rlgy-20211028
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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: October 28, 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 October 28, 2021, the Registrants announced their financial results for the quarter ended September 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 October 28, 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: October 28, 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: October 28, 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/cf94ee3d270f043509aead75f2ba2970-image1a.jpg
REALOGY REPORTS THIRD QUARTER
2021 FINANCIAL RESULTS


MADISON, N.J. (October 28, 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 September 30, 2021.
"Realogy delivered powerful third quarter results with terrific top- and bottom-line performance, market share gains for the fifth consecutive quarter, impressive free cash flow, and an even stronger capital structure," said Ryan Schneider, Realogy's chief executive officer and president. "We are excited by our strategic progress throughout 2021, especially across Realogy's market-leading luxury positions, differentiated RealSure venture, and continued technology innovation as we proactively transform the future of real estate.”

"In the third quarter, Realogy drove excellent financial performance, delivering $273 million in Operating EBITDA and generating $282 million of free cash flow, as we significantly strengthened our capital structure," said Charlotte Simonelli, Realogy's executive vice president, chief financial officer, and treasurer. "Realogy is making incredible progress, proactively repaying $435 million of debt in September, consistently delivering quality financial results, and strategically investing to unlock additional value for shareholders."
Third Quarter 2021 Highlights
Generated Revenue of $2.2 billion, an increase of 15% or $277 million year-over-year.
Reported Net income of $114 million and basic earnings per share of $0.98, an increase of $16 million or $0.13 per share vs. prior year.
Generated Operating EBITDA of $273 million, a decrease of $40 million year-over-year. The third quarter of 2020 included approximately $40 million in temporary cost savings (See Table 5a).
Net Debt Leverage Ratio of 2.3x and Senior Secured Leverage Ratio of negative 0.27x at September 30, 2021 (See Tables 8a and 8b).
Repaid $435 million of debt, including all outstanding Term Loan B and the non-extended portion of the Term Loan A.
Reported Free Cash Flow of $282 million in the third quarter of 2021 and $458 million year to date September 30, 2021 (See Table 7).
Combined closed transaction volume increased 12% year-over-year in the third quarter of 2021 driving market share gains for the fifth consecutive quarter. Our transaction volume growth was above the 9% year-over-year market volume growth reported by the National Association of Realtors (NAR).
Owned Brokerage agent count grew 5% year-over-year, with growth for the 5th consecutive quarter, and continued to maintain strong retention levels.
Strong cost management with $80 million in permanent cost savings expected in 2021 with actions taken for approximately 90% of the target savings and $70 million realized in the income statement through September 30, 2021.








Realogy Reports Financial Results for Third Quarter 2021

Third 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 September 30,
20212020 Change% Change
Revenue$2,186 $1,909 $277 15 %
Operating EBITDA 1
273 313 (40)(13)
Net income attributable to Realogy114 98 16 16 
Adjusted net income 2
119 162 (43)(27)
Earnings per share0.98 0.85 0.13 15 
Adjusted earnings per share 2
1.02 1.40 (0.38)(27)
Free Cash Flow 3
282 395 (113)(29)
Net cash provided by operating activities$303 $385 $(82)(21)%
Select Key Drivers
Realogy Franchise Group 4 5
Closed homesale sides 316,195 336,737 (6)%
Average homesale price$427,052 $367,095 16 %
Realogy Brokerage Group 5
Closed homesale sides101,536 101,890 — %
Average homesale price$662,006 $563,513 17 %
Realogy Title Group
Purchase title and closing units47,004 45,788 %
Refinance title and closing units12,836 18,387 (30)%
_______________
Footnotes:
1 See Tables 5a and 5b. Operating EBITDA is defined as net income (loss) before depreciation and amortization, interest expense, net (other 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 12% compared with the third quarter of 2020.
Balance Sheet and Capital Allocation
The Company ended the third quarter of 2021 with cash and cash equivalents of $701 million*. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.4 billion at September 30, 2021. The Company's Net Debt Leverage Ratio was 2.3x at September 30, 2021 (see Table 8b).
On September 16, 2021, we used cash on hand to repay an aggregate of $435 million of secured debt which included approximately $197 million in principal amount of outstanding borrowings under the Term Loan A Facility (representing all of the remaining Non-Extended Term Loan A) and approximately $238 million in principal amount of outstanding borrowings under the Term Loan B Facility (representing all of the remaining Term Loan B).


Realogy Reports Financial Results for Third Quarter 2021

A consolidated balance sheet is included as Table 2 of this press release.
______________
* excludes restricted cash
Investor Conference Call
Today, October 28, at 8:30 a.m. (ET), Realogy will hold a conference call via webcast to review its Q3 2021 results and provide a business update. The webcast will be hosted by Ryan Schneider, chief executive officer and president, and Charlotte Simonelli, chief financial officer, and will conclude with an investor Q&A period with management.
Investors may access the conference call live via webcast at ir.realogy.com or by dialing (833) 646-0499 (toll free); international participants should dial (918) 922-3007. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available on the website.
About Realogy Holdings Corp.
Realogy (NYSE: RLGY) is moving the real estate industry to what’s next. As the leading and most integrated provider of U.S. residential real estate services encompassing franchise, brokerage, relocation, and title and settlement businesses as well as a mortgage joint venture, Realogy supported approximately 1.4 million home transactions in 2020. The company’s diverse brand portfolio includes some of the most recognized names in real estate: Better Homes and Gardens® 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 196,600 independent sales agents in the U.S. and approximately 140,800 independent sales agents in 117 other countries and territories, helping them build stronger businesses and best serve today’s consumers. Recognized for ten consecutive years as one of the World’s Most Ethical Companies, Realogy has also been designated a Great Place to Work four years in a row, named one of LinkedIn’s 2021 Top Companies in the U.S., and honored on the Forbes list of World’s Best Employers 2021.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Realogy Holdings Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "potential" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements: adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to factors that could impact homesale transaction volume, such as: continued or accelerated declines in inventory or a decline in the number of home sales, increases in mortgage rates or inflation or tightened mortgage standards, changes in consumer preferences, including weakening in the consumer trends that have benefited us since the second half of 2020, reductions in housing affordability, and stagnant or declining home prices; adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to economic contraction in the U.S. economy, including the impact of recessions, slow economic growth, or a deterioration in other economic factors (including potential consumer, business or governmental defaults or delinquencies due to the COVID-19 crisis or otherwise) and fiscal and monetary policies of the federal government and its agencies, particularly those that may result in unfavorable changes to the interest rate environment and tax reform; The impact of evolving competitive and consumer dynamics, which could include, but are not limited to: continued erosion of the broker share of the commission income generated by homesale transactions and the continued rise of the sale agent’s share of such commissions, our ability to compete against non-traditional competitors, including but not limited to, iBuying and home swap business models and virtual brokerages, in particular those competitors with access to significant third-party capital that may prioritize market share over


Realogy Reports Financial Results for Third Quarter 2021

profitability, and meaningful decreases in the average broker commission rate; adverse impacts from the COVID-19 crisis (due to the impact of virus mutations or otherwise), including amplification of risks to our business and worsening economic consequences of the crisis or the reinstatement of significant limitations on normal business operations; our ability to execute our business strategy and achieve growth, including our efforts to: recruit and retain productive independent sales agents, attract and retain franchisees or renew existing franchise agreements without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives, compete for real estate services business, develop or procure products, services and technology that support our strategic initiatives, realize the expected benefits from our non-exclusive mortgage origination joint venture, our RealSure joint venture, our planned title underwriting joint venture, or from other existing or future strategic partnerships, achieve or maintain a beneficial cost structure or savings and other benefits from our cost-saving initiatives, generate a meaningful number of high-quality leads for independent sales agents and franchisees, complete or integrate acquisitions and joint ventures into our existing operations, or to complete or effectively manage divestitures or other corporate transactions; our geographic and high-end market concentration; the operating results of affiliated franchisees; continued consolidation among our top 250 franchisees; difficulties in the business or changes in the licensing strategy of, or complications in our relationships with, the owners of the two brands we do not own; the loss of our largest real estate benefit program client or multiple significant relocation clients; continued reductions in refinancing activity or corporate relocations or relocation benefits; the failure of third-party vendors or partners to perform as expected or our failure to adequately monitor such third-parties; interruptions in information technology used to operate our business and maintain our competitiveness; increases in mortgage rates, tightened mortgage underwriting standards or reductions in refinancing activity; actions taken by listing aggregators to monetize their concentration and market power; industry structure changes (as a result of new laws, regulations, consent decrees, administrative policies, litigation or other legal action, the rules of multiple listing services or NAR, or otherwise) that disrupt the functioning of the residential real estate market; adverse effects on our operations or liquidity due to our indebtedness, including with respect to: interest obligations and the negative covenant restrictions contained in our debt agreements, our ability to fund our operations, invest in our business or pursue growth opportunities, react to changes in the economy or our industry, or incur additional borrowings under our existing facilities, an event of default under our debt agreements, or our ability to refinance or repay our indebtedness or incur additional indebtedness; risks related to the issuance of our 0.25% Exchangeable Senior Notes and exchangeable note hedge and warrant transactions, including counterparty risk with respect to the exchangeable note hedge transactions; our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to: (1) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (2) privacy or data security laws and regulations, (3) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws, and (4) antitrust laws and regulations; cybersecurity incidents; impairment of our goodwill and other long-lived assets; and severe weather events or natural disasters, including increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events, including public health crises, such as pandemics and epidemics. Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and our Annual Report on Form 10-K for the year ended December 31, 2020, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events except as required by law.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release. See Tables 1a, 8a, 8b and 9 for definitions of these non-GAAP financial measures and Tables 1a, 5a, 5b, 6a, 6b, 7, 8a and 8b for reconciliations of the historical non-GAAP financial measures to their most comparable GAAP terms.
NAR data referenced herein is based on NAR’s most recent public estimates, which are subject to review and revision. Factors that may impact the comparability of the Company's homesale statistics to NAR are outlined in the


Realogy Reports Financial Results for Third Quarter 2021

Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and its Annual Report on Form 10-K for the year ended December 31, 2020.
Investor Contacts:Media Contacts:
Alicia 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 Third Quarter 2021                        6

Table 1

REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Revenues
Gross commission income$1,689 $1,458 $4,616 $3,227 
Service revenue315 281 878 702 
Franchise fees139 133 391 289 
Other43 37 124 114 
Net revenues2,186 1,909 6,009 4,332 
Expenses
Commission and other agent-related costs1,309 1,105 3,567 2,420 
Operating424 380 1,230 1,068 
Marketing69 55 193 155 
General and administrative120 108 324 265 
Former parent legacy cost, net— 
Restructuring costs, net17 14 47 
Impairments70 610 
Depreciation and amortization50 43 152 134 
Interest expense, net52 48 147 208 
Loss on the early extinguishment of debt— 21 
Other loss (income), net— (17)— 
Total expenses2,033 1,827 5,635 4,916 
Income (loss) before income taxes, equity in earnings and noncontrolling interests153 82 374 (584)
Income tax expense (benefit)48 36 125 (110)
Equity in earnings of unconsolidated entities(11)(53)(52)(98)
Net income (loss)116 99 301 (376)
Less: Net income attributable to noncontrolling interests(2)(1)(5)(2)
Net income (loss) attributable to Realogy Holdings$114 $98 $296 $(378)
Earnings (loss) per share attributable to Realogy Holdings shareholders:
Basic earnings (loss) per share$0.98 $0.85 $2.55 $(3.28)
Diluted earnings (loss) per share$0.95 $0.84 $2.46 $(3.28)
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic116.6 115.4 116.3 115.2 
Diluted120.3 116.7 120.2 115.2 



Realogy Reports Financial Results for Third Quarter 2021                        7

Table 1a
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(In millions, except per share data)
We present Adjusted net income (loss) and Adjusted earnings (loss) per share because we believe these measures are useful as supplemental measures in evaluating the performance of our operating businesses and provide greater transparency into our operating results.
Adjusted net income (loss) is defined by us as net income (loss) before: (a) mark-to-market interest rate swap adjustments, whose fair value is subject to movements in LIBOR and the forward yield curve and therefore are subject to significant fluctuations; (b) former parent legacy items, which pertain to liabilities of the former parent for matters prior to mid-2006 and are non-operational in nature; (c) restructuring charges as a result of initiatives currently in progress; (d) impairments; (e) the (gain) loss on the early extinguishment of debt that results from refinancing and deleveraging debt initiatives and (f) the tax effect of the foregoing adjustments. The gross amounts for these items as well as the adjustment for income taxes are shown in the table below.
Adjusted earnings (loss) per share is Adjusted net income (loss) divided by the weighted average common and common equivalent shares outstanding.
Set forth in the table below is a reconciliation of Net income (loss) to Adjusted net income for the three and nine months ended September 30, 2021 and 2020:
 Three Months Ended September 30, Nine Months Ended September 30,
2021202020212020
Net income (loss) attributable to Realogy Holdings$114 $98 $296 $(378)
Addback:
Mark-to-market interest rate swap losses(1)— (8)59 
Former parent legacy cost, net— 
Restructuring costs, net17 14 47 
Impairments (a)70 610 
Loss on the early extinguishment of debt— 21 
Adjustments for tax effect (b)(2)(24)(8)(196)
Adjusted net income attributable to Realogy Holdings$119 $162 $319 $151 
Earnings (loss) per share attributable to Realogy Holdings:
Basic earnings (loss) per share:$0.98 $0.85 $2.55 $(3.28)
Diluted earnings (loss) per share:$0.95 $0.84 $2.46 $(3.28)
Adjusted earnings per share attributable to Realogy Holdings:
Adjusted basic earnings per share:$1.02 $1.40 $2.74 $1.31 
Adjusted diluted earnings per share:$0.99 $1.39 $2.65 $1.31 
Weighted average common and common equivalent shares outstanding:
Basic:116.6 115.4 116.3 115.2 
Diluted:120.3 116.7 120.2 115.2 
_______________
(a)Non-cash impairments for the nine months ended September 30, 2020 primarily include:
a goodwill impairment charge of $413 million related to Realogy Brokerage Group;
an impairment charge of $30 million related to Realogy Franchise Group's trademarks; and
$133 million of impairment charges during the nine months ended September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds.
(b)Reflects tax effect of adjustments at the Company's blended state and federal statutory rate.


Realogy Reports Financial Results for Third Quarter 2021                        8

Table 2
REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
September 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents$701 $520 
Restricted cash
Trade receivables (net of allowance for doubtful accounts of $11 and $13)140 128 
Relocation receivables185 139 
Other current assets194 154 
Total current assets1,225 944 
Property and equipment, net302 317 
Operating lease assets, net448 450 
Goodwill2,899 2,910 
Trademarks685 685 
Franchise agreements, net1,038 1,088 
Other intangibles, net175 188 
Other non-current assets421 352 
Total assets$7,193 $6,934 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$125 $128 
Securitization obligations146 106 
Current portion of long-term debt62 
Current portion of operating lease liabilities126 129 
Accrued expenses and other current liabilities661 600 
Total current liabilities1,067 1,025 
Long-term debt2,938 3,145 
Long-term operating lease liabilities418 430 
Deferred income taxes353 276 
Other non-current liabilities289 291 
Total liabilities5,065 5,167 
Commitments and contingencies
Equity:
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, none issued and outstanding at September 30, 2021 and December 31, 2020— — 
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 116,586,201 shares issued and outstanding at September 30, 2021 and 115,457,067 shares issued and outstanding at December 31, 2020
Additional paid-in capital4,939 4,876 
Accumulated deficit(2,759)(3,055)
Accumulated other comprehensive loss(58)(59)
Total stockholders' equity2,123 1,763 
Noncontrolling interests
Total equity2,128 1,767 
Total liabilities and equity$7,193 $6,934 



Realogy Reports Financial Results for Third Quarter 2021                        9

Table 3
REALOGY HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Nine Months Ended
September 30,
 20212020
Operating Activities
Net income (loss)$301 $(376)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization152 134 
Deferred income taxes76 (112)
Impairments610 
Amortization of deferred financing costs and debt discount (premium)12 
Loss on the early extinguishment of debt21 
Gain on the sale of business, net(14)— 
Equity in earnings of unconsolidated entities(52)(98)
Stock-based compensation21 19 
Mark-to-market adjustments on derivatives(8)59 
Other adjustments to net income (loss)(2)(1)
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables(13)(24)
Relocation receivables(46)
Other assets(12)15 
Accounts payable, accrued expenses and other liabilities32 137 
Dividends received from unconsolidated entities49 59 
Other, net(31)(22)
Net cash provided by operating activities489 418 
Investing Activities
Property and equipment additions(71)(69)
Proceeds from the sale of business15 — 
Investment in unconsolidated entities(7)(2)
Other, net(5)(13)
Net cash used in investing activities(68)(84)
Financing Activities
Net change in Revolving Credit Facility— (50)
Repayments of Term Loan A Facility and Term Loan B Facility(1,490)— 
Proceeds from issuance of Senior 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(8)(31)
Net change in securitization obligations40 (62)
Debt issuance costs(20)(14)
Cash paid for fees associated with early extinguishment of debt(11)(7)
Taxes paid related to net share settlement for stock-based compensation(9)(5)
Other, net(27)(34)
Net cash used in financing activities(238)(203)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash— — 
Net increase in cash, cash equivalents and restricted cash183 131 
Cash, cash equivalents and restricted cash, beginning of period523 266 
Cash, cash equivalents and restricted cash, end of period$706 $397 
Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest of $3 and $4 respectively)$121 $133 
Income tax payments (refunds), net32 (9)


Realogy Reports Financial Results for Third Quarter 2021                        10

Table 4a

REALOGY HOLDINGS CORP.
2021 vs. 2020 KEY DRIVERS
Three Months Ended September 30, Nine Months Ended September 30,
20212020% Change20212020% Change
Realogy Franchise Group (a)
Closed homesale sides316,195 336,737 (6)%881,356 778,010 13 %
Average homesale price$427,052 $367,095 16 %$419,223 $341,427 23 %
Average homesale broker commission rate2.44 %2.48 %(4) bps2.46 %2.48 %(2) bps
Net royalty per side$401 $367 %$402 $341 18 %
Realogy Brokerage Group
Closed homesale sides101,536 101,890 — %280,474 235,806 19 %
Average homesale price$662,006 $563,513 17 %$654,113 $537,602 22 %
Average homesale broker commission rate2.42 %2.44 %(2) bps2.43 %2.43 %—  bps
Gross commission income per side$16,633 $14,315 16 %$16,457 $13,685 20 %
Realogy Title Group
Purchase title and closing units47,004 45,788 %128,207 106,540 20 %
Refinance title and closing units12,836 18,387 (30)%47,775 44,834 %
Average fee per closing unit$2,675 $2,239 19 %$2,524 $2,189 15 %
_______________
(a)Includes all franchisees except for Realogy Brokerage Group.



Realogy Reports Financial Results for Third 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 Third Quarter 2021                        12

Table 5a
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - OPERATING EBITDA
THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(In millions)
Set forth in the tables below is a reconciliation of Net income attributable to Realogy Holdings to Operating EBITDA for the three-month periods ended September 30, 2021 and 2020:
Three Months Ended September 30,
20212020
Net income attributable to Realogy Holdings
$114 $98 
Income tax expense48 36 
Income before income taxes162 134 
Add: Depreciation and amortization50 43 
Interest expense, net52 48 
Restructuring costs, net (a)17 
Impairments (b)70 
Former parent legacy cost, net (c)— 
Loss on the early extinguishment of debt (c)
— 
Loss on the sale of business, net
— 
Operating EBITDA$273 $313 
The following table reflects Revenue, Operating EBITDA and Operating EBITDA margin by reportable segments:
 Revenues (d)$ Change%
Change
Operating EBITDA$ Change% ChangeOperating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group$342 $314 $28 %$211 $200 $11 %62 %64 %(2)
Realogy Brokerage Group1,705 1,479 226 15 51 61 (10)(16)(1)
Realogy Title Group (e)250 213 37 17 54 95 (41)(43)22 45 (23)
Corporate and Other(111)(97)(14)*(43)(43)— *
Total Company$2,186 $1,909 $277 15 %$273 $313 $(40)(13)%12 %16 %(4)
The following table reflects Realogy Franchise and Brokerage Groups' results before intercompany royalties and marketing fees, as well as on a combined basis to show the Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company:
 Revenues$
Change
%
Change
Operating EBITDA$
Change
%
Change
Operating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group (f)$231 $217 $14 %$100 $103 $(3)(3)%43 %47 %(4)
Realogy Brokerage Group (f)1,705 1,479 226 15 162 158 10 11 (1)
Realogy Franchise and Brokerage Groups Combined$1,936 $1,696 $240 14 %$262 $261 $— %14 %15 %(1)
_______________
 
 
* not meaningful.
(a)Restructuring charges incurred for the three months ended September 30, 2021 include $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. Restructuring charges incurred for the three months ended September 30, 2020 include $4 million at Realogy Franchise Group, $11 million at Realogy Brokerage Group and $2 million at Corporate and Other.
(b)Non-cash impairments for the three months ended September 30, 2021 primarily relate to software impairments. Non-cash impairments for the three months ended September 30, 2020 include $59 million of impairment charges during the three months ended September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds and other asset impairments of $11 million primarily related to lease asset impairments.
(c)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(d)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $111 million and $97 million during the three months ended September 30, 2021 and 2020, respectively.
(e)Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage origination joint venture businesses. The title agency and title insurance underwriter businesses represented approximately 60% and 40%,


Realogy Reports Financial Results for Third Quarter 2021                        13

respectively, of RTG’s net revenues for the three-month period ended September 30, 2021. Excluding the mortgage origination joint venture from Operating EBITDA, title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the three-months ended September 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture, from $11 million for the three-months ended September 30, 2021 compared to $51 million for the three-months ended September 30, 2020, was primarily driven by the impact of mark-to-market adjustments on the mortgage loan pipeline, as well as gain-on-sale margin compression and a decline in refinance volumes, partially offset by strong purchase volume growth.
(f)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 $111 million and $97 million during the three months ended September 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Third Quarter 2021                        14

Table 5b
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - OPERATING EBITDA
NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(In millions)
Set forth in the tables below is a reconciliation of Net income (loss) attributable to Realogy Holdings to Operating EBITDA for the nine-month periods ended September 30, 2021 and 2020:
Nine Months Ended September 30,
20212020
Net income (loss) attributable to Realogy Holdings
$296 $(378)
Income tax expense (benefit)125 (110)
Income (loss) before income taxes421 (488)
Add: Depreciation and amortization152 134 
Interest expense, net147 208 
Restructuring costs, net (a)14 47 
Impairments (b)610 
Former parent legacy cost, net (c)
Loss on the early extinguishment of debt (c)21 
Gain on the sale of business, net (d)(14)— 
Operating EBITDA$745 $520 
The following table reflects Revenue, Operating EBITDA and Operating EBITDA margin by reportable segments:
 Revenues (e)$ Change%
Change
Operating EBITDA$ Change% ChangeOperating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group943 $761 $182 24 %576 $421 $155 37%61 %55 %
Realogy Brokerage Group4,667 3,281 1,386 42 116 25 91 364
Realogy Title Group (f)706 510 196 38 170 168 124 33 (9)
Corporate and Other(307)(220)(87)*(117)(94)(23)*
Total Company$6,009 $4,332 $1,677 39 %$745 $520 $225 43%12 %12 %— 
The following table reflects Realogy Franchise and Brokerage Groups' results before the intercompany royalties and marketing fees, as well as on a combined basis to show the Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company:
 Revenues$
Change
%
Change
Operating EBITDA$
Change
%
Change
Operating EBITDA MarginChange
 202120202021202020212020
Realogy Franchise Group (g)$636 $541 $95 18%$269 $201 $68 34 %42 %37 %
Realogy Brokerage Group (g)4,667 3,281 1,386 42423 245 178 73 
Realogy Franchise and Brokerage Groups Combined$5,303 $3,822 $1,481 39%$692 $446 $246 55 %13 %12 %
_______________
 
 
* not meaningful.
(a)Restructuring charges incurred for the nine months ended September 30, 2021 include $4 million at Realogy Franchise Group, $6 million at Realogy Brokerage Group and $4 million at Corporate and Other. Restructuring charges incurred for the nine months ended September 30, 2020 include $10 million at Realogy Franchise Group, $32 million at Realogy Brokerage Group, $3 million at Realogy Title Group and $2 million at Corporate and Other.
(b)Non-cash impairments for the nine months ended September 30, 2021 primarily relate to software and lease asset impairments. Non-cash impairments for the nine months ended September 30, 2020 include:
a goodwill impairment charge of $413 million related to Realogy Brokerage Group;
an impairment charge of $30 million related to Realogy Franchise Group's trademarks;
$133 million of impairment charges during the nine months ended September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds; and
other asset impairments of $34 million primarily related to lease asset impairments.
(c)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(d)Gain on the sale of business, net is primarily recorded in Realogy Brokerage Group.
(e)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $307 million and $220 million during the nine months ended September 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Third Quarter 2021                        15

(f)Realogy Title Group (RTG) includes our title, escrow and settlement services (title agency), title insurance underwriter and mortgage origination joint venture businesses. The title agency and title insurance underwriter businesses represented approximately 60% and 40%, respectively, of RTG’s net revenues for the nine-month period ended September 30, 2021. Excluding the mortgage origination joint venture from Operating EBITDA, title agency and title insurance underwriter represented approximately 60% and 40%, respectively of Operating EBITDA for the nine-months ended September 30, 2021. The year-over-year decline in Operating EBITDA contribution from the mortgage origination joint venture, from $49 million for the nine-months ended September 30, 2021 compared to $95 million for the nine-months ended September 30, 2020, was primarily driven by the impact of mark-to-market adjustments on the mortgage loan pipeline, as well as gain-on-sale margin compression and a decline in refinance volumes, partially offset by strong purchase volume growth.
(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 $307 million and $220 million during the nine months ended September 30, 2021 and 2020, respectively.


Realogy Reports Financial Results for Third Quarter 2021                        16

Table 6a
REALOGY HOLDINGS CORP.
SELECTED 2021 FINANCIAL DATA
(In millions)
 Three Months Ended
March 31,June 30,September 30,
202120212021
Net revenues (a)
Realogy Franchise Group$254 $347 $342 
Realogy Brokerage Group
1,171 1,791 1,705 
Realogy Title Group201 255 250 
Corporate and Other(79)(117)(111)
Total Company
$1,547 $2,276 $2,186 
Operating EBITDA
Realogy Franchise Group$141 $224 $211 
Realogy Brokerage Group
(5)70 51 
Realogy Title Group61 55 54 
Corporate and Other(35)(39)(43)
Total Company
$162 $310 $273 
Non-GAAP Reconciliation - Operating EBITDA
Total Company Operating EBITDA$162 $310 $273 
Less: Depreciation and amortization51 51 50 
Interest expense, net38 57 52 
Income tax expense17 60 48 
Restructuring costs, net (b)
Impairments (c)
Former parent legacy cost, net (d)— — 
Loss on the early extinguishment of debt (d)17 
(Gain) loss on the sale of business, net (e)— (15)
Net income attributable to Realogy Holdings
$33 $149 $114 
_______________
(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, $117 million and $111 million for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021, respectively. Such amounts are eliminated through Corporate and Other.
(b)Includes restructuring charges broken down by business unit as follows:
 Three Months Ended
March 31,June 30,September 30,
202120212021
Realogy Franchise Group$$$
Realogy Brokerage Group
Corporate and Other
Total Company
$$$
(c)Impairments for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021 primarily relate to software and lease asset impairments.
(d)Former parent legacy items and Loss on the early extinguishment of debt are recorded in Corporate and Other.
(e)(Gain) loss on the sale of business, net is primarily recorded in Realogy Brokerage Group.


Realogy Reports Financial Results for Third 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 Third 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 Third Quarter 2021                        19

Table 7
REALOGY HOLDINGS CORP.
NON-GAAP RECONCILIATION - FREE CASH FLOW
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(In millions)
A reconciliation of net income (loss) attributable to Realogy Holdings to Free Cash Flow is set forth in the following table:
 Three Months Ended September 30, Nine Months Ended September 30,
2021202020212020
Net income (loss) attributable to Realogy Holdings$114 $98 $296 $(378)
Income tax expense (benefit), net of payments29 45 93 (101)
Interest expense, net52 48 147 208 
Cash interest payments(38)(28)(121)(133)
Depreciation and amortization50 43 152 134 
Capital expenditures(21)(20)(71)(69)
Restructuring costs and former parent legacy items, net of payments(3)10 (8)15 
Impairments70 610 
Loss on the early extinguishment of debt— 21 
Loss (gain) on the sale of business, net
— (14)— 
Working capital adjustments73 108 (34)53 
Relocation receivables (assets), net of securitization obligations21 21 (6)(60)
Free Cash Flow$282 $395 $458 $287 
A reconciliation of net cash provided by operating activities to Free Cash Flow is set forth in the following table:
 Three Months Ended September 30, Nine Months Ended September 30,
2021202020212020
Net cash provided by operating activities$303 $385 $489 $418 
Property and equipment additions(21)(20)(71)(69)
Net change in securitization— 30 40 (62)
Effect of exchange rates on cash and cash equivalents— — — — 
Free Cash Flow$282 $395 $458 $287 
Net cash used in investing activities$(17)$(21)$(68)$(84)
Net cash used in financing activities$(446)$(671)$(238)$(203)



Realogy Reports Financial Results for Third Quarter 2021                        20

Table 8a

NON-GAAP RECONCILIATION - SENIOR SECURED LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED SEPTEMBER 30, 2021
(In millions)
The senior secured leverage ratio is tested quarterly pursuant to the terms of the senior secured credit facilities*. For the trailing four-quarter period ended September 30, 2021, Realogy Group LLC was required to maintain a senior secured leverage ratio not to exceed 4.75 to 1.00. The senior secured leverage ratio is measured by dividing Realogy Group LLC's total senior secured net debt by the trailing four quarters EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Total senior secured net debt does not include the 7.625% Senior Secured Second Lien Notes, our unsecured indebtedness, including the Unsecured Notes and Exchangeable Senior Notes, or the securitization obligations. EBITDA calculated on a Pro Forma Basis, as defined in the Senior Secured Credit Agreement, includes adjustments to Operating EBITDA for retention and disposition costs, non-cash charges and incremental securitization interest costs, as well as pro forma cost savings for restructuring initiatives, the pro forma effect of business optimization initiatives and the pro forma effect of acquisitions and new franchisees, in each case calculated as of the beginning of the trailing four-quarter period. The Company was in compliance with the senior secured leverage ratio covenant at September 30, 2021 with a ratio of negative 0.27 to 1.00.
A reconciliation of net (loss) income attributable to Realogy Group to Operating EBITDA and EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement, for the four-quarter period ended September 30, 2021 is set forth in the following table:
LessEqualsPlusEquals
Year EndedNine Months EndedThree Months EndedNine Months EndedTwelve Months
Ended
December 31, 2020September 30,
2020
December 31, 2020September 30,
2021
September 30,
2021
Net (loss) income attributable to Realogy Group (a)$(360)$(378)$18 $296 $314 
Income tax (benefit) expense(104)(110)125 131 
(Loss) income before income taxes(464)(488)24 421 445 
Depreciation and amortization186 134 52 152 204 
Interest expense, net246 208 38 147 185 
Restructuring costs, net67 47 20 14 34 
Impairments682 610 72 75 
Former parent legacy cost, net— 
Loss on the early extinguishment of debt— 21 21 
Gain on the sale of business, net— — — (14)(14)
Operating EBITDA (b)726 520 206 745 951 
Bank covenant adjustments:
Pro forma effect of business optimization initiatives (c)
28 
Non-cash charges (d)
26 
Pro forma effect of acquisitions and new franchisees (e)
Incremental securitization interest costs (f)
EBITDA as defined by the Senior Secured Credit Agreement*$1,013 
Total senior secured net debt (g)$(272)
Senior secured leverage ratio* (0.27)x
_______________
(a)Net (loss) income attributable to Realogy consists of: (i) income of $18 million for the fourth quarter of 2020, (ii) income of $33 million for the first quarter of 2021, (iii) income of $149 million for the second quarter of 2021 and (iv) income of $114 million for the third quarter of 2021.
(b)Operating EBITDA consists of: (i) $206 million for the fourth quarter of 2020, (ii) $162 million for the first quarter of 2021, (iii) $310 million for the second quarter of 2021 and (iv) $273 million for the third quarter of 2021.
(c)Represents the four-quarter pro forma effect of business optimization initiatives.


Realogy Reports Financial Results for Third Quarter 2021                        21

(d)Represents the elimination of non-cash expenses including $41 million of stock-based compensation expense less $7 million of other items, $4 million of foreign exchange benefits and $4 million for the change in the allowance for doubtful accounts and notes reserves for the four-quarter period ended September 30, 2021.
(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 October 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 October 1, 2020.
(f)Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended September 30, 2021.
(g)Represents total borrowings under the senior secured credit facilities (including the Revolving Credit Facility) and Term Loan A Facility and borrowings secured by a first priority lien on our assets of $234 million plus $26 million of finance lease obligations less $532 million of readily available cash as of September 30, 2021. Pursuant to the terms of our senior secured credit facilities, total senior secured net debt does not include our securitization obligations, 7.625% Senior Secured Second Lien Notes or unsecured indebtedness, including the Unsecured Notes and Exchangeable Senior Notes.

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




Realogy Reports Financial Results for Third Quarter 2021                        22

Table 8b

NET DEBT LEVERAGE RATIO
FOR THE FOUR-QUARTER PERIOD ENDED SEPTEMBER 30, 2021
(In millions)
Net corporate debt (excluding securitizations) divided by EBITDA calculated on a Pro Forma Basis, as those terms are defined in the senior secured credit facilities, for the four-quarter period ended September 30, 2021 (referred to as net debt leverage ratio) is set forth in the following table:
As of September 30, 2021
Non-extended Revolving Credit Commitment$— 
Extended Revolving Credit Commitment— 
Extended Term Loan A234 
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 obligations26 
Corporate Debt (excluding securitizations)3,070 
Less: Cash and cash equivalents701 
Net Corporate Debt (excluding securitizations)$2,369 
EBITDA as defined by the Senior Secured Credit Agreement (a)$1,013 
Net Debt Leverage Ratio (b)
2.3 x
_______________
(a)See Table 8a for a reconciliation of Net (loss) income attributable to Realogy Group to EBITDA as defined by the Senior Secured Credit Agreement.
(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 Third 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.