PR Newswire | Jul 29, 2021 07:31AM EDT

07/29 06:30 CDT

Realogy Reports Second Quarter 2021 Financial Results MADISON, N.J., July 29, 2021

MADISON, N.J., July 29, 2021 /PRNewswire/ -- Realogy Holdings Corp. (NYSE: RLGY), the largest full-service residential real estate services company in the United States, today reported financial results for the quarter ended June 30, 2021.

"Realogy delivered an outstanding second quarter. We generated record Operating EBITDA, gained market share for the fourth consecutive quarter, and strengthened our balance sheet to its best position ever," said Ryan Schneider, Realogy's chief executive officer and president. "The unmatched power of Realogy's strategic progress, innovation through technology, and leading presence in the luxury market, combined with our robust growth investments, position our business to lead into the future."

"In the second quarter, Realogy delivered phenomenal results, significantly advanced our balance sheet, and generated impressive free cash flow that enable us to invest in our future," said Charlotte Simonelli, Realogy's executive vice president, chief financial officer, and treasurer. "Over the past year Realogy has achieved tremendous quality and consistency in our financial performance."

Second Quarter 2021 Highlights

* Generated Revenue of $2.3 billion, an increase of 81% or $1,021 million year-over-year. * Reported Net income of $149 million and basic earnings per share of $1.28, an increase of $163 million vs. prior year or $1.40 per share. * Generated Operating EBITDA of $310 million, an increase of $135 million year-over-year (See Table 5a). * Lowest ever Net Debt Leverage Ratio of 2.5x and Senior Secured Leverage Ratio of 0.00x (See Tables 8a and 8b). * Reported Free Cash Flow of $243 million, an improvement of $196 million versus second quarter of 2020 (See Table 7). * Combined closed transaction volume increased 85% year-over-year in the second quarter driving market share gains for the fourth consecutive quarter. Our transaction volume growth was significantly above the 53% year-over-year market volume growth reported by the National Association of Realtors (NAR). * Realogy Title Group contributed meaningfully to our business results, generating approximately $55 million in second quarter Operating EBITDA, a decline of $6 million year-over-year, including a $27 million decrease in equity in earnings from the Company's mortgage origination joint venture (See Table 5a). * Owned Brokerage agent count grew 4% year-over-year and continued to maintain strong retention levels. * Strong cost management with $80 million in permanent cost savings expected in 2021 with actions taken for approximately 85% of the target savings and $50 million realized in the income statement through June 30, 2021.

Second Quarter 2021 Financial Highlights

The following table sets forth Realogy's financial highlights for the periods presented (in millions, except per share data) (unaudited):

Three Months Ended June 30,

2021 2020 Change % Change

Revenue $2,276 $1,255 $1,02181 %

Operating EBITDA ^1 310 175 135 77

Net income (loss) attributable to Realogy149 (14) 163 1,164

Adjusted net income ^2 159 57 102 179

Earnings (loss) per share 1.28 (0.12) 1.40 1,167

Adjusted earnings per share ^2 1.36 0.49 0.87 178

Free Cash Flow ^3 243 47 196 417

Net cash provided by operating activities$223 $115 $108 94 %



Select Key Drivers

Realogy Franchise Group ^4 5

Closed homesale sides 320,463 238,085 35 %

Average homesale price $430,756$321,308 34 %

Realogy Brokerage Group ^5

Closed homesale sides 103,945 71,375 46 %

Average homesale price $678,978$503,935 35 %

Realogy Title Group

Purchase title and closing units 47,375 32,028 48 %

Refinance title and closing units 14,472 17,548 (18) %

____________________

Footnotes:

See Tables 5a and 5b. Operating EBITDA is defined 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 the1 operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets.

See Table 1a. Adjusted Net income (loss) is defined as net income (loss) before mark-to-market interest rate swap adjustments, former parent legacy^2 items, restructuring charges, (gain) loss on the early extinguishment of debt, impairments and the tax effect of the foregoing adjustments. Adjusted earnings (loss) per share is Adjusted net income (loss) divided by the weighted average common and common equivalent shares outstanding.

See Table 7. Free Cash Flow is defined as net income (loss) attributable to Realogy before income tax expense (benefit), net of payments, net interest expense, cash interest payments, depreciation and amortization,^3 capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations.

^4 Includes all franchisees except for Realogy Brokerage Group.

The Company's combined homesale transaction volume growth (transaction^5 sides multiplied by average sale price) increased 85% compared with the second quarter of 2020.

Balance Sheet and Capital Allocation

The Company ended the quarter with cash and cash equivalents of $859 million*. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.6 billion at June 30, 2021. The Company's Net Debt Leverage Ratio was 2.5x at June 30, 2021 (see Table 8b).

On April 28, 2021, the Company used cash on hand to pay down $150 million of the Term Loan B Facility, reducing the principal amount of that facility to $240 million.

In June 2021, the Company issued $403 million principal amount of 0.25% Exchangeable Senior Notes due 2026. The Company used a portion of the net proceeds from this offering to pay the cost of exchangeable note hedge transactions (with such cost partially offset by the proceeds to the Company from the sale of warrants). Taken together, the purchase of such exchangeable note hedges and the sale of such warrants are intended to offset (in whole or in part) any potential dilution and/or cash payments upon the exchange of the Exchangeable Senior Notes, and to effectively increase the overall exchange price from $24.49 to $30.6075 per share.

A consolidated balance sheet is included as Table 2 of this press release.

____________________

* excludes restricted cash

Investor Conference Call

Today, July 29, at 8:30 a.m. (ET), Realogy will hold a conference call via webcast to review its Q2 2021 results and provide a business update. The webcast will be hosted by Ryan Schneider, chief executive officer and president, and Charlotte Simonelli, chief financial officer, and will conclude with an investor Q&A period with management.

Investors may access the conference call live via webcast at ir.realogy.com or by dialing (833) 646-0499 (toll free); international participants should dial (918) 922-3007. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available on the website.

About Realogy Holdings Corp.

Realogy (NYSE:?RLGY) is moving the real estate industry to what's next. As the leading and most integrated provider of U.S. residential real estate services encompassing franchise, brokerage, relocation, and title and settlement businesses as well as a mortgage joint venture, Realogy supported approximately 1.4 million home transactions in 2020. The company's diverse brand portfolio includes some of the most recognized names in real estate:?Better Homes and Gardens(r) Real Estate,?CENTURY 21(r),?Coldwell Banker(r),?Coldwell Banker Commercial(r),?Corcoran(r),?ERA(r), and?Sotheby's International Realty(r).?Using innovative technology, data and marketing products, high-quality lead generation programs, and best-in-class learning and support services, Realogy fuels the productivity of its approximately 194,200 independent sales agents in the U.S. and approximately 142,700 independent sales agents in 117 other countries and territories, helping them build stronger businesses and best serve today's consumers. Recognized for ten consecutive years as one of the?World's Most Ethical Companies, Realogy has also been designated a?Great Place to Work?three years in a row and is one of?LinkedIn's 2021 Top Companies in the U.S.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Realogy Holdings Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "potential" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements: adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to factors that could impact homesale transaction volume, such as: continued or accelerated declines in inventory or a decline in the number of home sales, increases in mortgage rates or inflation or tightened mortgage standards, changes in consumer preferences, including weakening in the consumer trends that have benefited us since the second half of 2020, reductions in housing affordability, and stagnant or declining home prices; adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to economic contraction in the U.S. economy, including the impact of recessions, slow economic growth, or a deterioration in other economic factors (including potential consumer, business or governmental defaults or delinquencies due to the COVID-19 crisis or otherwise) and fiscal and monetary policies of the federal government and its agencies, particularly those that may result in unfavorable changes to the interest rate environment and tax reform; The impact of evolving competitive and consumer dynamics, which could include, but are not limited to: continued erosion of the broker share of the commission income generated by homesale transactions and the continued rise of the sale agent's share of such commissions, our ability to compete against non-traditional competitors, including but not limited to, iBuying and home swap business models and virtual brokerages, in particular those competitors with access to significant third-party capital that may prioritize market share over profitability, and meaningful decreases in the average broker commission rate; adverse impacts from the COVID-19 crisis (due to the impact of virus mutations or otherwise), including amplification of risks to our business and worsening economic consequences of the crisis or the reinstatement of significant limitations on normal business operations; our ability to execute our business strategy and achieve growth, including our efforts to: recruit and retain productive independent sales agents, attract and retain franchisees or renew existing franchise agreements without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives, compete for real estate services business, develop or procure products, services and technology that support our strategic initiatives, realize the expected benefits from our non-exclusive mortgage origination joint venture, our RealSure joint venture, or from other existing or future strategic partnerships, achieve or maintain a beneficial cost structure or savings and other benefits from our cost-saving initiatives, generate a meaningful number of high-quality leads for independent sales agents and franchisees, complete or integrate acquisitions and joint ventures into our existing operations, or to complete or effectively manage divestitures or other corporate transactions; our geographic and high-end market concentration; the operating results of affiliated franchisees; continued consolidation among our top 250 franchisees; difficulties in the business or changes in the licensing strategy of the owners of the two brands we do not own; the loss of our largest real estate benefit program client or multiple significant relocation clients; continued reductions in corporate relocations or relocation benefits or refinancing activity; the failure of third-party vendors or partners to perform as expected or our failure to adequately monitor such third-parties; interruptions in information technology used to operate our business and maintain our competitiveness; increases in mortgage rates, tightened mortgage underwriting standards or reductions in refinancing activity; actions taken by listing aggregators to monetize their concentration and market power; industry structure changes (as a result of new laws, regulations or administrative policies, litigation, the rules of multiple listing services or NAR, or otherwise) that disrupt the functioning of the residential real estate market; adverse effects on our operations or liquidity due to our indebtedness, including with respect to: interest obligations and the negative covenant restrictions contained in our debt agreements, our ability to fund our operations, invest in our business or pursue growth opportunities, react to changes in the economy or our industry, or incur additional borrowings under our existing facilities, an event of default under our debt agreements, or our ability to refinance or repay our indebtedness or incur additional indebtedness; risks related to the issuance of our 0.25% Exchangeable Senior Notes and exchangeable note hedge and warrant transactions, including counterparty risk with respect to the exchangeable note hedge transactions; our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to: (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (2) privacy or data security laws and regulations, (3) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws, and (4) antitrust laws and regulations; cybersecurity incidents; impairment of our goodwill and other long-lived assets; and severe weather events or natural disasters, including increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events, including public health crises, such as pandemics and epidemics. Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and our Annual Report on Form 10-K for the year ended December 31, 2020, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events except as required by law.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release. See Tables 1a, 8a, 8b and 9 for definitions of these non-GAAP financial measures and Tables 1a, 5a, 5b, 6a, 6b, 7, 8a and 8b for reconciliations of the historical non-GAAP financial measures to their most comparable GAAP terms.

NAR data referenced herein is based on NAR's most recent public estimates, which are subject to review and revision. Factors that may impact the comparability of the Company's homesale statistics to NAR are outlined in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and its Annual Report on Form 10-K for the year ended December 31, 2020.

Investor Contacts: Media Contacts:

Alicia Swift Trey Sarten

(973) 407-4669 (973) 407-2162

alicia.swift@realogy.com trey.sarten@realogy.com



Danielle Kloeblen Gabriella Chiera

(973) 407-2148 (973) 407-5236

danielle.kloeblen@realogy.comGabriella.Chiera@realogy.com

Table 1

REALOGY HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)



Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Revenues

Gross commission income $1,773$919 $2,927$1,769

Service revenue 314 219 563 421

Franchise fees 147 85 252 156

Other 42 32 81 77

Net revenues 2,276 1,255 3,823 2,423

Expenses

Commission and other agent-related costs 1,373 685 2,258 1,315

Operating 422 320 806 688

Marketing 66 41 124 100

General and administrative 114 69 204 157

Former parent legacy cost, net 1 - 1 -

Restructuring costs, net 5 18 10 30

Impairments 1 63 2 540

Depreciation and amortization 51 46 102 91

Interest expense, net 57 59 95 160

Loss on the early extinguishment of debt 1 8 18 8

Other income, net (16) - (18) -

Total expenses 2,075 1,309 3,602 3,089

Income (loss) before income taxes, equity in earnings and201 (54) 221 (666) noncontrolling interests

Income tax expense (benefit) 60 (5) 77 (146)

Equity in earnings of unconsolidated entities (10) (36) (41) (45)

Net income (loss) 151 (13) 185 (475)

Less: Net income attributable to noncontrolling interests(2) (1) (3) (1)

Net income (loss) attributable to Realogy Holdings $149 $(14) $182 $(476)



Earnings (loss) per share attributable to Realogy Holdings shareholders:

Basic earnings (loss) per share $1.28 $(0.12)$1.57 $(4.14)

Diluted earnings (loss) per share $1.25 $(0.12)$1.52 $(4.14)

Weighted average common and common equivalent shares of Realogy Holdings outstanding:

Basic 116.5 115.4 116.2 115.0

Diluted 119.3 115.4 119.4 115.0

Table 1a

REALOGY HOLDINGS CORP.

NON-GAAP RECONCILIATION

ADJUSTED NET INCOME (LOSS) AND ADJUSTED EARNINGS (LOSS) PER SHARE

(In millions, except per share data)

We present Adjusted net income (loss) and Adjusted earnings (loss) per sharebecause we believe these measures are useful as supplemental measures inevaluating the performance of our operating businesses and provide greatertransparency into our operating results.

Adjusted net income (loss) is defined by us as net income (loss) before: (a)mark-to-market interest rate swap adjustments, whose fair value is subject tomovements in LIBOR and the forward yield curve and therefore are subject tosignificant fluctuations; (b) former parent legacy items, which pertain toliabilities of the former parent for matters prior to mid-2006 and arenon-operational in nature; (c) restructuring charges as a result of initiativescurrently in progress; (d) impairments; (e) the (gain) loss on the earlyextinguishment of debt that results from refinancing and deleveraging debtinitiatives and (f) the tax effect of the foregoing adjustments. The grossamounts for these items as well as the adjustment for income taxes are shown inthe table below.

Adjusted earnings (loss) per share is Adjusted net income (loss) divided by theweighted average common and common equivalent shares outstanding.

Set forth in the table below is a reconciliation of Net income (loss) toAdjusted net income (loss) for the three and six months ended June 30, 2021 and2020:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) attributable to Realogy Holdings $ 149 $ (14) $ 182 $ (476)

Addback:

Mark-to-market interest rate swap losses 6 8 (7) 59

Former parent legacy cost, net 1 - 1 -

Restructuring costs, net 5 18 10 30

Impairments (a) 1 63 2 540

Loss on the early extinguishment of debt 1 8 18 8

Adjustments for tax effect (b) (4) (26) (6) (172)

Adjusted net income (loss) attributable to Realogy Holdings $ 159 $ 57 $ 200 $ (11)

Earnings (loss) per share attributable to Realogy Holdings:

Basic earnings (loss) per share: $ 1.28 $ (0.12) $ 1.57 $ (4.14)

Diluted earnings (loss) per share: $ 1.25 $ (0.12) $ 1.52 $ (4.14)

Adjusted earnings (loss) per share attributable to Realogy Holdings:

Adjusted basic earnings (loss) per share: $ 1.36 $ 0.49 $ 1.72 $ (0.10)

Adjusted diluted earnings (loss) per share: $ 1.33 $ 0.49 $ 1.68 $ (0.10)

Weighted average common and common equivalent shares outstanding:

Basic: 116.5 115.4 116.2 115.0

Diluted: 119.3 115.4 119.4 115.0

_____________________

(a) Non-cash impairments for the six months ended June 30, 2020 primarily include:

? a goodwill impairment charge of $413 million related to Realogy Brokerage Group;

? an impairment charge of $30 million related to Realogy Franchise Group's trademarks; and

$74 million of impairment charges during the six months ended June 30, ? 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds.

(b) Reflects tax effect of adjustments at the Company's blended state and federal statutory rate.

Table 2

REALOGY HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)



June 30,December 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $859 $520

Restricted cash 7 3

Trade receivables (net of allowance for doubtful accounts of $11 and $13) 145 128

Relocation receivables 206 139

Other current assets 207 154

Total current assets 1,424 944

Property and equipment, net 304 317

Operating lease assets, net 453 450

Goodwill 2,899 2,910

Trademarks 685 685

Franchise agreements, net 1,054 1,088

Other intangibles, net 181 188

Other non-current assets 407 352

Total assets $7,407$6,934

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $124 $128

Securitization obligations 147 106

Current portion of long-term debt 18 62

Current portion of operating lease liabilities 125 129

Accrued expenses and other current liabilities 565 600

Total current liabilities 979 1,025

Long-term debt 3,357 3,145

Long-term operating lease liabilities 428 430

Deferred income taxes 343 276

Other non-current liabilities 294 291

Total liabilities 5,401 5,167

Commitments and contingencies

Equity:

Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, none - - issued and outstanding at June 30, 2021 and December 31, 2020

Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 116,566,078 shares issued and outstanding at June 30, 2021 and 115,457,067 1 1 shares issued and outstanding at December 31, 2020

Additional paid-in capital 4,932 4,876

Accumulated deficit (2,873)(3,055)

Accumulated other comprehensive loss (58) (59)

Total stockholders' equity 2,002 1,763

Noncontrolling interests 4 4

Total equity 2,006 1,767

Total liabilities and equity $7,407$6,934

Table 3

REALOGY HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Six Months Ended June 30,

2021 2020

Operating Activities

Net income (loss) $ 185$(475)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 102 91

Deferred income taxes 65 (141)

Impairments 2 540

Amortization of deferred financing costs and debt discount (premium) 6 5

Loss on the early extinguishment of debt 18 8

Gain on sale of business (15) -

Equity in earnings of unconsolidated entities (41) (45)

Stock-based compensation 14 10

Mark-to-market adjustments on derivatives (7) 59

Other adjustments to net income (loss) (2) -

Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:

Trade receivables (14) (3)

Relocation receivables (67) 11

Other assets (14) (8)

Accounts payable, accrued expenses and other liabilities (63) (29)

Dividends received from unconsolidated entities 38 22

Other, net (21) (12)

Net cash provided by operating activities 186 33

Investing Activities

Property and equipment additions (50) (49)

Proceeds from the sale of business 15 -

Investment in unconsolidated entities (7) (2)

Other, net (9) (12)

Net cash used in investing activities (51) (63)

Financing Activities

Net change in Revolving Credit Facility - 625

Payments for refinancing of Term Loan A Facility and Term Loan B Facility (1,055)-

Proceeds from issuance of Senior Notes 905 -

Proceeds from issuance of Senior Secured Second Lien Notes - 550

Redemption of Senior Notes - (550)

Proceeds from issuance of Exchangeable Senior Notes 403 -

Payments for purchase of Exchangeable Senior Notes hedge transactions (67) -

Proceeds from issuance of Exchangeable Senior Notes warrant transactions 46 -

Amortization payments on term loan facilities (6) (19)

Net change in securitization obligations 40 (92)

Debt issuance costs (20) (8)

Cash paid for fees associated with early extinguishment of debt (11) (7)

Taxes paid related to net share settlement for stock-based compensation (9) (5)

Other, net (18) (26)

Net cash provided by financing activities 208 468

Effect of changes in exchange rates on cash, cash equivalents and restricted - - cash

Net increase in cash, cash equivalents and restricted cash 343 438

Cash, cash equivalents and restricted cash, beginning of period 523 266

Cash, cash equivalents and restricted cash, end of period $ 866$704



Supplemental Disclosure of Cash Flow Information

Interest payments (including securitization interest of $2 and $3 respectively) $ 83 $105

Income tax payments, net 13 -

Table 4a

REALOGY HOLDINGS CORP.

2021 vs. 2020 KEY DRIVERS



Three Months Ended June 30, Six Months Ended June 30,

2021 2020 % Change 2021 2020 % Change

Realogy Franchise Group (a)

Closed homesale sides 320,463 238,085 35 % 565,161 441,273 28 %

Average homesale price $430,756 $321,308 34 % $414,842 $321,841 29 %

Average homesale broker commission rate2.46 %2.49 %(3) bps2.46 %2.48 %(2) bps

Net royalty per side $418 $324 29 % $402 $321 25 %

Realogy Brokerage Group

Closed homesale sides 103,945 71,375 46 % 178,938 133,916 34 %

Average homesale price $678,978 $503,935 35 % $649,634 $517,888 25 %

Average homesale broker commission rate2.43 %2.43 %- bps2.43 %2.42 %1 bps

Gross commission income per side $17,053 $12,863 33 % $16,357 $13,206 24 %

Realogy Title Group

Purchase title and closing units 47,375 32,028 48 % 81,203 60,752 34 %

Refinance title and closing units 14,472 17,548 (18)% 34,939 26,447 32 %

Average fee per closing unit $2,608 $2,062 26 % $2,446 $2,151 14 %

____________________

(a) Includes all franchisees except for Realogy Brokerage Group.

Table 4b

REALOGY HOLDINGS CORP.

2020 KEY DRIVERS



Quarter Ended Year Ended

March 31, June 30, September 30, December 31, December 31, 2020 2020 2020 2020 2020

Realogy Franchise Group (a)

Closed homesale sides 203,188 238,085 336,737 312,335 1,090,345

Average homesale price $322,465 $321,308 $ 367,095 $ 389,555 $ 355,214

Average homesale broker commission rate2.47 %2.49 %2.48 % 2.46 % 2.48 %

Net royalty per side $316 $324 $ 367 $ 383 $ 353

Realogy Brokerage Group

Closed homesale sides 62,541 71,375 101,890 97,930 333,736

Average homesale price $533,813 $503,935 $ 563,513 $ 590,351 $ 553,081

Average homesale broker commission rate2.41 %2.43 %2.44 % 2.42 % 2.43 %

Gross commission income per side $13,597 $12,863 $ 14,315 $ 14,725 $ 13,990

Realogy Title Group

Purchase title and closing units 28,724 32,028 45,788 42,586 149,126

Refinance title and closing units 8,899 17,548 18,387 20,490 65,324

Average fee per closing unit $2,269 $2,062 $ 2,239 $ 2,272 $ 2,213

____________________

(a) Includes all franchisees except for Realogy Brokerage Group.

Table 5a

REALOGY HOLDINGS CORP.

NON-GAAP RECONCILIATION - OPERATING EBITDA

THREE MONTHS ENDED JUNE 30, 2021 AND 2020

(In millions)

Set forth in the tables below is a reconciliation of Net income (loss)attributable to Realogy Holdings to Operating EBITDA for the three-monthperiods ended June 30, 2021 and 2020:

Three Months Ended June 30,

2021 2020

Net income (loss) attributable to Realogy Holdings$149 $(14)

Income tax expense (benefit) 60 (5)

Income (loss) before income taxes 209 (19)

Add: Depreciation and amortization 51 46

Interest expense, net 57 59

Restructuring costs, net (a) 5 18

Impairments (b) 1 63

Former parent legacy cost, net (c) 1 -

Loss on the early extinguishment of debt (c) 1 8

Gain on the sale of business (d) (15) -

Operating EBITDA $310 $175

The following table reflects Revenue, Operating EBITDA and Operating EBITDAmargin by reportable segments:

Revenues (e) $ % Operating EBITDA$ % Operating EBITDA Margin Change ChangeChangeChange 2021 2020 Change2021 2020 2021 2020

Realogy Franchise Group$347 $227 $120 53 % $224 $125$99 79 %65 % 55 % 10

Realogy Brokerage Group1,791 933 858 92 70 15 55 367 4 2 2

Realogy Title Group (f)255 160 95 59 55 61 (6) (10) 22 38 (16)

Corporate and Other (117) (65) (52) * (39) (26) (13) *

Total Company $2,276$1,255$1,02181 % $310 $175$13577 %14 % 14 % -

The following table reflects Realogy Franchise and Brokerage Groups' resultsbefore the intercompany royalties and marketing fees, as well as on a combinedbasis to show the Operating EBITDA contribution of these business segments tothe overall Operating EBITDA of the Company:

Revenues $ % Operating EBITDA$ % Operating EBITDA Margin Change 2021 2020 ChangeChange2021 2020 ChangeChange2021 2020

Realogy Franchise Group (g)$230 $162 $68 42 % $107 $60 $47 78 % 47 % 37 % 10

Realogy Brokerage Group (g)1,791 933 858 92 187 80 107 134 10 9 1

Realogy Franchise and $2,021$1,095$92685 % $294 $140 $154110% 15 % 13 % 2 Brokerage Groups Combined

____________________

* not meaningful.

Restructuring charges incurred for the three months ended June 30, 2021 include $1 million at Realogy Franchise Group, $2 million at Realogy(a) Brokerage Group and $2 million at Corporate and Other. Restructuring charges incurred for the three months ended June 30, 2020 include $4 million at Realogy Franchise Group, $12 million at Realogy Brokerage Group and $2 million at Realogy Title Group.

Impairments for the three months ended June 30, 2021 primarily relate to lease asset and software impairments. Non-cash impairments for the three months ended June 30, 2020 include $44 million of impairment charges during(b) the three months ended June 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds and other asset impairments of $19 million primarily related to lease asset impairments.

(c) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.

(d) Gain on the sale of business is recorded in Realogy Brokerage Group.

Includes the elimination of transactions between segments, which consists(e) of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $117 million and $65 million during the three months ended June 30, 2021 and 2020, respectively.

Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage origination joint venture businesses. Excluding the mortgage joint venture from Operating EBITDA, title agency and title insurance underwriter(f) represented approximately 60% and 40%, respectively of Operating EBITDA for the period ended June 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture was driven primarily by a negative $19 million related to mark-to-market adjustments on the mortgage loan pipeline as well as margin compression and a decline in refinance volumes, partially offset by strong purchase volume growth.

The segment numbers noted above do not reflect the impact of intercompany(g) royalties and marketing fees paid by Realogy Brokerage Group to Realogy Franchise Group of $117 million and $65 million during the three months ended June 30, 2021 and 2020, respectively.

Table 5b

REALOGY HOLDINGS CORP.

NON-GAAP RECONCILIATION - OPERATING EBITDA

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(In millions)

Set forth in the tables below is a reconciliation of Net income (loss)attributable to Realogy Holdings to Operating EBITDA for the six-month periodsended June 30, 2021 and 2020:

Six Months Ended June 30,

2021 2020

Net income (loss) attributable to Realogy Holdings$182 $(476)

Income tax expense (benefit) 77 (146)

Income (loss) before income taxes 259 (622)

Add: Depreciation and amortization 102 91

Interest expense, net 95 160

Restructuring costs, net (a) 10 30

Impairments (b) 2 540

Former parent legacy cost, net (c) 1 -

Loss on the early extinguishment of debt (c) 18 8

Gain on the sale of business (d) (15) -

Operating EBITDA $472 $207

The following table reflects Revenue, Operating EBITDA and Operating EBITDAmargin by reportable segments:

Revenues (e) % Operating EBITDA$ % Operating EBITDA Margin $ Change ChangeChangeChange 2021 2020 Change2021 2020 2021 2020

Realogy Franchise Group601 $447 $154 34 % 365 $221 $14465% 61 % 49 % 12

Realogy Brokerage Group2,962 1,802 1,160 64 65 (36) 101 281 2 (2) 4

Realogy Title Group (f)456 297 159 54 116 73 43 59 25 25 -

Corporate and Other (196) (123) (73) * (74) (51) (23) *

Total Company $3,823$2,423$1,40058 % $472 $207 $265128% 12 % 9 % 3



The following table reflects Realogy Franchise and Brokerage Groups' resultsbefore the intercompany royalties and marketing fees, as well as on a combinedbasis to show the Operating EBITDA contribution of these business segments tothe overall Operating EBITDA of the Company:

Revenues Operating EBITDA Operating EBITDA Margin $ % $ % 2021 2020 2021 2020 ChangeChange2021 2020 Change ChangeChange

Realogy Franchise Group (g)$405 $324 $81 25% $169 $98 $71 72 % 42 % 30 % 12

Realogy Brokerage Group (g)2,962 1,802 1,160 64 261 87 174 200 9 5 4

Realogy Franchise and $3,367$2,126$1,241 58% $430 $185$245132% 13 % 9 % 4 Brokerage Groups Combined

____________________

* not meaningful.

Restructuring charges incurred for the six months ended June 30, 2021 include $3 million at Realogy Franchise Group, $4 million at Realogy(a) Brokerage Group and $3 million at Corporate and Other. Restructuring charges incurred for the six months ended June 30, 2020 include $6 million at Realogy Franchise Group, $21 million at Realogy Brokerage Group and $3 million at Realogy Title Group.

Impairments for the six months ended June 30, 2021 primarily relate to(b) lease asset and software impairments. Non-cash impairments for the six months ended June 30, 2020 include:

? a goodwill impairment charge of $413 million related to Realogy Brokerage Group;

? an impairment charge of $30 million related to Realogy Franchise Group's trademarks;

$74 million of impairment charges during the six months ended June 30, ? 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds; and

? other asset impairments of $23 million primarily related to lease asset impairments.

(c) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.

(d) Gain on the sale of business is recorded in Realogy Brokerage Group.

Includes the elimination of transactions between segments, which consists(e) of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $196 million and $123 million during the six months ended June 30, 2021 and 2020, respectively.

Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage(f) origination joint venture businesses. Excluding the mortgage joint venture from Operating EBITDA, title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the year to date period ended June 30, 2021.

The segment numbers noted above do not reflect the impact of intercompany(g) royalties and marketing fees paid by Realogy Brokerage Group to Realogy Franchise Group of $196 million and $123 million during the six months ended June 30, 2021 and 2020, respectively.

Table 6a

REALOGY HOLDINGS CORP.

SELECTED 2021 FINANCIAL DATA

(In millions)



Three Months Ended

March 31,June 30,

2021 2021

Net revenues (a)

Realogy Franchise Group $254 $347

Realogy Brokerage Group 1,171 1,791

Realogy Title Group 201 255

Corporate and Other (79) (117)

Total Company $1,547 $2,276



Operating EBITDA

Realogy Franchise Group $141 $224

Realogy Brokerage Group (5) 70

Realogy Title Group 61 55

Corporate and Other (35) (39)

Total Company $162 $310



Non-GAAP Reconciliation - Operating EBITDA

Total Company Operating EBITDA $162 $310



Less: Depreciation and amortization 51 51

Interest expense, net 38 57

Income tax expense 17 60

Restructuring costs, net (b) 5 5

Impairments (c) 1 1

Former parent legacy cost, net (d) - 1

Loss on the early extinguishment of debt (d)17 1

Gain on the sale of business (e) - (15)

Net income attributable to Realogy Holdings $33 $149

_______________

Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing(a) fees paid by Realogy Brokerage Group of $79 million and $117 million for the three months ended March 31, 2021 and June 30, 2021, respectively. Such amounts are eliminated through Corporate and Other.

(b) Includes restructuring charges broken down by business unit as follows:

Three Months Ended

March 31,June 30,

2021 2021

Realogy Franchise Group$ 2 $ 1

Realogy Brokerage Group2 2

Corporate and Other 1 2

Total Company $ 5 $ 5

(c) Impairments for the three months ended March 31, 2021 and June 30, 2021 primarily relate to lease asset and software impairments.

(d) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.

(e) Gain on the sale of business is recorded in Realogy Brokerage Group.

Table 6b

REALOGY HOLDINGS CORP.

SELECTED 2020 FINANCIAL DATA

(In millions)



Three Months Ended Year Ended

March 31,June 30,September 30,December 31,December 31,

2020 2020 2020 2020 2020

Net revenues (a)

Realogy Franchise Group $220 $227 $314 $298 $1,059

Realogy Brokerage Group 869 933 1,479 1,461 4,742

Realogy Title Group 137 160 213 226 736

Corporate and Other (58) (65) (97) (96) (316)

Total Company $1,168 $1,255$1,909 $1,889 $6,221



Operating EBITDA

Realogy Franchise Group $96 $125 $200 $173 $594

Realogy Brokerage Group (51) 15 61 23 48

Realogy Title Group 12 61 95 58 226

Corporate and Other (25) (26) (43) (48) (142)

Total Company $32 $175 $313 $206 $726



Non-GAAP Reconciliation - Operating EBITDA

Total Company Operating EBITDA $32 $175 $313 $206 $726



Less: Depreciation and amortization 45 46 43 52 186

Interest expense, net 101 59 48 38 246

Income tax (benefit) expense (141) (5) 36 6 (104)

Restructuring costs, net (b) 12 18 17 20 67

Impairments (c) 477 63 70 72 682

Former parent legacy cost, net (d) - - 1 - 1

Loss on the early extinguishment of debt (d) - 8 - - 8

Net (loss) income attributable to Realogy Holdings$(462) $(14) $98 $18 $(360)

____________________

Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing(a) fees paid by Realogy Brokerage Group of $58 million, $65 million, $97 million and $96 million for the three months ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020, respectively. Such amounts are eliminated through Corporate and Other.

(b) Includes restructuring charges broken down by business unit as follows:

Three Months Ended Year Ended

March 31,June 30,September 30,December 31,December 31,

2020 2020 2020 2020 2020

Realogy Franchise Group$ 2 $ 4 $ 4 $ 5 $ 15

Realogy Brokerage Group9 12 11 5 37

Realogy Title Group 1 2 - 1 4

Corporate and Other - - 2 9 11

Total Company $ 12 $ 18 $ 17 $ 20 $ 67

(c) Non-cash impairments include:

a goodwill impairment charge of $413 million related to Realogy Brokerage? Group and an impairment charge of $30 million related to Realogy Franchise Group's trademarks during the three months ended March 31, 2020;

$30 million, $44 million and $59 million of reserves recorded during the three months ended March 31, 2020, June 30, 2020 and September 30, 2020,? respectively, (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds which were included in Impairments in connection with the reclassification of Cartus Relocation Services as continuing operations during the fourth quarter of 2020;

a goodwill impairment charge of $22 million related to Cartus Relocation? Services and an impairment charge of $34 million related to Cartus Relocation Services' trademarks during the three months ended December 31, 2020; and

$4 million, $19 million, $11 million and $16 million of other impairment? charges primarily related to lease asset impairments incurred during the three months ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020, respectively.

(d) Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.

Table 6c

REALOGY HOLDINGS CORP.

2020 CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)



Three Months Ended Year Ended

March 31,June 30, September 30,December 31,December 31,

2020 2020 2020 2020 2020

Revenues

Gross commission income $850 $919 $ 1,458 $1,442 $4,669

Service revenue 202 219 281 281 983

Franchise fees 71 85 133 130 419

Other 45 32 37 36 150

Net revenues 1,168 1,255 1,909 1,889 6,221

Expenses

Commission and other agent-related costs 630 685 1,105 1,107 3,527

Operating 368 320 380 405 1,473

Marketing 59 41 55 60 215

General and administrative 88 69 108 147 412

Former parent legacy cost, net - - 1 - 1

Restructuring costs, net 12 18 17 20 67

Impairments 477 63 70 72 682

Depreciation and amortization 45 46 43 52 186

Interest expense, net 101 59 48 38 246

Loss on the early extinguishment of debt - 8 - - 8

Other expense, net - - - (5) (5)

Total expenses 1,780 1,309 1,827 1,896 6,812

(Loss) income before income taxes, equity in earnings and(612) (54) 82 (7) (591) noncontrolling interests

Income tax (benefit) expense (141) (5) 36 6 (104)

Equity in earnings of unconsolidated entities (9) (36) (53) (33) (131)

Net (loss) income (462) (13) 99 20 (356)

Less: Net income attributable to noncontrolling interests- (1) (1) (2) (4)

Net (loss) income attributable to Realogy Holdings $(462) $(14) $ 98 $18 $(360)



(Loss) earnings per share attributable to Realogy Holdings shareholders:

Basic (loss) earnings per share $(4.03)$(0.12)$ 0.85 $0.16 $(3.13)

Diluted (loss) earnings per share $(4.03)$(0.12)$ 0.84 $0.15 $(3.13)

Weighted average common and common equivalent shares of Realogy Holdings outstanding:

Basic 114.7 115.4 115.4 115.5 115.2

Diluted 114.7 116.2 116.7 118.2 115.2

Table 7

REALOGY HOLDINGS CORP.

NON-GAAP RECONCILIATION - FREE CASH FLOW

THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(In millions)



A reconciliation of net income (loss) attributable to Realogy Holdings to Free Cash Flow is set forth in the following table:



Three Months Ended June 30,Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) attributable to Realogy Holdings $ 149 $ (14) $182 $(476)

Income tax expense (benefit), net of payments 49 (6) 64 (146)

Interest expense, net 57 59 95 160

Cash interest payments (69) (85) (83) (105)

Depreciation and amortization 51 46 102 91

Capital expenditures (27) (20) (50) (49)

Restructuring costs and former parent legacy items, net of payments- 6 (5) 5

Impairments 1 63 2 540

Loss on the early extinguishment of debt 1 8 18 8

Gain on the sale of business (15) - (15) -

Working capital adjustments 62 42 (107) (55)

Relocation receivables (assets), net of securitization obligations (16) (52) (27) (81)

Free Cash Flow $ 243 $ 47 $176 $(108)

A reconciliation of net cash provided by operating activities to Free Cash Flowis set forth in the following table:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net cash provided by operating activities $223 $ 115 $ 186 $33

Property and equipment additions (27) (20) (50) (49)

Net change in securitization 47 (49) 40 (92)

Effect of exchange rates on cash and cash equivalents- 1 - -

Free Cash Flow $243 $ 47 $ 176 $(108)



Net cash used in investing activities $(19) $ (24) $ (51) $(63)

Net cash provided by (used in) financing activities $253 $ (32) $ 208 $468

Table 8a

NON-GAAP RECONCILIATION - SENIOR SECURED LEVERAGE RATIO

FOR THE FOUR-QUARTER PERIOD ENDED JUNE 30, 2021

(In millions)

The senior secured leverage ratio is tested quarterly pursuant to theterms of the senior secured credit facilities*. For the trailingfour-quarter period ended June 30, 2021, Realogy Group LLC wasrequired to maintain a senior secured leverage ratio not to exceed4.75 to 1.00. The senior secured leverage ratio is measured bydividing Realogy Group LLC's total senior secured net debt by thetrailing four quarters EBITDA calculated on a Pro Forma Basis, asthose terms are defined in the Senior Secured Credit Agreement. Totalsenior secured net debt does not include the 7.625% Senior SecuredSecond Lien Notes, our unsecured indebtedness, including the UnsecuredNotes and Exchangeable Senior Notes, or the securitizationobligations. EBITDA calculated on a Pro Forma Basis, as defined inthe Senior Secured Credit Agreement, includes adjustments to OperatingEBITDA for retention and disposition costs, non-cash charges andincremental securitization interest costs, as well as pro forma costsavings for restructuring initiatives, the pro forma effect ofbusiness optimization initiatives and the pro forma effect ofacquisitions and new franchisees, in each case calculated as of thebeginning of the trailing four-quarter period. The Company was incompliance with the senior secured leverage ratio covenant at June 30,2021 with a ratio of 0.00 to 1.00.

A reconciliation of net (loss) income attributable to Realogy Group toOperating EBITDA and EBITDA calculated on a Pro Forma Basis, as thoseterms are defined in the Senior Secured Credit Agreement, for thefour-quarter period ended June 30, 2021 is set forth in the followingtable:

Less Equals Plus Equals

Six MonthsSix Months Six MonthsTwelve Months Year Ended Ended Ended Ended Ended

December 31,June 30, December 31,June 30, June 30, 2020 2020 2020 2021 2021

Net (loss) income attributable to Realogy Group (a)$(360) $(476) $116 $ 182 $298

Income tax (benefit) expense (104) (146) 42 77 119

(Loss) income before income taxes (464) (622) 158 259 417

Depreciation and amortization 186 91 95 102 197

Interest expense, net 246 160 86 95 181

Restructuring costs, net 67 30 37 10 47

Impairments 682 540 142 2 144

Former parent legacy cost, net 1 - 1 1 2

Loss on the early extinguishment of debt 8 8 - 18 18

Gain on the sale of business - - - (15) (15)

Operating EBITDA (b) 726 207 519 472 991

Bank covenant adjustments:

Pro forma effect of business optimization initiatives (c) 45

Non-cash charges (d) 26

Pro forma effect of acquisitions and new franchisees (e) 5

Incremental securitization interest costs (f) 3

Costs expensed related to the disposition (3)

EBITDA as defined by the Senior Secured Credit Agreement* $1,067

Total senior secured net debt (g) $(4)

Senior secured leverage ratio* 0.00 x

____________________

Net (loss) income attributable to Realogy consists of: (i) income of $98(a) million for the third quarter of 2020, (ii) income of $18 million for the fourth quarter of 2020, (iii) income of $33 million for the first quarter of 2021 and (iv) income of $149 million for the second quarter of 2021.

Operating EBITDA consists of: (i) $313 million for the third quarter of(b) 2020, (ii) $206 million for the fourth quarter of 2020, (iii) $162 million for the first quarter of 2021 and (iv) $310 million for the second quarter of 2021.

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

Represents the elimination of non-cash expenses including $43 million of stock-based compensation expense less $9 million of other items, $5 million(d) of foreign exchange benefits and $3 million for the change in the allowance for doubtful accounts and notes reserves for the four-quarter period ended June 30, 2021.

Represents the estimated impact of acquisitions and franchise sales activity, net of brokerages that exited our franchise system as if these changes had occurred on July 1, 2020. Franchisee sales activity is comprised of new franchise agreements as well as growth through(e) acquisitions and independent sales agent recruitment by existing franchisees with our assistance. We have made a number of assumptions in calculating such estimates and there can be no assurance that we would have generated the projected levels of Operating EBITDA had we owned the acquired entities or entered into the franchise contracts as of July 1, 2020.

(f) Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended June 30, 2021.

Represents total borrowings under the senior secured credit facilities (including the Revolving Credit Facility and Term Loan B Facility) and Term Loan A Facility and borrowings secured by a first priority lien on our assets of $670 million plus $27 million of finance lease obligations less(g) $701 million of readily available cash as of June 30, 2021. Pursuant to the terms of our senior secured credit facilities, total senior secured net debt does not include our securitization obligations, 7.625% Senior Secured Second Lien Notes or unsecured indebtedness, including the Unsecured Notes and the Exchangeable Senior Notes.

Our senior secured credit facilities include the facilities under our Amended and Restated Credit Agreement dated as of March 5, 2013, as amended from time to time (the "Senior Secured Credit Agreement"), and the Term Loan A Agreement dated as of October 23, 2015 (the "Term Loan A* Agreement"), as amended from time to time. Our Unsecured Notes include our 4.875% Senior Notes due 2023, 9.375% Senior Notes due 2027 and 5.75% Senior Notes due 2029. Exchangeable Senior Notes refers to our 0.25% Exchangeable Senior Notes due 2026. 7.625% Senior Secured Second Lien Notes refers to our 7.625% Senior Secured Second Lien Notes due 2025.

Table 8b

NET DEBT LEVERAGE RATIO

FOR THE FOUR-QUARTER PERIOD ENDED JUNE 30, 2021

(In millions)



Net corporate debt (excluding securitizations) divided by EBITDA calculated on a Pro Forma Basis, as those terms are defined in the senior secured credit facilities, for the four-quarter period ended June 30, 2021 (referred to as net debt leverage ratio) is set forth in the following table:



As of June 30, 2021

Non-extended Revolving Credit Commitment $ -

Extended Revolving Credit Commitment -

Non-extended Term Loan A 197

Extended Term Loan A 236

Term Loan B 237

7.625% Senior Secured Second Lien Notes 550

4.875% Senior Notes 407

9.375% Senior Notes 550

5.75% Senior Notes 900

0.25% Exchangeable Senior Notes 403

Finance lease obligations 27

Corporate Debt (excluding securitizations) 3,507

Less: Cash and cash equivalents 859

Net Corporate Debt (excluding securitizations) $ 2,648



EBITDA as defined by the Senior Secured Credit Agreement (a)$ 1,067



Net Debt Leverage Ratio(b) 2.5 x

_______________

(a) See Table 8a for a reconciliation of Net (loss) income attributable to Realogy Group to EBITDA as defined by the Senior Secured Credit Agreement.

Net Debt Leverage Ratio is substantially similar to Consolidated Leverage Ratio (as defined under the indentures governing the 9.375% Notes and(b) 7.625% Senior Secured Second Lien Notes), except that when the Consolidated Leverage Ratio is measured at March 31 of any given year, the calculation includes a positive $200 million seasonality adjustment to cash and cash equivalents.

Table 9

Non-GAAP Definitions

Adjusted net income (loss) is defined by us as net income (loss) before mark-to-market interest rate swap adjustments, former parent legacy items, restructuring charges, the (gain) loss on the early extinguishment of debt, impairments, the tax effect of the foregoing adjustments. The gross amounts for these items as well as the adjustment for income taxes are presented.

Operating EBITDA is defined by us as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. Operating EBITDA is our primary non-GAAP measure.

We present Operating EBITDA because we believe it is useful as a supplemental measure in evaluating the performance of our operating businesses and provides greater transparency into our results of operations. Our management, including our chief operating decision maker, uses Operating EBITDA as a factor in evaluating the performance of our business. Operating EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP.

We believe Operating EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles, as well as other items that are not core to the operating activities of the Company such as restructuring charges, gains or losses on the early extinguishment of debt, former parent legacy items, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets, which may vary for different companies for reasons unrelated to operating performance. We further believe that Operating EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an Operating EBITDA measure when reporting their results.

Operating EBITDA has limitations as an analytical tool, and you should not consider Operating EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:

* this measure does not reflect changes in, or cash required for, our working capital needs; * this measure does not reflect our interest expense (except for interest related to our securitization obligations), or the cash requirements necessary to service interest or principal payments on our debt; * this measure does not reflect our income tax expense or the cash requirements to pay our taxes; * this measure does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; * although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and this measure does not reflect any cash requirements for such replacements; and * other companies may calculate this measure differently so they may not be comparable.

Free Cash Flow is defined as net income (loss) attributable to Realogy before income tax expense (benefit), net of payments, interest expense, net, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations. We use Free Cash Flow in our internal evaluation of operating effectiveness and decisions regarding the allocation of resources, as well as measuring the Company's ability to generate cash. Since Free Cash Flow can be viewed as both a performance measure and a cash flow measure, the Company has provided a reconciliation to both net income attributable to Realogy Holdings and net cash provided by operating activities. Free Cash Flow is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance or liquidity. Free Cash Flow may differ from similarly titled measures presented by other companies.

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SOURCE Realogy Holdings Corp.