PR Newswire | Oct 28, 2021 07:31AM EDT

10/28 06:30 CDT

Realogy Reports Third Quarter 2021 Financial Results MADISON, N.J., Oct. 28, 2021

MADISON, N.J., Oct. 28, 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 September 30, 2021.

"Realogy delivered powerful third quarter results with terrific top- and bottom-line performance, market share gains for the fifth consecutive quarter, impressive free cash flow, and an even stronger capital structure," said Ryan Schneider, Realogy's chief executive officer and president. "We are excited by our strategic progress throughout 2021, especially across Realogy's market-leading luxury positions, differentiated RealSure venture, and continued technology innovation as we proactively transform the future of real estate."

"In the third quarter, Realogy drove excellent financial performance, delivering $273 million in Operating EBITDA and generating $282 million of free cash flow, as we significantly strengthened our capital structure," said Charlotte Simonelli, Realogy's executive vice president, chief financial officer, and treasurer. "Realogy is making incredible progress, proactively repaying $435 million of debt in September, consistently delivering quality financial results, and strategically investing to unlock additional value for shareholders."

Third Quarter 2021 Highlights

* Generated Revenue of $2.2 billion, an increase of 15% or $277 million year-over-year. * Reported Net income of $114 million and basic earnings per share of $0.98, an increase of $16 million or $0.13 per share vs. prior year. * Generated Operating EBITDA of $273 million, a decrease of $40 million year-over-year. The third quarter of 2020 included approximately $40 million in temporary cost savings (See Table 5a). * Net Debt Leverage Ratio of 2.3x and Senior Secured Leverage Ratio of negative 0.27x at September 30, 2021 (See Tables 8a and 8b). * Repaid $435 million of debt, including all outstanding Term Loan B and the non-extended portion of the Term Loan A. * Reported Free Cash Flow of $282 million in the third quarter of 2021 and $458 million year to date September 30, 2021 (See Table 7). * Combined closed transaction volume increased 12% year-over-year in the third quarter of 2021 driving market share gains for the fifth consecutive quarter. Our transaction volume growth was above the 9% year-over-year market volume growth reported by the National Association of Realtors (NAR). * Owned Brokerage agent count grew 5% year-over-year, with growth for the 5th consecutive quarter, 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 90% of the target savings and $70 million realized in the income statement through September 30, 2021.

Third Quarter 2021 Financial HighlightsThe following table sets forth Realogy's financial highlights for the periods presented (in millions, except per share data) (unaudited):

Three Months Ended September 30,

2021 2020 Change% Change

Revenue $2,186 $1,909 $277 15 %

Operating EBITDA ^1 273 313 (40) (13)

Net income attributable to Realogy 114 98 16 16

Adjusted net income ^2 119 162 (43) (27)

Earnings per share 0.98 0.85 0.13 15

Adjusted earnings per share ^2 1.02 1.40 (0.38)(27)

Free Cash Flow ^3 282 395 (113) (29)

Net cash provided by operating activities$303 $385 $(82)(21) %



Select Key Drivers

Realogy Franchise Group ^4 5

Closed homesale sides 316,195 336,737 (6) %

Average homesale price $427,052$367,095 16 %

Realogy Brokerage Group ^5

Closed homesale sides 101,536 101,890 - %

Average homesale price $662,006$563,513 17 %

Realogy Title Group

Purchase title and closing units 47,004 45,788 3 %

Refinance title and closing units 12,836 18,387 (30) %

_______________

Footnotes:

^1 See Tables 5a and 5b. Operating EBITDA is defined as net income (loss)before depreciation and amortization, interest expense, net (other thanrelocation services interest for securitization assets and securitizationobligations), income taxes, and other items that are not core to the operatingactivities of the Company such as restructuring charges, former parent legacyitems, gains or losses on the early extinguishment of debt, impairments, gainsor losses on discontinued operations and gains or losses on the sale ofinvestments or other assets.

^2 See Table 1a. Adjusted Net income (loss) is defined as net income (loss)before mark-to-market interest rate swap adjustments, former parent legacyitems, 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 averagecommon and common equivalent shares outstanding.

^3 See Table 7. Free Cash Flow is defined as net income (loss) attributable toRealogy before income tax expense (benefit), net of payments, net interestexpense, cash interest payments, depreciation and amortization, capitalexpenditures, 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 changein securitization obligations.

^4 Includes all franchisees except for Realogy Brokerage Group.

^5 The Company's combined homesale transaction volume growth (transactionsides multiplied by average sale price) increased 12% compared with the thirdquarter of 2020.

Balance Sheet and Capital AllocationThe Company ended the third quarter of 2021 with cash and cash equivalents of $701 million*. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.4 billion at September 30, 2021. The Company's Net Debt Leverage Ratio was 2.3x at September 30, 2021 (see Table 8b).

On September 16, 2021, we used cash on hand to repay an aggregate of $435 million of secured debt which included approximately $197 million in principal amount of outstanding borrowings under the Term Loan A Facility (representing all of the remaining Non-Extended Term Loan A) and approximately $238 million in principal amount of outstanding borrowings under the Term Loan B Facility (representing all of the remaining Term Loan B).

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

______________

* excludes restricted cash

Investor Conference CallToday, October 28, at 8:30 a.m. (ET), Realogy will hold a conference call via webcast to review its Q3 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 196,600 independent sales agents in the U.S. and approximately 140,800 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?four years in a row, named one of?LinkedIn's 2021 Top Companies in the U.S., and honored on the Forbes list of World's Best Employers 2021.

Forward-Looking StatementsCertain 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, our planned title underwriting 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, or complications in our relationships with, 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 refinancing activity or corporate relocations or relocation benefits; 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, consent decrees, administrative policies, litigation or other legal action, 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 quarters ended March 31, 2021 and June 30, 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 MeasuresThis 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 quarters ended March 31, 2021 and June 30, 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 EndedNine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenues

Gross commission income $1,689$1,458$4,616$3,227

Service revenue 315 281 878 702

Franchise fees 139 133 391 289

Other 43 37 124 114

Net revenues 2,186 1,909 6,009 4,332

Expenses

Commission and other agent-related costs 1,309 1,105 3,567 2,420

Operating 424 380 1,230 1,068

Marketing 69 55 193 155

General and administrative 120 108 324 265

Former parent legacy cost, net - 1 1 1

Restructuring costs, net 4 17 14 47

Impairments 1 70 3 610

Depreciation and amortization 50 43 152 134

Interest expense, net 52 48 147 208

Loss on the early extinguishment of debt 3 - 21 8

Other loss (income), net 1 - (17) -

Total expenses 2,033 1,827 5,635 4,916

Income (loss) before income taxes, equity in earnings and153 82 374 (584) noncontrolling interests

Income tax expense (benefit) 48 36 125 (110)

Equity in earnings of unconsolidated entities (11) (53) (52) (98)

Net income (loss) 116 99 301 (376)

Less: Net income attributable to noncontrolling interests(2) (1) (5) (2)

Net income (loss) attributable to Realogy Holdings $114 $98 $296 $(378)



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

Basic earnings (loss) per share $0.98 $0.85 $2.55 $(3.28)

Diluted earnings (loss) per share $0.95 $0.84 $2.46 $(3.28)

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

Basic 116.6 115.4 116.3 115.2

Diluted 120.3 116.7 120.2 115.2

Table 1a

REALOGY HOLDINGS CORP.NON-GAAP RECONCILIATIONADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE(In millions, except per share data)

We present Adjusted net income (loss) and Adjusted earnings (loss) per share because we believe these measures are useful as supplemental measures in evaluating the performance of our operating businesses and provide greater transparency 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 to movements in LIBOR and the forward yield curve and therefore are subject to significant fluctuations; (b) former parent legacy items, which pertain to liabilities of the former parent for matters prior to mid-2006 and are non-operational in nature; (c) restructuring charges as a result of initiatives currently in progress; (d) impairments; (e) the (gain) loss on the early extinguishment of debt that results from refinancing and deleveraging debt initiatives and (f) the tax effect of the foregoing adjustments. The gross amounts for these items as well as the adjustment for income taxes are shown in the table below.

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

Set forth in the table below is a reconciliation of Net income (loss) to Adjusted net income for the three and nine months ended September 30, 2021 and 2020:

Three Months EndedNine Months Ended September 30, September 30,

2021 2020 2021 2020

Net income (loss) attributable to Realogy Holdings $114 $98 $296 $(378)

Addback:

Mark-to-market interest rate swap losses (1) - (8) 59

Former parent legacy cost, net - 1 1 1

Restructuring costs, net 4 17 14 47

Impairments (a) 1 70 3 610

Loss on the early extinguishment of debt 3 - 21 8

Adjustments for tax effect (b) (2) (24) (8) (196)

Adjusted net income attributable to Realogy Holdings $119 $162 $319 $151



Earnings (loss) per share attributable to Realogy Holdings:

Basic earnings (loss) per share: $0.98 $0.85 $2.55$(3.28)

Diluted earnings (loss) per share: $0.95 $0.84 $2.46$(3.28)



Adjusted earnings per share attributable to Realogy Holdings:

Adjusted basic earnings per share: $1.02 $1.40 $2.74$1.31

Adjusted diluted earnings per share: $0.99 $1.39 $2.65$1.31



Weighted average common and common equivalent shares outstanding:

Basic: 116.6 115.4 116.3 115.2

Diluted: 120.3 116.7 120.2 115.2

_______________

(a) Non-cash impairments for the nine months ended September 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

$133 million of impairment charges during the nine months ended ? September 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)



September 30,December 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $701 $520

Restricted cash 5 3

Trade receivables (net of allowance for doubtful accounts of $11 and $13) 140 128

Relocation receivables 185 139

Other current assets 194 154

Total current assets 1,225 944

Property and equipment, net 302 317

Operating lease assets, net 448 450

Goodwill 2,899 2,910

Trademarks 685 685

Franchise agreements, net 1,038 1,088

Other intangibles, net 175 188

Other non-current assets 421 352

Total assets $7,193 $6,934

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $125 $128

Securitization obligations 146 106

Current portion of long-term debt 9 62

Current portion of operating lease liabilities 126 129

Accrued expenses and other current liabilities 661 600

Total current liabilities 1,067 1,025

Long-term debt 2,938 3,145

Long-term operating lease liabilities 418 430

Deferred income taxes 353 276

Other non-current liabilities 289 291

Total liabilities 5,065 5,167

Commitments and contingencies

Equity:

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

Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 116,586,201 shares issued and outstanding at September 30, 2021 and 115,457,067 1 1 shares issued and outstanding at December 31, 2020

Additional paid-in capital 4,939 4,876

Accumulated deficit (2,759) (3,055)

Accumulated other comprehensive loss (58) (59)

Total stockholders' equity 2,123 1,763

Noncontrolling interests 5 4

Total equity 2,128 1,767

Total liabilities and equity $7,193 $6,934

Table 3



REALOGY HOLDINGS CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)





Nine Months Ended September 30,

2021 2020

Operating Activities

Net income (loss) $ 301$(376)

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

Depreciation and amortization 152 134

Deferred income taxes 76 (112)

Impairments 3 610

Amortization of deferred financing costs and debt discount (premium) 12 8

Loss on the early extinguishment of debt 21 8

Gain on the sale of business, net (14) -

Equity in earnings of unconsolidated entities (52) (98)

Stock-based compensation 21 19

Mark-to-market adjustments on derivatives (8) 59

Other adjustments to net income (loss) (2) (1)

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

Trade receivables (13) (24)

Relocation receivables (46) 2

Other assets (12) 15

Accounts payable, accrued expenses and other liabilities 32 137

Dividends received from unconsolidated entities 49 59

Other, net (31) (22)

Net cash provided by operating activities 489 418

Investing Activities

Property and equipment additions (71) (69)

Proceeds from the sale of business 15 -

Investment in unconsolidated entities (7) (2)

Other, net (5) (13)

Net cash used in investing activities (68) (84)

Financing Activities

Net change in Revolving Credit Facility - (50)

Repayments of Term Loan A Facility and Term Loan B Facility (1,490)-

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 (8) (31)

Net change in securitization obligations 40 (62)

Debt issuance costs (20) (14)

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 (27) (34)

Net cash used in financing activities (238) (203)

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

Net increase in cash, cash equivalents and restricted cash 183 131

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

Cash, cash equivalents and restricted cash, end of period $ 706$397



Supplemental Disclosure of Cash Flow Information

Interest payments (including securitization interest of $3 and $4 respectively) $ 121$133

Income tax payments (refunds), net 32 (9)

Table 4a



REALOGY HOLDINGS CORP. 2021 vs. 2020 KEY DRIVERS



Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 % Change 2021 2020 % Change

Realogy Franchise Group (a)

Closed homesale sides 316,195 336,737 (6) % 881,356 778,010 13 %

Average homesale price $427,052 $367,095 16 % $419,223 $341,427 23 %

Average homesale broker commission rate2.44 %2.48 %(4) bps2.46 %2.48 %(2) bps

Net royalty per side $401 $367 9 % $402 $341 18 %

Realogy Brokerage Group

Closed homesale sides 101,536 101,890 - % 280,474 235,806 19 %

Average homesale price $662,006 $563,513 17 % $654,113 $537,602 22 %

Average homesale broker commission rate2.42 %2.44 %(2) bps2.43 %2.43 %- bps

Gross commission income per side $16,633 $14,315 16 % $16,457 $13,685 20 %

Realogy Title Group

Purchase title and closing units 47,004 45,788 3 % 128,207 106,540 20 %

Refinance title and closing units 12,836 18,387 (30)% 47,775 44,834 7 %

Average fee per closing unit $2,675 $2,239 19 % $2,524 $2,189 15 %

_______________

(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 SEPTEMBER 30, 2021 AND 2020 (In millions)



Set forth in the tables below is a reconciliation of Net income attributable to Realogy Holdings to Operating EBITDA for the three-month periods ended September 30, 2021 and 2020:



Three Months Ended September 30,

2021 2020

Net income attributable to Realogy Holdings $ 114 $ 98

Income tax expense 48 36

Income before income taxes 162 134

Add: Depreciation and amortization 50 43

Interest expense, net 52 48

Restructuring costs, net (a) 4 17

Impairments (b) 1 70

Former parent legacy cost, net (c) - 1

Loss on the early extinguishment of debt (c)3 -

Loss on the sale of business, net 1 -

Operating EBITDA $ 273 $ 313

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



Revenues (d) % Operating Operating $ EBITDA $ % EBITDA MarginChangeChangeChangeChange Change 2021 2020 2021 2020 2021 2020

Realogy Franchise Group$342 $314 $28 9 % $211$200$11 6 %62 % 64%(2)

Realogy Brokerage Group1,705 1,479 226 15 51 61 (10) (16) 3 4 (1)

Realogy Title Group (e)250 213 37 17 54 95 (41) (43) 22 45 (23)

Corporate and Other (111) (97) (14) * (43) (43) - *

Total Company $2,186$1,909$27715 % $273$313$(40)(13)%12 % 16%(4)



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



Revenues $ % Operating $ % Operating EBITDA EBITDA MarginChangeChangeChangeChangeChange 2021 2020 2021 2020 2021 2020

Realogy Franchise Group (f) $231 $217 $14 6 % $100$103$(3)(3) %43 % 47 %(4)

Realogy Brokerage Group (f) 1,705 1,479 226 15 162 158 4 3 10 11 (1)

Realogy Franchise and Brokerage Groups Combined$1,936$1,696$24014 % $262$261$1 - %14 % 15 %(1)

_______________

* not meaningful.

Restructuring charges incurred for the three months ended September 30, 2021 include $1 million at Realogy Franchise Group, $2 million at Realogy(a) Brokerage Group and $1 million at Corporate and Other. Restructuring charges incurred for the three months ended September 30, 2020 include $4 million at Realogy Franchise Group, $11 million at Realogy Brokerage Group and $2 million at Corporate and Other.

Non-cash impairments for the three months ended September 30, 2021 primarily relate to software impairments. Non-cash impairments for the three months ended September 30, 2020 include $59 million of impairment(b) charges during the three months ended September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds and other asset impairments of $11 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.

Includes the elimination of transactions between segments, which consists(d) of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $111 million and $97 million during the three months ended September 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. The title agency and title insurance underwriter businesses represented approximately 60% and 40%, respectively, of RTG's net revenues for the three-month period ended September 30, 2021. Excluding the mortgage origination joint venture from Operating EBITDA,(e) title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the three-months ended September 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture, from $11 million for the three-months ended September 30, 2021 compared to $51 million for the three-months ended September 30, 2020, was primarily driven by the impact of mark-to-market adjustments on the mortgage loan pipeline, as well as gain-on-sale 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(f) royalties and marketing fees paid by Realogy Brokerage Group to Realogy Franchise Group of $111 million and $97 million during the three months ended September 30, 2021 and 2020, respectively.

Table 5b



REALOGY HOLDINGS CORP. NON-GAAP RECONCILIATION - OPERATING EBITDA NINE MONTHS ENDED SEPTEMBER 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 nine-month periods ended September 30, 2021 and 2020:



Nine Months Ended September 30,

2021 2020

Net income (loss) attributable to Realogy Holdings$ 296 $ (378)

Income tax expense (benefit) 125 (110)

Income (loss) before income taxes 421 (488)

Add: Depreciation and amortization 152 134

Interest expense, net 147 208

Restructuring costs, net (a) 14 47

Impairments (b) 3 610

Former parent legacy cost, net (c) 1 1

Loss on the early extinguishment of debt (c) 21 8

Gain on the sale of business, net (d) (14) -

Operating EBITDA $ 745 $ 520

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



Revenues (e) % Operating Operating $ EBITDA $ % EBITDA MarginChangeChange ChangeChangeChange 2021 2020 2021 2020 2021 2020

Realogy Franchise Group943 $761 $182 24 % 576 $421$15537 %61 % 55%6

Realogy Brokerage Group4,667 3,281 1,386 42 116 25 91 364 2 1 1

Realogy Title Group (f)706 510 196 38 170 168 2 1 24 33 (9)

Corporate and Other (307) (220) (87) * (117)(94) (23) *

Total Company $6,009$4,332$1,67739 % $745$520$22543 %12 % 12%-





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



Revenues $ % Operating $ % Operating EBITDA EBITDA MarginChangeChange ChangeChangeChange 2021 2020 2021 2020 2021 2020

Realogy Franchise Group (g) $636 $541 $95 18 %$269$201$68 34 %42 % 37 %5

Realogy Brokerage Group (g) 4,667 3,281 1,386 42 423 245 178 73 9 7 2

Realogy Franchise and Brokerage Groups Combined $5,303$3,822$1,48139 %$692$446$24655 %13 % 12 %1

_______________

* not meaningful.

Restructuring charges incurred for the nine months ended September 30, 2021 include $4 million at Realogy Franchise Group, $6 million at Realogy(a) Brokerage Group and $4 million at Corporate and Other. Restructuring charges incurred for the nine months ended September 30, 2020 include $10 million at Realogy Franchise Group, $32 million at Realogy Brokerage Group, $3 million at Realogy Title Group and $2 million at Corporate and Other.

Non-cash impairments for the nine months ended September 30, 2021 primarily(b) relate to software and lease asset impairments. Non-cash impairments for the nine months ended September 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;

$133 million of impairment charges during the nine months ended ? September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds; and

? other asset impairments of $34 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, net is primarily 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 $307 million and $220 million during the nine months ended September 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. The title agency and title insurance underwriter businesses represented approximately 60% and 40%, respectively, of RTG's net revenues for the nine-month period ended September 30, 2021. Excluding the mortgage origination joint venture from Operating EBITDA,(f) title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the nine-months ended September 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture, from $49 million for the nine-months ended September 30, 2021 compared to $95 million for the nine-months ended September 30, 2020, was primarily driven by the impact of mark-to-market adjustments on the mortgage loan pipeline, as well as gain-on-sale 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 $307 million and $220 million during the nine months ended September 30, 2021 and 2020, respectively.

Table 6a



REALOGY HOLDINGS CORP. SELECTED 2021 FINANCIAL DATA (In millions)



Three Months Ended

March 31,June 30,September 30,

2021 2021 2021

Net revenues (a)

Realogy Franchise Group $254 $347 $342

Realogy Brokerage Group 1,171 1,791 1,705

Realogy Title Group 201 255 250

Corporate and Other (79) (117) (111)

Total Company $1,547 $2,276$2,186



Operating EBITDA

Realogy Franchise Group $141 $224 $211

Realogy Brokerage Group (5) 70 51

Realogy Title Group 61 55 54

Corporate and Other (35) (39) (43)

Total Company $162 $310 $273



Non-GAAP Reconciliation - Operating EBITDA

Total Company Operating EBITDA $162 $310 $273



Less: Depreciation and amortization 51 51 50

Interest expense, net 38 57 52

Income tax expense 17 60 48

Restructuring costs, net (b) 5 5 4

Impairments (c) 1 1 1

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

Loss on the early extinguishment of debt (d)17 1 3

(Gain) loss on the sale of business, net (e)- (15) 1

Net income attributable to Realogy Holdings $33 $149 $114

_______________

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, $117 million and $111 million for the three months ended March 31, 2021, June 30, 2021 and September 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,September 30,

2021 2021 2021

Realogy Franchise Group $ 2 $ 1 $ 1

Realogy Brokerage Group 2 2 2

Corporate and Other 1 2 1

Total Company $ 5 $ 5 $ 4

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

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

(e) (Gain) loss on the sale of business, net is primarily 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 NINE MONTHS ENDED SEPTEMBER 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Net income (loss) attributable to Realogy Holdings $114 $98 $296 $(378)

Income tax expense (benefit), net of payments 29 45 93 (101)

Interest expense, net 52 48 147 208

Cash interest payments (38) (28) (121) (133)

Depreciation and amortization 50 43 152 134

Capital expenditures (21) (20) (71) (69)

Restructuring costs and former parent legacy items, net of payments (3) 10 (8) 15

Impairments 1 70 3 610

Loss on the early extinguishment of debt 3 - 21 8

Loss (gain) on the sale of business, net 1 - (14) -

Working capital adjustments 73 108 (34) 53

Relocation receivables (assets), net of securitization obligations 21 21 (6) (60)

Free Cash Flow $282 $395 $458 $287



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



Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Net cash provided by operating activities $303 $385 $489 $418

Property and equipment additions (21) (20) (71) (69)

Net change in securitization - 30 40 (62)

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

Free Cash Flow $282 $395 $458 $287



Net cash used in investing activities $(17) $(21) $(68) $(84)

Net cash used in financing activities $(446) $(671) $(238) $(203)

Table 8a

NON-GAAP RECONCILIATION - SENIOR SECURED LEVERAGE RATIOFOR THE FOUR-QUARTER PERIOD ENDED SEPTEMBER 30, 2021(In millions)

The senior secured leverage ratio is tested quarterly pursuant to the terms of the senior secured credit facilities*. For the trailing four-quarter period ended September 30, 2021, Realogy Group LLC was required to maintain a senior secured leverage ratio not to exceed 4.75 to 1.00. The senior secured leverage ratio is measured by dividing Realogy Group LLC's total senior secured net debt by the trailing four quarters EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Total senior secured net debt does not include the 7.625% Senior Secured Second Lien Notes, our unsecured indebtedness, including the Unsecured Notes and Exchangeable Senior Notes, or the securitization obligations. EBITDA calculated on a Pro Forma Basis, as defined in the Senior Secured Credit Agreement, includes adjustments to Operating EBITDA for retention and disposition costs, non-cash charges and incremental securitization interest costs, as well as pro forma cost savings for restructuring initiatives, the pro forma effect of business optimization initiatives and the pro forma effect of acquisitions and new franchisees, in each case calculated as of the beginning of the trailing four-quarter period. The Company was in compliance with the senior secured leverage ratio covenant at September 30, 2021 with a ratio of negative 0.27 to 1.00.

A reconciliation of net (loss) income attributable to Realogy Group to Operating EBITDA and EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement, for the four-quarter period ended September 30, 2021 is set forth in the following table:

Less Equals Plus Equals

Nine Months Three MonthsNine Months Twelve Months Year Ended Ended Ended Ended Ended

December 31,September 30,December 31,September 30,September 30, 2020 2020 2020 2021 2021

Net (loss) income attributable to Realogy Group (a)$(360) $ (378) $18 $ 296 $314

Income tax (benefit) expense (104) (110) 6 125 131

(Loss) income before income taxes (464) (488) 24 421 445

Depreciation and amortization 186 134 52 152 204

Interest expense, net 246 208 38 147 185

Restructuring costs, net 67 47 20 14 34

Impairments 682 610 72 3 75

Former parent legacy cost, net 1 1 - 1 1

Loss on the early extinguishment of debt 8 8 - 21 21

Gain on the sale of business, net - - - (14) (14)

Operating EBITDA (b) 726 520 206 745 951

Bank covenant adjustments:

Pro forma effect of business optimization initiatives (c) 28

Non-cash charges (d) 26

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

Incremental securitization interest costs (f) 3

EBITDA as defined by the Senior Secured Credit Agreement* $1,013

Total senior secured net debt (g) $(272)

Senior secured leverage ratio* (0.27) x

_______________

Net (loss) income attributable to Realogy consists of: (i) income of $18(a) million for the fourth quarter of 2020, (ii) income of $33 million for the first quarter of 2021, (iii) income of $149 million for the second quarter of 2021 and (iv) income of $114 million for the third quarter of 2021.

Operating EBITDA consists of: (i) $206 million for the fourth quarter of(b) 2020, (ii) $162 million for the first quarter of 2021, (iii) $310 million for the second quarter of 2021 and (iv) $273 million for the third quarter of 2021.

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

Represents the elimination of non-cash expenses including $41 million of stock-based compensation expense less $7 million of other items, $4 million(d) of foreign exchange benefits and $4 million for the change in the allowance for doubtful accounts and notes reserves for the four-quarter period ended September 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 October 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 October 1, 2020.

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

Represents total borrowings under the senior secured credit facilities (including the Revolving Credit Facility) and Term Loan A Facility and borrowings secured by a first priority lien on our assets of(g) $234 million plus $26 million of finance lease obligations less $532 million of readily available cash as of September 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 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 SEPTEMBER 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 September 30, 2021 (referred to as net debt leverage ratio) is set forth in the following table:



As of September 30, 2021

Non-extended Revolving Credit Commitment $ -

Extended Revolving Credit Commitment -

Extended Term Loan A 234

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 26

Corporate Debt (excluding securitizations) 3,070

Less: Cash and cash equivalents 701

Net Corporate Debt (excluding securitizations) $ 2,369



EBITDA as defined by the Senior Secured Credit Agreement (a)$ 1,013



Net Debt Leverage Ratio(b) 2.3 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.