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______________________________________________________________________________________________________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 001-35674
Commission File No. 333-148153
REALOGY HOLDINGS CORP.REALOGY GROUP LLC
(Exact name of registrant as specified in its charter)(Exact name of registrant as specified in its charter)
20-8050955 20-4381990
(I.R.S. Employer Identification Number)(I.R.S. Employer Identification Number)
Delaware
(State or other jurisdiction of incorporation or organization)
175 Park Avenue
Madison, NJ 07940
(Address of principal executive offices) (Zip Code)
(973) 407-2000
(Registrants' telephone number, including area code)
___________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Realogy Holdings Corp.Common Stock, par value $0.01 per shareRLGYNew York Stock Exchange
Realogy Group LLCNoneNoneNone
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.  
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
Indicate by check mark whether the Registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit such files). 
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
Realogy Holdings Corp.
Realogy Group LLC
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
There were 115,456,844 shares of Common Stock, $0.01 par value, of Realogy Holdings Corp. outstanding as of November 3, 2020.
__________________________________________________________________________________________________________________


Table of Contents
TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II
OTHER INFORMATION
Item 1.
Item 1A.
Item 5.
Item 6.




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INTRODUCTORY NOTE
Except as otherwise indicated or unless the context otherwise requires, the terms "we," "us," "our," "our company," "Realogy," "Realogy Holdings" and the "Company" refer to Realogy Holdings Corp., a Delaware corporation, and its consolidated subsidiaries, including Realogy Intermediate Holdings LLC, a Delaware limited liability company ("Realogy Intermediate"), and Realogy Group LLC, a Delaware limited liability company ("Realogy Group"). Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.
Realogy Holdings is not a party to the Amended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time (the "Senior Secured Credit Agreement") that governs our senior secured credit facility (the "Senior Secured Credit Facility", which includes our "Revolving Credit Facility" and our "Term Loan B Facility") and the Term Loan A Agreement dated as of October 23, 2015, as amended from time to time (the "Term Loan A Agreement") that governs our senior secured term loan A credit facility (the "Term Loan A Facility") and certain references in this report to our consolidated indebtedness exclude Realogy Holdings with respect to indebtedness under the Senior Secured Credit Facility and Term Loan A Facility. In addition, while Realogy Holdings is a guarantor of Realogy Group's obligations under both its unsecured and secured second lien notes (in each case on an unsecured senior subordinated basis), Realogy Holdings is not subject to the restrictive covenants in the indentures governing such indebtedness.
As used in this Quarterly Report on Form 10-Q, the terms "4.875% Senior Notes" and "9.375% Senior Notes" refer to our 4.875% Senior Notes due 2023 and our 9.375% Senior Notes due 2027, respectively, and are referred to collectively as the "Unsecured Notes." The term "7.625% Senior Secured Second Lien Notes" refer to our 7.625% Senior Secured Second Lien Notes due 2025. The term "5.25% Senior Notes" refers to our 5.25% Senior Notes due 2021 (paid in full in June 2020).
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as "believe," "expect," "anticipate," "intend," "project," "estimate," "plan," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could."
In particular, information appearing under "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, it is based on management's current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, we can give no assurance that any such expectation or belief will result or will be achieved or accomplished.
The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the coronavirus disease (COVID-19) pandemic:
the extent, duration and severity of the spread of the COVID-19 pandemic and the economic consequences stemming from the COVID-19 crisis (including continued economic contraction and/or the failure of any recovery to be sustained) as well as related risks such as governmental regulation (including those that preclude or strictly limit showings of properties), changes in patterns of commerce or consumer activities and changes in consumer attitudes and the impact of any of the foregoing on our business, results of operations and liquidity;
adverse developments or the absence of sustained improvement in general business, economic or political conditions or the U.S. residential real estate markets, either regionally or nationally, including but not limited to:
a decline in consumer confidence or spending;
weak capital, credit and financial markets and/or the instability of financial institutions;

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intensifying or continued 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);
continued low or accelerated declines in home inventory levels;
continuing high levels of unemployment and/or declining wages or stagnant wage growth in the U.S.;
the economic impact of the termination and/or substantial curtailment of, or failure to extend, one or more federal and/or state monetary or fiscal programs meant to assist businesses and individuals navigate COVID-19 related financial challenges;
an increase in potential homebuyers with low credit ratings, inability to afford down payments, or other mortgage challenges due to disrupted earnings, including constraints on the availability of mortgage financing;
an increase in foreclosure activity;
a reduction in the affordability of housing, including in connection with rising home prices;
a decline or a lack of improvement in the number of homesales;
stagnant or declining home prices;
increases in mortgage rates;
a lack of improvement or deceleration in the building of new housing for homesales and/or irregular timing or volume of new development closings;
the potential negative impact of certain provisions of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) on (i) home values over time in states with high property, sales and state and local income taxes and (ii) homeownership rates, in particular in light of our market concentration in high-tax states; and/or
geopolitical and economic instability, including uncertainty around the 2020 U.S. election;
risks associated with our substantial indebtedness, interest obligations and the restrictions contained in our debt agreements as well as risks relating to our having to dedicate a significant portion of our cash flows from operations to service our debt and our ability to refinance or repay our indebtedness or incur additional indebtedness;
the impact of disruption in the residential real estate brokerage industry, and on our results of operations and financial condition, as a result of actions taken by listing aggregators to monetize their concentration and market power, including, among other things, expanding into the brokerage business, diluting the relationship between agents and brokers (and between agents and the consumer), and consolidating and leveraging data;
the impact of increased competition in the industry for clients and for the affiliation of independent sales agents and franchisees on our results of operations and market share, including competition from:
real estate brokerages, including those seeking to disrupt historical real estate brokerage models as well as virtual brokerages or brokerages that operate in a more virtual fashion;
other industry participants seeking to eliminate brokers or agents from, or minimize the role they play in, the homesale transaction;
other industry participants otherwise competing for a portion of gross commission income; and
other residential real estate franchisors;
continuing pressure on the share of gross commission income paid by our company owned brokerages and affiliated franchisees to affiliated independent sales agents and independent sales agent teams;
our inability to develop products, technology and programs (including our company-directed affinity programs) that support our strategy to grow the base of independent sales agents at our company owned and franchisee real estate brokerages and the base of our franchisees;
our geographic and high-end market concentration, including the heightened competition for independent sales agents in those geographies and price points;
our inability to enter into franchise agreements with new franchisees or renew existing franchise agreements, without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives;
the lack of revenue growth or declining profitability of our franchisees and company owned brokerage operations or declines in other revenue streams;
increases in uncollectible accounts receivable and note reserves as a result of the adverse financial effects of the COVID-19 crisis on our franchisees and relocation clients;

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the potential impact of negative industry or business trends (including further declines in our market capitalization) on our valuation of goodwill and intangibles;
the loss of our largest affinity client or multiple significant relocation clients;
changes in corporate relocation practices, including in connection with the COVID-19 crisis, resulting in fewer employee relocations, reduced relocation benefits and/or increasing competition in corporate relocation;
an increase in the experienced claims losses of our title underwriter;
our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (2) privacy or data security laws and regulations, (3) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws and (4) antitrust laws and regulations;
risks related to the impact on our operations and financial results that may be caused by any future meaningful changes in industry operations or structure as a result of governmental pressures (including pressures for lower brokerage commission rates), the actions of certain competitors, the introduction or growth of certain competitive models, changes to the rules of the multiple listing services ("MLS"), or otherwise; and
risks and growing costs related to both cybersecurity threats to our data and customer, franchisee, employee and independent sales agent data, as well as those related to our compliance with the growing number of laws, regulations and other requirements related to the protection of personal information.
More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Form 10-K"), particularly under the captions "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, particularly under the caption "Risk Factors". Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with any forward-looking statements that may be made by us and our businesses generally.
All forward-looking statements herein speak only as of the date of this Quarterly Report and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into this Quarterly Report. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Quarterly Report. For any forward-looking statement contained in this Quarterly Report, our public filings or other public statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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PART I - FINANCIAL INFORMATION
Item 1.    Financial Statements.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Realogy Holdings Corp.
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Holdings Corp. and its subsidiaries (the "Company") as of September 30, 2020, and the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2020 and 2019, and of cash flows for the nine-month periods ended September 30, 2020 and 2019, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of operations, comprehensive (loss) income, equity and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2020, which included a paragraph describing a change in the manner of accounting for leases in the 2019 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
November 5, 2020

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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholder of Realogy Group LLC
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries (the "Company") as of September 30, 2020, and the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2020 and 2019, and of cash flows for the nine-month periods ended September 30, 2020 and 2019, including the related notes (collectively referred to as the "interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of operations, comprehensive (loss) income and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2020, which included a paragraph describing a change in the manner of accounting for leases in the 2019 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB or in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
November 5, 2020


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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months EndedNine Months Ended
 September 30,September 30,
 2020201920202019
Revenues
Gross commission income$1,458 $1,201 $3,227 $3,310 
Service revenue230 191 553 503 
Franchise fees133 108 289 290 
Other36 50 111 165 
Net revenues1,857 1,550 4,180 4,268 
Expenses
Commission and other agent-related costs1,105 875 2,420 2,405 
Operating342 343 953 1,016 
Marketing56 63 155 200 
General and administrative97 69 230 217 
Former parent legacy cost, net1 1 1 1 
Restructuring costs, net13 11 38 29 
Impairments6 240 460 243 
Depreciation and amortization43 42 134 126 
Interest expense, net48 66 208 209 
(Gain) loss on the early extinguishment of debt (10)8 (5)
Total expenses1,711 1,700 4,607 4,441 
Income (loss) from continuing operations before income taxes, equity in earnings and noncontrolling interests
146 (150)(427)(173)
Income tax expense (benefit) from continuing operations54 (23)(67)(22)
Equity in earnings of unconsolidated entities(53)(7)(98)(15)
Net income (loss) from continuing operations145 (120)(262)(136)
(Loss) income from discontinued operations, net of tax(3)8 (17)(5)
Estimated loss on the sale of discontinued operations, net of tax(43) (97) 
Net (loss) income from discontinued operations(46)8 (114)(5)
Net income (loss)99 (112)(376)(141)
Less: Net income attributable to noncontrolling interests(1)(1)(2)(2)
Net income (loss) attributable to Realogy Holdings and Realogy Group
$98 $(113)$(378)$(143)
Basic earnings (loss) per share attributable to Realogy Holdings shareholders:
Basic earnings (loss) per share from continuing operations$1.25 $(1.06)$(2.29)$(1.21)
Basic (loss) earnings per share from discontinued operations(0.40)0.07 (0.99)(0.04)
Basic earnings (loss) per share$0.85 $(0.99)$(3.28)$(1.25)
Diluted earnings (loss) per share attributable to Realogy Holdings shareholders:
Diluted earnings (loss) per share from continuing operations$1.23 $(1.06)$(2.29)$(1.21)
Diluted (loss) earnings per share from discontinued operations(0.39)0.07 (0.99)(0.04)
Diluted earnings (loss) per share$0.84 $(0.99)$(3.28)$(1.25)
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic115.4 114.3 115.2 114.2 
Diluted116.7 114.3 115.2 114.2 

See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2020201920202019
Net income (loss)$99 $(112)$(376)$(141)
Currency translation adjustment (1)(1)(1)
Defined benefit pension plan—amortization of actuarial loss to periodic pension cost
1 1 2 2 
Other comprehensive income, before tax1  1 1 
Income tax expense related to items of other comprehensive income amounts
 1  1 
Other comprehensive income (loss), net of tax1 (1)1  
Comprehensive income (loss)100 (113)(375)(141)
Less: comprehensive income attributable to noncontrolling interests
(1)(1)(2)(2)
Comprehensive income (loss) attributable to Realogy Holdings and Realogy Group
$99 $(114)$(377)$(143)


See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
 September 30,
2020
December 31,
2019
 
ASSETS
Current assets:
Cash, cash equivalents and restricted cash$380 $235 
Trade receivables (net of allowance for doubtful accounts of $13 and $11)
109 79 
Other current assets149 147 
Current assets - held for sale583 750 
Total current assets1,221 1,211 
Property and equipment, net288 308 
Operating lease assets, net477 515 
Goodwill2,887 3,300 
Trademarks643 673 
Franchise agreements, net1,109 1,160 
Other intangibles, net69 72 
Other non-current assets354 304 
Total assets$7,048 $7,543 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$87 $84 
Current portion of long-term debt198 234 
Current portion of operating lease liabilities125 122 
Accrued expenses and other current liabilities439 350 
Current liabilities - held for sale297 356 
Total current liabilities1,146 1,146 
Long-term debt3,159 3,211 
Long-term operating lease liabilities441 467 
Deferred income taxes279 390 
Other non-current liabilities290 233 
Total liabilities5,315 5,447 
Commitments and contingencies (Note 9)
Equity:
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, none issued and outstanding at September 30, 2020 and December 31, 2019
  
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 115,440,569 shares issued and outstanding at September 30, 2020 and 114,355,519 shares issued and outstanding at December 31, 2019
1 1 
Additional paid-in capital4,856 4,842 
Accumulated deficit(3,073)(2,695)
Accumulated other comprehensive loss(55)(56)
Total stockholders' equity1,729 2,092 
Noncontrolling interests4 4 
Total equity1,733 2,096 
Total liabilities and equity$7,048 $7,543 


See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Nine Months Ended
September 30,
 20202019
Operating Activities
Net loss$(376)$(141)
Net loss from discontinued operations114 5 
Net loss from continuing operations(262)(136)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:
Depreciation and amortization134 126 
Deferred income taxes(70)(29)
Impairments460 243 
Amortization of deferred financing costs and debt discount8 7 
Loss (gain) on the early extinguishment of debt8 (5)
Equity in earnings of unconsolidated entities(98)(15)
Stock-based compensation18 22 
Mark-to-market adjustments on derivatives59 50 
Other adjustments to net loss (3)
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables(30)(17)
Other assets13 (6)
Accounts payable, accrued expenses and other liabilities115 14 
Dividends received from unconsolidated entities59 2 
Other, net(16)(3)
Net cash provided by operating activities from continuing operations398 250 
Net cash provided by (used in) operating activities from discontinued operations20 (20)
Net cash provided by operating activities418 230 
Investing Activities
Property and equipment additions(60)(71)
Payments for acquisitions, net of cash acquired(1)(1)
Investment in unconsolidated entities(2)(10)
Other, net(12)3 
Net cash used in investing activities from continuing operations(75)(79)
Net cash used in investing activities from discontinued operations(9)(7)
Net cash used in investing activities$(84)$(86)
See Notes to Condensed Consolidated Financial Statements.
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 Nine Months Ended
September 30,
 20202019
Financing Activities
Net change in Revolving Credit Facility$(50)$(5)
Proceeds from issuance of Senior Secured Second Lien Notes550  
Proceeds from issuance of Senior Notes 550 
Redemption and repurchases of Senior Notes(550)(533)
Amortization payments on term loan facilities(31)(22)
Debt issuance costs(14)(9)
Cash paid for fees associated with early extinguishment of debt(7)(5)
Repurchase of common stock (20)
Dividends paid on common stock (31)
Taxes paid related to net share settlement for stock-based compensation(5)(6)
Payments of contingent consideration related to acquisitions(1)(3)
Other, net(22)(18)
Net cash used in financing activities from continuing operations(130)(102)
Net cash used in financing activities from discontinued operations(73)(2)
Net cash used in financing activities(203)(104)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash  
Net increase in cash, cash equivalents and restricted cash131 40 
Cash, cash equivalents and restricted cash, beginning of period266 238 
Cash, cash equivalents and restricted cash, end of period397 278 
Less cash, cash equivalents and restricted cash of discontinued operations, end of period17 25 
Cash, cash equivalents and restricted cash of continuing operations, end of period$380 $253 
Supplemental Disclosure of Cash Flow Information
Interest payments for continuing operations$128 $124 
Income tax (refunds) payments for continuing operations, net(9)7 

See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, all amounts are in millions)
(Unaudited)
1.    BASIS OF PRESENTATION
Realogy Holdings Corp. ("Realogy Holdings", "Realogy" or the "Company") is a holding company for its consolidated subsidiaries including Realogy Intermediate Holdings LLC ("Realogy Intermediate") and Realogy Group LLC ("Realogy Group") and its consolidated subsidiaries. Realogy, through its subsidiaries, is a global provider of residential real estate services. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations, comprehensive income and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.
The accompanying Condensed Consolidated Financial Statements include the financial statements of Realogy Holdings and Realogy Group. Realogy Holdings' only asset is its investment in the common stock of Realogy Intermediate, and Realogy Intermediate's only asset is its investment in Realogy Group. Realogy Holdings' only obligations are its guarantees of certain borrowings and certain franchise obligations of Realogy Group. All expenses incurred by Realogy Holdings and Realogy Intermediate are for the benefit of Realogy Group and have been reflected in Realogy Group's Condensed Consolidated Financial Statements.
The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with Article 10 of Regulation S-X. Interim results may not be indicative of full year performance because of seasonal and short-term variations. The Company has eliminated all material intercompany transactions and balances between entities consolidated in these financial statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and the related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates.
In management's opinion, the accompanying unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of Realogy Holdings and Realogy Group's financial position as of September 30, 2020 and the results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2020 and 2019 and cash flows for the nine months ended September 30, 2020 and 2019. The Consolidated Balance Sheet at December 31, 2019 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2019.
COVID-19
A strong recovery in the residential real estate market began late in the second quarter of 2020, following a period of sharp decline in homesale transactions starting in the final weeks of the first quarter of 2020. The Company attributes the recovery to date to a favorable mortgage rate environment, low inventory contributing to higher average homesale price, and increased demand as the quarantine restrictions in place in many states have begun to be relaxed. In addition, the Company observed growing strength in certain trends that it believes are largely driven by behavioral changes related to the COVID-19 crisis, including home buyer preferences for certain geographies, including suburban locations and attractive tax and weather destinations and second home purchases.
In mid-March 2020, the Company began taking a series of proactive cost-saving measures in reaction to the evolving COVID-19 crisis, including salary reductions, furloughs and reductions in marketing and other spending which resulted in substantial cost-savings in the second quarter of 2020 to partially offset the decline in revenues. While these temporary cost-saving measures resulted in cost savings in the second and third quarters of 2020, almost all of such measures were reversed during the third quarter of 2020 based upon the significant improvement in the volume of homesale transactions and ongoing business needs.

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There remain significant uncertainties regarding the COVID-19 crisis, including the severity, duration and extent of the pandemic. The Company's business could be negatively impacted if the crisis, including adverse economic consequences of the crisis, worsen, if directives and mandates requiring businesses to again curtail or cease normal operations are reinstated, if mortgage rates rise, or if housing inventory constraints, across geographies and price point, limit homesale transaction growth. These negative impacts may be more pronounced in future periods and could have a material adverse effect on the Company's results of operations and liquidity.
See Note 3, "Goodwill and Intangible Assets", to the Condensed Consolidated Financial Statements for additional information on goodwill and intangible asset impairment charges recorded in the first quarter of 2020 due to the impact on future earnings related to the COVID-19 pandemic which qualified as a triggering event for all of the Company's reporting units as of March 31, 2020, and Note 5, "Short and Long-Term Debt", to the Condensed Consolidated Financial Statements for additional information on the Company's amendments to the Senior Secured Credit Agreement and Term Loan A Agreement, pursuant to which the senior secured leverage ratio has been eased and certain other covenants have been tightened.
Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
Level Input:Input Definitions:
Level I
Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the
measurement date.
Level II
Inputs other than quoted prices included in Level I that are observable for the asset or liability through
corroboration with market data at the measurement date.
Level III
Unobservable inputs that reflect management’s best estimate of what market participants would use in
pricing the asset or liability at the measurement date.
The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach.
The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred.
The following table summarizes fair value measurements by level at September 30, 2020 for assets and liabilities measured at fair value on a recurring basis:
Level ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$1 $ $ $1 
Interest rate swaps (included in other non-current liabilities) 94  94 
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)
  4 4 

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The following table summarizes fair value measurements by level at December 31, 2019 for assets and liabilities measured at fair value on a recurring basis:
Level ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$2 $ $ $2 
Interest rate swaps (included in other current and non-current liabilities) 47  47 
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)
  4 4 
The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions.  These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis.
The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis:
Level III
Fair value of contingent consideration at December 31, 2019$4 
Additions: contingent consideration related to acquisitions completed during the period1 
Reductions: payments of contingent consideration
(1)
Changes in fair value (reflected in general and administrative expenses) 
Fair value of contingent consideration at September 30, 2020$4 
The following table summarizes the principal amount of the Company’s indebtedness compared to the estimated fair value, primarily determined by quoted market values, at:
 September 30, 2020December 31, 2019
DebtPrincipal AmountEstimated
Fair Value (a)
Principal AmountEstimated
Fair Value (a)
Senior Secured Credit Facility:
Revolving Credit Facility$140 $140 $190 $190 
Term Loan B1,050 1,003 1,058 1,048 
Term Loan A Facility:
Term Loan A694 664 717 705 
7.625% Senior Secured Second Lien Notes550 578   
5.25% Senior Notes  550 557 
4.875% Senior Notes407 403 407 401 
9.375% Senior Notes550 570 550 572 
_______________
(a)The fair value of the Company's indebtedness is categorized as Level II.
Equity Method Investments
At September 30, 2020 and December 31, 2019, the Company had various equity method investments which are recorded within other non-current assets on the accompanying Condensed Consolidated Balance Sheets.
The Company's investment in Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity") at Realogy Title Group had investment balances of $99 million and $60 million at September 30, 2020 and December 31, 2019, respectively. The Company recorded equity earnings of $51 million and $5 million related to its investment in Guaranteed Rate Affinity during the three months ended September 30, 2020 and 2019, respectively. The Company recorded equity earnings of $95 million and $12 million related to its investment in Guaranteed Rate Affinity during the nine months ended September 30, 2020 and 2019, respectively. The Company received $56 million in cash dividends from Guaranteed Rate Affinity during the nine months ended September 30, 2020 and no cash dividends during the nine months ended September 30, 2019. The Company invested $2 million of cash into Guaranteed Rate Affinity during the nine months ended September 30, 2019.

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The Company's other equity method investments at Realogy Title Group had investment balances totaling $9 million at both September 30, 2020 and December 31, 2019. The Company recorded equity earnings from the operations of these equity method investments of $2 million during both the three months ended September 30, 2020 and 2019. The Company recorded equity earnings from the operations of these equity method investments of $3 million during both the nine months ended September 30, 2020 and 2019. The Company received $3 million and $2 million in cash dividends from these equity method investments during the nine months ended September 30, 2020 and 2019, respectively.
Income Taxes
The provision for income taxes was an expense of $54 million and a benefit of $23 million for the three months ended September 30, 2020 and 2019, respectively, and a benefit of $67 million and $22 million for the nine months ended September 30, 2020 and 2019, respectively.
Derivative Instruments
The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The Company enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. Interest rates swaps with a notional value of $600 million expired on August 7, 2020. As of September 30, 2020, the Company had interest rate swaps with an aggregate notional value of $1,000 million to offset the variability in cash flows resulting from the term loan facilities as follows:
Notional Value (in millions)Commencement DateExpiration Date
$450November 2017November 2022
$400August 2020August 2025
$150November 2022November 2027
The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations.
The fair value of derivative instruments was as follows:
Not Designated as Hedging InstrumentsBalance Sheet LocationSeptember 30, 2020December 31, 2019
Interest rate swap contractsOther current and non-current liabilities94 47 
The effect of derivative instruments on earnings was as follows:
Derivative Instruments Not Designated as Hedging InstrumentsLocation of Loss Recognized for Derivative InstrumentsLoss Recognized on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
2020201920202019
Interest rate swap contractsInterest expense$ $12 $59 $50 
Restricted Cash
Restricted cash approximated $1 million at September 30, 2020 and zero at December 31, 2019.

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Revenue
Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue standard.  The Company's revenue is disaggregated by major revenue categories on our Condensed Consolidated Statements of Operations and further disaggregated by business segment as follows:
Three Months Ended September 30,
 Realogy Franchise GroupRealogy Brokerage GroupRealogy Title
Group
Corporate and OtherTotal
Company
2020201920202019202020192020201920202019
Gross commission income (a)$ $ $1,458 $1,201 $