ 6 Foreign exchange contracts Operating expense (1 ) 2 (2 ) |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | 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 following table summarizes fair value measurements by level at December 31, 2017 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) $ 3 $ — $ — $ 3 Interest rate swaps (included in other current and non-current liabilities) — 13 — 13 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 34 34 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | 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, 2017 $ 34 Additions: contingent consideration related to acquisitions completed during the period 1 Reductions: payments of contingent consideration (23 ) Changes in fair value (reflected in the Consolidated Statement of Operations) (2 ) Fair value of contingent consideration at December 31, 2018 $ 10 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | 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: December 31, 2018 December 31, 2017 Debt Principal Amount Estimated Fair Value (a) Principal Amount Estimated Fair Value (a) Senior Secured Credit Facility: Revolving Credit Facility $ 270 $ 270 $ 70 $ 70 Term Loan B 1,069 1,010 1,083 1,085 Term Loan A Facility: Term Loan A 736 707 391 393 Term Loan A-1 — — 342 343 4.50% Senior Notes 450 447 450 457 5.25% Senior Notes 550 524 550 569 4.875% Senior Notes 500 434 500 495 Securitization obligations 231 231 194 194 _______________ (a) The fair value of the Company's indebtedness is categorized as Level II. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenues | Revenues (a) (b) Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 820 $ 830 $ 781 Company Owned Real Estate Brokerage Services 4,607 4,643 4,344 Relocation Services 378 382 405 Title and Settlement Services 580 570 573 Corporate and Other (c) (306 ) (311 ) (293 ) Total Company $ 6,079 $ 6,114 $ 5,810 _______________ (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 $306 million , $311 million and $293 million for the years ended December 31, 2018 , 2017 and 2016 , 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 $39 million , $40 million and $43 million for the years ended December 31, 2018 , 2017 and 2016 , 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 | Set forth in the tables below is a reconciliation of Net income to Operating EBITDA and Operating EBITDA presented by reportable segment for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 Net income attributable to Realogy Holdings and Realogy Group $ 137 $ 431 $ 213 Income tax expense (benefit) (a) 65 (65 ) 144 Income before income taxes 202 366 357 Add: Depreciation and amortization (b) 197 201 202 Interest expense, net 190 158 174 Restructuring costs, net (c) 58 12 39 Former parent legacy cost (benefit) (d) 4 (10 ) (2 ) Loss on the early extinguishment of debt (d) 7 5 — Operating EBITDA $ 658 $ 732 $ 770 Operating EBITDA Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 564 $ 560 $ 520 Company Owned Real Estate Brokerage Services (e) 44 135 159 Relocation Services 86 85 100 Title and Settlement Services 49 59 63 Corporate and Other (d)(f) (85 ) (107 ) (72 ) Total Company $ 658 $ 732 $ 770 ______________ (a) Income tax benefit for the year ended December 31, 2017 reflects the impact of the 2017 Tax Act. (b) Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million , respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. (c) The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment. The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment. The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. (d) Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. (e) Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016 , respectively. (f) Includes the elimination of transactions between segments. |
Reconciliation of Depreciation and Amortization from Segments to Consolidated | Depreciation and Amortization Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 77 $ 79 $ 77 Company Owned Real Estate Brokerage Services 51 50 49 Relocation Services 33 33 31 Title and Settlement Services 13 16 23 Corporate and Other 21 20 22 Total Company $ 195 $ 198 $ 202 |
Segment Assets | Segment Assets As of December 31, 2018 2017 Real Estate Franchise Services $ 4,388 $ 4,413 Company Owned Real Estate Brokerage Services 1,228 1,258 Relocation Services 1,010 1,029 Title and Settlement Services 492 486 Corporate and Other 172 151 Total Company $ 7,290 $ 7,337 |
Reconciliation of Capital Expenditures from Segments to Consolidated | Capital Expenditures Year Ended December 31, 2018 2017 2016 Real Estate Franchise Services $ 10 $ 9 $ 8 Company Owned Real Estate Brokerage Services 44 44 44 Relocation Services 13 11 12 Title and Settlement Services 11 13 9 Corporate and Other 27 22 14 Total Company $ 105 $ 99 $ 87 |
Geographic Segment Information | The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries. United States All Other Countries Total On or for the year ended December 31, 2018 Net revenues $ 5,961 $ 118 $ 6,079 Total assets 7,214 76 7,290 Net property and equipment 302 2 304 On or for the year ended December 31, 2017 Net revenues $ 5,997 $ 117 $ 6,114 Total assets 7,261 76 7,337 Net property and equipment 287 2 289 On or for the year ended December 31, 2016 Net revenues $ 5,683 $ 127 $ 5,810 Total assets 7,347 74 7,421 Net property and equipment 265 2 267 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Data | Provided below is selected unaudited quarterly financial data for 2018 and 2017 . 2018 First Second Third Fourth Net revenues Real Estate Franchise Services $ 176 $ 237 $ 221 $ 186 Company Owned Real Estate Brokerage Services 917 1,408 1,268 1,014 Relocation Services 79 105 108 86 Title and Settlement Services 120 162 162 136 Corporate and Other (a) (63 ) (92 ) (83 ) (68 ) Total Company $ 1,229 $ 1,820 $ 1,676 $ 1,354 Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) Real Estate Franchise Services $ 85 $ 152 $ 141 $ 107 Company Owned Real Estate Brokerage Services (76 ) 45 22 (37 ) Relocation Services (14 ) 29 34 9 Title and Settlement Services (8 ) 26 18 1 Corporate and Other (69 ) (78 ) (70 ) (108 ) Total Company $ (82 ) $ 174 $ 145 $ (28 ) Net income (loss) attributable to Realogy Holdings and Realogy Group $ (67 ) $ 123 $ 103 $ (22 ) Earnings (loss) per share attributable to Realogy Holdings (c) : Basic earnings (loss) per share $ (0.51 ) $ 0.97 $ 0.84 $ (0.19 ) Diluted earnings (loss) per share $ (0.51 ) $ 0.96 $ 0.83 $ (0.19 ) _______________ (a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. (b) The quarterly results include the following: • restructuring charges of $30 million , $6 million , $9 million and $13 million in the first, second, third and fourth quarters, respectively; • former parent legacy net cost of $4 million in the fourth quarter; and • a loss on the early extinguishment of debt of $7 million in the first quarter. (c) Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS (see Note 15 "Earnings Per Share" for further information). 2017 First Second Third Fourth Net revenues Real Estate Franchise Services $ 170 $ 237 $ 224 $ 199 Company Owned Real Estate Brokerage Services 897 1,392 1,267 1,087 Relocation Services 77 102 111 92 Title and Settlement Services 120 157 154 139 Corporate and Other (a) (61 ) (95 ) (82 ) (73 ) Total Company $ 1,203 $ 1,793 $ 1,674 $ 1,444 Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) Real Estate Franchise Services $ 82 $ 146 $ 139 $ 113 Company Owned Real Estate Brokerage Services (35 ) 65 36 (14 ) Relocation Services (5 ) 21 32 15 Title and Settlement Services (3 ) 23 19 6 Corporate and Other (73 ) (72 ) (73 ) (71 ) Total Company $ (34 ) $ 183 $ 153 $ 49 Net income (loss) attributable to Realogy Holdings and Realogy Group $ (28 ) $ 109 $ 95 $ 255 Earnings (loss) per share attributable to Realogy Holdings (c) : Basic earnings (loss) per share $ (0.20 ) $ 0.79 $ 0.70 $ 1.91 Diluted earnings (loss) per share $ (0.20 ) $ 0.78 $ 0.69 $ 1.89 _______________ (a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. (b) The quarterly results include the following: • restructuring charges of $5 million , $2 million , $2 million and $3 million in the first, second, third and fourth quarters, respectively; • former parent legacy net benefit of $11 million in the second quarter former parent legacy net cost of $1 million in the third quarter; and • a loss on the early extinguishment of debt of $4 million and $1 million in the first and third quarters, respectively. (c) Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS. |
Note 1. Basis of Presentation_2
Note 1. Basis of Presentation Business Description (Details) | Dec. 31, 2018Countries | Dec. 31, 2018franchisedandcompanyownedoffices | Dec. 31, 2018Brokerage_Offices | Dec. 31, 2018employees | Dec. 31, 2017franchisedandcompanyownedoffices | Dec. 31, 2016franchisedandcompanyownedoffices | Dec. 31, 2015franchisedandcompanyownedoffices |
Number of Countries in which Entity Operates | Countries | 113 | ||||||
Company Owned Real Estate Brokerage Services | |||||||
Number of Independent Sales Associates | 50,200 | ||||||
Number of offices | 755 | 760 | 789 | 789 | 787 | ||
Worldwide | Franchised and Company Owned | |||||||
Number of Independent Sales Associates | 299,400 | ||||||
Number of offices | franchisedandcompanyownedoffices | 16,600 | ||||||
United States | Franchised and Company Owned | |||||||
Number of Independent Sales Associates | 191,700 | ||||||
Number of offices | Brokerage_Offices | 6,000 |
Note 2. Summary of Significan_3
Note 2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum ownership percentage for consolidation | 50.00% | |||
Restricted cash | $ 13 | $ 7 | ||
Advertising Expense | 207 | 211 | $ 198 | |
Goodwill | 3,712 | $ 3,710 | $ 3,690 | $ 3,618 |
Indefinite-lived Intangible Assets (Excluding Goodwill) | $ 767 | |||
Percentage by which the estimated fair value of each reporting unit is lowered during goodwill evaluation | 10.00% | 10.00% | 10.00% | |
Maximum | ||||
Remaining maturity of highly-liquid investments | 3 months |
Note 2. Summary of Significan_4
Note 2. Summary of Significant Accounting Policies Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | $ (51) | $ (74) | |
Proceeds from investments in unconsolidated entities | 19 | 11 | $ 0 |
Income (Loss) from Equity Method Investments | 4 | (18) | (12) |
Proceeds from Equity Method Investment, Distribution | 3 | 63 | 11 |
Payments to Acquire Equity Method Investments | 15 | 55 | 0 |
Company Owned Real Estate Brokerage Services | Gain from sale of PHHHL assets by Guaranteed Rate Affinity | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | (35) | ||
Company Owned Real Estate Brokerage Services | Exit Costs related to PHHHL | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | 7 | ||
Company Owned Real Estate Brokerage Services | PHH Home Loans | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | (6) | ||
Title and Settlement Services | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | (4) | ||
Title and Settlement Services | Amortization of Intangible Assets related to GRA Acquisition | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | $ 2 | (3) | |
PHH Home Loans | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.90% | ||
Equity Method Investments | $ 0 | (19) | |
PHH Home Loans | Company Owned Real Estate Brokerage Services | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (Loss) from Equity Method Investments | (22) | $ (8) | |
Guaranteed Rate Affinity | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.90% | ||
Equity Method Investment, Unowned Percentage | 50.10% | ||
Equity Method Investments | $ (43) | (48) | |
Payments to Acquire Equity Method Investments | $ 4 | $ 55 |
Note 2. Summary of Significan_5
Note 2. Summary of Significant Accounting Policies Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 30 years | |
Leasehold Improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 20 years | |
Furniture and Fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Furniture and Fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized Computer Software, Net | $ 93 | $ 86 |
Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 1 year | |
Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years |
Note 2. Summary of Significan_6
Note 2. Summary of Significant Accounting Policies Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |||
Capital Lease Obligations Incurred | $ 20 | $ 18 | $ 14 |
Note 2. Summary of Significan_7
Note 2. Summary of Significant Accounting Policies New Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2018 | Jan. 01, 2016 | |
Item Effected [Line Items] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (22) | $ 5 | |
Accounting Standards Update 2018-02 | |||
Item Effected [Line Items] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 9 | ||
Assets | Scenario, Forecast | Minimum | Accounting Standards Update 2016-02 | Subsequent Event | |||
Item Effected [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 650 | ||
Assets | Scenario, Forecast | Maximum | Accounting Standards Update 2016-02 | Subsequent Event | |||
Item Effected [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 670 | ||
Liability | Scenario, Forecast | Minimum | Accounting Standards Update 2016-02 | Subsequent Event | |||
Item Effected [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 595 | ||
Liability | Scenario, Forecast | Maximum | Accounting Standards Update 2016-02 | Subsequent Event | |||
Item Effected [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 615 |
Note 3. Revenue Recognition R_4
Note 3. Revenue Recognition Revenue Recognition - Adoption of the New Revenue Standard (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2016 | Dec. 31, 2015 | |
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Trade receivables | $ 146 | $ 154 | $ 153 | ||||
Other current assets | 153 | 181 | 179 | ||||
Total current assets | 768 | 792 | 789 | ||||
Other non-current assets | 276 | 245 | 222 | ||||
Total assets | 7,290 | 7,363 | 7,337 | $ 7,421 | |||
Accrued expenses and other current liabilities | 401 | 480 | 478 | ||||
Total current liabilities | 1,527 | 957 | 955 | ||||
Deferred income taxes | 389 | 319 | 327 | ||||
Other non-current liabilities | 259 | 266 | 212 | ||||
Total liabilities | 4,975 | 4,763 | 4,715 | ||||
Accumulated deficit | (2,507) | (2,631) | |||||
Accumulated other comprehensive loss | (52) | (37) | |||||
Total stockholders' equity | 2,311 | 2,596 | 2,618 | ||||
Total equity | 2,315 | 2,600 | 2,622 | $ 2,469 | $ 2,422 | ||
Total liabilities and equity | $ 7,290 | 7,363 | $ 7,337 | ||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (22) | $ 5 | |||||
Accounting Standards Update 2014-09 | Trade Accounts Receivable | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 1 | ||||||
Accounting Standards Update 2014-09 | Other Current Assets | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 2 | ||||||
Accounting Standards Update 2014-09 | Current Assets | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 3 | ||||||
Accounting Standards Update 2014-09 | Other non-current assets | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 23 | ||||||
Accounting Standards Update 2014-09 | Assets, Total | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 26 | ||||||
Accounting Standards Update 2014-09 | Accounts Payable and Accrued Liabilities | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 2 | ||||||
Accounting Standards Update 2014-09 | Current Liabilities | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 2 | ||||||
Accounting Standards Update 2014-09 | Deferred Income Tax Charge | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | (8) | ||||||
Accounting Standards Update 2014-09 | Other Noncurrent Liabilities | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 54 | ||||||
Accounting Standards Update 2014-09 | Liabilities, Total | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 48 | ||||||
Accounting Standards Update 2014-09 | Accumulated Deficit | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | [1] | (22) | |||||
Accounting Standards Update 2014-09 | Accumulated Other Comprehensive Loss | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | [1] | 0 | |||||
Accounting Standards Update 2014-09 | Stockholders' Equity, Total | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | (22) | ||||||
Accounting Standards Update 2014-09 | Liabilities and Equity, Total | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Adjustments due to the adoption of the new revenue standard | 26 | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (22) | ||||||
Accounting Standards Update 2018-02 | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Accumulated deficit | [1] | (2,622) | |||||
Accumulated other comprehensive loss | [1] | (46) | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 9 | ||||||
Accounting Standards Update 2018-02 and 2014-09 | |||||||
Cumulative Effect of New Accounting Pronouncements [Abstract] | |||||||
Accumulated deficit | [1] | (2,644) | |||||
Accumulated other comprehensive loss | [1] | $ (46) | |||||
[1] | Beginning balances have been adjusted for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million. See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. |
Note 3. Revenue Recognition R_5
Note 3. Revenue Recognition Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | [3] | Dec. 31, 2016 | [3] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | $ (1,354) | $ (1,676) | $ (1,820) | $ (1,229) | $ (1,444) | $ (1,674) | $ (1,793) | $ (1,203) | $ (6,079) | [1],[2] | $ (6,114) | [1],[2] | $ (5,810) | [1],[2] | |||||||||
Approximate Percentage of Total Revenue from Gross Commission Income | 75.00% | ||||||||||||||||||||||
Approximate Percentage of Total Revenue from Services Rendered | 15.00% | ||||||||||||||||||||||
Approximate Percentage of Revenue from Franchise Fees | 5.00% | ||||||||||||||||||||||
Approximate Percentage of Other Revenue | 5.00% | ||||||||||||||||||||||
Real Estate Franchise Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | (186) | (221) | (237) | (176) | (199) | (224) | (237) | (170) | $ (820) | [1],[2] | (830) | [1],[2] | (781) | [1],[2] | |||||||||
Company Owned Real Estate Brokerage Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | (1,014) | (1,268) | (1,408) | (917) | (1,087) | (1,267) | (1,392) | (897) | (4,607) | [1],[2] | (4,643) | [1],[2] | (4,344) | [1],[2] | |||||||||
Relocation Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | (86) | (108) | (105) | (79) | (92) | (111) | (102) | (77) | (378) | [1],[2] | (382) | [1],[2] | (405) | [1],[2] | |||||||||
Title and Settlement Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | (136) | (162) | (162) | (120) | (139) | (154) | (157) | (120) | (580) | [1],[2] | (570) | [1],[2] | (573) | [1],[2] | |||||||||
Corporate and Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | $ 68 | [4] | $ 83 | [4] | $ 92 | [4] | $ 63 | [4] | $ 73 | [5] | $ 82 | [5] | $ 95 | [5] | $ 61 | [5] | 306 | [1],[2],[6] | 311 | [1],[2],[6] | 293 | [1],[2],[6] | |
Gross Commission Income | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | (4,533) | (4,576) | (4,277) | |||||||||||||||||||
Gross Commission Income | Real Estate Franchise Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | 0 | 0 | 0 | |||||||||||||||||||
Gross Commission Income | Company Owned Real Estate Brokerage Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | (4,533) | (4,576) | (4,277) | |||||||||||||||||||
Gross Commission Income | Relocation Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | 0 | 0 | 0 | |||||||||||||||||||
Gross Commission Income | Title and Settlement Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | 0 | 0 | 0 | |||||||||||||||||||
Gross Commission Income | Corporate and Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [7] | 0 | 0 | 0 | |||||||||||||||||||
Service revenue | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | (947) | (938) | (955) | |||||||||||||||||||
Service revenue | Real Estate Franchise Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | 0 | 0 | 0 | |||||||||||||||||||
Service revenue | Company Owned Real Estate Brokerage Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | (9) | (9) | (3) | |||||||||||||||||||
Service revenue | Relocation Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | (374) | (378) | (401) | |||||||||||||||||||
Service revenue | Title and Settlement Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | (564) | (551) | (551) | |||||||||||||||||||
Service revenue | Corporate and Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [8] | 0 | 0 | 0 | |||||||||||||||||||
Franchise fees | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | (393) | (396) | (372) | |||||||||||||||||||
Franchise fees | Real Estate Franchise Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | (688) | (695) | (654) | |||||||||||||||||||
Franchise fees | Company Owned Real Estate Brokerage Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | 0 | 0 | 0 | |||||||||||||||||||
Franchise fees | Relocation Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | 0 | 0 | 0 | |||||||||||||||||||
Franchise fees | Title and Settlement Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | 0 | 0 | 0 | |||||||||||||||||||
Franchise fees | Corporate and Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [9] | (295) | 299 | 282 | |||||||||||||||||||
Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | (206) | (204) | (206) | |||||||||||||||||||
Other | Real Estate Franchise Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | (132) | (135) | (127) | |||||||||||||||||||
Other | Company Owned Real Estate Brokerage Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | (65) | (58) | (64) | |||||||||||||||||||
Other | Relocation Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | (4) | (4) | (4) | |||||||||||||||||||
Other | Title and Settlement Services | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | (16) | (19) | (22) | |||||||||||||||||||
Other | Corporate and Other | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Net revenues | [10] | $ 11 | $ 12 | $ 11 | |||||||||||||||||||
[1] | Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $39 million, $40 million and $43 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions. | ||||||||||||||||||||||
[2] | 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 $306 million, $311 million and $293 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are eliminated through the Corporate and Other line. | ||||||||||||||||||||||
[3] | Prior period amounts have not been adjusted under the modified retrospective method. | ||||||||||||||||||||||
[4] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | ||||||||||||||||||||||
[5] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | ||||||||||||||||||||||
[6] | Includes the elimination of transactions between segments. | ||||||||||||||||||||||
[7] | Approximately 75% of the Company's total net 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. | ||||||||||||||||||||||
[8] | Approximately 15% of the Company's total net revenues related to service fees primarily consisting 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. Relocation fees at the Relocation Services segment primarily include: (i) referral fees which are recognized at a point in time of the closing of a homesale transaction, (ii) outsourcing fees, which are management fees charged to clients frequently related to a bundle of relocation services performed and are recognized over the average time period to complete a move, and (iii) referral commissions from third party suppliers which are recognized at the time of the completion of the related service. | ||||||||||||||||||||||
[9] | Approximately 5% of the Company's total net revenues related to franchise fees at the Real Estate Franchise Services segment, primarily domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). | ||||||||||||||||||||||
[10] | Approximately 5% of the Company's total net revenues related to other revenue, which comprised of brand marketing funds received at the Real Estate Franchise Services segment from franchisees and other miscellaneous revenues across all of the business segments. |
Note 3. Revenue Recognition R_6
Note 3. Revenue Recognition Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Jan. 01, 2018 | ||
Deferred Revenue Arrangement [Line Items] | ||||
Royalty Rate | 6.00% | |||
Deferred Revenue | $ 105 | $ 105 | $ 114 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 224 | |||
Recognized as Revenue during the period | (233) | |||
Ending Balance at December 31, 2018 | 105 | |||
Real Estate Franchise Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | [1] | 78 | 78 | 79 |
Deferred Sales Commission | 25 | 24 | ||
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | [1] | 118 | ||
Recognized as Revenue during the period | [1] | (119) | ||
Ending Balance at December 31, 2018 | [1] | 78 | ||
Real Estate Franchise Services | Brand Marketing Fees | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 12 | 12 | 13 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Ending Balance at December 31, 2018 | 12 | |||
Real Estate Franchise Services | Area Development Fees | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 54 | 54 | 58 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 1 | |||
Recognized as Revenue during the period | (5) | |||
Ending Balance at December 31, 2018 | 54 | |||
Company Owned Real Estate Brokerage Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 18 | 18 | 17 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 19 | |||
Recognized as Revenue during the period | (18) | |||
Ending Balance at December 31, 2018 | 18 | |||
Company Owned Real Estate Brokerage Services | New Development Business | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 10 | 10 | 10 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 6 | |||
Recognized as Revenue during the period | (6) | |||
Ending Balance at December 31, 2018 | 10 | |||
Relocation Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 9 | 9 | 18 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 87 | |||
Recognized as Revenue during the period | (96) | |||
Ending Balance at December 31, 2018 | 9 | |||
Relocation Services | Outsourcing Management Fees | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 4 | 4 | 5 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 62 | |||
Recognized as Revenue during the period | (63) | |||
Ending Balance at December 31, 2018 | 4 | |||
Relocation Services | Broker Network Fees | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred Revenue | 0 | $ 0 | $ 8 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Additions during the period | 4 | |||
Recognized as Revenue during the period | (12) | |||
Ending Balance at December 31, 2018 | $ 0 | |||
Minimum | Company Owned Real Estate Brokerage Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
New Development Period | 18 months | |||
Minimum | Relocation Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Average Length of a Move | 3 months | |||
Maximum | Company Owned Real Estate Brokerage Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
New Development Period | 24 months | |||
Maximum | Relocation Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Average Length of a Move | 6 months | |||
International Franchise Rights | Real Estate Franchise Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Amortization period | 25 years | |||
Franchise Rights | Real Estate Franchise Services | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Amortization period | 30 years | |||
[1] | (a)Revenues recognized include intercompany marketing fees paid by the Company Owned Real Estate Brokerage Services segment. |
Note 4. Intangible Assets Goodw
Note 4. Intangible Assets Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | Dec. 31, 2018USD ($)real_estate_brokerage_operations | Dec. 31, 2017USD ($)real_estate_brokerage_operations | Dec. 31, 2016USD ($)real_estate_brokerage_operations | Dec. 31, 2018USD ($) | |||||
Goodwill [Roll Forward] | ||||||||||
Goodwill Balance, beginning of period | $ 3,710 | $ 3,690 | $ 3,618 | |||||||
Goodwill acquired | 2 | [1] | 20 | [2] | 72 | [3] | ||||
Goodwill Balance, end of period | 3,712 | 3,710 | 3,690 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||||
Gross goodwill | $ 5,498 | |||||||||
Accumulated impairment losses (d) | [4] | (1,786) | ||||||||
Balance at December 31, 2018 | 3,710 | 3,690 | 3,618 | 3,712 | ||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||
Impairment of Goodwill | $ 1,279 | $ 507 | ||||||||
Real Estate Franchise Services | ||||||||||
Goodwill [Roll Forward] | ||||||||||
Goodwill Balance, beginning of period | 2,292 | 2,292 | 2,292 | |||||||
Goodwill acquired | 0 | [1] | 0 | [2] | 0 | [3] | ||||
Goodwill Balance, end of period | 2,292 | 2,292 | 2,292 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||||
Gross goodwill | 3,315 | |||||||||
Accumulated impairment losses (d) | [4] | (1,023) | ||||||||
Balance at December 31, 2018 | $ 2,292 | $ 2,292 | $ 2,292 | 2,292 | ||||||
Company Owned Real Estate Brokerage Services | ||||||||||
Goodwill [Line Items] | ||||||||||
Number of Businesses Acquired | real_estate_brokerage_operations | 3 | 16 | 11 | |||||||
Goodwill [Roll Forward] | ||||||||||
Goodwill Balance, beginning of period | $ 904 | $ 893 | $ 841 | |||||||
Goodwill acquired | 2 | [1] | 11 | [2] | 52 | [3] | ||||
Goodwill Balance, end of period | 906 | 904 | 893 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||||
Gross goodwill | 1,064 | |||||||||
Accumulated impairment losses (d) | [4] | (158) | ||||||||
Balance at December 31, 2018 | 904 | 893 | 841 | 906 | ||||||
Relocation Services | ||||||||||
Goodwill [Roll Forward] | ||||||||||
Goodwill Balance, beginning of period | 360 | 360 | 360 | |||||||
Goodwill acquired | 0 | [1] | 0 | [2] | 0 | [3] | ||||
Goodwill Balance, end of period | 360 | 360 | 360 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||||
Gross goodwill | 641 | |||||||||
Accumulated impairment losses (d) | [4] | (281) | ||||||||
Balance at December 31, 2018 | 360 | $ 360 | $ 360 | 360 | ||||||
Title and Settlement Services | ||||||||||
Goodwill [Line Items] | ||||||||||
Number of Businesses Acquired | real_estate_brokerage_operations | 2 | 1 | ||||||||
Goodwill [Roll Forward] | ||||||||||
Goodwill Balance, beginning of period | 154 | $ 145 | $ 125 | |||||||
Goodwill acquired | 0 | [1] | 9 | [2] | 20 | [3] | ||||
Goodwill Balance, end of period | 154 | 154 | 145 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||||
Gross goodwill | 478 | |||||||||
Accumulated impairment losses (d) | [4] | (324) | ||||||||
Balance at December 31, 2018 | $ 154 | $ 145 | $ 125 | $ 154 | ||||||
[1] | Goodwill acquired during the year ended December 31, 2018 relates to the acquisition of three real estate brokerage operations. | |||||||||
[2] | Goodwill acquired during the year ended December 31, 2017 relates to the acquisition of sixteen real estate brokerage operations and two title and settlement operations. | |||||||||
[3] | Goodwill acquired during the year ended December 31, 2016 relates to the acquisition of eleven real estate brokerage operations and one title and settlement operation. | |||||||||
[4] | During the fourth quarter of 2008 and 2007 the Company recorded impairment charges, which reduced goodwill by $1,279 million and $507 million, respectively. No goodwill or unamortized intangible asset impairments have been recorded since 2008. |
Note 4. Intangible Assets Int_3
Note 4. Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of indefinite-lived intangible assets | $ 767 | ||
Gross carrying amount of total other intangibles | 645 | $ 647 | |
Accumulated Amortization | 391 | 363 | |
Net carrying amount of finite-lived and indefinite-lived intangible assets | 254 | 284 | |
Indefinite life—Trademarks (b) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of indefinite-lived intangible assets | [1] | 749 | 749 |
Indefinite life—Title plant shares (e) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of indefinite-lived intangible assets | [2] | 18 | 18 |
Amortizable—Franchise agreements (a) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | [3] | 2,019 | 2,019 |
Accumulated Amortization | [3] | 792 | 725 |
Net carrying amount of finite-lived intangible assets | [3] | 1,227 | 1,294 |
Amortizable—License agreements (c) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | [4] | 45 | 45 |
Accumulated Amortization | [4] | 11 | 10 |
Net carrying amount of finite-lived intangible assets | [4] | $ 34 | 35 |
Amortization period | 50 years | ||
Amortizable—Customer relationships (d) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | [5] | $ 549 | 549 |
Accumulated Amortization | [5] | 359 | 335 |
Net carrying amount of finite-lived intangible assets | [5] | 190 | 214 |
Amortizable—Pendings and listings (f) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | [6] | 0 | 2 |
Accumulated Amortization | [6] | 0 | 1 |
Net carrying amount of finite-lived intangible assets | [6] | $ 0 | 1 |
Amortization period | 5 months | ||
Amortizable—Other (g) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | [7] | $ 33 | 33 |
Accumulated Amortization | [7] | 21 | 17 |
Net carrying amount of finite-lived intangible assets | [7] | $ 12 | $ 16 |
Maximum | Amortizable—Customer relationships (d) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 20 years | ||
Maximum | Amortizable—Other (g) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 10 years | ||
Minimum | Amortizable—Customer relationships (d) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 2 years | ||
Minimum | Amortizable—Other (g) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Real Estate Franchise Services | Amortizable—Franchise agreements (a) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 30 years | ||
[1] | Primarily related to real estate franchise brands and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time. | ||
[2] | 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. | ||
[3] | Generally amortized over a period of 30 years. | ||
[4] | Relates to the Sotheby’s International Realty® and Better Homes and Gardens® Real Estate agreements which are being amortized over 50 years (the contractual term of the license agreements). | ||
[5] | 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. | ||
[6] | Generally amortized over a period of 5 months. | ||
[7] | 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. |
Note 4. Intangible Assets Amort
Note 4. Intangible Assets Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | $ 97 | $ 102 | $ 113 |
Expected amortization expense for 2019 | 97 | ||
Expected amortization expense for 2020 | 95 | ||
Expected amortization expense for 2021 | 93 | ||
Expected amortization expense for 2022 | 92 | ||
Expected amortization expense for 2023 | 91 | ||
Expected amortization expense thereafter | 995 | ||
Amortizable—Franchise agreements (a) | |||
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | 67 | 67 | 67 |
Amortizable—License agreements (c) | |||
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | 1 | 1 | 1 |
Amortizable—Customer relationships (d) | |||
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | 24 | 25 | 28 |
Amortizable—Pendings and listings (f) | |||
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | 1 | 4 | 12 |
Amortizable—Other (g) | |||
Schedule of Finite-Lived Intangible Assets, Amortization Expense [Line Items] | |||
Amortization of Intangible Assets | $ 4 | $ 5 | $ 5 |
Note 5. Franchising and Marke_3
Note 5. Franchising and Marketing Activities Franchising and Marketing Activities (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018USD ($)franchisedandcompanyownedoffices | Dec. 31, 2017USD ($)franchisedandcompanyownedoffices | Dec. 31, 2016USD ($)franchisedandcompanyownedoffices | Dec. 31, 2018Brokerage_Offices | Dec. 31, 2015franchisedandcompanyownedoffices | |
Franchisor Disclosure [Line Items] | |||||
Initial franchise and area development fees | $ | $ 6 | $ 8 | $ 8 | ||
Annual volume incentives from Real Estate Franchisees | $ | 52 | 62 | 56 | ||
Brand Marketing Fund Revenue | $ | $ 86 | $ 87 | $ 83 | ||
Franchised: | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 15,830 | 14,039 | 13,314 | 12,771 | |
Franchised: | Century 21® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 9,637 | 7,973 | 7,330 | ||
Franchised: | ERA® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 2,331 | 2,298 | 2,347 | ||
Franchised: | Coldwell Banker® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 2,380 | 2,330 | 2,289 | ||
Franchised: | Coldwell Banker Commercial® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 171 | 180 | 180 | ||
Franchised: | Sotheby’s International Realty® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 949 | 905 | 836 | ||
Franchised: | Better Homes and Gardens® Real Estate | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 362 | 353 | 332 | ||
Company Owned: | |||||
Franchisor Disclosure [Line Items] | |||||
Royalty expense | $ | $ 295 | $ 299 | $ 282 | ||
Marketing and Advertising Expense | $ | $ 11 | $ 12 | $ 11 | ||
Number of offices | 755 | 789 | 789 | 760 | 787 |
Company Owned: | Coldwell Banker® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 672 | 707 | 708 | ||
Company Owned: | Sotheby’s International Realty® | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 41 | 41 | 41 | ||
Company Owned: | Corcoran Other | |||||
Franchisor Disclosure [Line Items] | |||||
Number of offices | 42 | 41 | 40 |
Note 5. Franchising and Marke_4
Note 5. Franchising and Marketing Activities Change in the Number of Franchised and Company Owned Outlets (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)franchisedandcompanyownedoffices | Dec. 31, 2018USD ($)Brokerage_Offices | Dec. 31, 2017USD ($)franchisedandcompanyownedoffices | Dec. 31, 2016USD ($)franchisedandcompanyownedoffices | |
Franchised: | |||||
Change in Number of Franchised and Company Owned Outlets [Roll Forward] | |||||
Beginning balance | 14,039 | 13,314 | 12,771 | ||
Additions | 2,149 | 1,137 | 847 | ||
Terminations/Closures | (358) | (412) | (304) | ||
Ending balance | 15,830 | 14,039 | 13,314 | ||
Company Owned: | |||||
Change in Number of Franchised and Company Owned Outlets [Roll Forward] | |||||
Beginning balance | 789 | 789 | 787 | ||
Additions | 8 | 20 | 38 | ||
Terminations/Closures | (42) | (20) | (36) | ||
Ending balance | 755 | 760 | 789 | 789 | |
Franchisee Conversion Notes and Development Advance Notes | |||||
Change in Number of Franchised and Company Owned Outlets [Roll Forward] | |||||
Franchise conversion and development advance notes | $ | $ 131 | $ 131 | $ 131 | $ 124 | |
Forgiveness of franchise conversion and development advance notes | $ | $ 29 | $ 25 | $ 24 |
Note 6. Property and Equipmen_3
Note 6. Property and Equipment, Net Property and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 968 | $ 915 | |
Less: accumulated depreciation | (664) | (626) | |
Property and equipment, net | 304 | 289 | $ 267 |
Depreciation and amortization expense | 98 | 96 | $ 89 |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 274 | 281 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 401 | 366 | |
Building and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 290 | 265 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3 | $ 3 |
Note 7. Accrued Expenses And _3
Note 7. Accrued Expenses And Other Current Liabilities Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | |||
Accrued payroll and related employee costs | $ 118 | $ 140 | |
Accrued volume incentives | 37 | 41 | |
Accrued commissions | 30 | 38 | |
Restructuring accruals | 15 | 5 | |
Deferred income | 59 | 68 | |
Accrued interest | 15 | 13 | |
Contingent consideration for acquisitions | 8 | 26 | |
Due to former parent | 21 | 18 | |
Other | 98 | 129 | |
Total accrued expenses and other current liabilities | $ 401 | $ 480 | $ 478 |
Note 8. Short And Long-Term D_3
Note 8. Short And Long-Term Debt Schedule of Total Indebtedness (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | ||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | [1] | $ 3,779 | ||
Total Short-Term & Long-Term Debt | 3,548 | $ 3,348 | ||
Securitization obligations | 231 | 194 | ||
Line of Credit | Revolving Credit Facility | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Line of Credit | 270 | [2],[3] | 70 | |
Securitization obligations | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Securitization obligations | 231 | 194 | ||
Securitization obligations | Apple Ridge Funding LLC | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Securitization obligations | 218 | [4],[5] | 181 | |
Securitization obligations | Cartus Financing Limited | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Securitization obligations | 13 | [5],[6] | 13 | |
Secured Debt | Term Loan B | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | 1,053 | [7] | 1,063 | |
Secured Debt | Term Loan A | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | 732 | [8] | 390 | |
Secured Debt | Term Loan A-1 | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | 0 | 339 | ||
Senior Notes | 4.50% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | 449 | 444 | ||
Senior Notes | 5.25% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | 547 | 546 | ||
Senior Notes | 4.875% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Long-term Debt | $ 497 | $ 496 | ||
[1] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | |||
[2] | As of December 31, 2018, the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019, the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. | |||
[3] | Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | |||
[4] | As of December 31, 2018, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $32 million of available capacity. | |||
[5] | Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. | |||
[6] | Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of December 31, 2018, the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 million of available capacity. | |||
[7] | The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%). | |||
[8] | The Term Loan A provides for quarterly amortization payments, which commenced on June 30, 2018, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. |
Note 8. Short And Long-Term D_4
Note 8. Short And Long-Term Debt Schedule of Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2018 | Feb. 22, 2019 | Feb. 15, 2019 | Feb. 28, 2018 | Dec. 31, 2017 | Jan. 31, 2017 | Oct. 23, 2015 | |||
Principal Amount | |||||||||
Long-term Debt, Gross | [1] | $ 3,806 | |||||||
Outstanding borrowings, securitization obligations | 231 | $ 194 | |||||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [1] | 27 | |||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | [1] | 3,779 | |||||||
Outstanding borrowings, securitization obligations | 231 | 194 | |||||||
Letter of Credit, borrowing capacity | $ 125 | ||||||||
Unsecured Letter of Credit Facility | |||||||||
Net Amount | |||||||||
Interest Rate | 3.33% | ||||||||
Letter of Credit, borrowing capacity | $ 66 | 74 | |||||||
Outstanding letter of credit | $ 63 | 69 | |||||||
LIBOR | |||||||||
Net Amount | |||||||||
Description of variable interest rate basis | LIBOR | ||||||||
ABR | |||||||||
Net Amount | |||||||||
Description of variable interest rate basis | ABR | ||||||||
Securitization obligations | |||||||||
Principal Amount | |||||||||
Outstanding borrowings, securitization obligations | $ 231 | 194 | |||||||
Net Amount | |||||||||
Outstanding borrowings, securitization obligations | 231 | 194 | |||||||
Revolving Credit Facility | Line of Credit | |||||||||
Principal Amount | |||||||||
Outstanding borrowings, short-term debt, line of credit facility | 270 | [2],[3] | 70 | ||||||
Net Amount | |||||||||
Outstanding borrowings, short-term debt, line of credit facility | 270 | [2],[3] | 70 | ||||||
Line of credit facility borrowing capacity | 1,400 | $ 1,400 | $ 1,050 | $ 815 | |||||
Available capacity, line or credit facility | $ 1,130 | ||||||||
Revolving Credit Facility | Line of Credit | LIBOR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 2.25% | ||||||||
Revolving Credit Facility | Line of Credit | ABR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | Subsequent Event | |||||||||
Principal Amount | |||||||||
Outstanding borrowings, short-term debt, line of credit facility | $ 880 | ||||||||
Net Amount | |||||||||
Outstanding borrowings, short-term debt, line of credit facility | 880 | ||||||||
Available capacity, line or credit facility | $ 520 | ||||||||
Term Loan B | LIBOR | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 2.25% | ||||||||
Debt Instrument, basis spread on variable rate, floor | 0.75% | ||||||||
Term Loan B | ABR | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 1.25% | ||||||||
Debt Instrument, basis spread on variable rate, floor | 1.75% | ||||||||
Term Loan B | Secured Debt | |||||||||
Principal Amount | |||||||||
Long-term Debt, Gross | $ 1,069 | [4] | 1,080 | 1,083 | |||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [4] | 16 | |||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | $ 1,053 | [4] | 1,063 | ||||||
Annual percentage of original principal amount for quarterly amortization payments | 1.00% | ||||||||
Term Loan A | Secured Debt | |||||||||
Principal Amount | |||||||||
Long-term Debt, Gross | $ 736 | [5] | $ 750 | 391 | |||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [5] | 4 | |||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | $ 732 | [5] | 390 | ||||||
Term Loan A | Secured Debt | LIBOR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 2.25% | ||||||||
Term Loan A | Secured Debt | ABR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | |||||||||
Net Amount | |||||||||
Debt Instrument, basis spread on variable rate | 1.25% | ||||||||
Term Loan A | Secured Debt | 2018 | |||||||||
Net Amount | |||||||||
Annual percentage of original principal amount for quarterly amortization payments | 2.50% | ||||||||
Term Loan A | Secured Debt | 2019 | |||||||||
Net Amount | |||||||||
Annual percentage of original principal amount for quarterly amortization payments | 2.50% | ||||||||
Term Loan A | Secured Debt | 2020 | |||||||||
Net Amount | |||||||||
Annual percentage of original principal amount for quarterly amortization payments | 5.00% | ||||||||
Term Loan A | Secured Debt | 2021 | |||||||||
Net Amount | |||||||||
Annual percentage of original principal amount for quarterly amortization payments | 7.50% | ||||||||
Term Loan A | Secured Debt | 2022 | |||||||||
Net Amount | |||||||||
Annual percentage of original principal amount for quarterly amortization payments | 10.00% | ||||||||
4.50% Senior Notes | Senior Notes | |||||||||
Principal Amount | |||||||||
Long-term Debt, Gross | $ 450 | 450 | |||||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 1 | ||||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | $ 449 | 444 | |||||||
Interest Rate | 4.50% | ||||||||
4.50% Senior Notes | Senior Notes | Subsequent Event | |||||||||
Net Amount | |||||||||
Debt Instrument, Repurchased Face Amount | $ 450 | ||||||||
5.25% Senior Notes | Senior Notes | |||||||||
Principal Amount | |||||||||
Long-term Debt, Gross | $ 550 | 550 | |||||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 3 | ||||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | $ 547 | 546 | |||||||
Interest Rate | 5.25% | ||||||||
4.875% Senior Notes | Senior Notes | |||||||||
Principal Amount | |||||||||
Long-term Debt, Gross | $ 500 | 500 | |||||||
Unamortized Discount and Debt Issuance Costs | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 3 | ||||||||
Net Amount | |||||||||
Outstanding borrowings, long-term debt | $ 497 | 496 | |||||||
Interest Rate | 4.875% | ||||||||
Apple Ridge Funding LLC | Securitization obligations | |||||||||
Principal Amount | |||||||||
Outstanding borrowings, securitization obligations | $ 218 | [6],[7] | 181 | ||||||
Net Amount | |||||||||
Outstanding borrowings, securitization obligations | 218 | [6],[7] | 181 | ||||||
Total capacity, securitization obligations | 250 | ||||||||
Available capacity, debt | 32 | ||||||||
Cartus Financing Limited | Securitization obligations | |||||||||
Principal Amount | |||||||||
Outstanding borrowings, securitization obligations | 13 | [7],[8] | 13 | ||||||
Net Amount | |||||||||
Outstanding borrowings, securitization obligations | 13 | [7],[8] | $ 13 | ||||||
Total capacity, securitization obligations | 19 | ||||||||
Available capacity, debt | $ 6 | ||||||||
[1] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | ||||||||
[2] | As of December 31, 2018, the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019, the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. | ||||||||
[3] | Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | ||||||||
[4] | 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%). | ||||||||
[5] | 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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | ||||||||
[6] | As of December 31, 2018, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $32 million of available capacity. | ||||||||
[7] | Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. | ||||||||
[8] | Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of December 31, 2018, the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 million of available capacity. |
Note 8. Short And Long-Term D_5
Note 8. Short And Long-Term Debt Debt Maturities Table (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2019 | Dec. 31, 2018 | Feb. 22, 2019 | Feb. 15, 2019 | Feb. 28, 2018 | Dec. 31, 2017 | |||
Maturities of Long-term Debt [Abstract] | ||||||||
2019 (a) | [1] | $ 749 | ||||||
2,020 | 44 | |||||||
2,021 | 612 | |||||||
2,022 | 81 | |||||||
2,023 | $ 1,075 | |||||||
Long-term Debt Maturities, Years Presented | 5 years | |||||||
Long-term Debt, Gross | [2] | $ 3,806 | ||||||
Revolving Credit Facility | Line of Credit | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Long-term Line of Credit | 270 | [3],[4] | $ 70 | |||||
Senior Notes | 4.50% Senior Notes | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Long-term Debt, Gross | $ 450 | 450 | ||||||
Interest Rate | 4.50% | |||||||
Secured Debt | Term Loan A | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Long-term Debt, Gross | $ 736 | [5] | $ 750 | 391 | ||||
Secured Debt | Term Loan B | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Long-term Debt, Gross | $ 1,069 | [6] | $ 1,080 | $ 1,083 | ||||
Scenario, Forecast | Secured Debt | Term Loan A | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Debt Instrument, Periodic Payment, Principal | $ 18 | |||||||
Scenario, Forecast | Secured Debt | Term Loan B | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Debt Instrument, Periodic Payment, Principal | $ 11 | |||||||
Subsequent Event | Revolving Credit Facility | Line of Credit | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Long-term Line of Credit | $ 880 | |||||||
Subsequent Event | Senior Notes | 4.50% Senior Notes | ||||||||
Maturities of Long-term Debt [Abstract] | ||||||||
Debt Instrument, Repurchased Face Amount | $ 450 | |||||||
[1] | Consists of $450 million of 4.50% Senior Notes due in April 2019, four quarters of 2019 amortization payments totaling $18 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, as well as $270 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. On February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. See Note 19, "Subsequent Events" for further details. | |||||||
[2] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | |||||||
[3] | As of December 31, 2018, the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019, the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. | |||||||
[4] | Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 were based on, at the Company's option, (a) adjusted London Interbank Offering Rate ("LIBOR") plus an additional margin or (b) JP Morgan Chase Bank, N.A.'s prime rate ("ABR") plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | |||||||
[5] | The Term Loan A provides for quarterly amortization payments, which commenced on June 30, 2018, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | |||||||
[6] | The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%). |
Note 8. Short And Long-Term D_6
Note 8. Short And Long-Term Debt Senior Secured Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||||
Dec. 31, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | Jan. 31, 2017 | Jul. 31, 2016 | Jul. 20, 2016 | Oct. 23, 2015 | Mar. 05, 2013 | |||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt, Gross | [1] | $ 3,806 | ||||||||
Letter of Credit, borrowing capacity | $ 125 | |||||||||
Additional Credit Facilities | $ 500 | |||||||||
Maximum | Required Covenant Ratio to Receive Additional Credit Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured leverage ratio | 3.50 | |||||||||
Ratio of Indebtedness to Net Capital Denominator | 1 | |||||||||
Maximum | Required Covenant Ratio | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured leverage ratio | 4.75 | |||||||||
Ratio of Indebtedness to Net Capital Denominator | 1 | |||||||||
LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description of variable interest rate basis | LIBOR | |||||||||
ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description of variable interest rate basis | ABR | |||||||||
Term Loan B | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 2.25% | |||||||||
Debt Instrument, basis spread on variable rate, floor | 0.75% | |||||||||
Term Loan B | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 1.25% | |||||||||
Debt Instrument, basis spread on variable rate, floor | 1.75% | |||||||||
Line of Credit | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility borrowing capacity | $ 1,400 | $ 1,400 | $ 1,050 | $ 815 | ||||||
Line of Credit | Revolving Credit Facility | Greater than 3.50 to 1.00 | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 2.50% | |||||||||
Line of Credit | Revolving Credit Facility | Greater than 3.50 to 1.00 | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 1.50% | |||||||||
Line of Credit | Revolving Credit Facility | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 2.25% | |||||||||
Line of Credit | Revolving Credit Facility | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 1.25% | |||||||||
Line of Credit | Revolving Credit Facility | Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 2.00% | |||||||||
Line of Credit | Revolving Credit Facility | Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 1.00% | |||||||||
Line of Credit | Revolving Credit Facility | Less than 2.00 to 1.00 | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 1.75% | |||||||||
Line of Credit | Revolving Credit Facility | Less than 2.00 to 1.00 | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, basis spread on variable rate | 0.75% | |||||||||
Secured Debt | Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Repurchase Amount | $ 1,100 | $ 1,858 | ||||||||
Long-term Debt, Gross | $ 1,069 | [2] | $ 1,080 | $ 1,083 | ||||||
Annual percentage of original principal amount for quarterly amortization payments | 1.00% | |||||||||
[1] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | |||||||||
[2] | The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%). |
Note 8. Short And Long-Term D_7
Note 8. Short And Long-Term Debt Term Loan A Facility (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | Jul. 20, 2016 | Oct. 23, 2015 | Mar. 05, 2013 | |||
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Gross | [1] | $ 3,806 | ||||||
Additional Credit Facilities | $ 500 | |||||||
Maximum | Required Covenant Ratio to Receive Additional Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Ratio of Indebtedness to Net Capital | 3.50 | |||||||
Ratio of Indebtedness to Net Capital Denominator | 1 | |||||||
Secured Debt | Term Loan A | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Repurchase Amount | $ 435 | |||||||
Long-term Debt, Gross | $ 736 | [2] | $ 750 | $ 391 | ||||
Secured Debt | Term Loan A | LIBOR | Greater than 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 2.50% | |||||||
Secured Debt | Term Loan A | LIBOR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 2.25% | |||||||
Secured Debt | Term Loan A | LIBOR | Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 2.00% | |||||||
Secured Debt | Term Loan A | LIBOR | Less than 2.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 1.75% | |||||||
Secured Debt | Term Loan A | ABR | Greater than 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 1.50% | |||||||
Secured Debt | Term Loan A | ABR | Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 1.25% | |||||||
Secured Debt | Term Loan A | ABR | Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 1.00% | |||||||
Secured Debt | Term Loan A | ABR | Less than 2.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, basis spread on variable rate | 0.75% | |||||||
Secured Debt | Term Loan A | 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual percentage of original principal amount for quarterly amortization payments | 2.50% | |||||||
Secured Debt | Term Loan A | 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual percentage of original principal amount for quarterly amortization payments | 2.50% | |||||||
Secured Debt | Term Loan A | 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual percentage of original principal amount for quarterly amortization payments | 5.00% | |||||||
Secured Debt | Term Loan A | 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual percentage of original principal amount for quarterly amortization payments | 7.50% | |||||||
Secured Debt | Term Loan A | 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual percentage of original principal amount for quarterly amortization payments | 10.00% | |||||||
Secured Debt | Term Loan A-1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Repurchase Amount | $ 355 | |||||||
Long-term Debt, Gross | $ 0 | $ 342 | ||||||
Secured Debt | Term Loan A Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional Credit Facilities | $ 500 | |||||||
Secured Debt | Term Loan A Facility | Maximum | Required Covenant Ratio to Receive Additional Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Ratio of Indebtedness to Net Capital | 350.00% | |||||||
Ratio of Indebtedness to Net Capital Denominator | 100.00% | |||||||
[1] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | |||||||
[2] | The Term Loan A provides for quarterly amortization payments, which commenced on June 30, 2018, totaling per annum 2.5%, 2.5%, 5.0%, 7.5% and 10.0% of the original principal amount of the Term Loan A, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. |
Note 8. Short And Long-Term D_8
Note 8. Short And Long-Term Debt Unsecured Notes (Details) - Senior Notes - USD ($) $ in Millions | Feb. 15, 2019 | Dec. 31, 2018 |
4.50% Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
5.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.25% | |
4.875% Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.875% | |
Subsequent Event | 4.50% Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Repurchased Face Amount | $ 450 |
Note 8. Short And Long-Term D_9
Note 8. Short And Long-Term Debt Other Debt Facilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||
Letter of Credit, borrowing capacity | $ 125 | |
Unsecured Letter of Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Letter of Credit, borrowing capacity | 66 | $ 74 |
Outstanding letter of credit | $ 63 | $ 69 |
Note 8. Short And Long-Term _10
Note 8. Short And Long-Term Debt Securitization Obligations (Details) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018GBP (£) | ||
Debt Instrument [Line Items] | ||||
Securitization obligations | $ 231 | $ 194 | ||
Securitization obligations | ||||
Debt Instrument [Line Items] | ||||
Securitization obligations | 231 | 194 | ||
Relocation receivables and other related relocation assets that collateralize securitization obligations | 238 | 218 | ||
Interest expense on securitization obligations | $ 9 | $ 7 | ||
Weighted average interest rate on securitization obligations | 3.80% | 3.30% | 3.80% | |
Apple Ridge Funding LLC | Securitization obligations | ||||
Debt Instrument [Line Items] | ||||
Total capacity, securitization obligations | $ 250 | |||
Securitization obligations | 218 | [1],[2] | $ 181 | |
Cartus Financing Limited | Securitization obligations | ||||
Debt Instrument [Line Items] | ||||
Total capacity, securitization obligations | 19 | |||
Securitization obligations | $ 13 | [2],[3] | $ 13 | |
Cartus Financing Limited | Revolving Credit Facility | Securitization obligations | ||||
Debt Instrument [Line Items] | ||||
Total capacity, securitization obligations | £ | £ 10 | |||
Cartus Financing Limited | Working Capital Facility | Securitization obligations | ||||
Debt Instrument [Line Items] | ||||
Total capacity, securitization obligations | £ | £ 5 | |||
[1] | As of December 31, 2018, the Company had $250 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $32 million of available capacity. | |||
[2] | Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. | |||
[3] | Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of December 31, 2018, the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $6 million of available capacity. |
Note 8. Short And Long-Term _11
Note 8. Short And Long-Term Debt Loss on the Early Extinguishment of Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | ||
Debt Disclosure [Abstract] | |||||||||
Loss on the early extinguishment of debt | $ 7 | $ 1 | $ 4 | $ 7 | [1] | $ 5 | $ 0 | ||
Write off of Deferred Debt Issuance Cost | $ 2 | ||||||||
[1] | Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. |
Note 9. Employee Benefit Plan_3
Note 9. Employee Benefit Plans Changes in Benefit Obligations and Plan Assets Table (Details) - Defined Benefit Pension Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Periodic Benefit Cost | ||
Net periodic pension cost | $ 1 | $ 1 |
Interest cost | 5 | 6 |
Actuarial loss | 2 | 2 |
Expected return on plan assets | (7) | (7) |
Benefit Obligations | ||
Defined Benefit Plan, Benefit Obligation | 128 | 145 |
Fair value of plan assets | 90 | 108 |
Underfunded at end of year | $ 38 | $ 37 |
Note 9. Employee Benefit Plan_4
Note 9. Employee Benefit Plans Estimated Future Funding (Details) - Defined Benefit Pension Plan $ in Millions | Dec. 31, 2018USD ($) |
Expected Future Benefit Payments, Fiscal Year Maturity | |
2,019 | $ 9 |
2,020 | 9 |
2,021 | 9 |
2,022 | 9 |
2,023 | 9 |
2024 through 2028 | 45 |
Estimated minimum funding required during 2019 | $ 3 |
Note 9. Employee Benefit Plan_5
Note 9. Employee Benefit Plans Fair Value of Plan Assets by Category (Details) - Defined Benefit Pension Plan - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 90 | $ 108 |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3 | 1 |
Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 43 | 71 |
Bond funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 44 | 36 |
Fair Value, Inputs, Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3 | 1 |
Fair Value, Inputs, Level 1 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3 | 1 |
Fair Value, Inputs, Level 1 | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 1 | Bond funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 87 | 107 |
Fair Value, Inputs, Level 2 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 2 | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 43 | 71 |
Fair Value, Inputs, Level 2 | Bond funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 44 | 36 |
Fair Value, Inputs, Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Bond funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 0 | $ 0 |
Note 9. Employee Benefit Plan_6
Note 9. Employee Benefit Plans Other Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Employee Benefit Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Benefit Obligation | $ 5 | $ 6 | |
Defined Contribution Savings Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | $ 16 | $ 16 | $ 15 |
Note 10. Income Taxes Pre-tax I
Note 10. Income Taxes Pre-tax Income (Loss) for Domestic and Foreign Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 204 | $ 365 | $ 351 |
Foreign | 1 | 4 | 10 |
Pretax income (loss) | $ 205 | $ 369 | $ 361 |
Note 10. Income Taxes Income _3
Note 10. Income Taxes Income Tax Provision (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Current: | ||||
Federal | $ (13) | $ (7) | $ 10 | |
State | 5 | 4 | 8 | |
Foreign | 2 | 1 | 2 | |
Current Income Tax Expense (Benefit) | (6) | (2) | 20 | |
Deferred: | ||||
Federal | 62 | (72) | 107 | |
State | 9 | 9 | 16 | |
Foreign | 0 | 0 | 1 | |
Deferred Income Tax Expense (Benefit) | 71 | (63) | 124 | |
Income tax expense (benefit) | [1] | $ 65 | $ (65) | $ 144 |
Federal statutory rate | 21.00% | 35.00% | 35.00% | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ (184) | |||
Unrecognized Tax Benefits, Period Increase (Decrease) | $ (32) | |||
[1] | Income tax benefit for the year ended December 31, 2017 reflects the impact of the 2017 Tax Act. |
Note 10. Income Taxes Reconcili
Note 10. Income Taxes Reconciliation of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Federal statutory rate | 21.00% | 35.00% | 35.00% |
State and local income taxes, net of federal tax benefits | 6.00% | 4.00% | 4.00% |
Change in Enacted Tax Rate | 0.00% | (50.00%) | 0.00% |
Non-deductible equity compensation | 2.00% | 1.00% | 1.00% |
Non-deductible executive compensation | 1.00% | 0.00% | 0.00% |
Other permanent differences | 1.00% | 1.00% | 0.00% |
Uncertain tax positions | (1.00%) | (9.00%) | 0.00% |
Net change in valuation allowance | 2.00% | 1.00% | 0.00% |
Other | 0.00% | (1.00%) | 0.00% |
Effective income tax rate | 32.00% | (18.00%) | 40.00% |
Note 10. Income Taxes Deferred
Note 10. Income Taxes Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Deferred income tax assets: | |||
Net operating loss carryforwards | $ 241 | $ 288 | |
Tax credit carryforwards | 24 | 35 | |
Accrued liabilities and deferred income | 92 | 85 | |
Minimum pension obligations | 16 | 16 | |
Provision for doubtful accounts | 7 | 8 | |
Liability for unrecognized tax benefits | 1 | 1 | |
Interest rate swaps | 5 | 2 | |
Total deferred tax assets | 386 | 435 | |
Less: valuation allowance | (18) | (13) | |
Total deferred income tax assets after valuation allowance | 368 | 422 | |
Deferred income tax liabilities: | |||
Depreciation and amortization | 747 | 736 | |
Prepaid expenses | 8 | 2 | |
Basis difference in investment in joint ventures | 1 | 10 | |
Total deferred tax liabilities | 756 | 748 | |
Net deferred income tax liabilities | (388) | (326) | |
Deferred Tax Assets, Net, Classification [Abstract] | |||
Net deferred income tax liabilities | (388) | (326) | |
Deferred income taxes | 389 | $ 319 | 327 |
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 1 | $ 1 | |
Operating Loss Carryforwards | $ 855 |
Note 10. Income Taxes Accountin
Note 10. Income Taxes Accounting for Uncertainty in Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized Tax Benefits | $ (22) | $ (78) | $ (78) | $ (20) |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 17 | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 1 | |||
Unrecognized Tax Benefits, Statute of Limitations, Scheduled Expiration as of Reporting Date | 12 months | |||
Increase (Decrease) in Interest Accrued for Unrecognized Tax Benefits | $ 1 | 2 | 4 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | ||||
Unrecognized Tax Benefits, Beginning of Period | 22 | 78 | 78 | |
Gross increases—tax positions in prior periods | 1 | 3 | ||
Reduction due to lapse of statute of limitations | (2) | (3) | (3) | |
Gross decreases—tax positions in prior periods | (54) | |||
Unrecognized Tax Benefits, End of Period | $ 20 | $ 22 | $ 78 |
Note 10. Income Taxes Tax Shari
Note 10. Income Taxes Tax Sharing Agreement (Details) | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | |
Guaranty Arrangement Percentage of Obligations Assumed by Realogy | 62.50% |
Note 11. Restructuring Costs _3
Note 11. Restructuring Costs Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | $ 13 | $ 9 | $ 6 | $ 30 | $ 3 | $ 2 | $ 2 | $ 5 | $ 58 | [1],[2] | $ 12 | [1],[2] | $ 39 | [1],[2] | |
Real Estate Franchise Services | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | 3 | 1 | 4 | ||||||||||||
Company Owned Real Estate Brokerage Services | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | 37 | 9 | 22 | ||||||||||||
Relocation Services | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | 11 | 4 | |||||||||||||
Title and Settlement Services | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | 4 | 1 | 1 | ||||||||||||
Leadership Realignment | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Balance at December 31, 2017 | 0 | 0 | |||||||||||||
Restructuring costs, net | 56 | ||||||||||||||
Costs paid or otherwise settled | (36) | ||||||||||||||
Balance at December 31, 2018 | 20 | 0 | 20 | 0 | |||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 58 | 58 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 56 | 56 | |||||||||||||
Total amount remaining to be incurred | 2 | 2 | |||||||||||||
Leadership Realignment | Real Estate Franchise Services | |||||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 3 | 3 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 3 | 3 | |||||||||||||
Total amount remaining to be incurred | 0 | 0 | |||||||||||||
Leadership Realignment | Company Owned Real Estate Brokerage Services | |||||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 37 | 37 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 36 | 36 | |||||||||||||
Total amount remaining to be incurred | 1 | 1 | |||||||||||||
Leadership Realignment | Relocation Services | |||||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 11 | 11 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 11 | 11 | |||||||||||||
Total amount remaining to be incurred | 0 | 0 | |||||||||||||
Leadership Realignment | Title and Settlement Services | |||||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 3 | 3 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 3 | 3 | |||||||||||||
Total amount remaining to be incurred | 0 | 0 | |||||||||||||
Leadership Realignment | Corporate | |||||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 4 | 4 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 3 | 3 | |||||||||||||
Total amount remaining to be incurred | 1 | 1 | |||||||||||||
Business Optimization Plan | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Balance at December 31, 2017 | 7 | 7 | |||||||||||||
Restructuring costs, net | 2 | ||||||||||||||
Costs paid or otherwise settled | (7) | ||||||||||||||
Balance at December 31, 2018 | 7 | 7 | |||||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount remaining to be incurred | 2 | 2 | |||||||||||||
Personnel-related costs | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | [3] | 25 | 7 | 22 | |||||||||||
Personnel-related costs | Leadership Realignment | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Balance at December 31, 2017 | 0 | 0 | |||||||||||||
Restructuring costs, net | 25 | ||||||||||||||
Costs paid or otherwise settled | (18) | ||||||||||||||
Balance at December 31, 2018 | 7 | 0 | 7 | 0 | |||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 27 | 27 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 25 | 25 | |||||||||||||
Total amount remaining to be incurred | 2 | 2 | |||||||||||||
Facility-related costs | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | [4] | 22 | 4 | 11 | |||||||||||
Facility-related costs | Leadership Realignment | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Balance at December 31, 2017 | 0 | 0 | |||||||||||||
Restructuring costs, net | 20 | ||||||||||||||
Costs paid or otherwise settled | (7) | ||||||||||||||
Balance at December 31, 2018 | 13 | 0 | 13 | 0 | |||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 20 | 20 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 20 | 20 | |||||||||||||
Total amount remaining to be incurred | 0 | 0 | |||||||||||||
Facility-related costs | Business Optimization Plan | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | 2 | ||||||||||||||
Internal Use Software Impairment | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | [5] | 11 | 0 | 0 | |||||||||||
Internal Use Software Impairment | Leadership Realignment | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Balance at December 31, 2017 | $ 0 | 0 | |||||||||||||
Restructuring costs, net | 11 | ||||||||||||||
Costs paid or otherwise settled | (11) | ||||||||||||||
Balance at December 31, 2018 | 0 | $ 0 | 0 | 0 | |||||||||||
Restructuring and Related Cost, Expected Cost [Abstract] | |||||||||||||||
Total amount expected to be incurred | 11 | 11 | |||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 11 | 11 | |||||||||||||
Total amount remaining to be incurred | $ 0 | 0 | |||||||||||||
Other restructuring costs | |||||||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||||||
Restructuring costs, net | [6] | $ 0 | $ 1 | $ 6 | |||||||||||
[1] | The year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. | ||||||||||||||
[2] | The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment.The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment.The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. | ||||||||||||||
[3] | Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition. | ||||||||||||||
[4] | Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments, net of applicable sublease income, 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. | ||||||||||||||
[5] | 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. | ||||||||||||||
[6] | 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. |
Note 12. Stock-Based Compensa_3
Note 12. Stock-Based Compensation Introduction Narrative (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2018Performance_metricsRateshares | |
Shares available for future grant under the plan (in shares) | 5 |
Retirement Eligibility Age | 65 years |
Retirement Eligibility Age with Ten Years of Service | 55 years |
Retirement Eligibility Years Tenure | 10 years |
Retirement Eligibility Service Requirement | 1 year |
Maximum | |
Shares authorized for issuance under the plan (in shares) | 6 |
Restricted Stock Units | |
Award Vesting Period | 3 years |
Annual Vesting Percentage | Rate | 33.33% |
Performance Share Units | |
Award Vesting Period | 3 years |
Annual Vesting Percentage | 33.33% |
Number of performance metrics | 2 |
The first performance metric | Performance_metrics | 1 |
Performance Share Units | RTSR | Minimum | |
Award Vesting Rights, Percentage | 0.00% |
Performance Share Units | RTSR | Maximum | |
Award Vesting Rights, Percentage | 175.00% |
Performance Share Units | Cumulative Free Cash Flow | Minimum | |
Award Vesting Rights, Percentage | 0.00% |
Performance Share Units | Cumulative Free Cash Flow | Maximum | |
Award Vesting Rights, Percentage | 200.00% |
Options | |
Award Vesting Period | 4 years |
Annual Vesting Percentage | 25.00% |
Award Expiration Period | 10 years |
Note 12. Stock-Based Compensa_4
Note 12. Stock-Based Compensation Incentive Equity Awards Activity - Summary of Share-Based Compensation Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Restricted Stock Units | ||||
Equity Instruments Other than Options, Number of Shares Roll Forward | ||||
Outstanding at January 1, 2018 | 2 | |||
Granted | 1.5 | |||
Distributed/Exercised | [1] | (0.9) | ||
Forfeited/Expired | (0.1) | |||
Outstanding at December 31, 2018 | 2.5 | 2 | ||
Equity Instruments Other than Options, Weighted Average Grant Date Fair Value Roll Forward | ||||
Outstanding at January 1, 2018 | $ 31.71 | |||
Granted | 25.39 | |||
Distributed/Exercised | 33.67 | |||
Forfeited/Expired | 27.80 | |||
Outstanding at December 31, 2018 | $ 27.32 | $ 31.71 | ||
Options, Weighted Average Exercise Price Roll Forward | ||||
Fair Value of Shares Distributed in Period | $ 30 | |||
Performance Share Units | ||||
Equity Instruments Other than Options, Number of Shares Roll Forward | ||||
Outstanding at January 1, 2018 | [2] | 1.8 | ||
Granted | [2] | 0.5 | ||
Distributed/Exercised | [2],[3] | 0.4 | ||
Forfeited/Expired | [2] | (0.1) | ||
Outstanding at December 31, 2018 | [2] | 1.8 | 1.8 | |
Equity Instruments Other than Options, Weighted Average Grant Date Fair Value Roll Forward | ||||
Outstanding at January 1, 2018 | $ 33.16 | |||
Granted | 25.11 | |||
Distributed/Exercised | 42.14 | |||
Forfeited/Expired | 27.99 | |||
Outstanding at December 31, 2018 | $ 28.13 | $ 33.16 | ||
Options, Weighted Average Exercise Price Roll Forward | ||||
Fair Value of Shares Distributed in Period | $ 15 | |||
Fair Value of Shares Vested in Period | $ 5 | $ 9 | ||
Shares Vested in Period | 0.2 | |||
Weighted Average Fair Value of Shares Vested in Period | $ 34 | |||
Options | ||||
Options, Number of Shares Roll Forward | ||||
Outstanding at January 1, 2018 | [4] | 3.6 | ||
Granted | [4] | 0.4 | ||
Distributed/Exercised | [4] | 0 | ||
Forfeited/Expired | [4] | (0.2) | ||
Outstanding at December 31, 2018 | [4] | 3.8 | [5] | 3.6 |
Options, Weighted Average Exercise Price Roll Forward | ||||
Outstanding at January 1, 2018 | $ 31.75 | |||
Granted | 25.35 | |||
Distributed/Exercised | 0 | |||
Forfeited/Expired | 38.28 | |||
Outstanding at December 31, 2018 | $ 30.92 | $ 31.75 | ||
Intrinsic Value of Outstanding Options | $ 0 | |||
Weighted Average Remaining Contractual Life of Outstanding Options | 5 years 4 months | |||
[1] | (b)The total fair value of RSUs which were distributed during the year ended December 31, 2018 was $30 million. | |||
[2] | (a)The PSU amounts in the table are shown at the target amount of the award. | |||
[3] | (c)The total fair value of PSUs which were distributed during the year ended December 31, 2018 was $15 million, which includes the distribution of PSUs awarded in 2015 subject to performance over the three-year performance period ended December 31, 2017, at a fair value of $9 million. Amounts distributed do not include 0.2 million PSUs awarded in 2016 subject to achievement against performance over the three-year period ended and vested December 31, 2018, at a fair value of $5 million and at a weighted average grant date fair value of $34.00. These PSUs were distributed in early 2019. | |||
[4] | (e)The following table summarizes information regarding exercisable stock options as of December 31, 2018:Range of Exercise Prices Options Vested Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life$15.00 to $50.00 2.6 $28.82 $— 4.1 years$50.01 and above 0.1 $137.50 $— 1.9 years | |||
[5] | (d)Options outstanding at December 31, 2018 have an intrinsic value of zero and have a weighted average remaining contractual life of 5.3 years. |
Note 12. Stock-Based Compensa_5
Note 12. Stock-Based Compensation Summary of Exercisable Stock Options (Details) - Options $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
$15.00 to $50.00 | |
Exercisable Stock Options, Additional Disclosures | |
Options Vested | shares | 2.6 |
Weighted Average Exercise Price | $ / shares | $ 28.82 |
Aggregate Intrinsic Value | $ | $ 0 |
Weighted Average Remaining Contractual Life | 4 years 1 month |
$50.01 and above | |
Exercisable Stock Options, Additional Disclosures | |
Options Vested | shares | 0.1 |
Weighted Average Exercise Price | $ / shares | $ 137.50 |
Aggregate Intrinsic Value | $ | $ 0 |
Weighted Average Remaining Contractual Life | 1 year 11 months |
Note 12. Stock-Based Compensa_6
Note 12. Stock-Based Compensation Incentive Equity Awards Activity - Summary of Market Performance Units Valuation Assumptions (Details) - Performance Share Units - RTSR | 12 Months Ended | |||
Dec. 31, 2018$ / shares | Dec. 31, 2017$ / shares | Dec. 31, 2016$ / shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value | $ 25.45 | $ 27.98 | $ 27.99 | |
Weighted average correlation coefficient | 0.44 | 0.53 | 0.58 | |
Weighted average risk-free interest rate | 2.60% | 1.50% | 0.90% | |
Weighted average dividend yield | 0.00% | 0.00% | 0.00% | |
Realogy and comparable companies | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average expected volatility (a) | [1] | 29.80% | 29.00% | 28.10% |
XHB | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average expected volatility (a) | 17.90% | 18.40% | 19.40% | |
[1] | (a)Expected volatility is based on historical volatilities of the Company and select comparable companies. |
Note 12. Stock-Based Compensa_7
Note 12. Stock-Based Compensation Incentive Equity Awards Activity - Summary of Stock Options Valuation Assumptions (Details) - Options - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Fair Value Assumptions | ||||
Weighted average grant date fair value | $ 7.12 | $ 8.61 | $ 10.81 | |
Weighted average expected volatility (a) | [1] | 28.50% | 30.70% | 31.70% |
Weighted average expected term (years) (b) | [2] | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Weighted average risk-free interest rate (c) | [3] | 2.70% | 2.00% | 1.30% |
Weighted average dividend yield | 1.40% | 1.20% | 0.10% | |
[1] | (a)Expected volatility was based on historical volatilities of the Company and select comparable companies. | |||
[2] | (b)The expected term of the options granted represents the period of time that options are expected to be outstanding and is based on the simplified method. | |||
[3] | (c)The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options. |
Note 12. Stock-Based Compensa_8
Note 12. Stock-Based Compensation Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Unrecognized compensation cost | $ 42 | ||
Remaining weighted average period | 1 year 11 months | ||
Stock-based compensation expense | $ 40 | $ 52 | $ 57 |
Note 13. Commitments And Cont_3
Note 13. Commitments And Contingencies Litigation and Tax Matters (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | ||
Guaranty Arrangement Percentage of Obligations Assumed by Realogy | 62.50% | |
Guaranty Arrangement Percentage of Obligations Assumed by Wyndham | 37.50% | |
Due to former parent | $ 18 | $ 21 |
Strader | ||
Loss Contingencies [Line Items] | ||
Legal Fees | $ 8 |
Note 13. Commitments And Cont_4
Note 13. Commitments And Contingencies Escrow and Trust Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Escrow and trust deposits | $ 426,000 | $ 469,000 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Cash, FDIC Insured Amount | $ 250 |
Note 13. Commitments And Cont_5
Note 13. Commitments And Contingencies Future Minimum Lease Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,019 | $ 165 | ||
2,020 | 144 | ||
2,021 | 120 | ||
2,022 | 95 | ||
2,023 | 79 | ||
Thereafter | 196 | ||
Total future minimum operating lease payments due | 799 | ||
Capital lease obligations | 33 | $ 29 | |
Imputed interest | 2 | 2 | |
Rent expense | $ 196 | $ 192 | $ 186 |
Note 13. Commitments And Cont_6
Note 13. Commitments And Contingencies Purchase Commitments and Minimum Licensing Fees (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Long-term Purchase Commitment [Line Items] | |
Purchase commitments | $ 113 |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2,019 | 71 |
2,020 | 25 |
2,021 | 20 |
2,022 | 9 |
2,023 | 9 |
Thereafter | 226 |
Total purchase obligations | 360 |
Sotheby’s International Realty® | |
Long-term Purchase Commitment [Line Items] | |
Licensing fees | 2 |
Meredith Corporation | Minimum | |
Long-term Purchase Commitment [Line Items] | |
Licensing fees | 0.5 |
Meredith Corporation | Maximum | |
Long-term Purchase Commitment [Line Items] | |
Licensing fees | $ 4 |
Note 13. Commitments And Cont_7
Note 13. Commitments And Contingencies Other Guarantees, Insurance and Self-Insurance (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Insurance liabilities | $ 26,000 | $ 40,000 |
Self insurance accruals | 15,000 | $ 16,000 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Guarantees, gross | 13,000 | |
Fidelity Insurance | ||
Loss Contingencies [Line Items] | ||
Insurance deductible | 750 | |
Fidelity Insurance | Maximum | ||
Loss Contingencies [Line Items] | ||
Insurance liabilities | 30,000 | |
Company Owned Real Estate Brokerage Services | Errors and Omissions Insurance | ||
Loss Contingencies [Line Items] | ||
Insurance liabilities | 15,000 | |
Insurance deductible | 1,000 | |
Company Owned Real Estate Brokerage Services | Errors and Omissions Insurance including additional Realogy Group Coverage | ||
Loss Contingencies [Line Items] | ||
Insurance deductible | 1,000 | |
Company Owned Real Estate Brokerage Services | Errors and Omissions Insurance including additional Realogy Group Coverage | Maximum | ||
Loss Contingencies [Line Items] | ||
Insurance liabilities | 60,000 | |
Realogy Group | Errors and Omissions Insurance | ||
Loss Contingencies [Line Items] | ||
Insurance deductible | 2,500 | |
Realogy Group | Errors and Omissions Insurance | Maximum | ||
Loss Contingencies [Line Items] | ||
Insurance liabilities | 45,000 | |
Title and Settlement Services | Maximum | ||
Loss Contingencies [Line Items] | ||
Underwriter of title insurance policies, value, per policy | 1,500 | |
Title and Settlement Services | Minimum | ||
Loss Contingencies [Line Items] | ||
Underwriter of title insurance policy, reinsurance policy obtained from national underwriter, value per policy | $ 1,500 |
Note 14. Equity (Deficit) Accum
Note 14. Equity (Deficit) Accumulated Other Comprehensive Loss (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Aug. 31, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Jan. 01, 2016 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Beginning of Period Balance | $ (37) | $ (37) | |||||||||||
Income tax benefit | (1) | $ 1 | $ (3) | ||||||||||
Current period change | (6) | 3 | (4) | ||||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (22) | $ 5 | |||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (52) | (52) | (37) | ||||||||||
Dividends [Abstract] | |||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | ||||||||
Dividends, Common Stock, Cash | 45 | 49 | 26 | ||||||||||
Currency Translation Adjustments (1) | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Beginning of Period Balance | [1] | $ (4) | (4) | (6) | (3) | ||||||||
Other comprehensive income (loss) before reclassifications | [1] | (3) | 3 | (5) | |||||||||
Amounts reclassified from accumulated other comprehensive income | [1] | 0 | 0 | 0 | |||||||||
Income tax benefit | [1] | 0 | (1) | 2 | |||||||||
Current period change | [1] | (4) | 2 | (3) | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | [1],[2] | (1) | |||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | [1] | $ (8) | (8) | (4) | (6) | ||||||||
Minimum Pension Liability Adjustment | Minimum | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Beginning of Period Balance | (33) | (33) | (34) | (33) | |||||||||
Other comprehensive income (loss) before reclassifications | (6) | (1) | (3) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | [3] | 2 | 2 | 1 | |||||||||
Income tax benefit | 1 | 0 | 1 | ||||||||||
Current period change | (11) | 1 | (1) | ||||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | [2] | (8) | |||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (44) | (44) | (33) | (34) | |||||||||
Accumulated Other Comprehensive Loss (2) | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Beginning of Period Balance | [4] | $ (37) | (37) | (40) | (36) | ||||||||
Other comprehensive income (loss) before reclassifications | [4] | (9) | 2 | (8) | |||||||||
Amounts reclassified from accumulated other comprehensive income | [4] | 2 | 2 | 1 | |||||||||
Income tax benefit | [4] | 1 | (1) | 3 | |||||||||
Current period change | (6) | 3 | [4] | (4) | [4] | ||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | [4] | (9) | |||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | [4] | $ (52) | (52) | $ (37) | $ (40) | ||||||||
Accounting Standards Update 2018-02 | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 9 | ||||||||||||
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Loss (2) | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Current period change | [4] | $ (15) | |||||||||||
[1] | Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the balance sheet dates and equity accounts are translated at historical spot rates. Revenues and expenses are translated at average exchange rates during the periods presented. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in accumulated other comprehensive income (loss). Gains or losses resulting from foreign currency transactions are included in the Consolidated Statements of Operations. | ||||||||||||
[2] | These amounts represent adjustments for the adoption of the accounting standard update on stranded tax effects related to the 2017 Tax Act which resulted in a debit to Accumulated other comprehensive loss and a credit to Accumulated deficit of $9 million during the first quarter of 2018. See Note 2, "Summary of Significant Accounting Policies" in the "Recently Adopted Accounting Pronouncements" section for additional information. | ||||||||||||
[3] | These amounts represent the amortization of actuarial loss to periodic pension cost and were reclassified from accumulated other comprehensive income to the general and administrative expenses line on the statement of operations. | ||||||||||||
[4] | As of December 31, 2018, the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests. |
Note 14. Equity (Deficit) State
Note 14. Equity (Deficit) Statement of Equity (Deficit) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Jan. 01, 2016 | ||||
Statement of Equity Table [Line Items] | ||||||||
Balance | $ 2,622 | $ 2,469 | $ 2,422 | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (22) | $ 5 | ||||||
Net income | 140 | 434 | 217 | |||||
Other comprehensive income (loss) | (6) | 3 | (4) | |||||
Stock Repurchased and Retired During Period, Value | (402) | (280) | (195) | |||||
Exercise of stock options | 1 | 8 | 2 | |||||
Repurchase of Common Stock | 30 | 41 | 51 | |||||
Dividends of Common Stock, Cash | (45) | (49) | (26) | |||||
Dividends Total Equity | (48) | (53) | (29) | |||||
Balance | 2,315 | 2,622 | 2,469 | |||||
Common Stock | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | 1 | 1 | 1 | |||||
Balance | 1 | 1 | 1 | |||||
Additional Paid-In Capital | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | 5,285 | 5,565 | 5,733 | |||||
Stock Repurchased and Retired During Period, Value | (402) | (280) | (195) | |||||
Exercise of stock options | 1 | 8 | 2 | |||||
Repurchase of Common Stock | 30 | 41 | 51 | |||||
Balance | 4,869 | 5,285 | 5,565 | |||||
Accumulated Deficit | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | (2,631) | (3,062) | (3,280) | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (13) | $ 5 | ||||||
Net income | 137 | 431 | 213 | |||||
Balance | (2,507) | (2,631) | (3,062) | |||||
Accumulated Other Comprehensive Loss | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | (37) | (40) | (36) | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | [1] | $ (9) | ||||||
Other comprehensive income (loss) | (6) | 3 | [1] | (4) | [1] | |||
Balance | (52) | (37) | (40) | |||||
Non- controlling Interests | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | 4 | 5 | 4 | |||||
Net income | 3 | 3 | 4 | |||||
Dividends ($0.36 per share) | (3) | (4) | (3) | |||||
Balance | 4 | 4 | 5 | |||||
Realogy Group | Common Stock | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | 0 | 0 | 0 | |||||
Balance | 0 | 0 | 0 | |||||
Realogy Group | Additional Paid-In Capital | ||||||||
Statement of Equity Table [Line Items] | ||||||||
Balance | 5,286 | 5,566 | 5,734 | |||||
Balance | $ 4,870 | $ 5,286 | $ 5,566 | |||||
[1] | As of December 31, 2018, the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests. |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Jan. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 23, 2017 | ||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||
Net income attributable to Realogy Holdings shareholders | $ (22) | $ 103 | $ 123 | $ (67) | $ 255 | $ 95 | $ 109 | $ (28) | $ 137 | $ 431 | $ 213 | |||||||||||
Basic weighted average shares | 124 | 136.7 | 144.5 | |||||||||||||||||||
Stock options, restricted stock units and performance share units (a) | [1] | 1.3 | 1.7 | 1.3 | ||||||||||||||||||
Weighted average diluted shares | 125.3 | 138.4 | 145.8 | |||||||||||||||||||
Earnings Per Share, Basic | $ (0.19) | [2] | $ 0.84 | [2] | $ 0.97 | [2] | $ (0.51) | [2] | $ 1.91 | [3] | $ 0.70 | [3] | $ 0.79 | [3] | $ (0.20) | [3] | $ 1.10 | $ 3.15 | $ 1.47 | |||
Earnings Per Share, Diluted | $ (0.19) | [2] | $ 0.83 | [2] | $ 0.96 | [2] | $ (0.51) | [2] | $ 1.89 | [3] | $ 0.69 | [3] | $ 0.78 | [3] | $ (0.20) | [3] | $ 1.09 | $ 3.11 | $ 1.46 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6.9 | 5.3 | 4.5 | |||||||||||||||||||
Stock Repurchases [Line Items] | ||||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 17.9 | 9.4 | 7.1 | |||||||||||||||||||
Stock Repurchased and Retired During Period, Value | $ 402 | $ 280 | $ 195 | |||||||||||||||||||
Stock Repurchased and Retired During Period, Weighted Average Market Price | $ 22.47 | $ 29.38 | $ 27.96 | |||||||||||||||||||
Maximum | ||||||||||||||||||||||
Stock Repurchases [Line Items] | ||||||||||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 925 | |||||||||||||||||||||
Common Stock Settlement Date after Period End [Member] | ||||||||||||||||||||||
Stock Repurchases [Line Items] | ||||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 0.2 | |||||||||||||||||||||
Stock Repurchased and Retired During Period, Value | $ 276 | $ 199 | ||||||||||||||||||||
[1] | Excludes 6.9 million, 5.3 million and 4.5 million shares of common stock issuable for incentive equity awards which includes performance share units based on the achievement of target amounts, for the years ended December 31, 2018, 2017 and 2016, respectively, that are anti-dilutive to the diluted earnings per share computation. | |||||||||||||||||||||
[2] | Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS (see Note 15 "Earnings Per Share" for further information). | |||||||||||||||||||||
[3] | Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS. |
Interest Rate, Credit, and Mark
Interest Rate, Credit, and Market Risk Exposures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Principal value of variable rate long term debt | $ 2,075 | ||
Securitization obligations | $ 231 | $ 194 | |
Company Owned Real Estate Brokerage Services | California | |||
Concentration risk, geographic area, revenue | 27.00% | 27.00% | 26.00% |
Company Owned Real Estate Brokerage Services | New York | |||
Concentration risk, geographic area, revenue | 20.00% | 22.00% | 22.00% |
Company Owned Real Estate Brokerage Services | Florida | |||
Concentration risk, geographic area, revenue | 9.00% | 9.00% | 9.00% |
Minimum | |||
Fixed interest rate of swaps | 2.07% | ||
Maximum | |||
Fixed interest rate of swaps | 3.11% | ||
Interest rate swap contracts | |||
Notional value of derivative instrument | $ 1,600 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | $ 27 | $ 25 | ||
Foreign exchange contracts | Not Designated as Hedging Instruments | Operating expense | ||||
Derivative [Line Items] | ||||
(Gain) or Loss Recognized on Derivatives | (1) | 2 | $ (2) | |
Interest rate swap contracts | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | 1,600 | |||
Interest rate swap contracts | Not Designated as Hedging Instruments | Interest expense | ||||
Derivative [Line Items] | ||||
(Gain) or Loss Recognized on Derivatives | 4 | (4) | $ 6 | |
Interest rate swap contracts | Other non-current assets | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Derivative Asset, Fair Value, Gross Asset | 6 | 0 | ||
Interest rate swap contracts | Other current and non-current liabilities | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Fair value of interest rate derivative liabilities | 16 | 13 | ||
Interest rate swap contracts | August 2015 | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | 600 | |||
Interest rate swap contracts | November 2017 | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | 450 | |||
Interest rate swap contracts | August 2020 | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | [1] | 400 | ||
Interest rate swap contracts | November 2022 | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | [1] | 150 | ||
New Interest Rate Swap Notional Value of $125 million | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | 125 | |||
New Interest Rate Swap Notional Value of $150 million | ||||
Derivative [Line Items] | ||||
Notional value of derivative instrument | 150 | |||
Maximum | Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Fair value of derivative instrument | $ 1 | $ 1 | ||
[1] | During the second quarter of 2018, the Company entered into four new forward starting interest rate swaps, two with a notional value of $125 million and two with a notional value of $150 million. |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Rollforward [Roll Forward] | ||
Fair value of contingent consideration at December 31, 2017 | $ 34 | |
Additions: contingent consideration related to acquisitions completed during the period | 1 | |
Reductions: payments of contingent consideration | (23) | |
Changes in fair value (reflected in the Consolidated Statement of Operations) | (2) | |
Fair value of contingent consideration at December 31, 2018 | 10 | |
Deferred compensation plan assets (included in other non-current assets) | Fair Value Measurements Recurring Member | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 2 | $ 3 |
Deferred compensation plan assets (included in other non-current assets) | Fair Value Measurements Recurring Member | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 2 | 3 |
Deferred compensation plan assets (included in other non-current assets) | Fair Value Measurements Recurring Member | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 0 | 0 |
Deferred compensation plan assets (included in other non-current assets) | Fair Value Measurements Recurring Member | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 0 | 0 |
Interest rate swap contracts | Fair Value Measurements Recurring Member | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other non-current assets) | 6 | |
Interest rate swaps (included in other non-current liabilities) | 16 | 13 |
Interest rate swap contracts | Fair Value Measurements Recurring Member | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other non-current assets) | 0 | |
Interest rate swaps (included in other non-current liabilities) | 0 | 0 |
Interest rate swap contracts | Fair Value Measurements Recurring Member | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other non-current assets) | 6 | |
Interest rate swaps (included in other non-current liabilities) | 16 | 13 |
Interest rate swap contracts | Fair Value Measurements Recurring Member | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other non-current assets) | 0 | |
Interest rate swaps (included in other non-current liabilities) | 0 | 0 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | Fair Value Measurements Recurring Member | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 10 | 34 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | Fair Value Measurements Recurring Member | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 0 | 0 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | Fair Value Measurements Recurring Member | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 0 | 0 |
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | Fair Value Measurements Recurring Member | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | $ 10 | $ 34 |
Fair Value Indebtedness Table (
Fair Value Indebtedness Table (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | [1] | $ 3,806 | |||
Securitization obligations | 231 | $ 194 | |||
Secured Debt | Term Loan B | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 1,069 | [2] | $ 1,080 | 1,083 | |
Fair value of long-term debt | [3] | 1,010 | 1,085 | ||
Secured Debt | Term Loan A | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 736 | [4] | $ 750 | 391 | |
Fair value of long-term debt | [3] | 707 | 393 | ||
Secured Debt | Term Loan A-1 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 0 | 342 | |||
Fair value of long-term debt | [3] | 0 | 343 | ||
Senior Notes | 4.50% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 450 | 450 | |||
Fair value of long-term debt | [3] | 447 | 457 | ||
Senior Notes | 5.25% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 550 | 550 | |||
Fair value of long-term debt | [3] | 524 | 569 | ||
Senior Notes | 4.875% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Long-term Debt, Gross | 500 | 500 | |||
Fair value of long-term debt | [3] | 434 | 495 | ||
Line of Credit | Revolving Credit Facility | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Line of credit facility outstanding amount | 270 | [5],[6] | 70 | ||
Line of credit facility fair value | [3] | 270 | 70 | ||
Securitization obligations | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Securitization obligations | 231 | 194 | |||
Fair value of securitization obligations | [3] | $ 231 | $ 194 | ||
[1] | Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $66 million with $63 million utilized at a weighted average rate of 3.33% at December 31, 2018 | ||||
[2] | 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%). | ||||
[3] | The fair value of the Company's indebtedness is categorized as Level II. | ||||
[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 senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. | ||||
[5] | As of December 31, 2018, the Company had $1,400 million of borrowing capacity under its Revolving Credit Facility, with $1,130 million of available capacity. 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 February 15, 2019, the Company redeemed all of its outstanding $450 million 4.50% Senior Notes due in April 2019. The Company utilized borrowings under its Revolving Credit Facility to redeem the 4.50% Senior Notes and plans to refinance on a long-term basis all or a portion of the funds used to redeem the 4.50% Senior Notes, subject to market conditions. On February 22, 2019, the Company had $880 million in outstanding borrowings under the Revolving Credit Facility, leaving $520 million of available capacity. | ||||
[6] | Interest rates with respect to revolving loans under the Senior Secured Credit Facility at December 31, 2018 were based on, at the Company's option, (a) adjusted London Interbank Offering Rate ("LIBOR") plus an additional margin or (b) JP Morgan Chase Bank, N.A.'s prime rate ("ABR") plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended December 31, 2018. |
Reconciliation of Revenue from
Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | $ 1,354 | $ 1,676 | $ 1,820 | $ 1,229 | $ 1,444 | $ 1,674 | $ 1,793 | $ 1,203 | $ 6,079 | [1],[2] | $ 6,114 | [1],[2],[3] | $ 5,810 | [1],[2],[3] | ||||||||
Real Estate Franchise Services | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 186 | 221 | 237 | 176 | 199 | 224 | 237 | 170 | 820 | [1],[2] | 830 | [1],[2],[3] | 781 | [1],[2],[3] | ||||||||
Real Estate Franchise Services | Royalties and Marketing Fees | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 306 | 311 | 293 | |||||||||||||||||||
Company Owned Real Estate Brokerage Services | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 1,014 | 1,268 | 1,408 | 917 | 1,087 | 1,267 | 1,392 | 897 | 4,607 | [1],[2] | 4,643 | [1],[2],[3] | 4,344 | [1],[2],[3] | ||||||||
Relocation Services | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 86 | 108 | 105 | 79 | 92 | 111 | 102 | 77 | 378 | [1],[2] | 382 | [1],[2],[3] | 405 | [1],[2],[3] | ||||||||
Relocation Services | Referral and Relocation Fees | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 39 | 40 | 43 | |||||||||||||||||||
Title and Settlement Services | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | 136 | 162 | 162 | 120 | 139 | 154 | 157 | 120 | 580 | [1],[2] | 570 | [1],[2],[3] | 573 | [1],[2],[3] | ||||||||
Corporate and Other | ||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||
Net revenues | $ (68) | [4] | $ (83) | [4] | $ (92) | [4] | $ (63) | [4] | $ (73) | [5] | $ (82) | [5] | $ (95) | [5] | $ (61) | [5] | $ (306) | [1],[2],[6] | $ (311) | [1],[2],[3],[6] | $ (293) | [1],[2],[3],[6] |
[1] | Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $39 million, $40 million and $43 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions. | |||||||||||||||||||||
[2] | 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 $306 million, $311 million and $293 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are eliminated through the Corporate and Other line. | |||||||||||||||||||||
[3] | Prior period amounts have not been adjusted under the modified retrospective method. | |||||||||||||||||||||
[4] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | |||||||||||||||||||||
[5] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | |||||||||||||||||||||
[6] | Includes the elimination of transactions between segments. |
Operating EBITDA (Details)
Operating EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net income (loss) attributable to Realogy Holdings and Realogy Group | $ (22) | $ 103 | $ 123 | $ (67) | $ 255 | $ 95 | $ 109 | $ (28) | $ 137 | $ 431 | $ 213 | ||||
Income tax expense (benefit) | [1] | 65 | (65) | 144 | |||||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 202 | 366 | 357 | ||||||||||||
Depreciation, Depletion and Amortization, Nonproduction, Adjusted for Amortization of Intangible Assets related to GRA Acquisition | [2] | 197 | 201 | ||||||||||||
Depreciation and amortization | 195 | 198 | [3] | 202 | [2] | ||||||||||
Interest expense, net | 190 | 158 | 174 | ||||||||||||
Restructuring costs, net | 13 | $ 9 | $ 6 | 30 | $ 3 | 2 | 2 | 5 | 58 | [4],[5] | 12 | [4],[5] | 39 | [4],[5] | |
Former parent legacy cost (benefit), net | $ 4 | 1 | $ (11) | 4 | [6] | (10) | [6] | (2) | [6] | ||||||
Loss on the early extinguishment of debt | $ 7 | $ 1 | $ 4 | 7 | [6] | 5 | [6] | 0 | [6] | ||||||
Operating EBITDA | 658 | 732 | 770 | ||||||||||||
Income (Loss) from Equity Method Investments | (4) | 18 | 12 | ||||||||||||
Real Estate Franchise Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Depreciation and amortization | 77 | 79 | 77 | ||||||||||||
Restructuring costs, net | 3 | 1 | 4 | ||||||||||||
Operating EBITDA | 564 | 560 | 520 | ||||||||||||
Company Owned Real Estate Brokerage Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Depreciation and amortization | 51 | 50 | 49 | ||||||||||||
Restructuring costs, net | 37 | 9 | 22 | ||||||||||||
Operating EBITDA | [3] | 44 | 135 | 159 | |||||||||||
Company Owned Real Estate Brokerage Services | PHH Home Loans | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Income (Loss) from Equity Method Investments | 22 | 8 | |||||||||||||
Relocation Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Depreciation and amortization | 33 | 33 | 31 | ||||||||||||
Restructuring costs, net | 11 | 4 | |||||||||||||
Operating EBITDA | 86 | 85 | 100 | ||||||||||||
Title and Settlement Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Depreciation and amortization | 13 | 16 | 23 | ||||||||||||
Restructuring costs, net | 4 | 1 | 1 | ||||||||||||
Operating EBITDA | 49 | 59 | 63 | ||||||||||||
Income (Loss) from Equity Method Investments | 4 | ||||||||||||||
Title and Settlement Services | Amortization of Intangible Assets related to GRA Acquisition | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Income (Loss) from Equity Method Investments | (2) | 3 | |||||||||||||
Corporate and Other | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Depreciation and amortization | 21 | 20 | 22 | ||||||||||||
Restructuring costs, net | 3 | 1 | 8 | ||||||||||||
Operating EBITDA | [6],[7] | $ (85) | $ (107) | $ (72) | |||||||||||
[1] | Income tax benefit for the year ended December 31, 2017 reflects the impact of the 2017 Tax Act. | ||||||||||||||
[2] | Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million, respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. | ||||||||||||||
[3] | Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016, respectively. | ||||||||||||||
[4] | The year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. | ||||||||||||||
[5] | The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment.The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment.The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. | ||||||||||||||
[6] | Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. | ||||||||||||||
[7] | Includes the elimination of transactions between segments. |
Reconciliation of Depreciation
Reconciliation of Depreciation and Amortization from Segments to Consolidated (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | $ 195 | $ 198 | [1] | $ 202 | [2] |
Real Estate Franchise Services | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | 77 | 79 | 77 | ||
Company Owned Real Estate Brokerage Services | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | 51 | 50 | 49 | ||
Relocation Services | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | 33 | 33 | 31 | ||
Title and Settlement Services | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | 13 | 16 | 23 | ||
Corporate and Other | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Depreciation and amortization | $ 21 | $ 20 | $ 22 | ||
[1] | Includes $22 million and $8 million of equity earnings from PHH Home Loans for the years ended December 31, 2017 and 2016, respectively. | ||||
[2] | Depreciation and amortization for the years ended December 31, 2018 and 2017 includes $2 million and $3 million, respectively, of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in losses (earnings) of unconsolidated entities" line on the Consolidated Statement of Operations. |
Reconciliation of Assets from S
Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 7,290 | $ 7,363 | $ 7,337 | $ 7,421 |
Real Estate Franchise Services | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 4,388 | 4,413 | ||
Company Owned Real Estate Brokerage Services | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 1,228 | 1,258 | ||
Relocation Services | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 1,010 | 1,029 | ||
Title and Settlement Services | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 492 | 486 | ||
Corporate and Other | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | $ 172 | $ 151 |
Reconciliation of Capital Expen
Reconciliation of Capital Expenditures from Segment to Consolidated (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | $ 105 | $ 99 | $ 87 |
Real Estate Franchise Services | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | 10 | 9 | 8 |
Company Owned Real Estate Brokerage Services | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | 44 | 44 | 44 |
Relocation Services | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | 13 | 11 | 12 |
Title and Settlement Services | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | 11 | 13 | 9 |
Corporate and Other | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | $ 27 | $ 22 | $ 14 |
Geographic Region (Details)
Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | ||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net revenues | $ 1,354 | $ 1,676 | $ 1,820 | $ 1,229 | $ 1,444 | $ 1,674 | $ 1,793 | $ 1,203 | $ 6,079 | [1],[2] | $ 6,114 | [1],[2],[3] | $ 5,810 | [1],[2],[3] | |
Total assets | 7,290 | 7,337 | 7,290 | 7,337 | 7,421 | $ 7,363 | |||||||||
Net property and equipment | 304 | 289 | 304 | 289 | 267 | ||||||||||
United States | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net revenues | 5,961 | 5,997 | 5,683 | ||||||||||||
Total assets | 7,214 | 7,261 | 7,214 | 7,261 | 7,347 | ||||||||||
Net property and equipment | 302 | 287 | 302 | 287 | 265 | ||||||||||
All Other Countries | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net revenues | 118 | 117 | 127 | ||||||||||||
Total assets | 76 | 76 | 76 | 76 | 74 | ||||||||||
Net property and equipment | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | ||||||||||
[1] | Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $39 million, $40 million and $43 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions. | ||||||||||||||
[2] | 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 $306 million, $311 million and $293 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are eliminated through the Corporate and Other line. | ||||||||||||||
[3] | Prior period amounts have not been adjusted under the modified retrospective method. |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | $ 1,354 | $ 1,676 | $ 1,820 | $ 1,229 | $ 1,444 | $ 1,674 | $ 1,793 | $ 1,203 | $ 6,079 | [1],[2] | $ 6,114 | [1],[2],[3] | $ 5,810 | [1],[2],[3] | ||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | (28) | 145 | 174 | (82) | 49 | 153 | 183 | (34) | 209 | 351 | 349 | |||||||||||
Net income (loss) attributable to Realogy Holdings and Realogy Group | $ (22) | $ 103 | $ 123 | $ (67) | $ 255 | $ 95 | $ 109 | $ (28) | $ 137 | $ 431 | $ 213 | |||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||||||
Basic earnings per share | $ (0.19) | [4] | $ 0.84 | [4] | $ 0.97 | [4] | $ (0.51) | [4] | $ 1.91 | [5] | $ 0.70 | [5] | $ 0.79 | [5] | $ (0.20) | [5] | $ 1.10 | $ 3.15 | $ 1.47 | |||
Diluted earnings per share | $ (0.19) | [4] | $ 0.83 | [4] | $ 0.96 | [4] | $ (0.51) | [4] | $ 1.89 | [5] | $ 0.69 | [5] | $ 0.78 | [5] | $ (0.20) | [5] | $ 1.09 | $ 3.11 | $ 1.46 | |||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | $ 13 | $ 9 | $ 6 | $ 30 | $ 3 | $ 2 | $ 2 | $ 5 | $ 58 | [6],[7] | $ 12 | [6],[7] | $ 39 | [6],[7] | ||||||||
Former parent legacy cost (benefit), net | 4 | 1 | (11) | 4 | [8] | (10) | [8] | (2) | [8] | |||||||||||||
Loss on the early extinguishment of debt | 7 | 1 | 4 | 7 | [8] | 5 | [8] | 0 | [8] | |||||||||||||
Real Estate Franchise Services | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | 186 | 221 | 237 | 176 | 199 | 224 | 237 | 170 | 820 | [1],[2] | 830 | [1],[2],[3] | 781 | [1],[2],[3] | ||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | 107 | [9] | 141 | [9] | 152 | [9] | 85 | [9] | 113 | [10] | 139 | [10] | 146 | [10] | 82 | [10] | ||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | 3 | 1 | 4 | |||||||||||||||||||
Company Owned Real Estate Brokerage Services | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | 1,014 | 1,268 | 1,408 | 917 | 1,087 | 1,267 | 1,392 | 897 | 4,607 | [1],[2] | 4,643 | [1],[2],[3] | 4,344 | [1],[2],[3] | ||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | (37) | [9] | 22 | [9] | 45 | [9] | (76) | [9] | (14) | [10] | 36 | [10] | 65 | [10] | (35) | [10] | ||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | 37 | 9 | 22 | |||||||||||||||||||
Relocation Services | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | 86 | 108 | 105 | 79 | 92 | 111 | 102 | 77 | 378 | [1],[2] | 382 | [1],[2],[3] | 405 | [1],[2],[3] | ||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | 9 | [9] | 34 | [9] | 29 | [9] | (14) | [9] | 15 | [10] | 32 | [10] | 21 | [10] | (5) | [10] | ||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | 11 | 4 | ||||||||||||||||||||
Title and Settlement Services | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | 136 | 162 | 162 | 120 | 139 | 154 | 157 | 120 | 580 | [1],[2] | 570 | [1],[2],[3] | 573 | [1],[2],[3] | ||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | 1 | [9] | 18 | [9] | 26 | [9] | (8) | [9] | 6 | [10] | 19 | [10] | 23 | [10] | (3) | [10] | ||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | 4 | 1 | 1 | |||||||||||||||||||
Other | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Net revenues | (68) | [11] | (83) | [11] | (92) | [11] | (63) | [11] | (73) | [12] | (82) | [12] | (95) | [12] | (61) | [12] | (306) | [1],[2],[13] | (311) | [1],[2],[3],[13] | (293) | [1],[2],[3],[13] |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||||||||||||||||||||||
Income (loss) before income taxes, equity in earnings and noncontrolling interests (b) | $ (108) | [9] | $ (70) | [9] | $ (78) | [9] | $ (69) | [9] | $ (71) | [10] | $ (73) | [10] | $ (72) | [10] | $ (73) | [10] | ||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Restructuring costs, net | $ 3 | $ 1 | $ 8 | |||||||||||||||||||
[1] | Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $39 million, $40 million and $43 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions. | |||||||||||||||||||||
[2] | 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 $306 million, $311 million and $293 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such amounts are eliminated through the Corporate and Other line. | |||||||||||||||||||||
[3] | Prior period amounts have not been adjusted under the modified retrospective method. | |||||||||||||||||||||
[4] | Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS (see Note 15 "Earnings Per Share" for further information). | |||||||||||||||||||||
[5] | Basic and diluted EPS amounts in each quarter are computed using the weighted-average number of shares outstanding during that quarter, while basic and diluted EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ basic or diluted EPS may not equal the full year basic or diluted EPS. | |||||||||||||||||||||
[6] | The year ended December 31, 2018 includes $56 million of expense related to the Leadership Realignment and Other Restructuring Activities program and $2 million of expense related to the Business Optimization Initiative program. The years ended December 31, 2017 and December 31, 2016 include expenses related to the Business Optimization Initiative program. | |||||||||||||||||||||
[7] | The year ended December 31, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $37 million in the Company Owned Real Estate Brokerage Services segment, $11 million in the Relocation Services segment, $4 million at the Title and Settlement Services segment and $3 million in the Corporate and Other segment.The year ended December 31, 2017 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $9 million in the Company Owned Real Estate Brokerage Services segment, $1 million at the Title and Settlement Services segment and $1 million in the Corporate and Other segment.The year ended December 31, 2016 includes restructuring charges of $4 million in the Real Estate Franchise Services segment, $22 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million at the Title and Settlement Services segment and $8 million in the Corporate and Other segment. | |||||||||||||||||||||
[8] | Former parent legacy items and loss on the early extinguishment of debt are recorded in the Corporate and Other segment. | |||||||||||||||||||||
[9] | The quarterly results include the following:•restructuring charges of $30 million, $6 million, $9 million and $13 million in the first, second, third and fourth quarters, respectively; •former parent legacy net cost of $4 million in the fourth quarter; and•a loss on the early extinguishment of debt of $7 million in the first quarter | |||||||||||||||||||||
[10] | The quarterly results include the following:•restructuring charges of $5 million, $2 million, $2 million and $3 million in the first, second, third and fourth quarters, respectively;•former parent legacy net benefit of $11 million in the second quarter former parent legacy net cost of $1 million in the third quarter; and•a loss on the early extinguishment of debt of $4 million and $1 million in the first and third quarters, respectively | |||||||||||||||||||||
[11] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | |||||||||||||||||||||
[12] | Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment. | |||||||||||||||||||||
[13] | Includes the elimination of transactions between segments. |
Note 19. Subsequent Events Su_2
Note 19. Subsequent Events Subsequent Events (Details) - 4.50% Senior Notes - Senior Notes - USD ($) $ in Millions | Feb. 15, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||
Interest Rate | 4.50% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Repurchased Face Amount | $ 450 |