rlgy-20210729
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______________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________________________
FORM 8-K
_______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 29, 2021
_______________________________
Realogy Holdings Corp.
(Exact Name of Registrant as Specified in its Charter)
Delaware
001-35674
20-8050955
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
_______________________________
Realogy Group LLC
(Exact Name of Registrant as Specified in its Charter)
Delaware
333-148153
20-4381990
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
_______________________________
175 Park Avenue
Madison, NJ 07940
(Address of principal executive offices) (Zip Code)
(973) 407-2000
(Registrant’s telephone number, including area code)
None
(Former name or former address if changed since last report)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Realogy Holdings Corp.
Common Stock, par value $0.01 per share
RLGY
New York Stock Exchange
Realogy Group LLC
None
None
None
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    
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.    
______________________________________________________________________________________________________



Item 2.02.Results of Operations and Financial Condition.
On July 29, 2021, the Registrants announced their financial results for the quarter ended June 30, 2021. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits
Exhibit No.
Description
99.1
Press Release dated July 29, 2021.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REALOGY HOLDINGS CORP.
By:/s/ Charlotte C. Simonelli
Charlotte C. Simonelli, Executive Vice President, Chief Financial Officer and Treasurer
Date: July 29, 2021


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REALOGY GROUP LLC
By:/s/ Charlotte C. Simonelli
Charlotte C. Simonelli, Executive Vice President, Chief Financial Officer and Treasurer
Date: July 29, 2021





EXHIBIT INDEX
Exhibit No.
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).



Document
Exhibit 99.1

https://cdn.kscope.io/59898bce30f9b7653665230f522446b5-image1.jpg
REALOGY REPORTS SECOND QUARTER
2021 FINANCIAL RESULTS


MADISON, N.J. (July 29, 2021) - Realogy Holdings Corp. (NYSE: RLGY), the largest full-service residential real estate services company in the United States, today reported financial results for the quarter ended June 30, 2021.
"Realogy delivered an outstanding second quarter. We generated record Operating EBITDA, gained market share for the fourth consecutive quarter, and strengthened our balance sheet to its best position ever,” said Ryan Schneider, Realogy’s chief executive officer and president. “The unmatched power of Realogy's strategic progress, innovation through technology, and leading presence in the luxury market, combined with our robust growth investments, position our business to lead into the future.”
“In the second quarter, Realogy delivered phenomenal results, significantly advanced our balance sheet, and generated impressive free cash flow that enable us to invest in our future,” said Charlotte Simonelli, Realogy's executive vice president, chief financial officer, and treasurer. “Over the past year Realogy has achieved tremendous quality and consistency in our financial performance.”

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






Realogy Reports Financial Results for Second Quarter 2021


Second Quarter 2021 Financial Highlights
The following table sets forth Realogy’s financial highlights for the periods presented (in millions, except per share data) (unaudited):
Three Months Ended June 30,
20212020 Change% Change
Revenue$2,276 $1,255 $1,021 81 %
Operating EBITDA 1
310 175 135 77 
Net income (loss) attributable to Realogy149 (14)163 1,164 
Adjusted net income 2
159 57 102 179 
Earnings (loss) per share1.28 (0.12)1.40 1,167 
Adjusted earnings per share 2
1.36 0.49 0.87 178 
Free Cash Flow 3
243 47 196 417 
Net cash provided by operating activities$223 $115 $108 94 %
Select Key Drivers
Realogy Franchise Group 4 5
Closed homesale sides 320,463 238,085 35 %
Average homesale price$430,756 $321,308 34 %
Realogy Brokerage Group 5
Closed homesale sides103,945 71,375 46 %
Average homesale price$678,978 $503,935 35 %
Realogy Title Group
Purchase title and closing units47,375 32,028 48 %
Refinance title and closing units14,472 17,548 (18)%
_______________
Footnotes:
1 See Tables 5a and 5b. Operating EBITDA is defined as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations), income taxes, and other items that are not core to 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.
2 See Table 1a. Adjusted Net income (loss) is defined as net income (loss) before mark-to-market interest rate swap adjustments, former parent legacy items, restructuring charges, (gain) loss on the early extinguishment of debt, impairments and the tax effect of the foregoing adjustments. Adjusted earnings (loss) per share is Adjusted net income (loss) divided by the weighted average common and common equivalent shares outstanding.
3 See Table 7. Free Cash Flow is defined as net income (loss) attributable to Realogy before income tax expense (benefit), net of payments, net interest expense, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations.
4 Includes all franchisees except for Realogy Brokerage Group.
5 The Company's combined homesale transaction volume growth (transaction sides multiplied by average sale price) increased 85% compared with the second quarter of 2020.
Balance Sheet and Capital Allocation
The Company ended the quarter with cash and cash equivalents of $859 million*. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.6 billion at June 30, 2021. The Company's Net Debt Leverage Ratio was 2.5x at June 30, 2021 (see Table 8b).
On April 28, 2021, the Company used cash on hand to pay down $150 million of the Term Loan B Facility, reducing the principal amount of that facility to $240 million.
In June 2021, the Company issued $403 million principal amount of 0.25% Exchangeable Senior Notes due 2026. The Company used a portion of the net proceeds from this offering to pay the cost of exchangeable note hedge


Realogy Reports Financial Results for Second Quarter 2021

transactions (with such cost partially offset by the proceeds to the Company from the sale of warrants). Taken together, the purchase of such exchangeable note hedges and the sale of such warrants are intended to offset (in whole or in part) any potential dilution and/or cash payments upon the exchange of the Exchangeable Senior Notes, and to effectively increase the overall exchange price from $24.49 to $30.6075 per share.
A consolidated balance sheet is included as Table 2 of this press release.
______________
* excludes restricted cash
Investor Conference Call
Today, July 29, at 8:30 a.m. (ET), Realogy will hold a conference call via webcast to review its Q2 2021 results and provide a business update. The webcast will be hosted by Ryan Schneider, chief executive officer and president, and Charlotte Simonelli, chief financial officer, and will conclude with an investor Q&A period with management.
Investors may access the conference call live via webcast at ir.realogy.com or by dialing (833) 646-0499 (toll free); international participants should dial (918) 922-3007. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available on the website.
About Realogy Holdings Corp.
Realogy (NYSE: RLGY) is moving the real estate industry to what’s next. As the leading and most integrated provider of U.S. residential real estate services encompassing franchise, brokerage, relocation, and title and settlement businesses as well as a mortgage joint venture, Realogy supported approximately 1.4 million home transactions in 2020. The company’s diverse brand portfolio includes some of the most recognized names in real estate: Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA®, and Sotheby’s International Realty®. Using innovative technology, data and marketing products, high-quality lead generation programs, and best-in-class learning and support services, Realogy fuels the productivity of its approximately 194,200 independent sales agents in the U.S. and approximately 142,700 independent sales agents in 117 other countries and territories, helping them build stronger businesses and best serve today’s consumers. Recognized for ten consecutive years as one of the World’s Most Ethical Companies, Realogy has also been designated a Great Place to Work three years in a row and is one of LinkedIn’s 2021 Top Companies in the U.S.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Realogy Holdings Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "potential" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements: adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to factors that could impact homesale transaction volume, such as: continued or accelerated declines in inventory or a decline in the number of home sales, increases in mortgage rates or inflation or tightened mortgage standards, changes in consumer preferences, including weakening in the consumer trends that have benefited us since the second half of 2020, reductions in housing affordability, and stagnant or declining home prices; adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to economic contraction in the U.S. economy, including the impact of recessions, slow economic growth, or a deterioration in other economic factors (including potential consumer, business or governmental defaults or delinquencies due to the COVID-19 crisis or otherwise) and fiscal and monetary policies of the federal government and its agencies, particularly those that may result in unfavorable changes to the interest rate environment and tax


Realogy Reports Financial Results for Second Quarter 2021

reform; The impact of evolving competitive and consumer dynamics, which could include, but are not limited to: continued erosion of the broker share of the commission income generated by homesale transactions and the continued rise of the sale agent’s share of such commissions, our ability to compete against non-traditional competitors, including but not limited to, iBuying and home swap business models and virtual brokerages, in particular those competitors with access to significant third-party capital that may prioritize market share over profitability, and meaningful decreases in the average broker commission rate; adverse impacts from the COVID-19 crisis (due to the impact of virus mutations or otherwise), including amplification of risks to our business and worsening economic consequences of the crisis or the reinstatement of significant limitations on normal business operations; our ability to execute our business strategy and achieve growth, including our efforts to: recruit and retain productive independent sales agents, attract and retain franchisees or renew existing franchise agreements without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives, compete for real estate services business, develop or procure products, services and technology that support our strategic initiatives, realize the expected benefits from our non-exclusive mortgage origination joint venture, our RealSure joint venture, or from other existing or future strategic partnerships, achieve or maintain a beneficial cost structure or savings and other benefits from our cost-saving initiatives, generate a meaningful number of high-quality leads for independent sales agents and franchisees, complete or integrate acquisitions and joint ventures into our existing operations, or to complete or effectively manage divestitures or other corporate transactions; our geographic and high-end market concentration; the operating results of affiliated franchisees; continued consolidation among our top 250 franchisees; difficulties in the business or changes in the licensing strategy of the owners of the two brands we do not own; the loss of our largest real estate benefit program client or multiple significant relocation clients; continued reductions in corporate relocations or relocation benefits or refinancing activity; the failure of third-party vendors or partners to perform as expected or our failure to adequately monitor such third-parties; interruptions in information technology used to operate our business and maintain our competitiveness; increases in mortgage rates, tightened mortgage underwriting standards or reductions in refinancing activity; actions taken by listing aggregators to monetize their concentration and market power; industry structure changes (as a result of new laws, regulations or administrative policies, litigation, the rules of multiple listing services or NAR, or otherwise) that disrupt the functioning of the residential real estate market; adverse effects on our operations or liquidity due to our indebtedness, including with respect to: interest obligations and the negative covenant restrictions contained in our debt agreements, our ability to fund our operations, invest in our business or pursue growth opportunities, react to changes in the economy or our industry, or incur additional borrowings under our existing facilities, an event of default under our debt agreements, or our ability to refinance or repay our indebtedness or incur additional indebtedness; risks related to the issuance of our 0.25% Exchangeable Senior Notes and exchangeable note hedge and warrant transactions, including counterparty risk with respect to the exchangeable note hedge transactions; our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to: (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (2) privacy or data security laws and regulations, (3) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws, and (4) antitrust laws and regulations; cybersecurity incidents; impairment of our goodwill and other long-lived assets; and severe weather events or natural disasters, including increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events, including public health crises, such as pandemics and epidemics. Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and our Annual Report on Form 10-K for the year ended December 31, 2020, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events except as required by law.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release. See Tables 1a, 8a, 8b and 9 for definitions of these non-GAAP financial measures and Tables 1a, 5a, 5b, 6a, 6b, 7, 8a and 8b for reconciliations of the historical non-GAAP financial measures to their most comparable GAAP terms.


Realogy Reports Financial Results for Second Quarter 2021

NAR data referenced herein is based on NAR’s most recent public estimates, which are subject to review and revision. Factors that may impact the comparability of the Company's homesale statistics to NAR are outlined in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and its Annual Report on Form 10-K for the year ended December 31, 2020.
Investor Contacts:Media Contacts:
Alicia SwiftTrey Sarten
(973) 407-4669(973) 407-2162
alicia.swift@realogy.comtrey.sarten@realogy.com
Danielle KloeblenGabriella Chiera
(973) 407-2148
(973) 407-5236
danielle.kloeblen@realogy.com
Gabriella.Chiera@realogy.com



Realogy Reports Financial Results for Second Quarter 2021                        6

Table 1

REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Revenues
Gross commission income$1,773 $919 $2,927 $1,769 
Service revenue314 219 563 421 
Franchise fees147 85 252 156 
Other42 32 81 77 
Net revenues2,276 1,255 3,823 2,423 
Expenses
Commission and other agent-related costs1,373 685 2,258 1,315 
Operating422 320 806 688 
Marketing66 41 124 100 
General and administrative114 69 204 157 
Former parent legacy cost, net— — 
Restructuring costs, net18 10 30 
Impairments63 540 
Depreciation and amortization51 46 102 91 
Interest expense, net57 59 95 160 
Loss on the early extinguishment of debt18 
Other income, net(16)— (18)— 
Total expenses2,075 1,309 3,602 3,089 
Income (loss) before income taxes, equity in earnings and noncontrolling interests201 (54)221 (666)
Income tax expense (benefit)60 (5)77 (146)
Equity in earnings of unconsolidated entities(10)(36)(41)(45)
Net income (loss)151 (13)185 (475)
Less: Net income attributable to noncontrolling interests(2)(1)(3)(1)
Net income (loss) attributable to Realogy Holdings$149 $(14)$182 $(476)
Earnings (loss) per share attributable to Realogy Holdings shareholders:
Basic earnings (loss) per share$1.28 $(0.12)$1.57 $(4.14)
Diluted earnings (loss) per share$1.25 $(0.12)$1.52 $(4.14)
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic116.5 115.4 116.2 115.0 
Diluted119.3 115.4 119.4 115.0 



Realogy Reports Financial Results for Second Quarter 2021                        7

Table 1a
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION
ADJUSTED NET INCOME (LOSS) AND ADJUSTED EARNINGS (LOSS) PER SHARE
(In millions, except per share data)
We present Adjusted net income (loss) and Adjusted earnings (loss) per 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 (loss) for the three and six months ended June 30, 2021 and 2020:
 Three Months Ended June 30, Six Months Ended June 30,
2021202020212020
Net income (loss) attributable to Realogy Holdings$149 $(14)$182 $(476)
Addback:
Mark-to-market interest rate swap losses(7)59 
Former parent legacy cost, net— — 
Restructuring costs, net18 10 30 
Impairments (a)63 540 
Loss on the early extinguishment of debt18 
Adjustments for tax effect (b)(4)(26)(6)(172)
Adjusted net income (loss) attributable to Realogy Holdings$159 $57 $200 $(11)
Earnings (loss) per share attributable to Realogy Holdings:
Basic earnings (loss) per share:$1.28 $(0.12)$1.57 $(4.14)
Diluted earnings (loss) per share:$1.25 $(0.12)$1.52 $(4.14)
Adjusted earnings (loss) per share attributable to Realogy Holdings:
Adjusted basic earnings (loss) per share:$1.36 $0.49 $1.72 $(0.10)
Adjusted diluted earnings (loss) per share:$1.33 $0.49 $1.68 $(0.10)
Weighted average common and common equivalent shares outstanding:
Basic:116.5 115.4 116.2 115.0 
Diluted:119.3 115.4 119.4 115.0 
_______________
(a)Non-cash impairments for the six months ended June 30, 2020 primarily include:
a goodwill impairment charge of $413 million related to Realogy Brokerage Group;
an impairment charge of $30 million related to Realogy Franchise Group's trademarks; and
$74 million of impairment charges during the six months ended June 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds.
(b)Reflects tax effect of adjustments at the Company's blended state and federal statutory rate.


Realogy Reports Financial Results for Second Quarter 2021                        8

Table 2
REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
June 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents$859 $520 
Restricted cash
Trade receivables (net of allowance for doubtful accounts of $11 and $13)145 128 
Relocation receivables206 139 
Other current assets207 154 
Total current assets1,424 944 
Property and equipment, net304 317 
Operating lease assets, net453 450 
Goodwill2,899 2,910 
Trademarks685 685 
Franchise agreements, net1,054 1,088 
Other intangibles, net181 188 
Other non-current assets407 352 
Total assets$7,407 $6,934 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$124 $128 
Securitization obligations147 106 
Current portion of long-term debt18 62 
Current portion of operating lease liabilities125 129 
Accrued expenses and other current liabilities565 600 
Total current liabilities979 1,025 
Long-term debt3,357 3,145 
Long-term operating lease liabilities428 430 
Deferred income taxes343 276 
Other non-current liabilities294 291 
Total liabilities5,401 5,167 
Commitments and contingencies
Equity:
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, none issued and outstanding at June 30, 2021 and December 31, 2020— — 
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 116,566,078 shares issued and outstanding at June 30, 2021 and 115,457,067 shares issued and outstanding at December 31, 2020
Additional paid-in capital4,932 4,876 
Accumulated deficit(2,873)(3,055)
Accumulated other comprehensive loss(58)(59)
Total stockholders' equity2,002 1,763 
Noncontrolling interests
Total equity2,006 1,767 
Total liabilities and equity$7,407 $6,934 



Realogy Reports Financial Results for Second Quarter 2021                        9

Table 3
REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Six Months Ended
June 30,
 20212020
Operating Activities
Net income (loss)$185 $(475)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization102 91 
Deferred income taxes65 (141)
Impairments540 
Amortization of deferred financing costs and debt discount (premium)
Loss on the early extinguishment of debt18 
Gain on sale of business(15)— 
Equity in earnings of unconsolidated entities(41)(45)
Stock-based compensation14 10 
Mark-to-market adjustments on derivatives(7)59 
Other adjustments to net income (loss)(2)— 
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables(14)(3)
Relocation receivables(67)11 
Other assets(14)(8)
Accounts payable, accrued expenses and other liabilities(63)(29)
Dividends received from unconsolidated entities38 22 
Other, net(21)(12)
Net cash provided by operating activities186 33 
Investing Activities
Property and equipment additions(50)(49)
Proceeds from the sale of business15 — 
Investment in unconsolidated entities(7)(2)
Other, net(9)(12)
Net cash used in investing activities(51)(63)
Financing Activities
Net change in Revolving Credit Facility— 625 
Payments for refinancing of Term Loan A Facility and Term Loan B Facility(1,055)— 
Proceeds from issuance of Senior Notes905 — 
Proceeds from issuance of Senior Secured Second Lien Notes— 550 
Redemption of Senior Notes— (550)
Proceeds from issuance of Exchangeable Senior Notes403 — 
Payments for purchase of Exchangeable Senior Notes hedge transactions(67)— 
Proceeds from issuance of Exchangeable Senior Notes warrant transactions46 — 
Amortization payments on term loan facilities(6)(19)
Net change in securitization obligations40 (92)
Debt issuance costs(20)(8)
Cash paid for fees associated with early extinguishment of debt(11)(7)
Taxes paid related to net share settlement for stock-based compensation(9)(5)
Other, net(18)(26)
Net cash provided by financing activities208 468 
Effect of changes in exchange rates on cash, cash equivalents and restricted cash— — 
Net increase in cash, cash equivalents and restricted cash343 438 
Cash, cash equivalents and restricted cash, beginning of period523 266 
Cash, cash equivalents and restricted cash, end of period$866 $704 
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $2 and $3 respectively)$83 $105 
Income tax payments, net13 — 



Realogy Reports Financial Results for Second Quarter 2021                        10

Table 4a

REALOGY HOLDINGS CORP.
2021 vs. 2020 KEY DRIVERS
Three Months Ended June 30, Six Months Ended June 30,
20212020% Change20212020% Change
Realogy Franchise Group (a)
Closed homesale sides320,463 238,085 35 %565,161 441,273 28 %
Average homesale price$430,756 $321,308 34 %$414,842 $321,841 29 %
Average homesale broker commission rate2.46 %2.49 %(3) bps2.46 %2.48 %(2) bps
Net royalty per side$418 $324 29 %$402 $321 25 %
Realogy Brokerage Group
Closed homesale sides103,945 71,375 46 %178,938 133,916 34 %
Average homesale price$678,978 $503,935 35 %$649,634 $517,888 25 %
Average homesale broker commission rate2.43 %2.43 %—  bps2.43 %2.42 % bps
Gross commission income per side$17,053 $12,863 33 %$16,357 $13,206 24 %
Realogy Title Group
Purchase title and closing units47,375 32,028 48 %81,203 60,752 34 %
Refinance title and closing units14,472 17,548 (18)%34,939 26,447 32 %
Average fee per closing unit$2,608 $2,062 26 %$2,446 $2,151 14 %
_______________
(a)Includes all franchisees except for Realogy Brokerage Group.



Realogy Reports Financial Results for Second Quarter 2021                        11

Table 4b

REALOGY HOLDINGS CORP.
2020 KEY DRIVERS
Quarter EndedYear Ended
March 31,
2020
June 30,
2020
September 30,
2020
December 31,
2020
December 31,
2020
Realogy Franchise Group (a)
Closed homesale sides203,188 238,085 336,737 312,335 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 sides62,541 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 units28,724 32,028 45,788 42,586 149,126 
Refinance title and closing units8,899 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.


Realogy Reports Financial Results for Second Quarter 2021                        12

    Table 5a
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - OPERATING EBITDA
THREE MONTHS ENDED JUNE 30, 2021 AND 2020
(In millions)
Set forth in the tables below is a reconciliation of Net income (loss) attributable to Realogy Holdings to Operating EBITDA for the three-month periods ended June 30, 2021 and 2020:
Three Months Ended June 30,
20212020
Net income (loss) attributable to Realogy Holdings
$149 $(14)
Income tax expense (benefit)60 (5)
Income (loss) before income taxes209 (19)
Add: Depreciation and amortization51 46 
Interest expense, net57 59 
Restructuring costs, net (a)18 
Impairments (b)63 
Former parent legacy cost, net (c)— 
Loss on the early extinguishment of debt (c)
Gain on the sale of business (d)
(15)— 
Operating EBITDA$310 $175 
The following table reflects Revenue, Operating EBITDA and Operating EBITDA margin by reportable segments:
 Revenues (e)$ Change%
Change
Operating EBITDA$ Change% ChangeOperating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group$347 $227 $120 53 %$224 $125 $99 79 %65 %55 %10 
Realogy Brokerage Group1,791 933 858 92 70 15 55 367 
Realogy Title Group (f)255 160 95 59 55 61 (6)(10)22 38 (16)
Corporate and Other(117)(65)(52)*(39)(26)(13)*
Total Company$2,276 $1,255 $1,021 81 %$310 $175 $135 77 %14 %14 %— 
The following table reflects Realogy Franchise and Brokerage Groups' results before the intercompany royalties and marketing fees, as well as on a combined basis to show the Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company:
 Revenues$
Change
%
Change
Operating EBITDA$
Change
%
Change
Operating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group (g)$230 $162 $68 42 %$107 $60 $47 78 %47 %37 %10 
Realogy Brokerage Group (g)1,791 933 858 92 187 80 107 134 10 
Realogy Franchise and Brokerage Groups Combined$2,021 $1,095 $926 85 %$294 $140 $154 110 %15 %13 %
_______________
 
 
* not meaningful.
(a)Restructuring charges incurred for the three months ended June 30, 2021 include $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $2 million at Corporate and Other. Restructuring charges incurred for the three months ended June 30, 2020 include $4 million at Realogy Franchise Group, $12 million at Realogy Brokerage Group and $2 million at Realogy Title Group.
(b)Impairments for the three months ended June 30, 2021 primarily relate to lease asset and software impairments. Non-cash impairments for the three months ended June 30, 2020 include $44 million of impairment charges during the three months ended June 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds and other asset impairments of $19 million primarily related to lease asset impairments.
(c)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(d)Gain on the sale of business is recorded in Realogy Brokerage Group.
(e)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $117 million and $65 million during the three months ended June 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Second Quarter 2021                        13

(f)Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage origination joint venture businesses. Excluding the mortgage joint venture from Operating EBITDA, title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the period ended June 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture was driven primarily by a negative $19 million related to mark-to-market adjustments on the mortgage loan pipeline as well as margin compression and a decline in refinance volumes, partially offset by strong purchase volume growth.
(g)The segment numbers noted above do not reflect the impact of intercompany royalties and marketing fees paid by Realogy Brokerage Group to Realogy Franchise Group of $117 million and $65 million during the three months ended June 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Second Quarter 2021                        14

Table 5b
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - OPERATING EBITDA
SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(In millions)
Set forth in the tables below is a reconciliation of Net income (loss) attributable to Realogy Holdings to Operating EBITDA for the six-month periods ended June 30, 2021 and 2020:
Six Months Ended June 30,
20212020
Net income (loss) attributable to Realogy Holdings
$182 $(476)
Income tax expense (benefit)77 (146)
Income (loss) before income taxes259 (622)
Add: Depreciation and amortization102 91 
Interest expense, net95 160 
Restructuring costs, net (a)10 30 
Impairments (b)540 
Former parent legacy cost, net (c)— 
Loss on the early extinguishment of debt (c)18 
Gain on the sale of business (d)(15)— 
Operating EBITDA$472 $207 
The following table reflects Revenue, Operating EBITDA and Operating EBITDA margin by reportable segments:
 Revenues (e)$ Change%
Change
Operating EBITDA$ Change% ChangeOperating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group601 $447 $154 34 %365 $221 $144 65%61 %49 %12 
Realogy Brokerage Group2,962 1,802 1,160 64 65 (36)101 281(2)
Realogy Title Group (f)456 297 159 54 116 73 43 5925 25 — 
Corporate and Other(196)(123)(73)*(74)(51)(23)*
Total Company$3,823 $2,423 $1,400 58 %$472 $207 $265 128%12 %%
The following table reflects Realogy Franchise and Brokerage Groups' results before the intercompany royalties and marketing fees, as well as on a combined basis to show the Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company:
 Revenues$
Change
%
Change
Operating EBITDA$
Change
%
Change
Operating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group (g)$405 $324 $81 25%$169 $98 $71 72 %42 %30 %12 
Realogy Brokerage Group (g)2,962 1,802 1,160 64261 87 174 200 
Realogy Franchise and Brokerage Groups Combined$3,367 $2,126 $1,241 58%$430 $185 $245 132 %13 %%
_______________
 
 
* not meaningful.
(a)Restructuring charges incurred for the six months ended June 30, 2021 include $3 million at Realogy Franchise Group, $4 million at Realogy Brokerage Group and $3 million at Corporate and Other. Restructuring charges incurred for the six months ended June 30, 2020 include $6 million at Realogy Franchise Group, $21 million at Realogy Brokerage Group and $3 million at Realogy Title Group.
(b)Impairments for the six months ended June 30, 2021 primarily relate to lease asset and software impairments. Non-cash impairments for the six months ended June 30, 2020 include:
a goodwill impairment charge of $413 million related to Realogy Brokerage Group;
an impairment charge of $30 million related to Realogy Franchise Group's trademarks;
$74 million of impairment charges during the six months ended June 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds; and
other asset impairments of $23 million primarily related to lease asset impairments.
(c)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(d)Gain on the sale of business is recorded in Realogy Brokerage Group.
(e)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $196 million and $123 million during the six months ended June 30, 2021 and 2020, respectively.
(f)Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage origination joint venture businesses. Excluding the mortgage joint venture from Operating EBITDA, title agency and title insurance


Realogy Reports Financial Results for Second Quarter 2021                        15

underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the year to date period ended June 30, 2021.
(g)The segment numbers noted above do not reflect the impact of intercompany royalties and marketing fees paid by Realogy Brokerage Group to Realogy Franchise Group of $196 million and $123 million during the six months ended June 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Second Quarter 2021                        16

Table 6a
REALOGY HOLDINGS CORP.
SELECTED 2021 FINANCIAL DATA
(In millions)
 Three Months Ended
March 31,June 30,
20212021
Net revenues (a)
Realogy Franchise Group$254 $347 
Realogy Brokerage Group
1,171 1,791 
Realogy Title Group201 255 
Corporate and Other(79)(117)
Total Company
$1,547 $2,276 
Operating EBITDA
Realogy Franchise Group$141 $224 
Realogy Brokerage Group
(5)70 
Realogy Title Group61 55 
Corporate and Other(35)(39)
Total Company
$162 $310 
Non-GAAP Reconciliation - Operating EBITDA
Total Company Operating EBITDA$162 $310 
Less: Depreciation and amortization51 51 
Interest expense, net38 57 
Income tax expense17 60 
Restructuring costs, net (b)
Impairments (c)
Former parent legacy cost, net (d)— 
Loss on the early extinguishment of debt (d)17 
Gain on the sale of business (e)— (15)
Net income attributable to Realogy Holdings
$33 $149 
_______________
(a)Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $79 million and $117 million for the three months ended March 31, 2021 and June 30, 2021, respectively. Such amounts are eliminated through Corporate and Other.
(b)Includes restructuring charges broken down by business unit as follows:
 Three Months Ended
March 31,June 30,
20212021
Realogy Franchise Group$$
Realogy Brokerage Group
Corporate and Other
Total Company
$$
(c)Impairments for the three months ended March 31, 2021 and June 30, 2021 primarily relate to lease asset and software impairments.
(d)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(e)Gain on the sale of business is recorded in Realogy Brokerage Group.


Realogy Reports Financial Results for Second Quarter 2021                        17

Table 6b
REALOGY HOLDINGS CORP.
SELECTED 2020 FINANCIAL DATA
(In millions)
 Three Months EndedYear Ended
 March 31,June 30,September 30,December 31,December 31,
20202020202020202020
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 Group137 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 Group12 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 amortization45 46 43 52 186 
Interest expense, net101 59 48 38 246 
Income tax (benefit) expense (141)(5)36 (104)
Restructuring costs, net (b)12 18 17 20 67 
Impairments (c)477 63 70 72 682 
Former parent legacy cost, net (d)— — — 
Loss on the early extinguishment of debt (d)— — — 
Net (loss) income attributable to Realogy Holdings
$(462)$(14)$98 $18 $(360)
_______________
(a)Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing 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 EndedYear Ended
 March 31,June 30,September 30,December 31,December 31,
20202020202020202020
Realogy Franchise Group$$$$$15 
Realogy Brokerage Group12 11 37 
Realogy Title Group— 
Corporate and Other— — 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.


Realogy Reports Financial Results for Second Quarter 2021                        18

Table 6c

REALOGY HOLDINGS CORP.
2020 CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
 Three Months EndedYear Ended
March 31,June 30,September 30,December 31,December 31,
 20202020202020202020
Revenues
Gross commission income$850 $919 $1,458 $1,442 $4,669 
Service revenue202 219 281 281 983 
Franchise fees71 85 133 130 419 
Other45 32 37 36 150 
Net revenues1,168 1,255 1,909 1,889 6,221 
Expenses
Commission and other agent-related costs630 685 1,105 1,107 3,527 
Operating368 320 380 405 1,473 
Marketing59 41 55 60 215 
General and administrative88 69 108 147 412 
Former parent legacy cost, net— — — 
Restructuring costs, net12 18 17 20 67 
Impairments477 63 70 72 682 
Depreciation and amortization45 46 43 52 186 
Interest expense, net101 59 48 38 246 
Loss on the early extinguishment of debt— — — 
Other expense, net— — — (5)(5)
Total expenses1,780 1,309 1,827 1,896 6,812 
(Loss) income before income taxes, equity in earnings and noncontrolling interests(612)(54)82 (7)(591)
Income tax (benefit) expense(141)(5)36 (104)
Equity in earnings of unconsolidated entities(9)(36)(53)(33)(131)
Net (loss) income(462)(13)99 20 (356)
Less: Net income attributable to noncontrolling interests— (1)(1)(2)(4)
Net (loss) income attributable to Realogy Holdings$(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:
Basic114.7 115.4 115.4 115.5 115.2 
Diluted114.7 116.2 116.7 118.2 115.2 



Realogy Reports Financial Results for Second Quarter 2021                        19

Table 7
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - FREE CASH FLOW
THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(In millions)
A reconciliation of net income (loss) attributable to Realogy Holdings to Free Cash Flow is set forth in the following table:
 Three Months Ended June 30, Six Months Ended June 30,
2021202020212020
Net income (loss) attributable to Realogy Holdings$149 $(14)$182 $(476)
Income tax expense (benefit), net of payments49 (6)64 (146)
Interest expense, net57 59 95 160 
Cash interest payments(69)(85)(83)(105)
Depreciation and amortization51 46 102 91 
Capital expenditures(27)(20)(50)(49)
Restructuring costs and former parent legacy items, net of payments— (5)
Impairments63 540 
Loss on the early extinguishment of debt18 
Gain on the sale of business
(15)— (15)— 
Working capital adjustments62 42 (107)(55)
Relocation receivables (assets), net of securitization obligations(16)(52)(27)(81)
Free Cash Flow$243 $47 $176 $(108)
A reconciliation of net cash provided by operating activities to Free Cash Flow is set forth in the following table:
 Three Months Ended June 30, Six Months Ended June 30,
2021202020212020
Net cash provided by operating activities$223 $115 $186 $33 
Property and equipment additions(27)(20)(50)(49)
Net change in securitization47 (49)40 (92)
Effect of exchange rates on cash and cash equivalents— — — 
Free Cash Flow$243 $47 $176 $(108)
Net cash used in investing activities$(19)$(24)$(51)$(63)
Net cash provided by (used in) financing activities$253 $(32)$208 $468 



Realogy Reports Financial Results for Second Quarter 2021                        20

Table 8a

NON-GAAP RECONCILIATION - SENIOR SECURED LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED JUNE 30, 2021
(In millions)
The senior secured leverage ratio is tested quarterly pursuant to the terms of the senior secured credit facilities*. For the trailing four-quarter period ended June 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 June 30, 2021 with a ratio of 0.00 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 June 30, 2021 is set forth in the following table:
LessEqualsPlusEquals
Year EndedSix Months EndedSix Months EndedSix Months EndedTwelve Months
Ended
December 31, 2020June 30,
2020
December 31, 2020June 30,
2021
June 30,
2021
Net (loss) income attributable to Realogy Group (a)$(360)$(476)$116 $182 $298 
Income tax (benefit) expense(104)(146)42 77 119 
(Loss) income before income taxes(464)(622)158 259 417 
Depreciation and amortization186 91 95 102 197 
Interest expense, net246 160 86 95 181 
Restructuring costs, net67 30 37 10 47 
Impairments682 540 142 144 
Former parent legacy cost, net— 
Loss on the early extinguishment of debt— 18 18 
Gain on the sale of business— — — (15)(15)
Operating EBITDA (b)726 207 519 472 991 
Bank covenant adjustments:
Pro forma effect of business optimization initiatives (c)
45 
Non-cash charges (d)
26 
Pro forma effect of acquisitions and new franchisees (e)
Incremental securitization interest costs (f)
Costs expensed related to the disposition(3)
EBITDA as defined by the Senior Secured Credit Agreement*$1,067 
Total senior secured net debt (g)$(4)
Senior secured leverage ratio* 0.00 x
_______________
(a)Net (loss) income attributable to Realogy consists of: (i) income of $98 million for the third quarter of 2020, (ii) income of $18 million for the fourth quarter of 2020, (iii) income of $33 million for the first quarter of 2021 and (iv) income of $149 million for the second quarter of 2021.
(b)Operating EBITDA consists of: (i) $313 million for the third quarter of 2020, (ii) $206 million for the fourth quarter of 2020, (iii) $162 million for the first quarter of 2021 and (iv) $310 million for the second quarter of 2021.
(c)Represents the four-quarter pro forma effect of business optimization initiatives.


Realogy Reports Financial Results for Second Quarter 2021                        21

(d)Represents the elimination of non-cash expenses including $43 million of stock-based compensation expense less $9 million of other items, $5 million of foreign exchange benefits and $3 million for the change in the allowance for doubtful accounts and notes reserves for the four-quarter period ended June 30, 2021.
(e)Represents the estimated impact of acquisitions and franchise sales activity, net of brokerages that exited our franchise system as if these changes had occurred on July 1, 2020. Franchisee sales activity is comprised of new franchise agreements as well as growth through acquisitions and independent sales agent recruitment by existing franchisees with our assistance. We have made a number of assumptions in calculating such estimates and there can be no assurance that we would have generated the projected levels of Operating EBITDA had we owned the acquired entities or entered into the franchise contracts as of July 1, 2020.
(f)Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended June 30, 2021.
(g)Represents total borrowings under the senior secured credit facilities (including the Revolving Credit Facility and Term Loan B Facility) and Term Loan A Facility and borrowings secured by a first priority lien on our assets of $670 million plus $27 million of finance lease obligations less $701 million of readily available cash as of June 30, 2021. Pursuant to the terms of our senior secured credit facilities, total senior secured net debt does not include our securitization obligations, 7.625% Senior Secured Second Lien Notes or unsecured indebtedness, including the Unsecured Notes and the Exchangeable Senior Notes.

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




Realogy Reports Financial Results for Second Quarter 2021                        22

Table 8b

NET DEBT LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED JUNE 30, 2021
(In millions)
Net corporate debt (excluding securitizations) divided by EBITDA calculated on a Pro Forma Basis, as those terms are defined in the senior secured credit facilities, for the four-quarter period ended June 30, 2021 (referred to as net debt leverage ratio) is set forth in the following table:
As of June 30, 2021
Non-extended Revolving Credit Commitment$— 
Extended Revolving Credit Commitment— 
Non-extended Term Loan A197 
Extended Term Loan A236 
Term Loan B237 
7.625% Senior Secured Second Lien Notes550 
4.875% Senior Notes407 
9.375% Senior Notes550 
5.75% Senior Notes900 
0.25% Exchangeable Senior Notes403 
Finance lease obligations27 
Corporate Debt (excluding securitizations)3,507 
Less: Cash and cash equivalents859 
Net Corporate Debt (excluding securitizations)$2,648 
EBITDA as defined by the Senior Secured Credit Agreement (a)$1,067 
Net Debt Leverage Ratio (b)
2.5 x
_______________
(a)See Table 8a for a reconciliation of Net (loss) income attributable to Realogy Group to EBITDA as defined by the Senior Secured Credit Agreement.
(b)Net Debt Leverage Ratio is substantially similar to Consolidated Leverage Ratio (as defined under the indentures governing the 9.375% Notes and 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.



Realogy Reports Financial Results for Second Quarter 2021                        23


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.